Document:

exv10w2

Exhibit 10.2

[DATE]

[Eligible Director]

Dear                     :

This will confirm that, in accordance with the Restated Directors Stock Plan (the “Plan”) of The
Talbots, Inc. (the “Company”), you have been granted an
Option for                      shares of Talbots common
stock effective
                     ___, ___ (“Grant Date”).

Details of Option Grant

The exercise price for each share of common stock subject to this Option is $                     per share,
which was the closing price of the common stock on the Grant Date as reported by the New York Stock
Exchange.

This Option shall vest for 100% of the shares covered by this Option on                      ___, ___, which is
the last business day of the Company’s ___ fiscal year. Vesting of all or a portion of the shares
covered by this Option may occur earlier under the terms included below. This Option may be
exercised only to the extent the Option is vested and exercisable. The Option will expire ten (10)
years from the Grant Date. This Option is subject to all of the terms of the Plan.

Performance Accelerated Vesting

To the extent not earlier vested, this Option shall vest, in increments, based on the achievement,
over a period of 15 trading days during any 20-consecutive trading day period, of a Closing Price
on the Company’s common stock equaling or exceeding the applicable threshold amounts set forth
below:

	 	 	 
	Vesting Percentage	 	Stock Price Threshold
	 
	[Insert Vesting Percentage]

	 	$[Insert Stock Price]
	[Insert Vesting Percentage]

	 	$[Insert Stock Price]
	[Insert Vesting Percentage]

	 	$[Insert Stock Price]

“Closing Price” means the closing price of Talbots common stock reported by the NYSE or the

 

 

principal securities exchange on which Talbots common stock is then listed or traded.

In the event of any stock split, stock dividend, split-up, spin-off, recapitalization, merger,
consolidation, reorganization, or other similar extraordinary corporate event, the Board of
Directors will equitably adjust the above Stock Price Thresholds to the extent (if any) the Board
determines that the adjustment is necessary or advisable to preserve the intended incentive and
benefit set forth above.

Vesting Upon Cessation of Board Membership

Upon your retirement, death, or any other cessation of your Board service for any reason (other
than for cause, or your unilateral decision to resign from the Board), any unvested shares of
Talbots common stock subject to the Option shall continue to vest and become exercisable following
such retirement, death or other cessation of Board service at the same time or times as such option
shares would otherwise have vested hereunder had such Board service continued. Upon a termination
of Board service for cause or such unilateral resignation, the Option as to any unvested shares
will automatically expire as of the effective date of the cessation of Board service.

Exercise Period Upon Cessation of Board Membership

Upon your retirement, death or other cessation of your Board service for any reason (other than for
cause), this Option will continue to be exercisable with all vested shares and any shares which
subsequently become vested in accordance with the terms of this Option, (i) for a period of three
(3) years following the effective date of your cessation of Board service or (ii) ninety (90) days
following the vesting date of those particular option shares which vest following cessation of
Board service, whichever period is greater. In no event, however, shall this Option be exercisable
after ten (10) years from the Grant Date.

Upon the cessation of Board service for cause, the exercise period for all vested shares will
continue for 90 days following the effective date of such cessation of Board service.

Vesting Upon a Change in Control Event

This Option, to the extent then outstanding and unvested, shall immediately vest upon a Change in
Control Event (as such term is defined in the Company’s 2003 Executive Stock Based Incentive Plan).

Sincerely,

	 	 	 	 	 
	 	THE TALBOTS, INC. 

 	 
	 	By:  	     
 	 
	 	 	     Richard T. O’Connell, Jr. 	 
	 	 	     Secretary, Board of DirectorsEX-10.1

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	%

 

			
	 	 	 
	
	 	
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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	 

 

			
	 	 	 
	
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	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.

 

			
	 	 	 
	
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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.

 

			
	 	 	 
	
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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

 

			
	 	 	 
	
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	 	 	 	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 

 

			
	 	 	 
	
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	 	 	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 

 

			
	 	 	 
	
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	 	 	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.

 

			
	 	 	 
	
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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;

 

			
	 	 	 
	
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	 	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;

 

			
	 	 	 
	
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	 	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 

 

			
	 	 	 
	
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	 	 	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.

 

			
	 	 	 
	
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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 	 
	 

			
	 	 	 
	
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