Eli Lilly and Company Shareholder Value Award

Eli Lilly and Company
Shareholder Value Award
(for Executive Officers)

This Shareholder Value Award has been granted for the Award Period of January 1,
2015 through December 31, 2017 by Eli Lilly and Company, an Indiana corporation
with its principal offices in Indianapolis, Indiana (“Lilly” or the “Company”),
to Grantee.

Performance Levels

 
No Payout
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Stock Price

< $63.02
$63.02
--
$68.72
$68.73
--
$74.41
$74.42
–
$80.29
$80.30
–
$86.17
$86.18
–
$92.04

> $92.04
% of Target
0%
40%
60%
80%
100%
120%
140%

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A. Recitals
Under the 2002 LILLY STOCK PLAN ("2002 Plan"), the Compensation Committee
("Committee") has determined the form of this Shareholder Value Award and
selected the Grantee, an Eligible Employee of the Company or one of its
subsidiaries, to receive a Shareholder Value Award for the Award Period January
1, 2015 through December 31, 2016. The applicable terms of the 2002 Plan are
incorporated in this Shareholder Value Award by reference, including the
definitions of terms contained in the 2002 Plan. This award is granted under
Section 6 of the 2002 Plan, “Performance Awards to Eligible Employees,” and
shall be considered a form of Performance Award for purposes of interpretation
and administration of the award under the 2002 Plan.
B. Shareholder Value Award
Lilly grants to the Grantee the right to acquire Lilly Stock by issuance or
transfer to the Grantee of the Performance Shares to which he or she is entitled
under this Shareholder Value Award, subject to certain restrictions and on the
terms and conditions contained in this Shareholder Value Award and the 2002
Plan. In the event of any conflict between the terms of the 2002 Plan and this
Shareholder Value Award, the terms of the 2002 Plan shall govern.
Section 1. Statement of Award Period
The Award Period shall begin January 1, 2015 and end December 31, 2017.
Section 2. Number of Shares
The target number of Performance Shares for the Award Period shall be determined
by the value approved by the Grantee’s supervisor, multiplied by the percentage
determined by the Committee to be granted as a Shareholder Value Award, divided
by the grant fair value determined in accordance with accounting principles
currently applicable in the United States, rounded to the nearest full share.
Target shares are set at Level 4. The remaining columns of the table on the
first page of this Shareholder Value Award are multiples of the target shares as
set forth in the % of Target row and correspond to the applicable stock price,
subject to adjustment as provided below in this Section or in Section 8.
Grantees may view their Shareholder Value Award by logging on to the Merrill
Lynch website at http://myequity.lilly.com beginning March 1 of each grant year.
The number of Performance Shares for the Award Period and the final stock price
as described in Section 3 below, shall be subject to adjustment in accordance
with the provisions of Section 4(b) of the 2002 Plan for certain corporate
recapitalizations and other events. A fractional share resulting from such
adjustment shall in the discretion of the Committee either be paid in cash or
rounded.
Section 3. Computation of Final Stock Price
The Final Stock Price shall be computed in accordance with Section 16 and using
the following procedures:
a.
The closing price for Lilly Stock on the New York Stock Exchange for each
trading day during the last two calendar months of the Award Period will be
collected and recorded.

b.
The stock price used to determine the payout level will be the average of the
closing stock prices collected in subsection (a) above rounded to the nearest
cent.

Section 4. Determination and Announcement of Award
After the Final Stock Price for the Award Period is announced, the Final Stock
Price and the resulting number of Performance Shares for Grantee (determined in
accordance with Sections 2 and 8), together

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with the Committee’s election between cash and Performance Shares under Section
5, shall be communicated to Grantee.
Section 5. Committee Election to Pay Cash
At any time during the Award Period or until paid in accordance with Section 6,
the Committee may, if it so elects, determine to pay part or all of any
Shareholder Value Award in cash in lieu of issuing or transferring Performance
Shares. The amount of cash shall be based upon the fair market value of Lilly
Stock on a valuation date to be determined by the Committee.
Section 6. Issuance or Transfer of Performance Shares and Payment of Cash Award
Subject to the provisions of Section 7 and Section 12 below, Lilly shall issue
or transfer to the Grantee any Performance Shares to be issued or transferred
under Section 4 (and/or pay to the Grantee any cash pursuant to Section 5)
within a sixty day period starting the day after the Award Period expiration and
ending on the sixtieth day after the Award Period expiration as stated in
Section 1. Grantee shall have no rights as a shareholder of Lilly with respect
to the shares of Lilly Stock until the shares are issued or transferred on the
books of Lilly.
Section 7. Continued Employment Requirement
If the status of the Grantee as an Eligible Employee, as defined in the 2002
Plan, terminates before the end of the Award Period except as outlined in
Section 8 (c), then all rights of the Grantee under this Shareholder Value Award
shall terminate with respect to the Award Period. The Company shall incur no
liability to Grantee under this Shareholder Value Award by terminating Grantee's
status as an Eligible Employee whether by action with respect to Grantee
individually, either with or without cause, or by dissolution or liquidation of
Lilly or merger or consolidation of Lilly with a corporation in which Lilly is
not the surviving corporation, or otherwise.
Section 8. Adjustments for Certain Employment Status Changes
The number of Performance Shares described in Section 2 is based on the
assumption that the Grantee is an employee in good standing throughout the
entire Award Period. Unless the Committee determines, in its sole discretion,
that such adjustments are not advisable after consideration of employment laws
in the country where the Grantee resides, the number of Performance Shares shall
be adjusted for changes in employment status during the Award Period as follows:
a.
Leaves of Absence. The number of Performance Shares shall be reduced
proportionally for any portion of the total days in the Award Period during
which the Grantee is on an approved unpaid leave of absence longer than ninety
(90) days.

b.
Demotions, Disciplinary Actions and Misconduct. The Committee may, at its
discretion, cancel this Shareholder Value Award or reduce the number of
Performance Shares, prorated according to time or other measure as determined
appropriate by the Committee, if during any portion of the Award Period the
Grantee has been (i) demoted to a job classification below those considered by
the Committee to be eligible for Shareholder Value Awards, (ii) subject to
disciplinary action by the Company, or (iii) determined to have committed a
material violation of law or Company policy or to have failed to properly manage
or monitor the conduct of an employee who has committed a material violation of
law or Company policy whereby, in either case, such conduct causes significant
harm to the Company.

c.
Retirement, death, disability or termination due to a plant closing or reduction
in workforce. In the event the Grantee’s employment is terminated due to
retirement as a retiree, death,

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disability, plant closing or reduction in workforce (as defined below), the
number of Performance Shares shall be reduced proportionally for the portion of
the total days during the Award Period in which the Grantee was not an active
employee. Any payment of Performance Shares that have been reduced by operation
of this Section 8(c). shall be paid following the Award Period expiration as
described in Section 6. A retiree is a person who is (i) a retired employee
under the Lilly Retirement Plan; (ii) a retired employee under the retirement
plan or program of a Lilly subsidiary; or (iii) a retired employee under a
retirement program specifically approved by the Committee. Plant closing means
the closing of a plant site or other corporate location that directly results in
termination of employment. 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. The Committee
will be responsible for approving, in its discretion, what is classified as
disability, a plant closing, or a reduction in workforce.
Section 9. Notices, Payments, and Electronic Delivery and Participation
Any notice to be given by the Grantee or Successor Grantee shall be in writing,
and any notice or payment shall be deemed to have been given or made only upon
receipt thereof by the Treasurer of Lilly at Lilly Corporate Center,
Indianapolis, Indiana 46285, U.S.A. Any notice or communication by Lilly in
writing shall be deemed to have been given in the case of the Grantee if mailed
or delivered to the Grantee at any address specified in writing to Lilly by the
Grantee and, in the case of any Successor Grantee, at the address specified in
writing to Lilly by the Successor Grantee. In addition, Lilly may, in its sole
discretion, decide to deliver any documents related to the Shareholder Value
Award and participation in the 2002 Plan by electronic means or request the
Grantee’s consent to participate in the 2002 Plan by electronic means. By
accepting this Shareholder Value Award, the Grantee hereby consents to receive
such documents by electronic delivery and agrees to participate in the 2002 Plan
through an on-line or electronic system established and maintained by Lilly or a
third party designated by Lilly.
Section 10. Waiver
The waiver by Lilly of any provision of this instrument at any time or for any
purpose shall not operate as or be construed to be a waiver of that provision or
any other provision of this instrument at any subsequent time or for any other
purpose.
Section 11. Revocation or Modification
This Shareholder Value Award shall be irrevocable except that Lilly shall have
the right to revoke or modify this Shareholder Value Award under Sections 13(e)
and/or 13(k) of the 2002 Plan or pursuant to Section 8(b) above.
Section 12. Responsibility for Taxes
Regardless of any action Lilly and/or the Grantee’s employer (the “Employer”)
takes with respect to any or all income tax (including federal, state, local and
non-U.S. tax), social insurance, payroll tax, fringe benefits tax, payment on
account or other tax-related items related to the Grantee’s participation in the
2002 Plan and legally applicable to the Grantee (“Tax Related Items”), the
Grantee acknowledges that the ultimate liability for all Tax Related Items is
and remains the Grantee’s responsibility and may exceed the amount actually
withheld by Lilly or the Employer. The Grantee further acknowledges that Lilly
and the Employer (a) make no representations or undertakings regarding the
treatment of any Tax Related Items in connection with any aspect of the
Shareholder Value Award, including the grant of the Shareholder Value Award, the
expiration of the Award Period, the transfer and issuance of any Performance
Shares or the receipt of any cash payment pursuant to this Shareholder Value
Award, the receipt of any dividends and the sale of any

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Performance Shares acquired pursuant to this Shareholder Value Award; and (b) do
not commit to and are under no obligation to structure the terms of the grant or
any aspect of the Shareholder Value Award to reduce or eliminate the Grantee’s
liability for Tax Related Items or achieve any particular tax result.
Furthermore, if the Grantee has become subject to tax in more than one
jurisdiction between the date of grant and the date of any relevant taxable or
tax withholding event, the Grantee acknowledges that the Company and/or the
Employer (or former employer, as applicable) may be required to withhold or
account for Tax Related Items in more than one jurisdiction.
Prior to the applicable taxable or tax withholding event, as applicable, the
Grantee shall pay, or make adequate arrangements satisfactory to Lilly and/or
the Employer to satisfy all Tax Related Items.

a.
If the Shareholder Value Award is paid to the Grantee in cash in lieu of
Performance Shares, the Grantee authorizes the Company and/or the Employer, or
their respective agents, at their discretion, to satisfy any obligation for
Tax-Related Items by withholding from the cash amount paid to the Grantee
pursuant to the Shareholder Value Award or from the Grantee’s wages or other
cash compensation paid to the Grantee by the Company and/or the Employer.

b.
If the Shareholder Value Award is paid to the Grantee in Performance Shares and
the Grantee is not subject to the short-swing profit rules of Section 16(b) of
the 1934 Act, the Grantee authorizes Lilly and/or the Employer, or their
respective agents, at their discretion, to (i) withhold from the Grantee’s wages
or other cash compensation paid to the Grantee by the Company and/or the
Employer, (ii) arrange for the sale of Performance Shares to be issued upon the
expiration of the Award Period (on the Grantee’s behalf and at the Grantee’s
direction pursuant to this authorization or such other authorization as the
Grantee may be required to provide to Lilly or its designated broker in order
for such sale to be effectuated) and withhold from the proceeds of such sale,
and/or (iii) withhold in Performance Shares otherwise issuable to the Grantee
pursuant to this Shareholder Value Award.

c.
If the Shareholder Value Award is paid to the Grantee in Performance Shares and
the Grantee is subject to the short-swing profit rules of Section 16(b) of the
1934 Act, Lilly will withhold in Performance Shares otherwise issuable to the
Grantee pursuant to this Shareholder Value Award, unless the use of such
withholding method is prevented by applicable law or has materially adverse
accounting or tax consequences, in which case the withholding obligation for
Tax-Related Items may be satisfied by one or a combination of the methods set
forth in Section 12(b)(i) and (ii) above.

Depending on the withholding method, Lilly and/or the Employer may withhold or
account for Tax Related Items by considering applicable minimum statutory
withholding amounts or other applicable withholding rates, including maximum
applicable rates, in which case the Grantee will receive a refund of any
over-withheld amount in cash and will not be entitled to the equivalent amount
in Performance Shares. If the obligation for Tax Related Items is satisfied by
withholding Performance Shares as described in Section 12(b)(iii) or Section
12(c) above, for tax purposes, the Grantee will be deemed to have been issued
the full number of Performance Shares to which he or she is entitled pursuant to
this Shareholder Value Award, notwithstanding that a number of Performance
Shares are withheld to satisfy the obligation for Tax Related Items. Lilly may
require Grantee to pay Lilly and/or the Employer any amount of Tax Related Items
that Lilly and/or the Employer may be required to withhold or account for as a
result of any aspect of this Shareholder Value Award that cannot be satisfied by
the means previously described. Lilly may refuse to deliver Performance Shares
or any cash payment to the Grantee if the Grantee fails to comply with the
Grantee’s obligation in connection with the Tax Related Items as described in
this Section 12.

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Section 13. Section 409A Compliance
To the extent applicable, it is intended that this Shareholder Value Award
comply with the requirements of Section 409A of the U.S. Internal Revenue Code
of 1986, as amended and the Treasury Regulations and other guidance issued
thereunder (“Section 409A”), and this Shareholder Value Award shall be
interpreted and applied by the Committee in a manner consistent with this intent
in order to avoid the imposition of any additional tax under Section 409A. This
Shareholder Value Award is subject to Section 13(k) of the 2002 Plan concerning
Section 409A.
Section 14. Prohibition Against Transfer
The right of a Grantee to receive Performance Shares (or the payment of the cash
equivalent) under this Shareholder Value Award may not be transferred except by
operation of law to a duly appointed guardian of the estate of Grantee or to a
Successor Grantee by will or the applicable laws of descent and distribution and
then only subject to the provisions of Sections 7 and 8. A Grantee may not
assign, sell, pledge or otherwise transfer Performance Shares or cash to which
he or she may be entitled hereunder prior to transfer or payment thereof to the
Grantee, and any such attempted assignment, sale, pledge or transfer shall be
void.
Section 15. Severability and Section Headings
If one or more of the provisions of this instrument shall be held invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and the invalid, illegal or unenforceable provisions shall be
deemed null and void; however, to the extent permissible by law, any provisions
which could be deemed null and void shall first be construed, interpreted or
revised retroactively to permit this instrument to be construed so as to foster
the intent of this Shareholder Value Award and the 2002 Plan.
The section headings in this instrument are for convenience of reference only
and shall not be deemed a part of, or germane to, the interpretation or
construction of this instrument.
Section 16. Determinations by Committee
Determinations by the Committee pursuant to any provision of the 2002 Plan,
pursuant to rules, regulations and procedures adopted by the Committee or
pursuant to this instrument, including without limitation (a) the determination
of the amount and method of computation of the Final Stock Price, (b) whether to
make an exception to the rule of Section 7 or adjustments under Section 2 or
Section 3, and (c) what constitutes “misconduct” for purposes of Section 26
below and any other determinations under Section 26, shall be final and binding
on the Grantee and any Successor Grantee.
Section 17. Change in Control
The provisions of Section 12(a)(iii) of the 2002 Plan apply to this Shareholder
Value Award with the following modifications:
a. The only Change in Control event that shall result in a payment under Section
12(a)(iii) of the 2002 Plan shall be consummation of a change in ownership of
the Company as defined in Section 12(b)(i) of the 2002 Plan (a “Transaction”).
b. On the date of the consummation of such Transaction, the Grantee will be paid
an amount equal to the product of (a) the Grantee's award opportunity for the
Shareholder Value Award based on the value of Lilly Stock established for the
consideration to be paid to holders of Lilly Stock in the Transaction, and (b) a
fraction, the numerator of which is the number of days that have elapsed since
the beginning of the Award Period to the date of the consummation of the

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Transaction and the denominator of which is the total number of days in the
Award Period. The payment shall be made in the form of shares of Lilly Stock
immediately prior to the consummation of the Transaction in order to allow the
Lilly Stock to be outstanding and for the Grantee to be eligible to receive the
consideration being paid to Lilly shareholders in connection with the
Transaction.
Section 18. Grantee’s Acknowledgements
In accepting this Shareholder Value Award, the Grantee acknowledges, understands
and agrees that:
a.
the 2002 Plan is established voluntarily by Lilly, it is discretionary in nature
and may be modified, amended, suspended or terminated by Lilly at any time, as
provided in the 2002 Plan;

b.
the Shareholder Value Award is voluntary and occasional and does not create any
contractual or other right to receive future Shareholder Value Awards, or
benefits in lieu of Shareholder Value Awards , even if Shareholder Value Awards
have been granted in the past;

c.
all decisions with respect to future grants of Shareholder Value Awards or other
grants, if any, will be at the sole discretion of Lilly;

d.
the Grantee’s participation in the 2002 Plan is voluntary;

e.
the Shareholder Value Award and any Performance Shares are not intended to
replace any pension rights or compensation;

f.
the Shareholder Value Award and any Performance Shares, and the income and value
of same, are not part of normal or expected compensation or salary for purposes
of calculating any severance, resignation, termination, redundancy, end of
service payments, bonuses, long-service awards, pension or welfare or retirement
benefits or similar payments;

g.
neither the Shareholder Value Award nor any provision of this instrument, the
2002 Plan or the policies adopted pursuant to the 2002 Plan confer upon the
Grantee any right with respect to employment or continuation of current
employment, and in the event that the Grantee is not an employee of Lilly or any
subsidiary of Lilly, the Shareholder Value Award shall not be interpreted to
form an employment contract or relationship with Lilly or any subsidiary of
Lilly;

h.
the future value of the underlying Performance Shares is unknown, indeterminable
and cannot be predicted with certainty;

i.
the value of any Performance Shares acquired upon expiration of the Award Period
may increase or decrease, even below the tax valuation price;

j.
no claim or entitlement to compensation or damages shall arise from forfeiture
of the Shareholder Value Award resulting from the Grantee ceasing to provide
employment or other services to Lilly or the Employer (for any reason whatsoever
and whether or not later found to be invalid or in breach of local labor laws in
the jurisdiction where the Grantee is employed or the terms of the Grantee's
employment agreement, if any) and, in consideration of the grant of the
Shareholder Value Award to which the Grantee is otherwise not entitled, the
Grantee agrees never to institute any claim against the Company, any subsidiary
of Lilly or the Employer, waives the ability, if any, to bring any such claim
and releases the Company, its subsidiaries and the Employer from any such claim;
if, notwithstanding the foregoing, any such claim is allowed by

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a court of competent jurisdiction, then, by participating in the 2002 Plan, the
Grantee will be deemed irrevocably to have agreed not to pursue such claim and
agrees to execute any and all documents necessary to request dismissal or
withdrawal of such claim;
k.
for purposes of the Shareholder Value Award, the Grantee’s employment will be
considered terminated as of the date he or she is no longer actively providing
services to Lilly or a subsidiary of Lilly and the Grantee’s right, if any, to
earn and be paid any portion of the Shareholder Value Award after such
termination of employment or services (regardless of the reason for such
termination and whether or not such termination is later found to be invalid or
in breach of employment laws in the jurisdiction where the Grantee is employed
or the terms of the Grantee's employment agreement, if any) will be measured by
the date the Grantee ceases to actively provide services and will not be
extended by any notice period (e.g., active service would not include any
contractual notice period or any period of “garden leave” or similar period
mandated under employment laws in the jurisdiction where the Grantee is employed
or the terms of the Grantee's employment agreement, if any); the Committee shall
have the exclusive discretion to determine when the Grantee is no longer
actively providing services for purposes of the Shareholder Value Award
(including whether the Grantee may still be considered to be actively providing
services while on a leave of absence);

l.
the Grantee is solely responsible for investigating and complying with any laws
applicable to him or her in connection with the Shareholder Value Award; and

m.
the Company has communicated share ownership guidelines that apply to the
Grantee, and the Grantee understands and agrees that those guidelines may impact
any Performance Shares subject to, or issued pursuant to, the Shareholder Value
Award;

Section 19. No Advice Regarding Grant
Lilly is not providing any tax, legal or financial advice, nor is Lilly making
any recommendations regarding the Grantee’s participation in the 2002 Plan, or
the Grantee’s acquisition or sale of the underlying Performance Shares. The
Grantee is hereby advised to consult with his or her own personal tax, legal and
financial advisors regarding the Grantee’s participation in the 2002 Plan before
taking any action related to the 2002 Plan.
Section 20. Data Privacy
The Grantee hereby explicitly and unambiguously consents to the collection, use
and transfer, in electronic or other form, of the Grantee’s personal data as
described in this Shareholder Value Award and any other Award materials by and
among, as applicable, the Employer, Lilly, its subsidiaries and its affiliates
for the exclusive purpose of implementing, administering and managing the
Grantee’s participation in the 2002 Plan.
The Grantee understands that Lilly and the Employer may hold certain personal
information about the Grantee, including, but not limited to, the Grantee’s
name, home address and telephone number, date of birth, social insurance number
or other identification number, salary, nationality, job title, any shares of
stock or directorships held in Lilly, details of all Shareholder Value Awards or
any other entitlement to shares of stock awarded, canceled, vested, unvested or
outstanding in the Grantee’s favor, for the purpose of implementing,
administering and managing the 2002 Plan (“Data”).
The Grantee understands that Data will be transferred to Merrill Lynch, KPMG
and/or any other stock plan service provider or tax or legal advisor as may be
selected by Lilly in the future, which is assisting in the implementation,
administration and management of the 2002 Plan. The Grantee understands that
these

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recipients may be located in the Grantee’s country, or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
the Grantee’s country. The Grantee authorizes the recipients to receive,
possess, use, retain and transfer the Data, in electronic or other form, for the
sole purpose of implementing, administering and managing the Grantee’s
participation in the 2002 Plan, including any requisite transfer of such Data as
may be required to a broker, escrow agent or other third party with whom any
shares or cash received pursuant to the Award may be deposited. The Grantee
understands that Data will be held only as long as is necessary to implement,
administer and manage the Grantee’s participation in the 2002 Plan. The Grantee
understands that the Grantee may, at any time, request an equity award
transaction statement, request any necessary amendments to Data or refuse or
withdraw the consents herein, in any case without cost, by contacting in writing
the Grantee’s local human resources representative. Further, the Grantee
understands that he or she is providing the consents herein on a purely
voluntary basis. If the Grantee does not consent, or if the Grantee later seeks
to revoke his or her consent, the Grantee’s employment status or service and
career with the Employer will not be adversely affected; the only consequence of
refusing or withdrawing the Grantee’s consent is that the Company would not be
able to grant the Grantee the Shareholder Value Award or other equity awards or
administer or maintain such awards. Therefore, the Grantee understands that
refusal or withdrawal of consent may affect the Grantee’s ability to participate
in the 2002 Plan. For more information on the consequences of the Grantee’s
refusal to consent or withdrawal of consent, the Grantee understands that the
Grantee may contact the Grantee’s local human resources representative.
Section 21. Effective Date
The effective date of this instrument shall be the date of grant.
Section 22. Governing Law and Choice of Venue
The validity and construction of this Shareholder Value Award shall be governed
by the laws of the State of Indiana, U.S.A. without regard to laws that might
cause other law to govern under applicable principles of conflict of laws. For
purposes of litigating any dispute that arises under this Shareholder Value
Award, the parties hereby submit to and consent to the jurisdiction of the State
of Indiana, and agree that such litigation shall be conducted in the courts of
Marion County, Indiana, or the federal courts for the United States for the
Southern District of Indiana, and no other courts, where this Shareholder Value
Award is granted and/or to be performed.
Section 23. Language
If the Grantee has received this instrument or any other document related to the
2002 Plan translated into a language other than English and if the meaning of
the translated version is different than the English version, the English
version will control.
Section 24. Imposition of Other Requirements
If the Grantee relocates to another country, any special terms and conditions
applicable to Shareholder Value Awards granted in such country will apply to the
Grantee, to the extent the Company determines that the application of such terms
and conditions is necessary or advisable for legal or administrative reasons.
In addition, the Company reserves the right to impose other requirements on the
Shareholder Value Award and any Performance Shares acquired under the 2002 Plan,
to the extent the Company determines it is necessary or advisable for legal or
administrative reasons, and to require the Grantee to execute any additional
agreements or undertakings that may be necessary to accomplish the foregoing.

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Section 25. Award Subject to Acknowledgement of Acceptance
Notwithstanding any provisions of this instrument, the Shareholder Value Award
is subject to acknowledgement of acceptance by the Grantee prior to 4:00 PM
(EDT) April 30, 2015, through the website of Merrill Lynch, the Company’s stock
plan administrator. If the Grantee does not acknowledge acceptance of the Award
prior to 4:00 PM (EDT) April 30, 2015, the Shareholder Value Award will be
cancelled, subject to the Committee’s discretion for unforeseen circumstances.
Section 26. Compensation Recovery
At any time during the three years following the date on which the number of
Performance Shares subject to the Shareholder Value Award has been determined
under Section 4 above, the Company reserves the right to and, in appropriate
cases, will seek restitution of all or part of any shares of Lilly stock that
have been issued or cash that has been paid pursuant to this Shareholder Value
Award if:
a. (i)
the number of Performance Shares or the amount of the cash payment was
calculated based, directly or indirectly, upon the achievement of financial
results that were subsequently the subject of restatement of all or a portion of
the Company’s financial statements;

(ii)
the Grantee engaged in intentional misconduct that caused or partially caused
the need for such a restatement; and

(iii)
the number of Performance Shares or the amount of cash payment that would have
been issued or paid to the Grantee had the financial results been properly
reported would have been lower than the number of Performance Shares actually
issued or the amount of cash actually paid.

b.
the Grantee has been determined to have committed a material violation of law or
Company policy or to have failed to properly manage or monitor the conduct of an
employee who has committed a material violation of law or Company policy
whereby, in either case, such conduct causes significant harm to the company.

Furthermore, in the event the number of Performance Shares issued or cash paid
pursuant to this Shareholder Value Award is determined to have been based on
materially inaccurate financial statements or other Company performance measures
or on calculation errors (without any misconduct on the part of the Grantee),
the Company reserves the right to and, in appropriate cases, will :
a.
seek restitution of the Performance Shares or cash paid pursuant to this
Shareholder Value Award to the extent that the number of Performance Shares
issued or the amount paid exceeded the number of Performance Shares that would
have been issued or the amount that would have been paid had the inaccuracy or
error not occurred, or

b. issue additional Performance Shares or make additional payment to the extent
that the number of Performance Shares issued or the amount paid was less than
the correct amount,
This Section 26 is not intended to limit the Company’s power to take such action
as it deems necessary to remedy any misconduct, prevent its reoccurrence and, if
appropriate, based on all relevant facts and circumstances, punish the wrongdoer
in a manner it deems appropriate.

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IN WITNESS WHEREOF, Lilly has caused this Shareholder Value Award to be executed
and granted in Indianapolis, Indiana, by its proper officer.

ELI LILLY AND COMPANY

     
[lly2014123110kex_image1a01.gif]
By: ______________________
John C. Lechleiter
Chairman of the Board, President and
Chief Executive Officer

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