Document:

WELLS FARGO & COMPANY 8-K

 

Exhibit 4.2

 

[Face
of Note]

 

Unless
this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede
& Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

	CUSIP
NO. 95001B7G3
	FACE AMOUNT: $____________

	
REGISTERED
NO. __
	 

 

WELLS
FARGO & COMPANY

 

MEDIUM-TERM
NOTE, SERIES S

 

Due
Nine Months or More From Date of Issue

 

Principal
at Risk Securities Linked to the S&P 500® Index

due March 20, 2020

 

WELLS
FARGO & COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the
“Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to CEDE & Co., or registered assigns, an amount equal to the Maturity Payment
Amount (as defined below), in such coin or currency of the United States of America as at the time of payment is legal tender
for payment of public and private debts, on the Stated Maturity Date. The “Initial Stated Maturity Date” shall
be March 20, 2020. If the Calculation Day (as defined below) is not postponed, the Initial Stated Maturity Date will be the
“Stated Maturity Date.” If the Calculation Day is postponed, the “Stated Maturity Date”
shall be the later of (i) the Initial Stated Maturity Date and (ii) three Business Days (as defined below) after the
Calculation Day as postponed. This Security shall not bear any interest.

Any
payments on this Security at Maturity will be made against presentation of this Security at the office or agency of the Company
maintained for that purpose in the City of Minneapolis, Minnesota and at any other office or agency maintained by the Company
for such purpose.

“Face
Amount” shall mean, when used with respect to this Security, the amount set forth on the face of this Security as its
“Face Amount.”

    	 	 	 

    	 

    

Determination
of Maturity Payment Amount

The
“Maturity Payment Amount” of this Security will equal:

 

●

if the Ending Level is greater than the Starting Level: the Face Amount plus the lesser of:

 

	 	(i)		Face Amount x		Ending Level – Starting Level

Starting Level		x Participation Rate		; and

 

(ii)
the Maximum Return;

 

●

if the Ending Level is less than or equal to the Starting Level, but greater than or equal to the Threshold Level: the Face
Amount; or

 

●

if the Ending Level is less than the Threshold Level: the Face Amount minus:

 

	 		Face Amount x	 	Threshold Level - Ending Level

Starting Level		 

 

All
calculations with respect to the Maturity Payment Amount will be rounded to the nearest one hundred-thousandth, with five one-millionths
rounded upward (e.g., 0.000005 would be rounded to 0.00001); and the Maturity Payment Amount will be rounded to the nearest cent,
with one-half cent rounded upward.

 

“Index”
shall mean the S&P 500® Index.

 

The
“Pricing Date” shall mean September 17, 2018.

 

The
“Starting Level” is 2888.80, the Closing Level of the Index on the Pricing Date.

 

The
“Closing Level” of the Index on any Trading Day means the official closing level of the Index reported by the
Index Sponsor on such Trading Day, as obtained by the Calculation Agent on such Trading Day from the licensed third-party market
data vendor contracted by the Calculation Agent at such time; in particular, taking into account the decimal precision and/or
rounding convention employed by such licensed third-party market data vendor on such date, subject to the provisions set forth
below under “Adjustments to the Index,” “Discontinuance of the Index” and “Market Disruption Events.”

 

The
“Ending Level” will be the Closing Level of the Index on the Calculation Day.

 

The
“Threshold Level” is 2599.92, which is equal to 90% of the Starting Level.

 

The
“Participation Rate” is 150%.

 

The
“Maximum Return” is 15.00% of the Face Amount of this Security.

 

    	 	2	 

     

    

 

“Index
Sponsor” shall mean S&P Dow Jones Indices LLC.

 

“Business
Day” shall mean a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in New York, New York.

 

A
“Trading Day” means a day, as determined by the Calculation Agent, on which (i) the Relevant Stock Exchanges
with respect to each security underlying the Index are scheduled to be open for trading for their respective regular trading sessions
and (ii) each Related Futures or Options Exchange is scheduled to be open for trading for its regular trading session.

 

The
“Related Futures or Options Exchange” for the Index means an exchange or quotation system where trading has
a material effect (as determined by the Calculation Agent) on the overall market for futures or options contracts relating to
the Index.

 

The
“Relevant Stock Exchange” for any security underlying the Index means the primary exchange or quotation system
on which such security is traded, as determined by the Calculation Agent.

 

The
“Calculation Day” shall be March 17, 2020. If such day is not a Trading Day, the Calculation Day will
be postponed to the next succeeding Trading Day. The Calculation Day is also subject to postponement due to the occurrence of
a Market Disruption Event (as defined below). If a Market Disruption Event occurs or is continuing with respect to the Index on
the Calculation Day, such Calculation Day will be postponed to the first succeeding Trading Day on which a Market Disruption Event
has not occurred and is not continuing; however, if such first succeeding Trading Day has not occurred as of the eighth Trading
Day after the originally scheduled Calculation Day, that eighth Trading Day shall be deemed to be the Calculation Day. If the
Calculation Day has been postponed eight Trading Days after the originally scheduled Calculation Day and a Market Disruption Event
occurs or is continuing on such eighth Trading Day, the Calculation Agent will determine the Closing Level of the Index on such
eighth Trading Day in accordance with the formula for and method of calculating the Closing Level of the Index last in effect
prior to commencement of the Market Disruption Event, using the closing price (or, with respect to any relevant security, if a
Market Disruption Event has occurred with respect to such security, its good faith estimate of the value of such security at the
Scheduled Closing Time of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the regular
trading session of such Relevant Stock Exchange) on such date of each security included in the Index. As used herein, “closing
price” means, with respect to any security on any date, the Relevant Stock Exchange traded or quoted price of such security
as of the Scheduled Closing Time of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the
regular trading session of such Relevant Stock Exchange.

 

“Calculation
Agent Agreement” shall mean the Calculation Agent Agreement dated as of January 24, 2018 between the Company and the
Calculation Agent, as amended from time to time.

 

    	 	3	 

     

    

 

“Calculation
Agent” shall mean the Person that has entered into the Calculation Agent Agreement with the Company providing for, among
other things, the determination of the Ending Level and the Maturity Payment Amount, which term shall, unless the context otherwise
requires, include its successors under such Calculation Agent Agreement. The initial Calculation Agent shall be Wells Fargo Securities,
LLC. Pursuant to the Calculation Agent Agreement, the Company may appoint a different Calculation Agent from time to time after
the initial issuance of this Security without the consent of the Holder of this Security and without notifying the Holder of this
Security.

 

Adjustments
to the Index

 

If
at any time the method of calculating the Index or a Successor Equity Index, or the closing level thereof, is changed in a material
respect, or if the Index or a Successor Equity Index is in any other way modified so that such index does not, in the opinion
of the Calculation Agent, fairly represent the level of such index had those changes or modifications not been made, then the
Calculation Agent will, at the close of business in New York, New York, on each date that the closing level of such index is to
be calculated, make such calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary
in order to arrive at a level of an index comparable to the Index or Successor Equity Index as if those changes or modifications
had not been made, and the Calculation Agent will calculate the closing level of the Index or Successor Equity Index with reference
to such index, as so adjusted. Accordingly, if the method of calculating the Index or Successor Equity Index is modified so that
the level of such index is a fraction or a multiple of what it would have been if it had not been modified (e.g., due to
a split or reverse split in such equity index), then the Calculation Agent will adjust the Index or Successor Equity Index in
order to arrive at a level of such index as if it had not been modified (e.g., as if the split or reverse split had not
occurred).

 

Discontinuance
of the Index

If
the Index Sponsor discontinues publication of the Index, and the Index Sponsor or another entity publishes a successor or substitute
equity index that the Calculation Agent determines, in its sole discretion, to be comparable to the Index (a “Successor
Equity Index”), then, upon the Calculation Agent’s notification of that determination to the Trustee and the Company,
the Calculation Agent will substitute the Successor Equity Index as calculated by the Index Sponsor or any other entity and calculate
the Ending Level as described above. Upon any selection by the Calculation Agent of a Successor Equity Index, the Company will
cause notice to be given to the Holder of this Security.

In
the event that the Index Sponsor discontinues publication of the Index prior to, and the discontinuance is continuing on, the
Calculation Day and the Calculation Agent determines that no Successor Equity Index is available at such time, the Calculation
Agent will calculate a substitute Closing Level for the Index in accordance with the formula for and method of calculating the
Index last in effect prior to the discontinuance, but using only those securities that comprised the Index immediately prior to
that discontinuance. If a Successor Equity Index is selected or the Calculation Agent calculates a level as a substitute for the
Index, the Successor Equity Index or level will be used as a substitute for the Index for all purposes, including the purpose
of determining whether a Market Disruption Event exists.

    	 	4	 

     

    

If
on the Calculation Day the Index Sponsor fails to calculate and announce the level of the Index, the Calculation Agent will calculate
a substitute Closing Level of the Index in accordance with the formula for and method of calculating the Index last in effect
prior to the failure, but using only those securities that comprised the Index immediately prior to that failure; provided
that, if a Market Disruption Event occurs or is continuing on such day, then the provisions set forth above under the definition
of “Calculation Day” shall apply in lieu of the foregoing.

Market
Disruption Events 

A
“Market Disruption Event” means any of the following events as determined by the Calculation Agent in its sole
discretion:

 

(A)       

The
occurrence or existence of a material suspension of or limitation imposed on trading by the Relevant Stock Exchanges or otherwise
relating to securities which then comprise 20% or more of the level of the Index or any Successor Equity Index at any time during
the one-hour period that ends at the Close of Trading on that day, whether by reason of movements in price exceeding limits permitted
by those Relevant Stock Exchanges or otherwise.

(B)       

The
occurrence or existence of a material suspension of or limitation imposed on trading by any Related Futures or Options Exchange
or otherwise in futures or options contracts relating to the Index or any Successor Equity Index on any Related Futures or Options
Exchange at any time during the one-hour period that ends at the Close of Trading on that day, whether by reason of movements
in price exceeding limits permitted by the Related Futures or Options Exchange or otherwise.

(C)       

The
occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the ability of market participants
in general to effect transactions in, or obtain market values for, securities that then comprise 20% or more of the level of the
Index or any Successor Equity Index on their Relevant Stock Exchanges at any time during the one-hour period that ends at the
Close of Trading on that day.

(D)       

The
occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the ability of market participants
in general to effect transactions in, or obtain market values for, futures or options contracts relating to the Index or any Successor
Equity Index on any Related Futures or Options Exchange at any time during the one-hour period that ends at the Close of Trading
on that day.

(E)       

The
closure on any Exchange Business Day of the Relevant Stock Exchanges on which securities that then comprise 20% or more of the
level of the Index or any Successor Equity Index are traded or any Related Futures or Options Exchange prior to its Scheduled
Closing Time unless the earlier closing time is announced by the Relevant Stock Exchange or Related Futures or Options Exchange,
as

    	 	5	 

     

    

applicable,
at least one hour prior to the earlier of (1) the actual closing time for the regular trading session on such Relevant Stock
Exchange or Related Futures or Options Exchange, as applicable, and (2) the submission deadline for orders to be entered
into the Relevant Stock Exchange or Related Futures or Options Exchange, as applicable, system for execution at such actual closing
time on that day.

(F)       

The
Relevant Stock Exchange for any security underlying the Index or Successor Equity Index or any Related Futures or Options Exchange
fails to open for trading during its regular trading session.

For
purposes of determining whether a Market Disruption Event has occurred:

(1)       

the
relevant percentage contribution of a security to the level of the Index or any Successor Equity Index will be based on a comparison
of (x) the portion of the level of such Index attributable to that security and (y) the overall level of the Index or
Successor Equity Index, in each case immediately before the occurrence of the Market Disruption Event;

(2)       

the
“Close of Trading” on any Trading Day for the Index or any Successor Equity Index means the Scheduled Closing
Time of the Relevant Stock Exchanges with respect to the securities underlying the Index or Successor Equity Index on such Trading
Day; provided that, if the actual closing time of the regular trading session of any such Relevant Stock Exchange is earlier
than its Scheduled Closing Time on such Trading Day, then (x) for purposes of clauses (A) and (C) of the definition of “Market
Disruption Event” above, with respect to any security underlying the Index or Successor Equity Index for which such Relevant
Stock Exchange is its Relevant Stock Exchange, the “Close of Trading” means such actual closing time and (y) for purposes
of clauses (B) and (D) of the definition of “Market Disruption Event” above, with respect to any futures or options
contract relating to the Index or Successor Equity Index, the “close of trading” means the latest actual closing time
of the regular trading session of any of the Relevant Stock Exchanges, but in no event later than the Scheduled Closing Time of
the Relevant Stock Exchanges;

(3)       

the
“Scheduled Closing Time” of any Relevant Stock Exchange or Related Futures or Options Exchange on any Trading
Day for the Index or any Successor Equity Index means the scheduled weekday closing time of such Relevant Stock Exchange or Related
Futures or Options Exchange on such Trading Day, without regard to after hours or any other trading outside the regular trading
session hours; and

(4)       

an
“Exchange Business Day” means any Trading Day for the Index or any Successor Equity Index on which each Relevant
Stock Exchange for the securities underlying the Index or any Successor Equity Index and each Related Futures or Options Exchange
are open for trading during their respective regular

    	 	6	 

     

    

trading
sessions, notwithstanding any such Relevant Stock Exchange or Related Futures or Options Exchange closing prior to its Scheduled
Closing Time.

Calculation
Agent

The
Calculation Agent will determine the Maturity Payment Amount and the Ending Level. In addition, the Calculation Agent will (i)
determine if adjustments are required to the Closing Level of the Index under the circumstances described in this Security, (ii)
if publication of the Index is discontinued, select a Successor Equity Index or, if no Successor Equity Index is available, determine
the Closing Level of the Index under the circumstances described in this Security, and (iii) determine whether a Market Disruption
Event or non-Trading Day has occurred.

The
Company covenants that, so long as this Security is Outstanding, there shall at all times be a Calculation Agent (which shall
be a broker-dealer, bank or other financial institution) with respect to this Security.

All
determinations made by the Calculation Agent with respect to this Security will be at the sole discretion of the Calculation Agent
and, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security.

Tax
Considerations

The
Company agrees, and by acceptance of a beneficial ownership interest in this Security each Holder of this Security will be deemed
to have agreed (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary), for United States
federal income tax purposes to characterize and treat this Security as a prepaid derivative contract that is an “open transaction.”

Redemption
and Repayment

This
Security is not subject to redemption at the option of the Company or repayment at the option of the Holder hereof prior to March 20,
2020. This Security is not entitled to any sinking fund.

Acceleration

If
an Event of Default, as defined in the Indenture, with respect to this Security shall occur and be continuing, the Maturity Payment
Amount (calculated as set forth in the next sentence) of this Security may be declared due and payable in the manner and with
the effect provided in the Indenture. The amount payable to the Holder hereof upon
any acceleration permitted under the Indenture will be equal to the Maturity Payment Amount hereof calculated as provided herein
as though the date of acceleration was the Calculation Day.

	 	 	 

 

Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this
place.

    	 	7	 

     

    

 

Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature
or its duly authorized agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

    	 	8	 

     

    

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

DATED:

 

	 	WELLS FARGO & COMPANY
	 	 	 
	 	By:	 
	 	 	 
	 	 	Its:
	 	 	 
	 	Attest:	 
	 	 	 
	 	 	Its:

 

TRUSTEE’S
CERTIFICATE OF

AUTHENTICATION

This
is one of the Securities of the 

series
designated therein described

in
the within-mentioned Indenture.

 

	CITIBANK, N.A.,	 
	 	as Trustee	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 
	 	 	 
	OR	 
	 	 	 
	WELLS FARGO BANK, N.A.,	 
	 	as Authenticating Agent for the Trustee	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 

 

 

    	 	9	 

     

    

 

[Reverse
of Note]

 

 

WELLS
FARGO & COMPANY

 

MEDIUM-TERM
NOTE, SERIES S

 

Due
Nine Months or More From Date of Issue

 

Principal
at Risk Securities Linked to the S&P 500® Index

due March 20, 2020

 

This
Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued
and to be issued in one or more series under an indenture dated as of February 21, 2017, as amended or supplemented from
time to time (herein called the “Indenture”), between the Company and Citibank, N.A., as Trustee (herein called
the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series of the Securities designated as Medium-Term Notes,
Series S, of the Company. The amount payable on the Securities of this series may be determined by reference to the performance
of one or more equity-, commodity- or currency-based indices, exchange traded funds, securities, commodities, currencies, statistical
measures of economic or financial performance, or a basket comprised of two or more of the foregoing, or any other market measure
or may bear interest at a fixed rate or a floating rate. The Securities of this series may mature at different times, be redeemable
at different times or not at all, be repayable at the option of the Holder at different times or not at all and be denominated
in different currencies.

The
Securities are issuable only in registered form without coupons and will be either (a) book-entry securities represented
by one or more Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities
issued to and registered in the names of, the beneficial owners or their nominees.

The
Company agrees, to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of
interest against a Holder of this Security.

Modification
and Waivers 

The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding
of all series to be affected, acting together as a class. The Indenture also contains provisions permitting the Holders of a majority
in principal amount of the Securities of all series at the time Outstanding affected by certain provisions of the Indenture, acting
together as a class, on

    	 	10	 

     

    

behalf
of the Holders of all Securities of such series, to waive compliance by the Company with those provisions of the Indenture. Certain
past defaults under the Indenture and their consequences may be waived under the Indenture by the Holders of a majority in principal
amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series. Solely
for the purpose of determining whether any consent, waiver, notice or other action or Act to be taken or given by the Holders
of Securities pursuant to the Indenture has been given or taken by the Holders of Outstanding Securities in the requisite aggregate
principal amount, the principal amount of this Security will be deemed to be equal to the amount set forth on the face hereof
as the “Face Amount” hereof. Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this
Security.

Defeasance

Section 403
and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture, relating
to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants, upon
compliance by the Company with certain conditions set forth therein, shall not apply to this Security. The remaining provisions
of Section 401 of the Indenture shall apply to this Security.

Authorized
Denominations

This
Security is issuable only in registered form without coupons in denominations of $1,000 or any amount in excess thereof which
is an integral multiple of $1,000.

Registration
of Transfer

Upon
due presentment for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis,
Minnesota, a new Security or Securities of this series, with the same terms as this Security, in authorized denominations for
an equal aggregate Face Amount will be issued to the transferee in exchange herefor, as provided in the Indenture and subject
to the limitations provided therein and to the limitations described below, without charge except for any tax or other governmental
charge imposed in connection therewith.

This
Security is exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing
agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days
after the Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines
that this Security shall be exchangeable for definitive Securities in registered form and notifies the Trustee thereof or (z)
an Event of Default with respect to the Securities represented hereby has occurred and is continuing. If this Security is exchangeable
pursuant to the preceding sentence, it shall be exchangeable for definitive Securities in registered form, having the same date
of issuance, Stated Maturity Date and other terms and of authorized denominations aggregating a like amount.

    	 	11	 

     

    

This
Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary
or a nominee of such successor. Except as provided above, owners of beneficial interests in this Global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under
the Indenture.

Prior
to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

Obligation
of the Company Absolute

No
reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Maturity Payment Amount at the times, place and rate, and in the coin
or currency, herein prescribed, except as otherwise provided in this Security.

No
Personal Recourse

No
recourse shall be had for the payment of the Maturity Payment Amount, or for any claim based hereon, or otherwise in respect hereof,
or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly waived and released.

Defined
Terms

All
terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless
otherwise defined in this Security.

Governing
Law

This
Security shall be governed by and construed in accordance with the law of the State of New York, without regard to principles
of conflicts of laws.

    	 	12	 

     

    

 

ABBREVIATIONS

 

 

The
following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:

 

	TEN COM	--	as tenants in common
	 	 	 
	TEN ENT	--	as tenants by the entireties
	 	 	 
	JT TEN	--	as joint tenants with right
	 	 	of survivorship and not
	 	 	as tenants in common

 

	UNIF GIFT MIN ACT --	 	 Custodian 	 
	 	(Cust)	 	(Minor)

 

	Under Uniform Gifts to Minors Act	 
	 	 
	 	 
	(State)	 

 

Additional abbreviations
may also be used though not in the above list.

 

FOR VALUE RECEIVED,
the undersigned hereby sell(s) and transfer(s) unto

 

	Please Insert Social Security or	 
	Other Identifying Number of Assignee
	 	 
	 	 

 

 

	 
	 
	 

(Please
print or type name and address including postal zip code of Assignee)

 

 

    	 	13	 

     

    

 

the
within Security of WELLS FARGO & COMPANY and does hereby irrevocably constitute and appoint __________________ attorney to
transfer the said Security on the books of the Company, with full power of substitution in the premises.

 

 

Dated:
_________________________

  

	 	 
	 	 
	 	 
	 	 

 

 

NOTICE:
The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.

 

 

    	 	14Exhibit 4.1

 

ELANCO ANIMAL HEALTH INCORPORATED
 (an Indiana corporation)

 

AMENDED AND RESTATED ARTICLES OF INCORPORATION

 

1.                                      The name of the Corporation shall be

 

ELANCO ANIMAL HEALTH INCORPORATED.

 

2.                                      The purposes for which the Corporation is formed are to engage in any lawful act or activity for which a corporation may be organized under the Indiana Business Corporation Law, as amended from time to time (the “IBCL”).

 

3.                                      The period during which the Corporation is to continue as a corporation is perpetual.

 

4.                                      The total number of shares which the Corporation shall have authority to issue is 6,000,000,000 shares, consisting of 5,000,000,000 shares of Common Stock and 1,000,000,000 shares of Preferred Stock.  The Corporation’s shares do not have any par or stated value, except that, solely for the purpose of any statute or regulation imposing any tax or fee based upon the capitalization of the Corporation, each of the Corporation’s shares shall be deemed to have no par value per share.

 

5.                                      The following provisions shall apply to the Corporation’s shares:

 

(a)                                 The Corporation shall have the power to acquire (by purchase, redemption, or otherwise), hold, own, pledge, sell, transfer, assign, reissue, cancel, or otherwise dispose of the shares of the Corporation in the manner and to the extent now or hereafter permitted by the laws of the State of Indiana (but such power shall not imply an obligation on the part of the owner or holder of any share to sell or otherwise transfer such share to the Corporation), including the power to purchase, redeem, or otherwise acquire the Corporation’s own shares, directly or indirectly, and without pro rata treatment of the owners or holders of any class or series of shares, unless, after giving effect thereto, the Corporation would not be able to pay its debts as they become due in the usual course of business or the Corporation’s total assets would be less than its total liabilities (and without regard to any amounts that would be needed, if the Corporation were to be dissolved at the time of the purchase, redemption, or other acquisition, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those of the holders of the shares of the Corporation being purchased, redeemed, or otherwise acquired, unless otherwise expressly provided with respect to a series of Preferred Stock).  Shares of the Corporation purchased, redeemed, or otherwise acquired by it shall constitute authorized but unissued shares, unless prior to any such

 

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purchase, redemption or other acquisition or within thirty (30) days thereafter the Board of Directors adopts a resolution providing that such shares constitute authorized and issued but not outstanding shares.

 

(b)                                 Preferred Stock of any series that has been redeemed (whether through the operation of a retirement or sinking fund or otherwise) or purchased by the Corporation, or which, if convertible, have been converted into shares of the Corporation of any other class or series, may be reissued as a part of such series or of any other series of Preferred Stock, subject to such limitations (if any) as may be fixed by the Board of Directors with respect to such series of Preferred Stock in accordance with the provisions of Article 7 of these Amended and Restated Articles of Incorporation.

 

(c)                                  The Corporation may, by action of the Board of Directors, dispose of, issue, and sell shares of the Corporation in accordance with, and in such amounts as may be permitted by, the laws of the State of Indiana and the provisions of these Amended and Restated Articles of Incorporation and for such consideration, at such price or prices, at such time or times and upon such terms and conditions (including the privilege of selectively repurchasing the same) as the Board of Directors of the Corporation shall determine, without the authorization or approval by any shareholders of the Corporation.  Shares may be disposed of, issued, and sold to such persons, firms, or corporations as the Board of Directors may determine, without any preemptive or other right on the part of the owners or holders of other shares of the Corporation of any class or kind to acquire such shares by reason of their ownership of such other shares.

 

6.                                      The following provisions shall apply to the Common Stock:

 

(a)                                 Except as otherwise provided by the IBCL and subject to such shareholder disclosure and recognition procedures (which may include voting prohibition sanctions) as the Corporation may by action of its Board of Directors establish, shares of Common Stock shall have unlimited voting rights and each outstanding share of Common Stock shall, when validly issued by the Corporation, entitle the record holder thereof to one vote at all shareholders’ meetings on all matters submitted to a vote of the shareholders of the Corporation.

 

(b)                                 Shares of Common Stock shall be equal in every respect, but such equality of rights shall not imply equality of treatment as to purchase or other acquisition of shares by the Corporation.  Subject to the rights of the holders of any outstanding series of Preferred Stock, the holders of Common Stock shall be entitled to share ratably in such dividends or other distributions (other than purchases or other acquisitions of shares by the Corporation), if any, as are declared and paid from time to time on the Common Stock at the discretion of the Board of Directors.

 

(c)                                  In the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, after payment shall have been made to the holders of any outstanding series of Preferred Stock of the full amount to which they shall be entitled, the holders of Common Stock shall be entitled, to the exclusion of the holders of the Preferred Stock of any and all series, to share, ratably according to the

 

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number of shares of Common Stock held by them, in all remaining assets of the Corporation available for distribution to its shareholders, except as otherwise may be provided in an applicable certificate of designation for a series of Preferred Stock.

 

7.                                      The Board of Directors is hereby expressly authorized to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock.  Before any shares of any such series are issued, the Board of Directors shall fix, and hereby is expressly empowered to fix, by the adoption and filing in accordance with the IBCL, of an amendment or amendments to these Amended and Restated Articles of Incorporation, the terms of such Preferred Stock or series of Preferred Stock, including the following:

 

(a)                                 the designation of such series, the number of shares to constitute such series and the stated value thereof if different from the par value thereof;

 

(b)                                 whether the shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be limited and may include the right, under specified circumstances, to elect directors in addition to those to be elected by the holders of Common Stock;

 

(c)                                  the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any shares of stock of any other class or any other series of Preferred Stock;

 

(d)                                 whether the shares of such series shall be subject to redemption by the Corporation and, if so, the times, prices and other conditions of such redemption;

 

(e)                                  the amount or amounts payable upon shares of such series upon, and the rights of the holders of such series in, the voluntary or involuntary liquidation, dissolution or winding up, or upon any distribution of the assets, of the Corporation;

 

(f)                                   whether the shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof;

 

(g)                                  whether the shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class or any other series of Preferred Stock or any other securities (whether or not issued by the Corporation) and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange;

 

(h)                                 the limitations and restrictions, if any, to be effective while any shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the

 

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Corporation of, the Common Stock or shares of stock of any other class or any other series of Preferred Stock;

 

(i)                                     the conditions or restrictions, if any, upon the creation of indebtedness of the Corporation or upon the issue of any additional stock, including additional shares of such series or of any other series of Preferred Stock or of any other class of stock; and

 

(j)                                    any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof.

 

Except to the extent otherwise expressly provided in these Amended and Restated Articles of Incorporation or required by law, (i) no share of Preferred Stock shall have any voting rights other than those which shall be fixed by the Board of Directors pursuant to this Article 7 and (ii) no share of Common Stock shall have any voting rights with respect to any amendment to the terms of any series of Preferred Stock; provided, however, that in the case of this clause (ii) the terms of such series of Preferred Stock, as so amended, could have been established without any vote of any shares of Common Stock.

 

8.                                      The Corporation shall have the power to declare and pay dividends or other distributions upon the issued and outstanding shares of the Corporation, subject only to the limitations set forth in the IBCL.  The Corporation shall have the power to issue shares of one class or series as a share dividend or other distribution in respect of that class or series or one or more other classes or series.

 

9.                                      The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and it is expressly provided that the same are intended to be in furtherance and not in limitation or exclusion of the powers conferred by statute:

 

(a)                                 The number of directors of the Corporation, exclusive of directors who may be elected by the holders of any one or more series of Preferred Stock pursuant to Article 9(b) (the “Preferred Stock Directors”), shall not be less than five, the exact number to be fixed from time to time solely by resolution of the Board of Directors, acting by not less than a majority of the directors then in office.

 

(b)                                 The Board of Directors (exclusive of Preferred Stock Directors, if any) shall be divided into three classes as nearly equal in number as possible, with the term of office of one class expiring at each annual meeting. The Board of Directors may assign members of the Board of Directors already in office upon the effectiveness of the Corporation’s registration statement on Form S-1, as amended, filed with the Securities and Exchange Commission in connection with the initial listing of Common Stock on a stock exchange (the “Effective Time”) to such classes as of the Effective Time.  The term of office of the initial Class I directors shall expire at the first annual meeting following the Effective Time; the term of office of the initial Class II directors shall expire at the second annual meeting following the Effective Time; and the term of office of the initial Class III directors shall expire at the third annual meeting following the Effective Time. Commencing with the first annual meeting of shareholders following the Effective Time,

 

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each class of directors whose term shall then expire shall be elected to hold office for a three-year term.  In the case of any vacancy on the Board of Directors, including a vacancy created by an increase in the number of directors, the vacancy shall be filled by election of the Board of Directors with the director so elected to serve for the remainder of the term of the director being replaced or, in the case of an additional director, for the remainder of the term of the class to which the director has been assigned.  All directors shall continue in office until the election and qualification of their respective successors in office, their death, their resignation in accordance with Section 2.7 of the bylaws of the Corporation (as amended, restated or otherwise modified from time to time, the “Bylaws”), their removal in accordance with Article 9(c) below and Section 2.8 of the Bylaws, or if there has been a reduction in the number of directors, until the end of their respective terms. When the number of directors is changed, any newly created directorships or any decrease in directorships shall be so assigned among the classes by a majority of the directors then in office, though less than a quorum, as to make all classes as nearly equal in number as possible.  No decrease in the number of directors shall have the effect of shortening the term of any incumbent director.  Election of directors need not be by written ballot unless the Bylaws so provide.

 

(c)                                  Any director or directors (exclusive of Preferred Stock Directors, if any) may be removed from office at any time, but only for cause and only by the affirmative vote of at least 66 2/3% of the votes entitled to be cast by holders of all the outstanding shares of Voting Stock (as defined below), voting together as a single class.

 

(d)                                 Notwithstanding any other provision of these Amended and Restated Articles of Incorporation or of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class of Voting Stock required by law or these Amended and Restated Articles of Incorporation, the affirmative vote of at least 66 2/3% of the votes entitled to be cast by holders of all the outstanding shares of Voting Stock, voting together as a single class, shall be required to alter, amend or repeal this Article 9.

 

(e)                                  For purposes of these Amended and Restated Articles of Incorporation, the term “Voting Stock” shall mean all shares of any class of capital stock of the Corporation which are entitled to vote generally in the election of directors.

 

10.                               The Corporation shall, to the fullest extent permitted by applicable law now or hereafter in effect, indemnify any person who is or was a director, officer or employee of the Corporation (an “Eligible Person”) and who is or was involved in any manner (including, without limitation, as a party or a witness) or is threatened to be made so involved in any threatened, pending or completed investigation, claim, action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, any action, suit or proceeding by or in the right of the Corporation to procure a judgment in its favor) (a “Proceeding”) by reason of the fact that such Eligible Person is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation, partnership, joint venture, limited liability company, trust or other enterprise (including, without limitation, any employee benefit plan), against all expenses (including attorneys’ fees),

 

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judgments, fines or penalties (including excise taxes assessed with respect to an employee benefit plan) and amounts paid in settlement actually and reasonably incurred by such Eligible Person in connection with such Proceeding; provided, however, that the foregoing shall not apply to a Proceeding commenced by an Eligible Person except to the extent provided otherwise in the Bylaws or an agreement with an Eligible Person.  The Corporation may establish provisions supplemental to or in furtherance of the provisions of this Article 10, including, but not limited to, provisions concerning the determination of any Eligible Person to indemnification, mandatory or permissive advancement of expenses to an Eligible Person incurred in connection with a Proceeding, the effect of any change in control of the Corporation on indemnification and advancement of expenses and the funding or other payment of amounts necessary to effect indemnification and advancement of expenses, in the Bylaws or in agreements with any Eligible Person.

 

11.                               The provisions of IBCL §23-1-42 shall not apply to the acquisition of shares of the Corporation.

 

12.                               Except as otherwise expressly provided in these Amended and Restated Articles of Incorporation, the Corporation reserves the right to amend, alter or repeal any provision contained in these Amended and Restated Articles of Incorporation, in the manner now or hereafter prescribed by law, and all rights conferred upon shareholders herein are subject to this reservation.

 

13.                               Subject to the rights of the holders of preferred stock to elect any directors voting separately as a class or series, at each annual meeting of shareholders, the directors to be elected at the meeting shall be chosen by a plurality of the votes cast by the holders of shares entitled to vote in the election at the meeting, provided a quorum is present.  For purposes of this Article 13, a “plurality of the votes cast” shall mean that the individuals with the highest number of votes are elected as directors up to the maximum number of directors to be elected.

 

14.                               Certain Relationships and Transactions.

 

(a)                                 General.  The Corporation has been chartered to succeed to and carry on the animal health business of Lilly separate from the other businesses conducted by Lilly.  Notwithstanding the fact that Lilly may continue to hold a significant percentage or even a controlling majority of the Corporation’s stock, no fiduciary duty of any nature shall be deemed to exist between Lilly and the Corporation and no such duty shall be owed one to the other.  The Corporation and each person acquiring at any time any shares of capital stock or other equity securities of the Corporation acquires such shares subject to this limitation and agrees there is no expectancy of any fiduciary duty owed by either Lilly or the Corporation to the other. To the fullest extent permitted by law, any person purchasing or otherwise acquiring any shares of capital stock of the Corporation, or any interest therein, shall be deemed to have notice of and to have consented to the provisions of this Article 14.

 

In recognition and anticipation that (i) the Corporation will not be a wholly owned subsidiary of Lilly and that Lilly will be a significant shareholder of the Corporation, (ii) directors, officers and/or employees of Lilly may serve as directors

 

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and/or officers of the Corporation, (iii) subject to any contractual arrangements that may otherwise from time to time be agreed to between Lilly and the Corporation, Lilly may engage in the same, similar or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, (iv) Lilly may have an interest in the same areas of corporate opportunity as the Corporation and Affiliated Companies thereof, and (v) as a consequence of the foregoing, it is in the best interests of the Corporation that the respective rights and obligations of the Corporation and of Lilly, and the duties of any directors and/or officers of the Corporation who are also directors, officers and/or employees of Lilly, be determined and delineated in respect of any transactions between, or opportunities that may be suitable for both, the Corporation and Affiliated Companies thereof, on the one hand, and Lilly, on the other hand, the sections of this Article 14 shall to the fullest extent permitted by law regulate and define the conduct of certain of the business and affairs of the Corporation in relation to Lilly and the conduct of certain affairs of the Corporation as they may involve Lilly and its directors, officers and/or employees, and the power, rights, duties and liabilities of the Corporation and its officers, directors and shareholders in connection therewith.

 

Nothing in this Article 14 creates or is intended to create any fiduciary duty on the part of Lilly, the Corporation, any Affiliated Company, or any shareholder, director, officer or employee of any of them that does not otherwise exist under Indiana law and nothing in this Article 14 expands any such duty of any such person that may now or hereafter exist under Indiana law.

 

(b)                                 Certain Agreements and Transactions Permitted. The Corporation may from time to time enter into and perform, and cause or permit any Affiliated Company of the Corporation to enter into and perform, one or more agreements (or modifications or supplements to pre-existing agreements) with Lilly pursuant to which the Corporation or an Affiliated Company thereof, on the one hand, and Lilly, on the other hand, agree to engage in transactions of any kind or nature with each other and/or agree to compete, or to refrain from competing or to limit or restrict their competition, with each other, including to allocate, and to cause their respective directors, officers and/or employees (including any who are directors, officers and/or employees of both) to allocate opportunities between or to refer opportunities to each other. Subject to Section 14(d) below, no such agreement, or the performance thereof by the Corporation or any Affiliated Company thereof, or Lilly, shall, to the fullest extent permitted by law, be considered contrary to any fiduciary duty that any director and/or officer of the Corporation or any Affiliated Company thereof who is also a director, officer and/or employee of Lilly may owe to the Corporation or may be alleged to owe to such Affiliated Company, or to any shareholder thereof, or any legal duty or obligation Lilly may be alleged to owe on any basis, notwithstanding the provisions of these Amended and Restated Articles of Incorporation stipulating to the contrary. Subject to Section 14(d) below, to the fullest extent permitted by law, no director and/or officer of the Corporation who is also a director, officer and/or employee of Lilly shall have or be under any fiduciary duty to the Corporation or any Affiliated Company thereof to refer any corporate opportunity to the Corporation or any Affiliated Company or to refrain

 

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from acting on behalf of the Corporation or any Affiliated Company thereof or of Lilly in respect of any such agreement or transaction or performing any such agreement in accordance with its terms.

 

(c)                                  Authorized Business Activities.  Without limiting the other provisions of this Article 14, Lilly shall have no duty to communicate information regarding a corporate opportunity to the Corporation or to refrain from (i) engaging in the same or similar activities or lines of business as the Corporation or (ii) doing business with any client, customer or vendor of the Corporation.  To the fullest extent permitted by law, except as provided in Section 14(d), no officer, director and/or employee of the Corporation who is also a director, officer or employee of Lilly shall be deemed to have breached his or her fiduciary duties, if any, to the Corporation solely by reason of Lilly’s engaging in any such activity.

 

(d)                                 Corporate Opportunities.  Except as otherwise agreed in writing between the Corporation and Lilly, for so long as Lilly owns a majority of all the outstanding shares of Voting Stock, in the event that a director and/or officer of the Corporation who is also a director, officer and/or employee of Lilly acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both the Corporation and Lilly, such director and/or officer shall to the fullest extent permitted by law have fully satisfied and fulfilled his or her fiduciary duty, if any, with respect to such corporate opportunity, and the Corporation to the fullest extent permitted by law renounces any interest or expectancy in such business opportunity and waives any claim that such business opportunity constituted a corporate opportunity that should have been presented to the Corporation or any Affiliated Company thereof, if such director and/or officer acts in a manner consistent with the following policy:

 

(i)                                     such a corporate opportunity offered to any person who is a director but not an officer of the Corporation and who is also a director, officer and/or employee of Lilly shall belong to the Corporation only if such opportunity is expressly offered to such person solely in his or her capacity as a director of the Corporation and otherwise shall belong to Lilly; and

 

(ii)                                  such a corporate opportunity offered to any person who is an officer of the Corporation and also is a director, officer and/or employee of Lilly shall belong to the Corporation unless such opportunity is expressly offered to such person solely in his or her capacity as a director, officer and/or employee of Lilly, in which case such opportunity shall belong to Lilly.

 

The foregoing policy, and the action of any director or officer of Lilly, the Corporation or any Affiliated Company taken in accordance with, or in reliance upon, the foregoing policy or in entering into or performing any agreement, transaction or arrangement is deemed and presumed to be fair to the Corporation.

 

Except as otherwise agreed in writing between the Corporation and Lilly, if a director and/or officer of the Corporation, who also serves as a director, officer and/or employee of Lilly, acquires knowledge of a potential corporate opportunity for both the

 

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Corporation and Lilly in any manner not addressed by this Article 14, such director and/or officer shall have no duty to communicate or present such corporate opportunity to the Corporation and shall to the fullest extent permitted by law not be liable to the Corporation or its shareholders for breach of fiduciary duty as a director and/or officer of the Corporation by reason of the fact that Lilly pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another person or does not present such corporate opportunity to the Corporation, and the Corporation to the fullest extent permitted by law renounces any interest or expectancy in such business opportunity and waives any claim that such business opportunity constituted a corporate opportunity that should be presented to the Corporation.

 

(e)                                  Delineation of Indirect Interests. To the fullest extent permitted by law, no director or officer of the Corporation or any Affiliated Company shall be deemed to have an indirect interest in any matter, transaction or corporate opportunity that may be received or exploited by, or allocated to, Lilly, merely by virtue of being a director or officer or employee of Lilly, unless such director or officer’s role with Lilly involves direct responsibility for such matter, in his or her role with Lilly, such director or officer exercises supervision over such matter, or the compensation of such director or officer is materially affected by such matter. Such director or officer’s compensation shall not be deemed to be materially affected by such matter if it is only affected by virtue of its effect on the value of Lilly capital stock generally or on Lilly’s results or performance on an enterprise-wide basis.

 

(f)                                   Special Approval Procedures. If, notwithstanding the provisions of this Article 14, it is deemed desirable by Lilly, the Corporation or an Affiliated Company or any other party that the Corporation take action with specific regard to a particular transaction, corporate opportunity or a type or series of transactions or corporate opportunities to ensure, out of an abundance of caution, that such transaction or transactions are not voidable, or that such an opportunity or opportunities are effectively disclaimed, the Corporation may employ any of the following procedures:

 

(i)                                     the material facts of the transaction and the director’s or officer’s interest are disclosed or known to the Board of Directors of the Corporation or a duly appointed committee of the Board of Directors and the Board of Directors or such committee, as applicable, authorizes, approves, or ratifies the transaction by the affirmative vote or consent of a majority of the directors (or committee members) who have no direct or indirect interest in the transaction and, in any event, of at least two directors (or committee members);

 

(ii)                                  the material facts of the transaction and the director’s interest are disclosed or known to the shareholders entitled to vote and they authorize, approve or ratify such transaction by vote.

 

The interested director or directors may be counted in determining the presence of a quorum at such meeting. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any actions taken under subsection (i) of this section.

 

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One or more matters, transactions or corporate opportunities approved pursuant to any of the foregoing procedures is not void or voidable and shall not give rise to any equitable relief or damages or other sanctions against any director, officer, or shareholder (including Lilly) of the Corporation on the ground that the matter, transaction or corporate opportunity should have first been offered to the Corporation. Nothing in this Article 14 requires any matter to be considered by the board of directors or the shareholders of the Corporation and, in all cases, officers and directors of the Corporation are authorized to refrain from bringing a matter otherwise addressed in this Article 14 before the Board of Directors or the shareholders for consideration unless such matter is required to be considered by the board of directors or shareholders, as applicable, under Indiana law.  This Article 14 shall not be construed to invalidate any contract or other transaction which would otherwise be valid under the common, equitable, or statutory law applicable thereto.

 

(g)                                  Certain Definitions. For purposes of this Article 14:

 

“Affiliated Company” in respect of the Corporation shall mean any entity controlled by the Corporation.

 

“corporate opportunities” shall include, but not be limited to, business opportunities which the Corporation is financially able to undertake, which are, from their nature, in the line of the Corporation’s business, are of practical advantage to it and are ones in which the Corporation would have an interest or a reasonable expectancy, and in which, by embracing the opportunities or allowing such opportunities to be embraced by Lilly, the self-interest of the Corporation’s directors, officers and/or employees will be brought into conflict with that of the Corporation either directly or indirectly by virtue of such director’s, officer’s or employee’s service as a director, officer or employee of Lilly; and

 

“Lilly” shall mean Eli Lilly and Company and each other subsidiary of Eli Lilly & Company and each other person that either is controlled directly or indirectly by Eli Lilly and Company (other than the Corporation and any entity that is controlled by the Corporation).

 

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