Document:

EMPLOYMENT AGREEMENT

 

 

THIS
AGREEMENT is made as of the 28th day of October 2022, by and among ENB Financial Corp (“Corporation”), The Ephrata
National Bank (“Bank”), and Rachel G. Bitner (“Executive”), an adult individual residing at 740 Dustin
Drive, Lancaster, PA 17601.

 

WITNESSETH:

 

WHEREAS, the Corporation is a bank
holding company;

 

WHEREAS, the Bank is a subsidiary of
the Corporation;

 

WHEREAS, the Corporation and the Bank
wish to employ the Executive as Executive Vice President/Chief Financial Officer and Treasurer in accordance with the terms and conditions
set forth herein;

 

WHEREAS, Executive is not a party nor subject
to any employment, noncompete, non-solicitation or restrictive covenant agreements, or any other restrictions or agreements that would
hinder or limit his ability to fully perform his duties hereunder, except as identified on Schedule I attached hereto and deemed an integral
part hereof;

 

WHEREAS, as additional consideration for entering
into this Agreement, the Corporation is providing the Executive with a Restricted Stock Unit Grant of the Corporation’s Common Stock
as delineated on Schedule 2 hereto; and

 

WHEREAS, Executive wishes to
serve the Corporation and the Bank in accordance with the terms and conditions herein.

 

AGREEMENT:

 

NOW THEREFORE, in consideration
of the mutual covenants herein, the parties hereto, intending to be legally bound, agree as follows:

 

		1.	Employment. The Corporation and the Bank hereby employ Executive and Executive hereby accepts employment with the Corporation
and the Bank, under the terms and conditions set forth in this Agreement.

 

		2.	Duties of Executive. Executive shall serve as the Executive Vice President/Chief Financial Officer and Treasurer of
the Corporation and of the Bank reporting only to the President and CEO, and to the Board of Directors, or committee thereof, as may be
required by law, rule or regulation. Executive shall have such other duties and hold such other titles as may be given to her from time
to time by the Boards of Directors of the Corporation and the Bank provided that such duties are consistent with the Executive’s
position as Executive Vice President/Chief Financial Officer and Treasurer.

 

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		3.	Engagement in Other Employment. Executive shall devote all of her working time, ability and attention to the business
of the Corporation and the Bank and/or their subsidiaries or affiliates, during the term of this Agreement. The Executive shall seek approval
of the President and CEO of the Corporation and of the Bank in writing before the Executive engages in any other business or commercial
duties or pursuits, including but not limited to, directorships of other companies. Under no circumstances may the Executive engage in
any business or commercial activities, duties or pursuits which compete with the business or commercial activities of the Corporation,
the Bank and/or any of their subsidiaries or affiliates nor may the Executive serve as a director or officer or in any other capacity
in a company which competes with the Corporation, the Bank and/or any of their subsidiaries
or affiliates. Executive shall not be precluded, however, upon written notification to the President and CEO, from engaging in voluntary
or philanthropic endeavors, from engaging in activities designed to maintain and improve her professional skills, or from engaging in
activities incident or necessary to personal investments, so long as they are, in the President and CEO’s reasonable opinion, not
in conflict with or detrimental to the Executive’s rendition of services on behalf of the Corporation, the Bank and/or any of their
subsidiaries or affiliates.

 

		4.	Term of Agreement.

 

		(a)	This Agreement shall be for a three (3) year period (the “Employment Period”) beginning October 28, 2022, and if not previously
terminated pursuant to the terms of this Agreement, the Employment Period shall end three (3) years later (the “Initial Term”).
The Employment Period shall be extended automatically for successive three (3) year terms after the expiration of the Initial Term (each
successive term shall be referred to as a “Renewal Term”) unless the Corporation, the Bank, or Executive gives written notice
on non-renewal of this Employment Agreement to the other not less than one hundred eighty (180) days before the expiration of the Initial
Term or any Renewal Term, the Employment Period shall be and continue for a three (3) year period thereafter. References in the Agreement
to “Employment Period” shall refer to the Initial Term of this Agreement and any Renewal Term. It is the intention of the
parties that this Agreement be “Evergreen” unless (i) either party gives written notice to the other party of his or its intention
not to renew this Agreement as provided above or (ii) this Agreement is terminated pursuant to Section 4(b) hereof.

 

		(b)	Notwithstanding the provisions of Section 4(a) of this Agreement, this Agreement shall terminate automatically for Cause (as defined
herein) upon written notice from the Board of Directors of the Corporation or the Bank to Executive. As used in this Agreement, “Cause”
shall mean any of the following:

 

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(i)       Executive’s
conviction of or plea of guilty or nolo contendere to a felony, a crime of falsehood or a crime involving moral turpitude, or the actual
incarceration of Executive;

 

(ii)       Executive’s
failure to follow the good faith lawful instructions of the Boards of Directors or the President and CEO of the Corporation or the Bank
with respect to their operations;

 

(iii)       Executive’s
willful failure to substantially perform Executive’s duties to the Corporation or the Bank, other than a failure resulting from
Executive’s incapacity because of physical or mental illness, as provided in subsection (d) of this Section 4;

 

(iv)       Executive’s
intentional violation of the provisions of this

Agreement;

 

(v)       dishonesty
or gross negligence of the Executive in the performance of her duties;

 

(vi)       Executive’s
removal or prohibition from being an institutional-affiliated party by a final order of an appropriate federal banking agency pursuant
to Section 8(e) or 8(g) of the Federal Deposit Insurance Act or by any state or federal regulatory agency or any other correspondence
from the Bank’s regulators instructing the Bank to terminate, remove or limit the authority or activities of the Executive;

 

(vii)       conduct
by the Executive as determined by an affirmative vote of seventy-five percent (75%) of the disinterested members of the Board of Directors
of the Corporation which brings public discredit to the Corporation or the Bank and which results or may be reasonably expected to result
in material financial or reputational harm to the Corporation or the Bank;

 

(viii)       Executive’s
breach of fiduciary duty involving personal profit;

 

(ix)unlawful harassment by the Executive
against employees, customers, business associates, contractors, or vendors of the Corporation or the Bank, as determined by an affirmative
vote of seventy-five percent (75%) of the disinterested members of the Board of Directors of the Corporation;

 

(x)       the
willful violation by the Executive of the provisions of Sections 9, 10, or 11 hereof, after notice from the Corporation;

 

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(xi)       the
willful violation of any law, rule or regulation governing banks or bank officers or any Bank policy, or receipt of any cease and desist
order issued by a bank regulatory authority;

 

(xii)       theft
or abuse by Executive of the Corporation’s or the Bank’s property or the property of the Corporation’s or the Bank’s
customers, employees, contractors, vendors, or business associates;

 

(xiii)       any
act of fraud, misappropriation or personal dishonesty;

 

(xiv)       insubordination
as determined by an affirmative vote of seventy-five percent (75%) of the disinterested members of Board of Directors of the Corporation,
after written notice from the Corporation and a failure to cure such violation within fifteen (15) days of said written notice;

 

(xv)       the
existence of any material conflict between the interests of the Corporation or the Bank and the Executive that is not disclosed in writing
by the Executive to the Corporation and the Bank and approved in writing by the Boards of Directors of the Corporation and the Bank; or

 

(xvi)       gross
neglect or incompetence in the performance of one’s duties as determined by the affirmative vote of seventy-five percent (75%) of
the disinterested members of the Board of Directors of the Corporation.

 

If this Agreement is terminated for
Cause, all of Executive’s rights under this Agreement shall cease as of the effective date of such termination, except for the rights
under Section 20 hereof with respect to arbitration.

 

		(c)	Notwithstanding the provisions of Section 4(a) of this Agreement, this Agreement shall terminate automatically upon Executive’s
voluntary termination of employment for Good Reason. The term “Good Reason” shall mean (i) the assignment of duties and responsibilities
materially inconsistent with Executive’s status as Executive Vice President/Chief Financial Officer and Treasurer of the Corporation
or of the Bank, (ii) a reassignment which requires Executive to move her principal residence or her office more than twenty five (25)
miles from the Bank’s principal executive office immediately prior to this Agreement, (iii) any removal of Executive from office
or any materially adverse change in the terms, conditions, responsibilities, duties, reporting, compensation, or benefits of Executive’s
employment, except for any termination of Executive’s employment for Cause, or unless in accordance with this Agreement, (iv) any
reduction in the Executive’s Annual Base Salary as in effect on the date hereof or as the same may be increased from time to time
unless such reduction is the result of a reduction applicable to all employees (provided that such reduction does not result in a proportionately
greater adverse change in the Annual Base Salary of Executive as compared with any other executive officers of the Bank or the executive
group of which Executive is a member), or (v) any failure of the Bank to provide the Executive with benefits at least as favorable as
those enjoyed by the Executive during the Employment Period under any of the pension, life insurance, medical, health and accident, disability
or other employee plans of the Bank, or the taking of any action that would materially reduce any of such benefits unless such reduction
is part of a reduction applicable to all employees or the executive group which the Executive is a member of at the time of the change.

 

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Executive shall within sixty (60)
days of the occurrence of any of the foregoing events, provide notice to the Bank of the existence of the condition and provide the Bank
thirty (30) days in which to cure such condition. In the event that the Bank does not cure the condition within thirty (30) days of such
notice, Executive may resign from employment for Good Reason by delivering written notice ("Notice of Termination") to the Bank.

 

If such termination occurs for Good
Reason and such termination constitutes a Separation of Service as defined by Internal Revenue Code of 1986, as amended (“Code”)
Section 409A (“Separation of Service”), then the Bank shall pay Executive an amount equal to the Executive’s remaining
Annual Base Salary that would otherwise be due and payable under the Agreement to the Executive for the remaining Employment Period, minus
applicable taxes and withholdings, payable in equal monthly installments over the remaining Employment Period. Such amount in the aggregate
shall not exceed 2.99 times Executive’s Annual Base Salary or be less than 2.00 times Executive’s Annual Base Salary. In addition,
for a period of two (2) years from the date of Separation of Service, or until Executive secures benefits of comparable coverage through
other employment, whichever shall first occur, Executive shall receive a continuation of all life, disability, medical insurance and other
normal health and welfare benefits in effect or that would otherwise be provided, and available with respect to Executive and her spouse
during the two (2) years prior to her termination of employment at the time of her termination of employment under the terms of and as
provided by the medical insurance plan then in effect in which she and her spouse were participants, or, if the Bank cannot legally provide
such benefits because Executive is no longer an employee, or future law or plans do not permit so, the Bank shall reimburse Executive
in an amount equal to the monthly premium paid by her to obtain comparable coverage for employee benefits which she and her spouse enjoyed
prior to termination, subject to Code Section 409A if applicable.

 

		(d)	Notwithstanding the provisions of Section 4(a) of this Agreement, this Agreement shall terminate automatically upon Executive’s
Disability and Executive’s rights under this Agreement shall cease as of the date of such termination; provided, however, that Executive
shall nevertheless be entitled to receive any amount payable under any disability plan of the Bank for which she is eligible. Disability
shall have the meaning provided in Code Section 409A and the regulations promulgated thereunder.

 

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		(e)	In the event that Executive terminates her employment without Good Reason as defined in Section 4(c), or retires, all of Executive’s
rights under this Agreement shall cease as of the effective date of such termination, except for the rights under Paragraph 20 hereof
with respect to arbitration.

 

		(f)	Upon the expiration or termination of the Employment Period and this Agreement, all of Executive’s rights under this Agreement
shall cease; however, the provisions of Paragraphs 9 and 10 shall survive the expiration or termination of the Employment Period and the
termination of this Agreement regardless of reason.

 

		(g)	Executive agrees that in the event her employment under this Agreement is terminated, Executive shall resign and by this Agreement
does upon such event resign as a director of the Corporation and the Bank, or any affiliate or subsidiary thereof, if she is then serving
as a director of any of such entities.

 

		5.	Employment Period Compensation.

 

		(a)	Annual Base Salary. For services performed by Executive under this Agreement, the Bank shall pay Executive an Annual Base Salary
during the Employment Period at the rate of $202,144.80 per year, minus applicable withholdings and deductions, payable at the same times
as salaries are payable to other executive employees of the Bank. The Bank may, from time to time, increase Executive’s Annual Base
Salary or in the event a reduction applicable to all employees reduce Executive’s Annual Base Salary, (provided that such reduction
does not result in a proportionately greater adverse change in the Annual Base Salary of Executive as compared with other executive officers
of the Bank or the executive group of which Executive is a member), and any and all such increases or reductions shall be deemed to constitute
amendments to this Section 5(a) to reflect the increased or reduced amounts, effective as of the date established for such increases or
reductions by the Board of Directors of the Bank or any committee of such Board.

 

		(b)	Bonus. For services performed by Executive under this Agreement, the Bank may, from time to time, pay a bonus or bonuses to
Executive as the Bank or an affiliate thereof, in its sole discretion, deems appropriate. The payment or nonpayment of any such bonuses
shall not reduce or otherwise affect any other obligation of the Bank to Executive provided for in this Agreement. In addition, the Corporation
shall provide (as of the date of execution of this Agreement) the Executive with a Restricted Stock Unit Grant of the Corporation’s
Common Stock as delineated on Schedule 2 hereto.

 

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		(c)	Paid Time-Off. During the term of this Agreement, Executive shall be entitled to Paid Time-Off in accordance with the manner
provided under the paid time-off plan then in effect.

 

		(d)	Employee Benefit Plans. During the term of this Agreement, Executive shall be entitled to participate in or receive the benefits
of any employee benefit plan currently in effect at the Bank, subject to the terms of said plan, until such time that the Board of Directors
of the Bank authorize a change in such benefits. The Bank shall not make any changes in such plans or benefits which would materially
and adversely affect Executive’s rights or benefits thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Bank, or the executive group which the Executive is a member of at the time of the change, and does not result
in a proportionately greater adverse change in the rights of or benefits to Executive as compared with any other executive officers of
the Bank or the executive group of which Executive is a member. Nothing paid to Executive under any plan or arrangement presently in effect
or made available in the future shall be deemed to be in lieu of the salary payable to Executive pursuant to Section 5(a) hereof.

 

		(e)	Business Expenses. During the term of this Agreement, Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him, which are properly accounted for, in accordance with the policies and procedures established by the Board of
Directors of the Bank for its executive officers.

 

		6.	Termination of Employment Following Change in Control.

 

		(a)	If a Change in Control (as defined in Section 6(b) of this Agreement) shall occur and Executive experiences an involuntary separation
of service as defined in Code Section 409A (“Separation of Service”) without Cause within two (2) years after the Change in
Control, then the provisions of Section 7 of this Agreement shall apply.

 

		(b)	As used in this Agreement, “Change in Control” shall mean the change in ownership or effective control of the Corporation
as further defined by Treasury Regulation §1.409A-3(i)(5).

 

		7.	Rights in Event of Termination Following a Change in Control.

 

		(a)	In the event that Executive is involuntarily terminated without Cause within two (2) years after a Change in Control (as defined in
Section 6(b) of this Agreement) and such termination of employment constitutes a Separation of Service, then the Bank shall pay Executive
a lump sum amount equal to 2.5 times the Executive’s Annual Base Salary, minus applicable taxes and withholdings, payable within
thirty (30) days of Executive’s Separation of Service. In addition, for a period of two (2) years from the date of Separation of
Service, or until Executive secures benefits of comparable coverage through other employment, whichever shall first occur, Executive shall
receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect
to Executive and her spouse during the two (2) years prior to her termination of employment at the time of her termination of employment
under the terms of and as provided by the medical insurance plan then in effect in which she and her spouse were participants, or, if
the Bank cannot legally provide such benefits because Executive is no longer an employee, or future law or plans do not permit so, the
Bank shall reimburse Executive in an amount equal to the monthly premium paid by her to obtain comparable coverage for employee benefits
which she and her spouse enjoyed prior to termination, subject to Code Section 409A if applicable.

 

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		(b)	Executive shall not be required to mitigate the amount of any payment provided for in this Section 7 by seeking other employment or
otherwise. Unless otherwise agreed to in writing, the amount of payment or the benefit provided for in this Section 7 shall not be reduced
by any compensation earned by Executive as the result of employment by another employer or by reason of Executive’s receipt of or
right to receive any retirement or other benefits after the date of termination of employment or otherwise.

 

This Section 7 and the provisions
and terms hereof shall be subject to Sections 19 and 21 of this Agreement.

 

		8.	Rights in Event of Termination of Employment Absent Change in Control.

 

		(a)	In the event that Executive’s employment is involuntarily terminated by the Corporation and the Bank without Cause and no Change
in Control has occurred at the date of such termination and such termination constitutes a Separation of Service, then the Bank shall
pay Executive an amount equal to the Executive’s remaining Annual Base Salary that would otherwise be due and payable under the
Agreement to the Executive for the remaining Employment Period, minus applicable taxes and withholdings, payable in equal monthly installments
over the remaining Employment Period. Such amount in the aggregate shall not exceed 2.99 times Executive’s Annual Base Salary or
be less than 2.00 times Executive’s Annual Base Salary. In addition, for a period of two (2) years from the date of Separation of
Service, or until Executive secures benefits of comparable coverage through other employment, whichever shall first occur, Executive shall
receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect
to Executive during the two (2) years prior to her termination of employment at the time of her termination of employment under the terms
of and as provided by the medical insurance plan then in effect in which she and her spouse were participants, or, if the Bank cannot
legally provide such benefits because Executive is no longer an employee, or future law or plans do not permit so, the Bank shall reimburse
Executive in an amount equal to the monthly premium paid by her to obtain comparable coverage for employee benefits which she enjoyed
prior to termination, subject to Code Section 409A if applicable.

 

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		(b)	Executive shall not be required to mitigate the amount of any payment provided for in this Section 8 by seeking other employment or
otherwise. Unless otherwise agreed to in writing, the amount of payment or the benefit provided for in this Section 8 shall not be reduced
by any compensation earned by Executive as the result of employment by another employer or by reason of Executive’s receipt of or
right to receive any retirement or other benefits after the date of termination of employment or otherwise.

 

This Section 8 and the provisions and terms
hereof shall be subject to Sections 19 and 21 of this Agreement.

 

		9.	Covenant Not to Compete.

 

		(a)	Executive hereby acknowledges and recognizes the highly competitive nature of the business of the Corporation and the Bank and accordingly
agrees that, during employment and for two years following termination of employment regardless of the reason for termination, Executive
shall not, except as otherwise permitted in writing by the Bank:

 

		(i)	(A) in any county in which, as of the date of Executive’s termination, a branch, office or other facility of the Corporation
or the Bank is located or in any county contiguous to such county, or (B) in the area which is within 25 miles from any branch office
or other facility of the Corporation or Bank (“Non-Competition Area”), be engaged, directly or indirectly, either for her
own account or as agent, consultant, employee, partner, officer, director, proprietor, investor (except as an investor owning less than
5% of the stock of a publicly owned company) or otherwise of any person, firm, corporation or enterprise engaged in (1) the banking (including
bank holding company) or financial services industry, or (2) any other activity in which the Corporation or the Bank or any of their subsidiaries
are engaged during the Employment Period;

 

		(ii)	provide financial or other assistance to any person, firm, corporation, or enterprise engaged in (1) the banking (including bank holding
company) or financial services industry, or (2) any other activity in which the Corporation or the Bank or any of their subsidiaries are
engaged during the Employment Period, in the Non-Competition Area;

 

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		(iii)	directly or indirectly solicit persons or entities who were customers or referral sources of the Corporation, the Bank or their subsidiaries
within one (1) year prior to Executive’s termination of employment, to become a customer or referral source of a person or entity
other than the Corporation, the Bank or their subsidiaries; or

 

		(iv)	directly or indirectly solicit employees of the Corporation, the Bank or their subsidiaries who were employed within two (2) years
prior to Executive’s termination of employment to work for anyone other than the Corporation, the Bank or their subsidiaries.

 

		(b)	It is expressly understood and agreed that, although Executive and the Corporation and the Bank consider the restrictions contained
in Section 9(a) hereof reasonable for the purpose of preserving for the Corporation and the Bank and their subsidiaries their good will
and other proprietary rights, if a final judicial determination is made by a court having jurisdiction that the time or territory or any
other restriction contained in Section 9(a) hereof is an unreasonable or otherwise unenforceable restriction against Executive, the provisions
of Section 9(a) hereof shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such
other extent as such court may judicially determine or indicate to be reasonable.

 

		10.	Unauthorized Disclosure. During the term of her employment hereunder, or at any later time, Executive shall not, without
the written consent of the Board of Directors of the Bank or a person authorized thereby, knowingly disclose to any person, other than
an employee of the Corporation or the Bank or a person to whom disclosure is reasonably necessary or appropriate in connection with the
performance by Executive of her duties as an executive of the Bank, any material confidential information obtained by her while in the
employ of the Bank with respect to any of the Corporation’s and the Bank’s services, products, improvements, formulas, designs
or styles, processes, customers, methods of business, strategic, business, capital, or human resource plans, or any business practices
the disclosure of which could be or will be damaging to the Corporation or the Bank; provided, however, that confidential information
shall not include any information known generally to the public (other than as a result of unauthorized disclosure by Executive or any
person with the assistance, consent or direction of the Executive) or any information of a type not otherwise considered confidential
by persons engaged in the same business or a business similar to that conducted by the Corporation and the Bank or any information that
must be disclosed as required by law.

 

		11.	Work Made for Hire. Any work performed by the Executive under this Agreement is considered a “Work Made for Hire”
as the phrase is defined by the Copyright Act of 1976 and shall be owned by and for the express benefit of Bank and its subsidiaries and
affiliates. In the event it is established that such work does not qualify as a Work Made for Hire, the Executive agrees to and does hereby
assign to Bank, and its affiliates and subsidiaries, all of her rights, title, and/or interest in such work product, including, but not
limited to, all copyrights, patents, trademarks, and proprietary rights.

 

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		12.	Return of Company Property and Documents. The Executive agrees that, at the time of termination of her employment, regardless
of the reason for termination, she will deliver to Bank and its subsidiaries and affiliates, any and all company property, including,
but not limited to, keys, security codes or passes, mobile telephones, laptops, electronic notebooks, smart devices, automobiles, strategic,
business, capital or human resource plans, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings,
blueprints, sketches, software programs, equipment, other documents or property, or reproductions of any of the aforementioned items developed
or obtained by the Executive during the course of her employment.

 

		13.	Liability Insurance. The Bank shall obtain liability insurance coverage, if available, for the Executive under an insurance
policy with similar terms as that which is currently covering officers and directors of Bank against lawsuits, arbitrations or other legal
or regulatory proceedings.

 

		14.	Notices. Except as otherwise provided in this Agreement, any notice required or permitted to be given under this Agreement
shall be deemed properly given if in writing and if mailed by registered or certified mail, postage prepaid with return receipt requested,
to Executive’s residence, in the case of notices to Executive, and to the principal executive office of the Bank, in the case of
notices to the Bank.

 

		15.	Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by Executive and an executive officer specifically designated by the Board of Directors of the Bank.
No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.

 

		16.	Assignment. This Agreement shall not be assignable by any party, except by the Corporation or the Bank to any successor
in interest to its respective businesses.

 

		17.	Entire Agreement. This Agreement supersedes any and all agreements, either oral or in writing, among or between the
parties with respect to the employment of the Executive by the Bank and/or Corporation. This Agreement contains all the covenants and
agreements between the parties with respect to employment and termination of employment.

 

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		18.	Successors; Binding Agreement. 

 

		(a)	The Bank will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially
all of the businesses and/or assets of Bank to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that Bank would be required to perform it if no such succession had taken place. Failure by Bank to obtain such assumption and
agreement prior to the effectiveness of any such succession shall constitute a breach of this Agreement and the provisions of Section
7 of this Agreement shall apply. As used in this Agreement, “Corporation” and “Bank” shall mean Corporation and
Bank, as defined previously and any successor to their respective businesses and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law or otherwise.

 

		(b)	This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees. If Executive should die after a Change in Control or following termination
of Executive’s employment without Cause, and any amounts would be payable to Executive under this Agreement if Executive had continued
to live, all such amounts shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee, or other
designee, or, if there is no such designee, to Executive’s estate.

 

		19.	Code Section 409A

 

		(a)	Any payments made pursuant to this Agreement, to the extent of payments made from the date of termination through March 15th of the
calendar year following such date, are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) and thus
payable pursuant to the “short-term deferral” rule set forth in Treas. Reg. §1.409A-1(b)(4); to the extent such payments
are made following said March 15th, they are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2)
made upon an involuntary termination from service and payable pursuant to Treas. Reg. §1.409A-1(b)(9)(iii), to the maximum extent
permitted by said provision.

 

		(b)	The parties hereto intend that any and all post-employment compensation under this Agreement satisfy the requirements of Section 409A
or an exception or exclusion therefrom to avoid the imposition of any accelerated or additional taxes pursuant to Section 409A. Any terms
not specifically defined shall have the meaning as set forth in Section 409A.

 

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		(c)	If when the Executive’s employment terminates, the Executive is a “specified employee,” as defined in Code Section
409A(a)(2)(B)(i), then despite any provision of this Agreement or other plan or agreement to the contrary, the Executive will not be entitled
to the payments until the earliest of: (a) the date that is at least six months after the Executive’s Separation from Service for
reasons other than the Executive’s death, (b) the date of the Executive’s death, or (c) any earlier date that does not result
in additional tax or interest to the Executive under Code Section 409A. As promptly as possible after the end of the period during which
payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single lump sum
with any remaining payments to commence in accordance with the terms of this Agreement or other applicable plan or agreement.

 

		(d)	Notwithstanding the foregoing, no payment shall be made pursuant to this Agreement unless such termination of employment is a “separation
of service” as defined in Code Section 409A.

 

		(e)	409A Safe Harbor. Notwithstanding anything in this Agreement to the contrary, in no event shall the
Corporation or Bank be obligated to commence payment or distribution to the Executive of any amount that constitutes nonqualified deferred
compensation within the meaning of Code Section 409A (“Section 409A”) earlier than the earliest permissible date under Section
409A that such amount could be paid without additional taxes or interest being imposed under Section 409A. The Corporation, Bank and Executive
agree that they will execute any and all amendments to this Agreement as they mutually agree in good faith may be necessary to ensure
compliance with the distribution provisions of Section 409A, to be paid or distributed in a single sum payment at the earliest permissible
date under Section 409A. Without limiting the generality of the foregoing, in the event Executive is to receive a payment of compensation
hereunder that is or account of a Separation from Service, such payment is subject to the provisions of Section 409A, and Executive is
a key employee of the Corporation or Bank, then payment shall not be made before the date that is six months after the date of Separation
from Service (or, if earlier than the end of the six month period, the date of the Executive’s death). Amounts otherwise payable
during such six month payment shall be accumulated and paid in a lump sum on the first day of the seventh month. For purposes hereof,
Executive is a key employee of the Corporation or Bank if, on his date of separation from service, the Corporation is publicly traded
and he met the definition key employee found in Code Section 416(i)(1)(A)(i), (ii) or (iii) (disregarding Section 416(i)(5)) as of the
last day of the calendar year preceding the date of separation.

 

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		20.	Arbitration. The Corporation, Bank and Executive recognize that in the event a dispute should arise among or between
them concerning the interpretation or implementation of this Agreement, lengthy and expensive litigation will not afford a practical resolution
of the issues within a reasonable period of time. Consequently, each party agrees that all disputes, disagreements and questions of interpretation
concerning this Agreement (except for any enforcement sought with respect to Sections 9, 10, 11 or 12 which may be litigated in court,
including an action for injunction or other relief) are to be submitted for resolution, in Lancaster, Pennsylvania, to the American Arbitration
Association (the “Association”) in accordance
with the Association’s National Rules for the Resolution of Employment Disputes or other applicable rules then in effect (“Rules”).
The Corporation, Bank or Executive may initiate an arbitration proceeding at any time by giving notice to the other in accordance with
the Rules. The Corporation, Bank and Executive may, as a matter of right, mutually agree on the appointment of a particular arbitrator
from the Association’s pool. The arbitrator shall not be bound by the rules of evidence and procedure of the courts of the Commonwealth
of Pennsylvania but shall be bound by the substantive law applicable to this Agreement. The decision of the arbitrator, absent fraud,
duress, incompetence or gross and obvious error of fact, shall be final and binding upon the parties and shall be enforceable in courts
of proper jurisdiction. Following written notice of a request for arbitration, the Corporation, Bank and Executive shall be entitled to
an injunction restraining all further proceedings in any pending or subsequently filed litigation concerning this Agreement, except as
otherwise provided herein or any enforcement sought with respect to Sections 9, 10, 11 or 12 of this Agreement, including an action for
injunction or other relief.

 

		21.	Code Sections 280G and 4999. In the event the payment described herein, when added to all other amounts or benefits
provided to or on behalf of the Executive in connection with her termination of employment, would result in the imposition of an excise
tax under Section 4999 of the Code, such payments shall be retroactively reduced to the extent necessary to avoid such excise tax imposition.
Upon written notice to Executive, together with calculations from the Corporation, Executive shall remit to Corporation the amount of
the reduction plus such interest as may be necessary to avoid the imposition of such excise tax. Notwithstanding the foregoing or any
other provision of this contract to the contrary, if any portion of the amount herein payable to the Executive is determined to be non-deductible
pursuant to the regulations promulgated under Section 280G of the Code, then Corporation shall be required only to pay to Executive the
amount determined to be deductible under Section 280G.

 

		22.	Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and effect.

 

		23.	Applicable Law. This Agreement shall be governed by and construed in accordance with the domestic, internal laws of
the Commonwealth of Pennsylvania, without regard to its conflicts of laws principles.

 

		24.	Consent to Jurisdiction. To the extent that any court action is permitted consistent with
or to enforce this Agreement, the parties hereby consent to the jurisdiction of the Court of Common Pleas of Lancaster County located
in Lancaster, Pennsylvania. Accordingly, with respect to any such court action, Executive (a) submits to the personal jurisdiction of
such court; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court or otherwise)
with respect to personal jurisdiction or service of process.

 

    14 

     

    

		25.	Headings. The section headings of this Agreement are for convenience only and shall not control or affect the meaning
or construction or limit the scope or intent of any of the provisions of this Agreement.

 

 

 

(Remainder of page intentionally
left blank)

 

 

    15 

     

    

 

IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date below.

 

 

	ATTEST:	 	ENB FINANCIAL CORP
	 	 	 	 	 
	/s/ Adrienne L. Miller	 	By	/s/ Jeffrey S. Stauffer
	 	 	 	 	Jeffrey S. Stauffer
	Date:	October 31, 2022	 	 	President and Chief Executive Officer
	 	 	 
	ATTEST:	 	THE EPHRATA NATIONAL BANK
	 	 	 	 	
	/s/ Adrienne L. Miller	 	By	/s/ Jeffrey S. Stauffer
	 	 	 	 	Jeffrey S. Stauffer
	Date:	October 31, 2022	 	 	President and Chief Executive Officer
	 	 	 	 
	 	 	 	EXECUTIVE
	 	 	 	/s/ Rachel G. Bitner
	 	 	 	Rachel G. Bitner

 

 

    16 

     

    

 

Schedule 1

 

None.

 

 

 

 

 

 

    17 

     

    

 

Schedule 2

 

Participant’s
Restricted Stock Unit Grant

 

A. Declaration of Award to Participant

 

As additional
consideration for entering into an Employment Agreement dated October 28, 2022 with the ENB Financial Corp and The Ephrata National Bank,
(“Company”), (the “Employment Agreement”) and in recognition of the Participant's role in the Company and the
extent of opportunities for the executive to contribute to the growth and success of the business, the Board of Directors of the Company
hereby grants to the Participant on the Grant Date an award of “1204” units of Company common stock, par value $0.10 per share
(“Restricted Company Stock”), at $16.80 per share, the Fair Market Value (FMV) of the stock on the Grant Date, on the terms,
conditions and subject to the restrictions set forth in this Exhibit to Employment Agreement, which terms are incorporated therein.

 

B. Terms and Conditions of the Restricted Stock
Unit Grant

 

		1.	Vesting of Interests in the Grant. The Participant will vest interests in
the grant over a three (3) year period at a rate of 33 1/3% on each anniversary of the grant.

 

Further, if
the Participant voluntarily terminates employment for any reason, but violates the noncompetition/nonsolicitation provisions of the Employment
Agreement, any interests that have not yet been distributed will be forfeited.

 

		2.	Restricted Period. The foregoing vesting schedule notwithstanding, if the
Participant's continuous service terminates for any reason at any time before all of his or her Restricted Company Stock has vested, the
Participant's unvested Restricted Company Stock shall be automatically forfeited upon such termination of continuous service and neither
the Company nor any affiliate shall have any further obligations to the Participant under the Employment Agreement.

 

		3.	Participant's Rights. Participant will enjoy rights and privileges accorded
Shareholders, including voting rights and receipt of dividends, on those portions of the grant that have vested. Any dividends received
on vested portions of this award will be treated as ordinary income for tax purposes.

 

		4.	Investment Requirement. The Participant is not required to make any investment
in the Company in order to participate in this grant.

 

		5.	Distribution of Vested Interests. Vested portions of this grant will be distributed
to the Participant as soon as practical following vesting in shares of Company common stocks.

 

		6.	Nontransferability of Grant. The Participant's rights and financial interests in this award may
not be transferred other than by will or laws of descent and distribution.

 

    18 

     

    

		7.	Tax Liability and Withholding. The ultimate liability for all Tax-Related
Items is and remains the Participant's responsibility and the Company (a) makes no representation or undertakings regarding the treatment
of any Tax-Related Items in connection with the grant or vesting of the Restricted Stock or the subsequent sale of any shares; and (b)
does not commit to structure the Restricted Stock to reduce or eliminate the Grantee's liability for Tax-Related Items.

 

		8.	Compliance with Law. The issuance and transfer of shares of common stock
shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and state securities laws
and with all applicable requirements of any stock exchange on which the Company's shares of common stock may be listed or quoted. No shares
of common stock shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory
agencies have been fully complied with to the satisfaction of the Company and its counsel. The Participant understands that the Company
is under no obligation to register the shares of common stock with the Securities and Exchange Commission, any state securities commission
or any stock exchange to effect such compliance.

 

 

    19Document

Exhibit 10.1 Form of Performance Award under the 2002 Lilly Stock Plan (with non-compete)

Eli Lilly and Company
Performance Award Agreement
(for Executive Officers)

This Performance Award has been granted on [•] (“Grant Date”) by Eli Lilly and Company, an Indiana corporation, with its principal offices in Indianapolis, Indiana (“Lilly” or the “Company”), to the Eligible Individual who has received this Performance Award Agreement (the “Grantee”).

Performance Levels:

Performance Period:    January 1, 2022 – December 31, 2023

Service Vesting Date:    February 1, 2025

    

Eli Lilly and Company Performance Award Agreement (Executive Officer)

Table of Contents

						
	Section 1.    Grant of Performance Award
	3

	Section 2.    Vesting
	3

	Section 3.    Impact of Certain Employment Status Changes
	4

	Section 4.    Change in Control
	6

	Section 5.    Settlement
	7

	Section 6.    Rights of the Grantee
	8

	Section 7.    Prohibition Against Transfer
	8

	Section 8.    Responsibility for Taxes
	8

	Section 9.    Section 409A Compliance
	10

	Section 10.    Grantee’s Acknowledgments
	10

	Section 11.    Data Privacy
	11

	Section 12.    Restrictive Covenants, Remedies, and Additional Terms and Conditions
	12

	Section 13.    Governing Law and Choice of Venue
	15

	Section 14.    Miscellaneous Provisions
	15

	Section 15.    Compensation Recovery
	16

	Section 16.    Award Subject to Acknowledgement of Acceptance
	17

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Eli Lilly and Company Performance Award Agreement (Executive Officer)

Section 1.    Grant of Performance Award
Eli Lilly and Company, an Indiana corporation (“Lilly” or the “Company”), has granted to the Eligible Individual who has received this Performance Award Agreement (the “Grantee”) a Performance-Based Award (the “Performance Award” or the “Award”) with respect to the target number of shares of Lilly Common Stock (the “Shares”) that the Grantee may view by logging on to the Merrill Lynch website at http://myequity.lilly.com (the "Target Number of Shares").   
The Award is made pursuant to and subject to the terms and conditions set forth in the Amended and Restated 2002 Lilly Stock Plan (the “Plan”) and to the terms and conditions set forth in this Performance Award Agreement, including all appendices, exhibits and addenda hereto (the “Award Agreement”).  In the event of any conflict between the terms of the Plan and this Award Agreement, the terms of the Plan shall govern except with respect to the provisions described in Section 12 below (in which case, the terms of the Award Agreement shall govern). 

Any capitalized terms used but not defined in this Award Agreement shall have the meanings set forth in the Plan.  
Section 2.    Vesting
As soon as reasonably practicable following the end of the Performance Period, the Committee shall determine the number of units eligible to vest (“Performance Units”) based on the actual cumulative Earnings Per Share ("EPS") for the Performance Period and using the Non-GAAP EPS (as adjusted to the extent determined by the Committee) for the year immediately prior to the commencement of the Performance Period as a reference point (as shown on page 1 of this document) (“EPS Growth”), the corresponding payout multiple and the Target Number of Shares.
a.    The actual cumulative EPS for the Performance Period shall be computed using the following procedures:
i.    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 Performance Period in accordance with accounting principles currently applicable in the United States ("US GAAP"), adjusted to the extent deemed appropriate by the Committee for any unusual items deemed significant by the Committee.
ii.    The number of shares of outstanding Lilly Common Stock used to compute consolidated EPS shall be determined as of the end of each fiscal year in the Performance Period on a diluted basis or its equivalent in accordance with US GAAP.
iii.    To calculate consolidated EPS for each fiscal year in the Performance Period, the adjusted consolidated net income shall be divided by the number of shares of outstanding Lilly Common Stock as computed in accordance with subsection (ii) above and the quotient rounded to the nearest cent.
iv.    To determine the cumulative EPS for the Performance Period, the EPS amounts for each fiscal year as determined above shall be added.
b.    The payout multiple corresponding to the EPS Growth (as shown on page 1 of this document) shall then be applied to the Target Number of Shares.
c.    The number of Performance Units under this Performance Award will be the number resulting from the calculation described in subsection (b) above. 
Page 3

Eli Lilly and Company Performance Award Agreement (Executive Officer)

d.    In the event the Grantee’s Service is terminated prior to the Service Vesting Date for any reason or in any circumstance other than as described in Section 3 below, the Award, including any accrued Dividend Equivalent Rights, shall be forfeited.  
Section 3.    Impact of Certain Employment Status Changes 
Unless the Committee determines, in its sole discretion, that such treatment is not advisable after consideration of Applicable Laws, the number of Shares that are eligible to vest upon a change in employment status of the Grantee during the Performance Period will be as follows: 
a.    Leaves of Absence.  In the event the Grantee is on an approved leave of absence during the Performance Period, the number of Shares eligible to vest shall be the number determined in accordance with Section 2 above.
b.    Retirement; Death; Disability.  Except as otherwise provided below (including Section 12), in the event the Grantee’s Service is terminated (i) on or following the Retirement Vesting Date (A) due to the Grantee’s Retirement or (B) due to the Grantee’s Qualifying Termination (as defined below) on a date that the Grantee is eligible for Retirement, (ii) due to the Grantee’s death, or (iii) by reason of Grantee’s Disability, the number of Shares eligible to vest shall be the number determined in accordance with Section 2 above.  For the avoidance of any doubt, the Award shall be forfeited in the event the Grantee’s Service is terminated prior to the Retirement Vesting Date due to the Grantee’s Retirement.
“Retirement” means retirement as a “retiree,” which is a person who is (A) a retired employee under The Lilly Retirement Plan; (B) a retired employee under the retirement plan or program of an Affiliate; (C) a retired employee under a retirement program specifically approved by the Committee; (D) required to retire under local law, to the extent authorized by the Company to address such local requirements or (E) otherwise determined to be a retired employee in the sole discretion of the Company.
“Retirement Vesting Date” means the date that is on or following December 31 immediately following the commencement of the Performance Period.
“Disability” for purposes of this Award Agreement means that the Grantee would qualify to receive benefit payments under the long-term disability plan or policy, as it may be amended from time to time, of the Company or the Affiliate that employs the Grantee (the “Employer”).  If the Company or the Employer does not have a long-term disability plan or policy, “Disability” means that the Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determined physical or mental impairment for a period of at least ninety (90) consecutive days as determined by the Company or Employer.  The Grantee shall not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Company as it determines in its sole discretion.
c.    Qualifying Termination.  Except as otherwise provided in section 3(b), in the event the Grantee’s employment is subject to a Qualifying Termination (as defined below), the Performance Units shall vest, provided that if the Qualifying Termination occurs prior to the last day of the Performance Period, the number of Shares eligible to vest shall be the number determined in accordance with Section 2 above, reduced proportionally for the portion of the total days during the Performance Period in which the Grantee was not in active Service.
For purposes of this Award Agreement, a “Qualifying Termination” means the termination of the Grantee's Service under any one of the following circumstances:
Page 4

Eli Lilly and Company Performance Award Agreement (Executive Officer)

i.    due to a plant closing or reduction in workforce (as defined below);
ii.    as a result of the Grantee’s failure to locate a position within the Company or an Affiliate following the placement of the Grantee on reallocation or medical reassignment in the United States (or equivalent as determined by the Committee).
“Plant closing” means the closing of a plant site or other corporate location that directly results in termination of the Grantee’s Service. 
“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 the Grantee’s Service.  
d.    Post-Performance Period Retirement.  Notwithstanding Section 3(b), in the event the Grantee's Service is terminated due to Retirement subsequent to the last day of the Performance Period but prior to the Service Vesting Date, the Performance Units, if any, shall continue to accrue Dividend Equivalent Rights and the Performance Units and Dividend Equivalent Rights shall vest on the Service Vesting Date.  
A Grantee who has not received a year-end individual performance rating and (i) is on final written warning (or equivalent as determined by the Committee) for unsatisfactory performance and elects to retire in lieu of a termination of employment; or (ii) elects to retire in lieu of termination of employment because of an immediately terminable offense (e.g., absence of three days without notice, insubordination, violation of substance abuse policy, possession of firearms, misconduct) will not be considered to have terminated due to Retirement as described herein.
e.    Demotions, Disciplinary Actions and Misconduct.  The Company may, in its sole discretion, cancel this Performance Award or reduce the number of Performance Units, prorated according to time or other measure as determined appropriate by the Company, if during any period prior to the Service Vesting Date the Grantee has been (i) subject to disciplinary action by the Company or (ii) 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, as determined in the sole discretion of the Company.
f.    Final Written Warning.  If the Grantee is placed on final written warning (or its equivalent as determined by the Committee) at any time subsequent to the last day of the Performance Period but prior to the Service Vesting Date, the Grantee shall forfeit the Performance Units and Dividend Equivalent Rights scheduled to vest on the Service Vesting Date to the extent the Award is the next subsequent Award (when compared to other Awards held by the Grantee) that is scheduled to vest following the date that the Grantee is placed on final written warning (it being understood that all other Awards, if any, that are scheduled to vest on the Service Vesting Date shall also be forfeited).
The Committee’s determination as to whether (1) a leave of absence or a transfer of employment between Lilly and an Affiliate or between Affiliates constitutes a termination of Service, (2) the Grantee’s Service has been terminated by reason of Disability or Retirement, (3) the Grantee is eligible for Retirement, (4) the Grantee’s Service has been terminated as a direct result of either a plant closing or a reduction in force, and (5) the Grantee's service has been terminated as a result of the failure to locate a position within the Company or an Affiliate following reallocation or medical reassignment shall be final and binding on the Grantee.  
Page 5

Eli Lilly and Company Performance Award Agreement (Executive Officer)

Section 4.    Change in Control
The provisions of Section 13.2 of the Plan apply to this Award with the following modifications:
a.    The only Change in Control event that shall result in a benefit under this Section 4 shall be the consummation of a merger, share exchange, or consolidation of the Company, as defined in Section 2.6(c) of the Plan (a “Transaction”).
b.    In the event of a Transaction that occurs prior to the last day of the Performance Period, the Grantee will be credited with an award of Restricted Stock Units equal to the number of Performance Units, to be calculated in a manner consistent with Section 2, but the cumulative EPS shall equal the Company’s cumulative EPS expected results (as determined by the Company’s last approved forecast prior to the consummation of the Transaction, not considering the impact of the Transaction) (the “Credited RSU Award”).  The Credited RSU Award shall be eligible to vest on the last day of the Performance Period, subject to the Grantee’s continued Service through the last day of the Performance Period, except as provided below:
i.    In the event that the Credited RSU Award is not converted, assumed, substituted, continued or replaced by a successor or surviving corporation, or a parent or subsidiary thereof, in connection with a Transaction, then immediately prior to the Transaction, the Credited RSU Award shall vest automatically in full.  
ii.    In the event that the Credited RSU Award is converted, assumed, substituted, continued or replaced by a successor or surviving corporation, or a parent or subsidiary thereof, in connection with the Transaction and the Grantee is subject to a Covered Termination (as defined below) prior to the last day of the Performance Period, then immediately as of the date of the Covered Termination, the Credited RSU Award shall vest automatically in full. 
For purposes of this Award Agreement, “Covered Termination” shall mean a termination of Service as described in Sections 3(b) and (c), Grantee’s termination of Service without Cause or the Grantee’s resignation for Good Reason.  “Cause” and “Good Reason” shall have the meanings ascribed to them in the Eli Lilly and Company 2007 Change in Control Severance Pay Plan for Select Employees (as amended from time to time) or any successor plan or arrangement thereto.
c.    The following shall apply in the event of a Transaction that occurs subsequent to the last day of the Performance Period but prior to the Service Vesting Date:
i.    In the event that the Performance Units are not converted, assumed, substituted, continued or replaced by a successor or surviving corporation, or a parent or subsidiary thereof, in connection with a Transaction, then immediately prior to the Transaction, the Performance Units shall vest automatically in full.
ii.    In the event that the Performance Units are converted, assumed, substituted, continued or replaced by a successor or surviving corporation, or a parent or subsidiary thereof, in connection with the Transaction and the Grantee is subject to a Covered Termination prior to the Service Vesting Date, then immediately as of the date of the Covered Termination, the Performance Units shall vest automatically in full.
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Eli Lilly and Company Performance Award Agreement (Executive Officer)

Section 5.    Settlement  
a.    Except as provided below, a vested Award shall be paid to the Grantee as soon as practicable, but in no event later than sixty (60) days following the Service Vesting Date, including if the Award vests pursuant to Sections 3(b) or 3(c). 
b.    If the Award vests pursuant to Section 3(b)(ii) or (iii) subsequent to the last day of the Performance Period, the Award shall be paid to the Grantee no later than sixty (60) days following the date of the Grantee’s termination of Service under Section 3(b)(ii) or (iii), provided that if the Award is considered an item of nonqualified deferred compensation subject to Section 409A of the Code (“NQ Deferred Compensation”), the Award shall be paid within sixty (60) days following the date the Grantee experiences a “separation from service” within the meaning of Section 409A of the Code (a “409A Separation”), provided that if the Grantee is a “specified employee” within the meaning of Section 409A of the Code as of the payment date, the Award shall instead be paid on the earliest of (i) the first day following the six (6) month anniversary of the Grantee’s Section 409A Separation and (ii) the date of the Grantee’s death, as applicable.
c.    If the Award vests pursuant to Section 4(b)(i) or Section 4(c)(i), the Award shall be paid to the Grantee immediately prior to the Transaction, provided that if the Award is considered NQ Deferred Compensation and the Transaction does not constitute a “change in control event” under Section 409A of the Code (a “409A CIC”), then the Award shall be paid in cash (calculated based on the value of the Shares established for the consideration to be paid to holders of Shares in the Transaction) on the Service Vesting Date.  
d.    If the Award vests pursuant to Section 4(b)(ii) or Section 4(c)(ii), the Award shall be paid to the Grantee as soon as practicable, but in no event later than sixty (60) days following the date the Grantee is subject to a Covered Termination, provided that if the Award is NQ Deferred Compensation, (i) the Award shall be paid within sixty (60) days following the date the Grantee experiences a 409A Separation, and (ii) if the Grantee is a “specified employee” within the meaning of Section 409A of the Code as of the payment date, the Award shall instead be paid on the earliest of (1) the first day following the six (6) month anniversary of the Grantee’s Section 409A Separation and (2) the date of the Grantee’s death.
e.    At the time of settlement provided in this Section 5, Lilly shall issue or transfer Shares or the cash equivalent, as contemplated under Section 5(f) below, to the Grantee.  In the event the Grantee is entitled to a fractional Share, the fraction may be paid in cash or rounded, in the Committee’s discretion.
f.    At any time prior to the Service Vesting Date or until the Performance Units are paid in accordance with this Section 5, the Committee may, if it so elects, determine to pay part or all of the Performance Units in cash in lieu of issuing or transferring Shares.  The amount of cash shall be calculated based on the Fair Market Value of the Shares on the last day of the Restriction Period in the case of payment pursuant to Section 5(a) and on the date of payment in the case of a payment pursuant to Section 5(d).
g.    Dividend Equivalent Rights, if any, that accrue hereunder shall be settled in cash.
h.    In the event of the death of the Grantee, the payments described above shall be made to the successor of the Grantee.
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Eli Lilly and Company Performance Award Agreement (Executive Officer)

Section 6.    Rights of the Grantee
a.    No Shareholder Rights.  The Performance Award does not entitle the Grantee to any rights of a shareholder of Lilly until such time as the Performance Award is settled and Shares are issued or transferred to the Grantee.
b.    Dividend Equivalent Rights.  On each date that the Company pays a cash dividend to holders of Shares during the period commencing on the date the number of Performance Units are determined continuing through the date the Performance Units are settled, the Grantee shall be credited with Dividend Equivalent Rights in an amount equal to the total number of Performance Units, multiplied by the dollar amount of the cash dividend paid per Share by the Company on such date.  Dividend Equivalent Rights shall accrue in an account denominated in U.S. dollars and shall not accrue interest or other credits prior to being paid.  The Dividend Equivalent Rights shall be subject to the same vesting conditions and restrictions as the Performance Units to which the Dividend Equivalent Rights relate, and the Dividend Equivalent Rights shall be forfeited in the event that the Performance Units with respect to which such Dividend Equivalent Rights were credited are forfeited.
c.    No Trust; Grantee’s Rights Unsecured.  Neither this Award Agreement nor any action in accordance with this Award Agreement shall be construed to create a trust of any kind.  The right of the Grantee to receive payments of cash or Shares pursuant to this Award Agreement shall be an unsecured claim against the general assets of the Company.
Section 7.    Prohibition Against Transfer
The right of a Grantee to receive payments of Shares and/or cash under this Award may not be transferred except to a duly appointed guardian of the estate of the Grantee or to a successor of the Grantee by will or the applicable laws of descent and distribution and then only subject to the provisions of this Award Agreement.  A Grantee may not assign, sell, pledge, or otherwise transfer 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 8.    Responsibility for Taxes
a.    Regardless of any action Lilly and/or 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 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 (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the Award, including the grant of the Performance Award, the vesting of the Performance Award, the transfer and issuance of any Shares, the receipt of any cash payment pursuant to the Award, the accrual and payment of Dividend Equivalent Rights, the receipt of any dividends and the sale of any Shares acquired pursuant to this Award; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Grantee’s liability for Tax Related Items or achieve any particular tax result.  Furthermore, if the Grantee becomes subject to Tax Related Items in more than one jurisdiction, the Grantee acknowledges that the Company and/or the Employer (or 
Page 8

Eli Lilly and Company Performance Award Agreement (Executive Officer)

former employer, as applicable) may be required to withhold or account for Tax Related Items in more than one jurisdiction.
b.    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.
i.    If the Performance Award is paid to the Grantee in cash in lieu of 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 Award or from the Grantee’s wages or other cash compensation paid to the Grantee by the Company and/or the Employer.
ii.    If the Performance Award is paid to the Grantee in Shares and the Grantee is not subject to the short-swing profit rules of Section 16(b) of the Exchange Act, the Grantee authorizes Lilly and/or the Employer, or their respective agents, at their discretion, to (A) withhold from the Grantee’s wages or other cash compensation paid to the Grantee by the Company and/or the Employer, (B) arrange for the sale of Shares to be issued upon settlement of the Award (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, (C) withhold in Shares otherwise issuable to the Grantee pursuant to this Award, and/or (D) apply any other method of withholding determined by the Company and, to the extent required by Applicable Laws or the Plan, approved by the Committee.
iii.    If the Performance Award is paid to the Grantee in Shares and the Grantee is subject to the short-swing profit rules of Section 16(b) of the Exchange Act, Lilly will withhold in Shares otherwise issuable to the Grantee pursuant to this Award, unless the use of such withholding method is prevented by Applicable Laws 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 8(b)(ii)(A) and (B) above.
c.    Depending on the withholding method, Lilly and/or the Employer may withhold or account for Tax Related Items by considering applicable statutory or other withholding rates, including minimum or maximum rates in the jurisdiction(s) applicable to the Grantee.  In the event of over-withholding, the Grantee may receive a refund of any over-withheld amount in cash (without interest and without entitlement to the equivalent amount in Shares).  If the obligation for Tax Related Items is satisfied by withholding Shares, for tax purposes, the Grantee will be deemed to have been issued the full number of Shares to which he or she is entitled pursuant to this Award, notwithstanding that a number of Shares are withheld to satisfy the obligation for Tax Related Items.
d.    Lilly may refuse to deliver 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 8. 

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Eli Lilly and Company Performance Award Agreement (Executive Officer)

Section 9.    Section 409A Compliance
To the extent applicable, it is intended that this 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 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.
Section 10.    Grantee’s Acknowledgments
In accepting this Award, the Grantee acknowledges, understands and agrees that:
a.    the Plan is established voluntarily by Lilly, it is discretionary in nature and it may be modified, amended, suspended or terminated by Lilly at any time, as provided in the Plan;
b.    the Award is voluntary and occasional and does not create any contractual or other right to receive future Performance-Based Awards, or benefits in lieu thereof, even if Performance-Based Awards have been granted in the past;
c.    all decisions with respect to future Performance-Based Awards or other awards, if any, will be at the sole discretion of the Committee;
d.    the Grantee’s participation in the Plan is voluntary;
e.    the Award and any Shares subject to the Award are not intended to replace any pension rights or compensation;
f.    the Award and any Shares subject to the Award, and the income and value of same, are not part of normal or expected compensation for any purpose, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, leave pay, pension or welfare or retirement benefits or similar mandatory payments;
g.    neither the Award nor any provision of this Award Agreement, the Plan or the policies adopted pursuant to the 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 Award shall not be interpreted to form an employment contract or relationship with Lilly or any Affiliate; 
h.    the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
i.    no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from the Grantee ceasing to provide employment or other services to Lilly or the Employer (for any reason whatsoever, 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 Grantee’s employment agreement, if any);
j.    for purposes of the Award, the Grantee’s employment will be considered terminated as of the date he or she is no longer actively providing services to the Company or an Affiliate and the Grantee’s right, if any, to earn and be paid any portion of the Award and any Dividend Equivalent Rights 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 
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“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 Award (including whether the Grantee may still be considered to be actively providing services while on a leave of absence) in accordance with Section 409A;
k.    unless otherwise provided in the Plan or by the Committee in its discretion, the Award and the benefits evidenced by this Award Agreement do not create any entitlement to have the Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares;
l.    the Grantee is solely responsible for investigating and complying with any laws applicable to him or her in connection with the 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 shares of Lilly Stock that may be issued pursuant to this Award.
Section 11.    Data Privacy
a.    Data Collection and Usage.  The Company and the Employer may collect, process and use certain personal information about the Grantee, and persons closely associated with the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, email address, date of birth, social insurance number, passport or other identification number (e.g., resident registration number), salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Performance Awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor (“Data”), for the purposes of implementing, administering and managing the Plan.  The legal basis, where required, for the processing of Data is the Grantee’s consent.  Where required under Applicable Laws, Data may also be disclosed to certain securities or other regulatory authorities where the Company’s securities are listed or traded or regulatory filings are made and the legal basis, where required, for such disclosure are the Applicable Laws.
b.    Stock Plan Administration Service Providers.  The Company transfers Data to Bank of America Merrill Lynch and/or its affiliated companies (“Merrill Lynch”), an independent service provider, which is assisting the Company with the implementation, administration and management of the Plan.  In the future, the Company may select a different service provider and share Data with such other provider serving in a similar manner.  The Grantee may be asked to agree on separate terms and data processing practices with the service provider, with such agreement being a condition to the ability to participate in the Plan.  The Company may also transfer Data to KPMG, an independent service provider, which is also assisting the Company with certain aspects of the implementation, administration and management of the Plan.  In the future, the Company may select a different service provider and share Data with such other provider serving in a similar manner.
c.    International Data Transfers.  The Company and its service providers are based in the United States.  The Grantee’s country or jurisdiction may have different data privacy laws and protections than the United States.  The Company’s legal basis, where required, for the transfer of Data is Grantee’s consent.
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d.    Data Retention.  The Company will hold and use the Data only as long as is necessary to implement, administer and manage the Grantee’s participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and security laws.
e.    Voluntariness and Consequences of Consent Denial or Withdrawal.  Participation in the Plan is voluntary and the Grantee is providing the consents herein on a purely voluntary basis.  If the Grantee does not consent, or if the Grantee later seeks to revoke the Grantee’s consent, the Grantee’s salary from or employment and career with the Employer will not be affected; the only consequence of refusing or withdrawing the Grantee’s consent is that the Company would not be able to grant this Award or other awards to the Grantee or administer or maintain such awards.  
f.    Data Subject Rights. The Grantee understands that data subject rights regarding the processing of Data vary depending on Applicable Laws and that, depending on where the Grantee is based and subject to the conditions set out in such Applicable Laws, the Grantee may have, without limitation, the right to (i) inquire whether and what kind of Data the Company holds about the Grantee and how it is processed, and to access or request copies of such Data, (ii) request the correction or supplementation of Data about the Grantee that is inaccurate, incomplete or out-of-date in light of the purposes underlying the processing, (iii) obtain the erasure of Data no longer necessary for the purposes underlying the processing, (iv) request the Company to restrict the processing of the Grantee’s Data in certain situations where the Grantee feels its processing is inappropriate, (v) object, in certain circumstances, to the processing of Data for legitimate interests, and to (vi) request portability of the Grantee’s Data that the Grantee has actively or passively provided to the Company or the Employer (which does not include data derived or inferred from the collected data), where the processing of such Data is based on consent or the Grantee’s employment and is carried out by automated means.  In case of concerns, the Grantee understands that he or she may also have the right to lodge a complaint with the competent local data protection authority.  Further, to receive clarification of, or to exercise any of, the Grantee’s rights, the Grantee understands that he or she should contact his or her local human resources representative.
g.    Declaration of Consent.  By accepting the Award and indicating consent via the Company’s online acceptance procedure, the Grantee is declaring that he or she agrees with the data processing practices described herein and consents to the collection, processing and use of Data by the Company and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above.
Section 12.    Restrictive Covenants, Remedies, and Additional Terms and Conditions
a.    Restrictive Covenants.  In consideration of the Grantee’s receipt of the Award from Lilly, the Grantee agrees that during the Grantee’s employment with Lilly or an Affiliate that the Grantee provided services to or had access to confidential information concerning (“Covered Affiliate”) and for twelve (12) months immediately following the end of the Grantee’s employment (regardless of reason), the Grantee will not directly or indirectly, on a worldwide basis, engage in any of the following activities:
i.    Work for, advise, manage, act as an agent, employee or consultant for, or otherwise provide any services, in a Competitively-Sensitive Capacity, to: (a) any person or entity engaged in research, development, production, sale, or distribution of a product or service competitive with or substantially similar to any product or service in research, development or design, or 
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Eli Lilly and Company Performance Award Agreement (Executive Officer)

manufactured, produced, sold, or distributed by Lilly or a Covered Affiliate; or (b) any person or entity that otherwise competes or intends to compete with Lilly or a Covered Affiliate.    
ii.    Directly or indirectly solicit, urge, divert, induce, or seek to induce any of Lilly’s (or Covered Affiliate’s) independent contractors, subcontractors, business partners, distributors, brokers, consultants, sales representatives, customers, vendors, suppliers or any other person with whom Lilly or Covered Affiliate has a business relationship and with whom the Grantee interacted during the Grantee’s employment with Lilly or Covered Affiliate to terminate their relationship with, or representation of, Lilly or Covered Affiliate or to cancel, withdraw, reduce, limit or in any manner modify any such person's business with, or representation of, Lilly or a Covered Affiliate. 
The Grantee acknowledges and agrees that any Lilly Affiliate is an intended third-party beneficiary of this Award Agreement, which may be enforced by Lilly or any such Affiliate, either singularly or jointly.
For purposes of this Award Agreement, “Competitively-Sensitive Capacity” means: (A) the same or similar capacity or function in which the Grantee worked for Lilly or a Covered Affiliate at any time during the two (2) years immediately preceding the end of the Grantee’s employment; (B) any officer, director, executive or senior management capacity or function; (C) any research and development capacity or function; (D) any sales management or business development management capacity or function; (E) any ownership capacity (except the Grantee may own as a passive investment up to 2% of any publicly traded securities); and/or (F) any other capacity or function in which there is a material risk that the Grantee likely would inevitably use or disclose trade secrets and/or confidential information Lilly or a Covered Affiliate.  For purposes of clarity, if a competing business has multiple divisions, lines or segments, some of which are not competitive with the business of Lilly, including its Covered Affiliates, nothing in this Award Agreement will prohibit the Grantee from being employed by, working for or assisting only that division, line or segment of such competing business that is not competitive with the business of Lilly or a Covered Affiliate, provided the Grantee is not involved in a Competitively-Sensitive Capacity in the research, development, manufacture, provision or sale of any products that compete with any products of Lilly or a Covered Affiliate.
The Grantee and Lilly acknowledge and agree that the worldwide geographic scope of the foregoing covenants is reasonable and necessary given, among other things, that: (a) absent the restrictions, the Grantee could utilize Lilly’s (or its Affiliates) trade secrets and/or confidential information and compete with Lilly or Affiliate from virtually anywhere; and (b) such scope is the only way for Lilly and its Affiliates to protect their trade secrets and confidential information.  In the event the Grantee violates any of the restrictive covenants contained herein, their duration will automatically be extended by the length of time during which the Grantee was in violation of any of the restrictive covenants.
The Grantee acknowledges and agrees that during the course of the Grantee’s employment with Lilly or a Covered Affiliate, the Grantee will become intimately familiar with confidential information and trade secrets key to its unique competitive advantage.  The Grantee also acknowledges and agrees that Lilly’s (and Covered Affiliate’s) confidential information and trade secrets will retain continuing vitality throughout and beyond the one-year restricted period.  And the Grantee acknowledges and agrees that, should the Grantee leave Lilly or Covered Affiliate and, near the Grantee’s departure from Lilly or Covered Affiliate, work with another person or entity that engages in business activities similar to those of Lilly and/or 
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Covered Affiliate, it would be highly likely, if not inevitable, that the Grantee would rely on confidential information of Lilly and/or Covered Affiliate in the course of the Grantee’s work, either consciously or subconsciously, harming Lilly and any Covered Affiliates.  For these and other reasons, the Grantee agrees that the restrictions above are reasonably necessary to protect Lilly’s and its Covered Affiliate’s legitimate business interests, and do so by creating a specific amount of time after the Grantee’s employment ends during which the Grantee will not be able to engage or prepare to engage in the activities above.
The Grantee and Lilly further acknowledge and agree that if any particular covenant or provision is determined to be unreasonable or unenforceable for any reason, including, without limitation, the time period, geographic area, and/or scope of activity covered by any restrictive covenant, such covenant or provision will automatically be deemed reformed so that the contested covenant or provision will have the closest effect permitted by applicable law to the original form and will be given effect and enforced as so reformed to whatever extent would be reasonable and enforceable under applicable law.  Any court interpreting any restrictive covenant provision of this Award Agreement will, if necessary, reform any such provision to make it enforceable under applicable law.
This Award Agreement is intended, among other things, to supplement (and not supersede) all applicable statutes protecting trade secrets and the duties the Grantee owes to Lilly and/or Covered Affiliates under the common law, as well as any other non-competition, non-solicitation, or confidentiality provisions that the Grantee agreed to in the past, including those in the Grantee’s Employee Confidentiality and Invention Agreement, each of which remains in full force and effect, or that the Grantee agrees to in the future.  
The Grantee acknowledges that a breach by the Grantee of this Award Agreement will give rise to irreparable injury to Lilly and Covered Affiliates and money damages will not be adequate relief for such injury.  As a result, the Grantee agrees that Lilly (including any third-party beneficiary) will be entitled to obtain equitable or injunctive relief without having to post any bond or other security to restrain or prohibit any such breach or threatened breach, in addition to any other remedies which may be available, including the recovery of monetary damages from the Grantee.
b.    Remedies.  If the Company determines that the Grantee has violated any applicable provisions of this Section 12, in addition to injunctive relief and damages, the Grantee agrees and covenants that: (i) the Award shall be immediately rescinded; (ii) the Grantee shall automatically forfeit any rights the Grantee may have with respect to the Award as of the date of such determination, including the rights to continue to be eligible to vest or receive a payment under the Award; and (iii) the foregoing remedies set forth in this Section 12 shall not be Lilly’s exclusive remedies.  Lilly reserves all other rights and remedies available to it at law or in equity. 
In addition, the Company reserves the right to impose other requirements on the Award and any Shares acquired under the 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.  Without limitation to the foregoing, the Grantee agrees that the Performance Award and any benefits or proceeds the Grantee may receive hereunder shall be subject to forfeiture and/or repayment to the Company to the extent required to comply with any requirements imposed under Applicable Laws or any compensation recovery policy of the Company that reflects the provisions of Applicable Laws.
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Eli Lilly and Company Performance Award Agreement (Executive Officer)

Section 13.    Governing Law and Choice of Venue
The validity, construction, and enforcement of this Award Agreement 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 or cause the application of substantive law of any jurisdiction other than Indiana.  For purposes of litigating any dispute that arises under this Award Agreement, the parties hereby submit to and consent to the jurisdiction and venue of the State of Indiana, and agree that such litigation shall be conducted exclusively in the courts having appropriate subject matter jurisdiction in Marion County, Indiana, or the federal courts for the United States for the Southern District of Indiana, and no other courts, where this Award is granted and/or to be performed.
Section 14.    Miscellaneous Provisions
a.    Notices and Electronic Delivery and Participation.  Any notice to be given by the Grantee or successor Grantee shall be in writing, and any notice shall be deemed to have been given or made only upon receipt thereof by the Corporate Secretary 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 Award and participation in the Plan by electronic means or request the Grantee’s consent to participate in the Plan by electronic means.  By accepting this Award, the Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by Lilly or a third party designated by Lilly.
b.    Language.  The Grantee acknowledges that he or she is proficient in the English language or has consulted with an advisor who is sufficiently proficient in English, so as to allow the Grantee to understand the terms and conditions of this Award Agreement.  If the Grantee has received this Award Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different from the English version, the English version will control.
c.    Waiver.  The waiver by Lilly of any provision of this Award Agreement at any time or for any purpose shall not operate as or be construed to be a waiver of the same or any other provision of this Award Agreement at any subsequent time or for any other purpose.
d.    Severability and Section Headings.  If one or more of the provisions of this Award Agreement 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 Award Agreement to be construed so as to foster the intent of this Award Agreement and the Plan.  
The section headings in this Award Agreement are for convenience of reference only and shall not be deemed a part of, or germane to, the interpretation or construction of this instrument.
e.    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 
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Eli Lilly and Company Performance Award Agreement (Executive Officer)

the Plan or the Grantee’s acquisition or sale of the underlying Shares.  The Grantee should consult with his or her own personal tax, legal and financial advisors regarding the Grantee’s participation in the Plan before taking any action related to the Plan.
Section 15.    Compensation Recovery
At any time during the three years following the date on which the number of Performance Units subject to the Award has been determined under Section 2 above, the Company reserves the right to and, in appropriate cases, will seek restitution of all or part of any Shares that have been issued or cash that has been paid pursuant to this Award if:
a.    (i)    the number of 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 a restatement of all or a portion of the Company’s financial statements; and 
(ii)    the Grantee engaged in intentional misconduct that caused or partially caused the need for such a restatement; and
(iii)    the number of 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 Shares actually issued or the amount of cash actually paid; or 
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 misconduct causes significant harm to the company.
Furthermore, in the event the number of Shares issued or cash paid pursuant to this 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 Shares or cash paid pursuant to this Award to the extent that the number of Shares issued or the amount paid exceeded the number of 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 Shares or make additional payment to the extent that the number of Shares issued or the amount paid was less than the correct amount.
This Section 15 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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Eli Lilly and Company Performance Award Agreement (Executive Officer)

Section 16.    Award Subject to Acknowledgement of Acceptance
Notwithstanding any provisions of this Award Agreement, the Award is subject to acknowledgement of acceptance by the Grantee prior to 4:00 PM (EDT) [•], 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) [•], the Award will be cancelled, subject to the Committee’s discretion for unforeseen circumstances. 

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

ELI LILLY AND COMPANY

By: _________________________

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