Exhibit 10.1
Your work. Your life. Your rewards.
 
TOTAL COMPENSATION
Eli Lilly and Company
Performance Award
This Performance Award has been granted for the period of January 1, 2009
through December 31, 2010 by Eli Lilly and Company, an Indiana corporation with
its principal offices in Indianapolis, Indiana (“Lilly” or the “Company”), to
[Grantee].
Performance Levels

                                                                      Box 1  
Box 2   Box 3   Box 4   Box 5   Box 6   Box 7   Box 8
 
          $ X     $ X     $ X     $ X     $ X     $ X          
Aggregate EPS
    < $X       –       –       –       –       –       –       > $X  
 
          $ X     $ X     $ X     $ X     $ X     $ X          
% of Target
    0 %     50 %     75 %     100 %     125 %     150 %     175 %     200 %

 

        (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award
Table of Contents

         
A. Recitals
    3  
B. Performance Award
    3  
Section 1. Statement of Award Period
    3  
Section 2. Number of Shares
    3  
Section 3. Computation of EPS
    4  
Section 4. Determination and Announcement of Award
    4  
Section 5. Committee Election to Pay Cash
    4  
Section 6. Issuance or Transfer of Performance Shares and Payment of Cash Award
    4  
Section 7. Restricted Stock Units
    5  
Section 8. Consideration for Continued Employment Requirement
    5  
Section 9. Adjustments for Certain Employment Status Changes
    5  
Section 10. Compensation Recovery
    6  
Section 11. Notices, Payments and Electronic Delivery and Participation
    6  
Section 12. Waiver
    7  
Section 13. Revocation or Modification
    7  
Section 14. Withholding Tax
    7  
Section 15. No Compensation Deferrals
    8  
Section 16. Non-Transfer of Performance Award
    8  
Section 17. Severability and Section Headings
    9  
Section 18. Determinations by Committee
    9  
Section 19. Change in Control
    9  
Section 20. Nature of 2002 Plan and Performance Award
    9  
Section 21. Data Privacy Notice and Consent
    11  
Section 22. Effective Date
    12  
Section 23. Governing Law
    12  
Section 24. Language
    12  
Section 25. Appendix
    13  

 

     
Page 2   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

A.   Recitals       Under the 2002 LILLY STOCK PLAN (“2002 Plan”), the
Compensation Committee (“Committee”) has determined the form of this Performance
Award and selected the Grantee, an Eligible Employee of the Company, to receive
a Performance Award for the Award Period January 1, 2009, through December 31,
2010. The applicable terms of the 2002 Plan are incorporated in this Performance
Award by reference, including the definitions of terms contained in the 2002
Plan.   B.   Performance 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 Performance Award upon the
following terms and conditions, including any special terms and conditions set
forth in the appendix for the Grantee’s country of residence, if any, as
provided in Section 23:

Section 1. Statement of Award Period

    The Award Period shall begin January 1, 2009 and end December 31, 2010.

Section 2. Number of Shares

    The target number of Performance Shares for the Award Period shall be the
Performance Share value as approved by the Grantee’s supervisor, divided by the
grant date price of $x rounded to the nearest full share. Target shares are set
in box 4. The remaining columns of the table on the first page of this
Performance Award are multiples of the target shares as set forth in the %
Target row and correspond to the applicable level of earnings per share (“EPS”),
subject to adjustment as provided below in this Section or in Section 8.
Grantees may view their Performance Award by logging on to the Merrill Lynch
website at http://benefits.ml.com after March 31 of each grant year.

    The number of Performance Shares for the Award Period and the EPS ranges on
the first page of this Performance Award will be adjusted by the Committee under
Section 4(b) of the 2002 Plan upon the occurrence, prior to the effective date
of issuance or transfer of shares for payment, of any subdivision or combination
of shares of Lilly Stock, or a stock dividend, capital reorganization,
recapitalization, or consolidation or merger with Lilly as the surviving
corporation, or if additional shares or new or different shares or other
securities of Lilly or any other issuer are distributed with respect to the
shares of Lilly Stock through a spin-off, exchange offer, or other extraordinary
distribution occurring prior to the effective date of issuance or transfer of
shares for payment. A fractional share resulting from such adjustment shall in
the discretion of the Committee either be paid in cash or rounded.

 

     
Page 3   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

Section 3. Computation of EPS

    The EPS for the Award Period shall be computed in accordance with Section 18
and using the following procedures:

  a.   A determination of adjusted consolidated net income ascertained from the
Company’s audited consolidated financial statements shall be made for each
fiscal year in the Award Period in accordance with generally accepted accounting
principles, adjusted to the extent deemed appropriate by the Committee for any
unusual items deemed significant by the Committee.     b.   The number of shares
of outstanding Lilly Stock used to compute consolidated earnings per share shall
be determined as of the end of each fiscal year in the Award Period on a diluted
basis or its equivalent in accordance with generally accepted accounting
principles.     c.   To calculate consolidated earnings per share for each
fiscal year in the Award Period, the adjusted consolidated net income shall be
divided by the number of shares of outstanding Lilly Stock as computed in
accordance with subsection (b) above and the quotient rounded to the nearest
cent.     d.   To determine the EPS for the Award Period, the EPS amounts for
each fiscal year as determined above shall be added.

Section 4. Determination and Announcement of Award

    After the EPS for the Award Period is computed, the EPS and the resulting
number of Performance Shares for Grantee (determined in accordance with
Sections 2 and 8), together with the Committee’s election between cash and
shares of Lilly Stock under Section 5, shall be communicated to Grantee.

Section 5. Committee Election to Pay Cash

    At any time until the determination of EPS and the resulting number of
Performance Shares, the Committee may, if it so elects, determine to pay part or
all of any Performance 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 condition relating to withholding tax stated in Section 14,
Lilly shall issue or transfer to the Grantee any Performance Shares to be issued
or transferred under Section 4 and pay to the Grantee any cash determined to be
payable under that section within a sixty day period starting the day after the
Award Period expiration (as stated in Section 1) and ending on the sixtieth day
after the Award Period expiration, but not later than December 31 of the year
after the Award Period expires. 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.

 

     
Page 4   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

Section 7. Restricted Stock Units

    Any shares issued or transferred under this grant shall be in the form of
restricted stock units that will be governed by the provisions of Section 10 of
the 2002 Plan and the restricted stock unit grant document to be provided to the
Grantee. The Restriction Period shall be approximately one year from the date of
valuation, as specified in the restricted stock unit grant document. The
restrictions shall lapse upon the earliest of (a) the expiration of the
Restriction Period if all conditions related to the Restriction Period have been
met; (b) the date of Grantee’s death, disability or retirement as a retiree (as
defined in Section 9(c)); or (c) a change in control as provided under
Section 12(a)(iii) of the 2002 Plan, unless the Committee specifies in the
restricted stock unit grant document that Section 12 (a)(iii) shall not apply.

Section 8. Consideration for 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 9 (c), then all rights of the Grantee under this Performance Award shall
terminate with respect to the Award Period. The Company shall incur no liability
to Grantee under this Performance 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 9. 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 otherwise required by law, 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 and Disciplinary Actions. The Committee may, at
its discretion, reduce the number of Performance Shares, prorated according to
time, for any portion of the Award Period during which the Grantee has been
(i) demoted to a job classification below those considered by the Committee to
be eligible for Performance Awards, or (ii) subject to disciplinary action by
the Company. In the case of disciplinary action during the Award Period, the
senior most vice president responsible for human resources may also, in his or
her discretion, withhold payment of this Performance Award entirely.     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, 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

 

     
Page 5   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

      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 senior most vice president
over human resources of Lilly will be responsible for approving, in his or her
discretion, what is classified as disability, a plant closing, or a reduction in
workforce.

Section 10. Compensation Recovery

    The Company reserves the right to and, in appropriate cases, will, seek
restitution of all or part of any performance shares or cash paid under this
Performance Award if:

  a.   the amount of the payment was based upon the achievement of earnings per
share (EPS) that were subsequently the subject of restatement of all or a
portion of the Company’s financial statements;     b.   the Grantee engaged in
intentional misconduct that caused or partially caused the need for such a
restatement; and     c.   the amount of the payment that would have been made to
the Grantee had the financial results been properly reported would have been
lower than the amount actually paid.

    In the event that the Company determines to seek restitution under this
section at a time when the Performance Shares are still subject to the
restrictions set forth in Section 7, then, notwithstanding any contrary language
in the restricted stock unit grant, the conditions of the restriction shall be
deemed to have been breached by the Grantee, and all interest of the grantee in
the restricted performance shares shall immediately terminate and be forfeited.

    This section is not intended to limit the Company’s power to take such
action as it deems necessary to remedy the misconduct, prevent its reoccurrence
and, if appropriate, based on all relevant facts and circumstances, punish the
wrongdoer in a manner it deems appropriate.

Section 11. 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 Performance Award
grant or future awards under the 2002 Plan by electronic means or request the
Grantee’s consent to participate in the 2002 Plan by electronic means. By
accepting this Performance Award, the Grantee hereby consents to receive such
documents by electronic delivery and agrees to participate in the

 

     
Page 6   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

    2002 Plan through an on-line or electronic system established and maintained
by Lilly or another third party designated by Lilly.

Section 12. 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 13. Revocation or Modification

    This Performance Award shall be irrevocable except that Lilly shall have the
right to revoke or modify this Performance Award under Section 13(e) of the 2002
Plan.

Section 14. Withholding Tax

    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, payment on
account or other tax-related withholding (“Tax Related Items”), the Grantee
acknowledges that the ultimate liability for all Tax Related Items legally due
by the Grantee is and remains the Grantee’s responsibility and 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 Performance Award,
including the grant of the Performance 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 Performance Award, the receipt of any
dividends and the sale of any Performance Shares acquired pursuant to this
Performance Award; and (b) do not commit to structure the terms of the grant or
any aspect of the Performance Award to reduce or eliminate the Grantee’s
liability for Tax Related Items.

    Prior to the applicable tax event, the Grantee shall pay, or make adequate
arrangements satisfactory to Lilly and/or the Employer to satisfy all Tax
Related Items. In this regard, the Grantee authorizes Lilly and/or the Employer
to withhold all applicable Tax Related Items legally payable by the Grantee from
the Grantee’s wages or other cash compensation payable to the Grantee by Lilly
and/or the Employer or from any cash payment received upon expiration of the
Award Period in accordance with Section 6. Alternatively, or in addition, if
permissible under local law, the Grantee authorizes Lilly and/or the Employer,
at their discretion, to (i) withhold from the proceeds of the sale of
Performance Shares acquired pursuant to this Performance Award, (ii) arrange for
the sale of Performance Shares to be issued upon the expiration of the Award
Period (at the Grantee’s behalf and at the Grantee’s direction pursuant to this
authorization), and/or (iii) withhold in Performance Shares otherwise issuable
to the Grantee pursuant to this Performance Award, provided that Lilly and/or
the Employer shall withhold only the number of Performance Shares necessary to
satisfy the minimum withholding amount (or such other amount that, as determined
by Lilly, will not trigger unfavorable accounting). If the obligation for Tax
Related Items is satisfied by withholding Performance Shares as described in
(iii) herein, 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 Performance
Award, notwithstanding that a number of Performance Shares are withheld to
satisfy the obligation for Tax Related Items. The Grantee shall pay to Lilly
and/or the Employer any amount of Tax Related

 

     
Page 7   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

    Items that Lilly and/or the Employer may be required to withhold as a result
of any aspect of this Performance 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 herein.

Section 15. Section 409A Compliance

    To the extent applicable, it is intended that this Performance 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 Performance 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 Performance Award is
subject to Section 13(k) of the 2002 Plan concerning Section 409A.

Section 16. Non-Transfer of Performance Award

    No right in or under this Performance Award is transferable except by
operation of law to a duly appointed guardian of the estate of Grantee or upon
the death of the Grantee by will or the applicable laws of descent and
distribution and then only subject to the provisions of Sections 8 and 9.

 

     
Page 8   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

Section 17. 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 Performance 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 18. 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 the determination of
the amount and method of computation of EPS, whether to make an exception to the
rule of Section 8, or adjustments under Section 2 or Section 3, shall be final
and binding on the Grantee and any Successor Grantee.

Section 19. Change in Control

    The provisions of Section 12(a)(iii) of the 2002 Plan apply to this
Performance 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 Performance Award based on the Company’s expected
results for the Award Period (as determined by the company’s last approved
forecast prior to the consummation of the Transaction, not considering the
impact of 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 Transaction and the denominator of which is the
total number of days in the Award Period. The payment will be deemed to have
been made immediately prior to the consummation of the Transaction in order to
allow the Performance Shares paid to be deemed outstanding and eligible to
receive the consideration being paid to Lilly shareholders in the Transaction.

Section 20. Nature of 2002 Plan and Performance Award

    In accepting this Performance Award, the Grantee acknowledges 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;

 

     
Page 9   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

  b.   the Performance Award is voluntary and occasional and does not create any
contractual or other right to receive future Performance Awards, or benefits in
lieu of Performance Awards even if Performance Awards have been granted
repeatedly in the past;     c.   all decisions with respect to future grants of
Performance Awards, if any, will be at the sole discretion of Lilly;     d.  
the Grantee’s participation in the 2002 Plan is voluntary;     e.   the
Performance Award is an extraordinary item that does not constitute compensation
of any kind for services of any kind rendered to Lilly or the Employer and which
is outside the scope of the Grantee’s employment contract, if any;     f.   the
Performance Award is not part of normal or expected compensation or salary for
any purposes, including, but not limited to, calculation of any severance,
resignation, termination, redundancy, end of service payments, bonuses,
long-service awards, pension or welfare or retirement benefits or similar
payments and in no event should be considered as compensation for, or relating
in any way to, past services for Lilly or the Employer;     g.   neither the
Performance 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 Performance 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 and cannot be predicted with
certainty;     i.   the value of any Performance Shares acquired upon expiration
of the Award Period may increase or decrease in value, even below the tax
valuation price;     j.   no claim or entitlement to compensation or damages
shall arise from termination of the Performance Award or from any diminution in
value of the Performance Award or Performance Shares acquired upon expiration of
the Award Period resulting from termination of the Grantee’s employment by Lilly
or the Employer (for any reason whatsoever and whether or not in breach of local
labor laws) and the Grantee irrevocably releases Lilly and the Employer from any
such claim that may arise; if, notwithstanding the foregoing, any such claim is
found by a court of competent jurisdiction to have arisen, then, by accepting
this Performance Award, the Grantee shall be deemed irrevocably to have waived
his or her entitlement to pursue such claim;

 

     
Page 10   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

  k.   in the event of termination of the Grantee’s employment (whether or not
in breach of local labor laws), the Grantee’s right to receive Performance
Shares upon expiration of the Award Period will terminate effective as of the
date the Grantee is no longer actively employed (unless one of the adjustments
in Section 8 applies) and will not be extended by any notice period mandated
under local law (e.g., active employment would not include a period of “garden
leave” or similar period pursuant to local law); the Committee shall have the
exclusive discretion to determine when the Grantee is no longer actively
employed for purposes of the Performance Award;     l.   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; and     m.   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 21. Data Privacy Notice and Consent

    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 Performance Award 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 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 Performance Awards or any other
entitlement to shares 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 may be transferred to any
third parties assisting in the implementation, administration and management of
the 2002 Plan, that these 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 purposes 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 received upon expiration of the Award Period 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. 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

 

     
Page 11   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award

    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 22. Effective Date

    The effective date of this instrument shall be the date of grant.

Section 23. Governing Law

    The validity and construction of this Performance 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 Performance 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 Performance Award
is granted and/or to be performed.

Section 24. 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
translated version is different than the English version, the English version
will control.

 

     
Page 12   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.

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

 

Eli Lilly and Company Performance Award
Section 25. Appendix

    If the Grantee is a non-U.S. resident, his or her participation in the 2002
Plan and this Performance Award will be subject to the special terms and
conditions set forth in the appendix for the Grantee’s country of residence, if
any (“Appendix”). The Appendix constitutes part of this instrument.

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

            ELI LILLY AND COMPANY
      By:   /s/ John Lechleiter         John Lechleiter        Chairman of the
Board and Chief Executive Officer     

     
Page 13   (LILLY LOGO) [c48185c4818501.gif]
Answers That Matter.