Document:

Document

Exhibit 10.11 — Form of Restricted Stock Unit Award under the 2002 Lilly Stock Plan

Eli Lilly and Company
Restricted Stock Unit Award Agreement
(for Executive Officer)

This Restricted Stock Unit Award has been granted on [INSERT DATE] (“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 Restricted Stock Unit Award Agreement (the “Grantee”).

Vesting Date:     100% on [INSERT DATE]
    (except as otherwise provided in this 
    Restricted Stock Unit Award Agreement)

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

Table of Contents

						
	Section 1.    Grant of Restricted Stock Units
	3

	Section 2.    Vesting
	3

	Section 3.    Change in Control
	4

	Section 4.    Settlement
	5

	Section 5.    Rights of the Grantee
	5
	Section 6.    Prohibition Against Transfer
	6
	Section 7.    Responsibility for Taxes
	6
	Section 8.    Section 409A Compliance
	8
	Section 9.    Grantee’s Acknowledgement
	8
	Section 10.    Data Privacy
	9

	Section 11.    Restrictive Covenants, Remedies, and Additional Terms and Conditions
	11

	Section 12.    Governing Law and Choice of Venue
	12

	Section 13.    Miscellaneous Provisions
	12

	Section 14.    Compensation Recovery
	13

	Section 15.    Award Subject to Acknowledgement of Acceptance
	14

    Page 2    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

 
Section 1.Grant of Restricted Stock Units
Eli Lilly and Company, an Indiana corporation (“Lilly” or the “Company”), has granted to the Eligible Individual who has received this Restricted Stock Unit Award Agreement (the “Grantee”) an award of restricted stock units (the “Restricted Stock Units” or the “Award”) with respect to the 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 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 Restricted Stock Unit 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 11 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 
a.For purposes of the vesting provisions set forth in Section 2 of this Award Agreement, the following definitions will apply:

(i)“Disability” 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 may be 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.

(ii)“Qualifying Termination” means the termination of the Grantee's Service under any one of the following circumstances:

A.due to a plant closing or reduction in workforce (as defined below);

B.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.

    Page 3    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

“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.
b.The Award shall vest at the close of business in Indianapolis, Indiana, U.S.A. on the earliest of the following dates (each, a “Vesting Date”):
(i)[INSERT DATE] with respect to 100% of the Award, provided the Grantee is still in active Service on the Vesting Date, 

subject to any alternative date(s) set forth in any appendix attached hereto (the “Appendix”), or 

(ii)the date the Grantee’s Service is terminated (A) due to the Grantee’s death or (B) by reason of the Grantee’s Disability, with respect to 100% of the Award, or

(iii)the date the Grantee is subject to a Qualifying Termination, in which case the number of Restricted Stock Units that shall vest shall be reduced proportionally for the portion of the total days between the Grant Date and the Vesting Date specified in 2(b)(i) that the Grantee was not in active Service. 

The Committee’s determination as to whether (A) the Grantee’s Service has been terminated by reason of Disability, (B) the Grantee’s Service has been terminated as a direct result of either a plant closing or a reduction in workforce, (C) 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, and (D) a leave of absence or a transfer of employment between Lilly and an Affiliate or between Affiliates constitutes a termination of Service shall be final and binding on the Grantee.

c.In the event the Grantee's Service with the Company or an Affiliate is terminated prior to a Vesting Date for any reason or in any circumstance other than those specified in Sections 2(b)(ii) or 2(b)(iii), any unvested portion of the Award will be forfeited.  

d.The Committee may, at its discretion, cancel the Award or reduce the number of Restricted Stock Units and any accrued Dividend Equivalent Rights, prorated according to time or other measure as deemed appropriate by the Committee, if at any time prior to the 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.
Section 3.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 3 shall be the consummation of a merger, share exchange, or 
    Page 4    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

consolidation of the Company, as defined in Section 2.6(c) of the Plan (a “Transaction”).

b.In the event that the 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 Award shall vest automatically in full.

c.In the event that the Award is converted, assumed, substituted, continued or replaced by a successor or surviving corporation, or a parent or subsidiary thereof, in connection with a Transaction and the Grantee is subject to a Covered Termination (as defined below) prior to any applicable Vesting Date, the Award shall vest automatically in full. 

For purposes of this provision, “Covered Termination” shall mean a termination of Service as described in Sections 2(b)(ii) and 2(b)(iii), Grantee’s termination 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 Employees or the Eli Lilly and Company 2007 Change in Control Severance Pay Plan for Select Employees (both as amended from time to time) or any successor plan or arrangement thereto, as applicable.

d.If the Grantee is entitled to receive stock of the acquiring entity or successor to the Company as a result of the application of this Section 3, then references to Shares in this Award Agreement shall be read to mean stock of the successor or surviving corporation, or a parent or subsidiary thereof, as and when applicable.     
Section 4.Settlement  
a.Except as provided below, the Award shall be paid to the Grantee as soon as practicable and generally within sixty (60) days following the applicable Vesting Date, or, if earlier, a vesting event contemplated under the Section 3 above.

b.At such time, Lilly shall issue or transfer Shares or the cash equivalent, as contemplated under Section 4(c) 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.

c.At any time prior to the applicable Vesting Date or until the Award is paid in accordance with this Section 4, the Committee may, if it so elects, determine to pay part or all of the Award 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 applicable Vesting Date. 
     
d.In the event of the death of the Grantee, the payments described above shall be made to the successor of the Grantee.
Section 5.Rights of the Grantee 
a.No Shareholder Rights.  The Restricted Stock Units do not entitle the Grantee to any rights of a shareholder of Lilly until such time as the 
    Page 5    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

Restricted Stock Units vest and Shares are issued or transferred to the Grantee.  
b.Dividend Equivalent Rights.  As long as the Grantee holds Restricted Stock Units granted pursuant to this Award, the Company shall accrue for the Grantee, on each date that the Company pays a cash dividend to holders of Company Shares, Dividend Equivalent Rights equal to the total number of Restricted Stock Units credited to the Grantee under this Award 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.  A report showing the accrued Dividend Equivalent Rights shall be sent to the Grantee periodically, as determined by the Company.  The accrued Dividend Equivalent Rights shall be subject to the same vesting conditions as the Restricted Stock Units to which the Dividend Equivalent Rights relate, and the Dividend Equivalent Rights shall be forfeited in the event that the Restricted Stock Units with respect to which such Dividend Equivalent Rights were credited are forfeited. Following the applicable Vesting Date, Lilly shall pay to the Grantee in cash all accrued Dividend Equivalent Rights in accordance with Section 4 above.

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 6.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 7.Responsibility for Taxes
a.Regardless of any action Lilly and/or the Grantee’s 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 Restricted Stock Units, the accrual of Dividend Equivalent Rights, the vesting of the Restricted Stock Units and the lapse of restrictions, the transfer and issuance of any Shares, the receipt of any cash payment pursuant to the Award and/or 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 
    Page 6    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

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 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)In the case of Dividend Equivalent Rights paid to the Grantee and if the Restricted Stock Units are 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 Restricted Stock Units are 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 Restricted Stock Units are 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 7(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 which case 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 
    Page 7    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

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 require the Grantee to pay Lilly and/or the Employer any amount of Tax Related Items that Lilly and/or the Employer may be required to withhold or account for as a result of any aspect of this Award that cannot be satisfied by the means previously described.  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 7. 
Section 8.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 9.Grantee’s Acknowledgement
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 awards of Restricted Stock Units and/or Dividend Equivalent Rights, or benefits in lieu thereof, even if Restricted Stock Units and/or Dividend Equivalent Rights have been granted in the past;
c.all decisions with respect to future awards of Restricted Stock Units, Dividend Equivalent Rights 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.unless otherwise agreed with Lilly, the Award and any Shares subject to the Award, and the income and value of same, are not granted as consideration for, or in connection with, the service the Grantee may provide as a director of an Affiliate;
    Page 8    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

h.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; 
i.the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
j.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);
k.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 after such termination of employment or services (regardless of the reason for such termination and whether or not such termination is later found to be invalid or in breach of employment laws in the jurisdiction where the Grantee is employed or the terms of the Grantee's employment agreement, if any) will be measured by the date the Grantee ceases to actively provide services and will not be extended by any notice period (e.g., active service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where the Grantee is employed or the terms of the Grantee's employment agreement, if any); the Committee shall have the exclusive discretion to determine when the Grantee is no longer actively providing services for purposes of the Award (including whether the Grantee may still be considered to be actively providing services while on a leave of absence);
l.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; and
m.neither the Company, the Employer nor any Affiliate shall be liable for any foreign exchange rate fluctuation between the Grantee’s local currency and the United States Dollar that may affect the value of the Award or any amounts due to the Grantee pursuant to the settlement of the Award or the subsequent sale of any Shares acquired upon settlement.  
Section 10.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 
    Page 9    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

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 Restricted Share Units 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 law, 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.

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 law and that, depending on where the Grantee is based and subject to the conditions set out in such applicable law, 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 
    Page 10    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

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 offer an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above.
Section 11.Additional Terms and Conditions
a.Insider Trading/Market Abuse Laws. The Grantee may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including but not limited to the United States and the Grantee’s country of residence, which may affect the Grantee’s ability to directly or indirectly, for the Grantee or for a third party, acquire or sell, or attempt to sell,  or otherwise dispose of Shares or rights to acquire Shares (e.g., Restricted Stock Units) under the Plan during such times as the Grantee is considered to have “inside information” regarding the Company (as determined under the laws or regulations in the applicable jurisdictions).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy.  The Grantee acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Grantee should consult with his or her personal legal advisor on this matter.  

b.Imposition of Other Requirements.  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 Restricted Stock Unit 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.
    Page 11    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

Section 12.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 13.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 than 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.  

    Page 12    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

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 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 14.Compensation Recovery
At any time during the three years following the date on which the number of shares of Lilly Stock subject to this Award was determined, the Company reserves the right to and, in appropriate cases, will seek restitution of all or part of any shares of Lilly Stock subject to or issued (or cash paid) pursuant to this Award if:
a. (i)    the number of shares of Lilly Stock subject to the Award was calculated based, directly or indirectly, upon the achievement of financial results (e.g., earnings per share) that were subsequently the subject of restatement of all or a portion of the Company’s financial statements;
(ii)    the Grantee engaged in intentional misconduct that caused or partially caused the need for such a restatement; and
(iii)    the number of shares of Lilly Stock that would have been subject to the Award had the financial results been properly reported would have been lower than the number of shares of Lilly Stock actually subject to the Award.
b.    the Grantee has been determined to have committed a material violation of law or Company policy or to have failed to properly manage or monitor the conduct of an employee who has committed a material violation of law or Company policy whereby, in either case, such conduct causes significant harm to the company.
In the event the number of shares of Lilly Stock subject to the 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 of Lilly Stock subject to or issued (or cash paid) pursuant to this Award to the extent that the number of shares of Lilly Stock subject to the Award exceeded the number of shares of Lilly Stock that would have been subject to the Award had the inaccuracy or error not occurred, or
b.issue additional shares of Lilly Stock or make additional cash payment to the extent that the number of shares of Lilly Stock subject to the Award was less than the correct amount.
This Section 14 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.
    Page 13    

Eli Lilly and Company Restricted Stock Unit Award Agreement
    

Section 15.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) [INSERT DATE], through the website of Merrill, the Company’s stock plan administrator.  If the Grantee does not acknowledge acceptance of the Award prior to 4:00 PM (EDT) [INSERT DATE], 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: _________________________

    Page 14Document

Exhibit 10.17 — The Loxo Oncology, Inc. Bonus Plan

The Loxo Oncology, Inc. Bonus Plan

(effective January 1, 2021)

TABLE OF CONTENTS

						
	SECTION 1.  PURPOSE
	1

	SECTION 2.  DEFINITIONS
	1

	SECTION 3.  ADMINISTRATION
	5

	SECTION 4.  PARTICIPATION IN THE PLAN
	6

	SECTION 5.  DEFINITION AND COMPUTATION OF COMPANY BONUS
	6

	SECTION 6.  TIME OF PAYMENT
	10

	SECTION 7.  ADMINISTRATIVE GUIDELINES
	10

	SECTION 8.  MISCELLANEOUS
	11

	SECTION 9.  AMENDMENT, SUSPENSION, OR TERMINATION
	12

- i -

The Loxo Oncology, Inc. Bonus Plan
(effective January 1, 2021)

SECTION 1.  PURPOSE

The purpose of The Loxo Oncology, Inc. Bonus Plan is to encourage and promote eligible employees to create and deliver innovative pharmaceutical-based health care solutions that enable people to live longer, healthier and more active lives, to outgrow our competitors through a constant stream of pharmaceutical innovation, and to materially increase shareholder value.  The Plan is designed to accomplish the following key objectives:

a.motivate superior employee performance through the implementation of a Company performance-based bonus system for all eligible management employees, United States employees and other employees as may be designated from time to time; 

b.create a direct relationship between key company measurements and individual bonus payouts; and 

c.enable the Company to attract and retain employees that will be instrumental in driving sustained growth and performance of the Company by providing a competitive bonus program that rewards outstanding performance consistent with the Company’s mission, values and increased shareholder value of Lilly. 

SECTION 2.  DEFINITIONS

The following words and phrases as used in this Plan will have the following meanings unless a different meaning is clearly required by the context.  Masculine pronouns will refer both to males and to females:

2.1Additional Cash Award means an additional incentive opportunity for Eligible Employees as described in subsection 5.4 below.  The Additional Cash Award is available to Eligible Employees beginning with the 2020 Applicable Year and thereafter. 

2.2Applicable Year means the calendar year immediately preceding the year in which payment of the Company Bonus (and, for 2020 and thereafter, Additional Cash Award) is payable pursuant to Section 6.  For example, the Applicable Year for 2022 payout is January 1, 2021 through December 31, 2021.

2.3Bonus Target means the percentage of Participant Earnings for each Participant as described in Section 5.3(a) below.

2.4Code means the Internal Revenue Code of 1986, as amended from time to time.

2.5Committee means (i) with respect to members of the Committee, the Lilly Review Committee; and (ii) with respect to all other Eligible Employees, the Loxo Oncology Steering Committee or its designee.  

2.6Company means Loxo Oncology, Inc.

2.7Company Bonus means the amount of bonus compensation payable to a Participant as described in Section 5 below.  Notwithstanding the foregoing, however, the Committee 
- 1 -

may determine, in its sole discretion, to reduce the amount of a Participant’s Company Bonus if such Participant becomes eligible to participate in such other bonus program of the Company as may be specifically designated by the Committee.  Such reduction may be by a stated percentage up to and including 100% of the Company Bonus.

2.8Company Performance Bonus Multiple means the phrase as defined by the terms of The Lilly Bonus Plan and calculated consistent with the terms of such plan.

2.9Disabled means a Participant employed by the Company who has become eligible for a payment under The TriNet IV Long-Term Disability Plan, assuming eligibility to participate in that plan; or a Participant employed by Lilly who has become eligible for a payment under The Eli Lilly and Company Long Term Disability Plan, assuming eligibility to participate in that plan.

2.10Effective Date means January 1, 2020, as amended from time to time.

2.11Eligible Employee means:

a.a person who is (1) employed as an employee by the Company on a scheduled basis of twenty (20) or more hours per week and is scheduled to work at least five (5) months per year; and (2) receiving compensation, including short-term disability under The TriNet IV Short-Term Disability Program or similar short-term disability program from the Company for services rendered as an employee; and

b.a person who is (1) employed as an employee by Lilly or a wholly-owned subsidiary of Lilly on a scheduled basis of twenty (20) or more hours per week and is scheduled to work at least five (5) months per year; and (2) receiving compensation, including short-term disability under Lilly’s Short-Term Disability Illness Pay Program for services rendered as an employee; and (3) designated by the Committee (either on an individual, group, or combined basis) as a member of “Loxo Oncology at Lilly” for purposes of eligibility to participate in this Plan.  

c.Notwithstanding anything herein to the contrary, the term “Eligible Employee” will not include:

(1)a person who is Disabled;

(2)a person who is a “leased employee” within the meaning of Section 414(n) of the Internal Revenue Code of 1986, as amended, or whose basic compensation for services on behalf of the Company is not paid directly by the Company; 

(3)a person who is classified as a special status employee because his employment status is temporary, seasonal, or otherwise inconsistent with regular employment status; 

(4)a person who is eligible to participate in a separate bonus or incentive plan for eligible employees of Loxo Oncology, Inc. as may be specifically designated by the Committee or its designee;  

(5)a person who submits to the Committee in writing a request that he not be considered eligible for participation in the Plan; or

- 2 -

(6)any other category of employees designated by the Committee in its discretion with respect to any Applicable Year.

d.Notwithstanding anything herein to the contrary, the term Eligible Employee will not include any person who is not so recorded on the payroll records of the Company, including any such person who is subsequently reclassified by a court of law or regulatory body as a common law employee of the Company.  Consistent with the foregoing, and for purposes of clarification only, the term employee or Eligible Employee does not include any individual who performs services for the Company as an independent contractor or under any other non-employee classification.

2.12Lilly means Eli Lilly and Company.

2.13Participant means an Eligible Employee who is participating in the Plan.

2.14Participant Earnings means (A) those amounts described below that are paid during the portion of the Applicable Year during which the employee is a Participant in the Plan:

(i)regular compensation, overtime, shift premiums and other forms of additional compensation determined by and paid currently pursuant to an established formula or procedure; 
(ii)salary reduction contributions to The Loxo Oncology, Inc. 401(k) Plan or The Lilly Employee 401(k) Plan or elective contributions under any similar tax-qualified plan that is intended to meet the requirements of Section 401(k) of the Internal Revenue Code or similar Company savings program;
(iii)elective contributions to any cafeteria plan that is intended to meet the requirements of Section 125 of the Internal Revenue Code or other pre-tax contributions to a similar Company benefit plan; 
(iv)payments made under the terms of The TriNet IV Short-Term Disability Program or other similar Company program during an Applicable Year to a Participant who is on approved leave of absence and is receiving one hundred percent (100%) of his base pay; and
(v)other legally-mandated or otherwise required pre-tax deductions from a Participant’s base salary. 

(B)    Notwithstanding the foregoing, the term "Participant Earnings" does not include:

(i)       compensation paid in lieu of earned vacation; 
(ii)amounts contributed to a qualified plan (as described in ERISA), except as provided in clause (A)(ii), above;
(iii)payments made under the terms of The TriNet IV Short-Term Disability Program or other similar Company leave program during an Applicable Year to a Participant who is on approved leave of absence and is receiving less than the full amount of his base pay;
(iv)amounts paid under this Plan or other bonus or incentive program of the Company;
(v)payments made under any severance-type benefit (whether company-sponsored or mandated by law) arising out of or relating to a Participant’s termination of employment; 
- 3 -

(vi)payments based upon the discretion of the Company;
(vii)amounts paid as commissions, sales bonuses, or any premium payments paid to those deemed by the Company as essential onsite personnel in conjunction with COVID-19 efforts; or
(viii)earnings with respect to the exercise, vesting, or payment of any equity-based awards, including but not limited to stock options, restricted stock units, restricted stock, and performance share units.

2.15Plan means The Loxo Oncology, Inc. Bonus Plan as set forth herein and as hereafter modified or amended from time to time.  The Plan is an incentive compensation program and is not subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), pursuant to Department of Labor Regulation Section 2510.3.

2.16Plant Closing means the closing of a plant site or other Company location that directly results in termination of employment.  

2.17Reduction in Workforce means the elimination of a work group, functional or business unit or other broadly applicable reduction in job positions that directly results in termination of employment.  

- 4 -

SECTION 3.  ADMINISTRATION

3.1Committee.  The Plan will be administered by the Committee or, if the name of the Committee is changed, the Plan will be administered by such successor committee.  For all Eligible Employees other than members of the Committee, the Committee may delegate all or a portion of its responsibilities within its sole discretion by resolution.  Any reference in this Plan to the Committee or its authority will be deemed to include such designees (other than with respect to decisions relating to members of the Committee or for purposes of Section 9).

3.2Powers of the Committee.  The Committee will have the full power and authority in its discretion to

a.interpret the terms and provisions of the Plan and to determine any and all questions arising under the Plan, including, without limitation, the right to remedy possible ambiguities, inconsistencies, or omissions by a general rule or particular decision;

b.adopt, amend and rescind rules consistent with the Plan;

c.make exceptions in particular cases to the rules of eligibility for participation in the Plan (except with respect to Eligible Employees who are members of the Committee); 

d.determine whether, to what extent, and under what circumstances payments made or to be made should be recovered or forfeited under Lilly’s Executive Compensation Recovery Policy as in effect from time to time; and 

e.delegate authority for administration of the Plan with respect to any Eligible Employee except for members of the Committee.  The Committee will take all necessary action to approve the timing of payments, as necessary.

3.3Certification of Results.  Before any amount is paid under the Plan, the Committee will confirm the certification of the Company Performance Bonus Multiple for the Applicable Year from Lilly in writing and the satisfaction of all other material terms of the calculation of the Company Bonus as well as any Additional Cash Award.

3.4Finality of Committee Determinations.  Any determination by the Committee of the Company Performance Bonus Multiple or any other performance measure, and the level and entitlement to Company Bonus, Additional Cash Award, and any interpretation, rule, or decision adopted by the Committee under the Plan or in carrying out or administering the Plan, will be final and binding for all purposes and upon all interested persons, their heirs, and personal representatives.  The Committee may rely conclusively on determinations made by Lilly and its auditors to determine the Company Performance Bonus Multiple, Additional Cash Award, and related information for administration of the Plan, whether such information is determined by the Company, Lilly, auditors or a third-party vendor engaged specifically to provide such information to the Company.  This subsection is not intended to limit the Committee’s power, to the extent it deems proper in its discretion, to take any action permitted under the Plan.

SECTION 4.  PARTICIPATION IN THE PLAN

4.1General Rule.  Only Eligible Employees may participate in and receive payments under the Plan.

- 5 -

4.2Commencement of Participation.  An Eligible Employee will become a Participant in the Plan on the date on which the individual completes at least one hour of employment as an Eligible Employee.

4.3Termination of Participation.  An Eligible Employee will cease to be a Participant upon termination of employment with the Company for any reason, or at the time he otherwise ceases to be an Eligible Employee under the Plan; provided, however, a terminated Participant shall be eligible for a Company Bonus and Additional Cash Award to the extent provided in Section 5.6.

SECTION 5.  DEFINITION AND COMPUTATION OF COMPANY BONUS 
AND ADDITIONAL CASH AWARD

5.1Computation of Company Bonus for Eligible Employees.  Company Bonus amounts will depend significantly on Lilly company performance.  As more specifically described below, a Participant’s Company Bonus is calculated by multiplying the Participant’s Bonus Target by his Participant Earnings and the Company Performance Bonus Multiple.  For certain eligible employees, whether an individual met their job expectations may also impact the Company Bonus calculation, as described in Section 5.3(c) below.  Company Bonuses are paid out to eligible Participants in the manner provided below.

5.2Company Performance Bonus Multiple Threshold and Ceiling; Committee’s Downward Discretion.  The Company Performance Bonus Multiple will not be less than 0.25 or greater than 2.0 in an Applicable Year.  Notwithstanding the foregoing, at any time prior to certification as described in Section 3.3, the Committee in its discretion may reduce 
the Company Performance Bonus Multiple (including but not limited to a reduction below 0.25) for some or all Eligible Employees.

5.3Participant Company Bonus.  

a.Bonus Target.  Not later than 90 days after the beginning of the Applicable Year, the Bonus Target for each Participant, whether such Participant is designated on an individual basis or by specified job categories, classifications, levels, or other appropriate classification, will be determined by the Committee on a basis that takes into consideration a Participant's pay grade level and job responsibilities.  The Bonus Target for each Participant for the Applicable Year will be expressed as a percentage of Participant Earnings as of December 31 of the Applicable Year.  No later than early in the Applicable Year, each Participant will receive information regarding the Participant’s Bonus Target.  In the event that a Participant’s pay grade level changes during the Applicable Year (e.g., because of promotion, demotion or otherwise), the Participant’s Bonus Target will be prorated based on the Bonus Target applicable to each pay grade level (with related job responsibilities) and the percentage of time that the Participant is employed at each pay grade level during the Applicable Year.

b.Company Bonus Calculation.  Except as described in Section 5.3(c) below, a Participant’s Company Bonus will equal the product of the Company Performance Bonus Multiple and the Participant’s Bonus Target and the Participant’s Earnings.  

c.Adjustment for Individual Performance Multiplier, if Applicable.
Notwithstanding anything herein to the contrary, all Participants may be subject to individual performance multipliers.  For any such Participants subject to an individual performance multiplier, the amount calculated in Section 5.3(b) above will be adjusted based on whether the Participant met job expectations as determined by the 
- 6 -

Company at the end of the Applicable Year.  If a Participant does not meet such job expectations, the Participant will receive an individual performance multiplier equal to either 0.0 or 0.5, as determined by the Company.  In that event, the individual performance multiplier will be multiplied by the amount described in Section 5.3(b) above to calculate the Participant’s Company Bonus.  If a Participant meets job expectations, the Participant’s Company Bonus will equal the amount calculated in Section 5.3(b) above.  In addition, if a Participant meets job expectations, the Company may increase the Participant’s Company Bonus by an additional amount based on its determination of the Participant’s individual performance and related factors.  Not later than 90 days after the beginning of the Applicable Year, the Committee will determine applicable multipliers for meeting job expectations or ranges for the applicable rating system in effect for the Participant.  For each such Participant, such rating will be determined by the Participant’s supervision.

In the event that a Participant does not receive a year-end performance rating, but is otherwise eligible for a Company Bonus, the amount calculated in Section 5.3(b) will be multiplied by 1.0 so that the Participant’s actual Company Bonus will be the amount calculated in Section 5.3(b) above.

5.4Computation of Additional Cash Award.  In addition to Company Bonus amounts described above, Eligible Employees may be eligible for an Additional Cash Award beginning with the 2020 Applicable Year and thereafter.  The Additional Cash Award amounts will depend significantly on Loxo company performance.  In general, a Participant’s Additional Cash Award will equal the product of the Additional Cash Award Multiple and the Participant’s Bonus Target and the Participant’s Earnings.  The Additional Cash Award Multiple may range from 0 to 2.0 and will be calculated as described below.

Specifically, the Company will adopt a combination of business objectives that will be assessed at the end of each Applicable Year (beginning with the 2020 Applicable Year) by Lilly for determining whether Loxo will provide an Additional Cash Award to Eligible Employees.  Beginning with the 2021 Applicable Year, such metrics may include, but are not limited to, milestones established by the Company relating to preclinical, clinical, external innovation and/or scientific disclosure objectives.  The achievement of each business objective will result in a point being awarded toward the overall evaluation of Company achievement with critical development milestones carrying more weight than other achievements as defined by the Committee.  Company achievements will result in an Additional Cash Award Multiple between 0 to 2.0 as assessed by Lilly.  

5.5Conditions on Company Bonus and Additional Cash Award.  Payment of any Company Bonus and/or Additional Cash Award is neither guaranteed nor automatic.  A Participant’s Company Bonus and Additional Cash Award are not considered to be any form of compensation, wages, or benefits, unless and until paid. 

5.6Required Employment.  Except as provided below in this Section 5.6, required by applicable law or as otherwise designated by the Committee, if a Participant is not employed by the Company on the last day of the Applicable Year, or is otherwise not an Eligible Employee on that date, the Participant is not entitled to any Company Bonus payment or Additional Cash Award under this Plan for that Applicable Year.

a.Leaves of Absence.  A Participant who, on the last day of the Applicable Year, is on approved leave of absence under the Family and Medical Leave Act of 1993, military leave under the Uniformed Services Employment and Reemployment 
- 7 -

Rights Act, or such other approved leave of absence will be considered to be an Eligible Employee on that date for purposes of this Plan.  

b.Transfer.  An employee who is a Participant in this Plan for a portion of the Applicable Year and then transfers to a position within the Company in which he is ineligible to participate in this Plan, but who remains employed by the Company on the last day of the Applicable Year, will be treated as satisfying the last-day-of-Applicable Year requirement for purposes of this Plan.  In that event, his Company Bonus and Additional Cash Award will be based on his Participant Earnings for the portion of the Applicable Year in which the employee was a Participant in the Plan.

c.Disability or Death.  Except as described below, a Participant who was an Eligible Employee for some portion of the Applicable Year and then becomes and remains Disabled through the end of the Applicable Year, or dies during the Applicable Year will be considered to satisfy the last-day-of-Applicable-Year requirement described in this Section 5.6 for purposes of this Plan.  

d.Plant Closing or Reduction in Workforce.  A Participant who was an Eligible Employee for some portion of the Applicable Year and whose employment is terminated as a result of his failure to locate a position following a Plant Closing or Reduction in Workforce will be considered to satisfy the last-day-of-Applicable Year requirement described in this Section 5.6 for purposes of this Plan.  The Committee or its designee’s determination regarding whether a Participant’s termination is a direct result of either a Plant Closing or a Reduction in Workforce will be final and binding.   

e.Notice of Resignation.  In addition, a Participant who submits a notice of resignation from employment with the Company prior to the end of the Applicable Year and whose effective date of resignation is two (2) weeks or less from the date of notice of resignation (or as otherwise required by law) will be considered employed by the Company for purposes of this Plan until the end of his specified notice period.

5.7New Participants.  If an Eligible Employee began participation in the Plan during an Applicable Year and is eligible for a Company Bonus, his Company Bonus will be based on Participant Earnings paid after the employee became a Participant.  If an Eligible Employee began participation in the Plan during the 2020 Applicable Year before May 1, 2020, remains an Eligible Employee throughout the Applicable Year, and is eligible for an Additional Cash Award, his Additional Cash Award will be based on Participant Earnings for the entire 2020 Applicable Year.  If, however, an Eligible Employee began participation in the Plan during the 2020 Applicable Year on or after May 1, 2020, remains an Eligible Employee throughout the remainder of the Applicable Year, and is eligible for an Additional Cash Award, his Additional Cash Award will be based on Participant Earnings prorated for the period of time between May 1, 2020 and December 31, 2020 that the individual participated in the Plan.  Similarly, any Additional Cash Award for an Eligible Employee who begins participation in the Plan during the 2021 Applicable Year or after (and is otherwise eligible for an Additional Cash Award) will be based on Participant Earnings paid during the Applicable Year. 

5.8Minimum Amount.  Notwithstanding any other provision of the Plan, the minimum total amount of Company Bonus and/or Additional Cash Award payable to Participants in the aggregate as a group or applicable subgroup (the “Minimum Amount”) may be fixed through a resolution of the Board of Directors of Lilly or the Committee, made before the 
- 8 -

end of the Applicable Year.  The Minimum Amount shall not be reduced or eliminated by the Company, including by either the Board of Directors of the Company or the Committee, following the end of the Applicable Year, but shall be payable to Participants as determined by the Company and consistent with the terms of the Plan.  In addition, the Minimum Amount shall not be reduced by any discretionary action to reduce a particular Participant’s Company Bonus or Additional Cash Award and shall be payable to persons, as determined by the Company, who are Participants in the Plan during the Applicable Year and eligible to receive a Company Bonus.

- 9 -

SECTION 6.  TIME OF PAYMENT

6.1General Rule.  Payment under the Plan will be made in the year following the Applicable Year on or prior to March 15 of such year.

6.2Terminated Employee.  Except as provided in Section 5.6 above, in the event an Eligible Employee’s employment with the Company ends for any reason prior to the last day of the Applicable Year, he will not receive any Company Bonus or Additional Cash Award for the Applicable Year.

6.3Deceased Eligible Employee.  In the event an Eligible Employee dies before payment under the Plan is made, the Committee may, in its sole discretion, authorize the Company to pay to his personal representative or beneficiary an amount not to exceed the amount established by the Committee to reflect the payment accrued at the date of death.  Any such payment would be paid consistent with the timing requirements described in subsection 6.1 above.

SECTION 7.  ADMINISTRATIVE GUIDELINES

7.1    Establishment and Amendment by the Committee.  The Committee may establish objective and nondiscriminatory written guidelines for administering those provisions of the Plan that expressly provide for the determination of eligibility, Company Bonus, Additional Cash Award or benefits on the basis of rules established by the Committee.  The Committee may, from time to time, amend or supplement the administrative guidelines established in accordance with this subsection 7.1.  The administrative guidelines established or amended in accordance with this subsection 7.1 will not be effective to the extent that they materially increase the Plan's liability, or to the extent that they are inconsistent with, or purport to amend, any provision of the Plan set forth in a document other than such administrative guidelines.

7.2.    Amendment by Board of Directors.  Any administrative guidelines established by the Committee pursuant to subsection 7.1 may be amended or revoked by the Board of Directors, either prospectively or retroactively, in accordance with the general amendment procedures set forth in section 9 below.

- 10 -

SECTION 8.  MISCELLANEOUS

8.1No Vested Right.  No employee, participant, beneficiary, or other individual will have a vested right to a Company Bonus or Additional Cash Award or any part thereof until payment is made to him under Section 6.

8.2No Employment Rights.  No provision of the Plan or any action taken by the Company, the Board of Directors of the Company, or the Committee will give any person any right to be retained in the employ of the Company.  The right and power of the Company to dismiss or discharge any Participant for any reason or no reason, with or without notice, is specifically reserved.

8.3No Adjustments.  After the certification of the calculation of EPS, EPS Change, Revenue, Revenue Change, Pipeline Metrics and any other material terms of the calculation of the Company Performance Bonus Multiple, Company Bonus and Additional Cash Award for the Applicable Year as described in Section 3.3 above, no adjustments will be made to reflect any subsequent change in accounting, the effect of federal, state, or municipal taxes later assessed or determined, or otherwise.  

8.4Executive Compensation Recovery Policy.  Notwithstanding any other provision of the Plan, including Section 8.3, all payments made or to be made pursuant to the Plan are subject to Lilly’s Executive Compensation Recovery Policy, as in effect from time to time.  In addition, nothing herein shall limit the Company’s power to take such action as it deems necessary to remedy any misconduct, prevent its recurrence and, if appropriate, based on all relevant facts and circumstances, punish the wrongdoer in a manner that it deems appropriate.

8.5Other Representations.  Nothing contained in this Plan, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any employee, participant, beneficiary, legal representative, or any other person.  Although Participants generally have no right to any payment from this Plan, to the extent that any Participant acquires a right to receive payments from the Company under the Plan, such right will be no greater than the right of an unsecured general creditor of the Company.  All payments to be made hereunder will be paid from the general funds of the Company and no special or separate fund will be established, and no segregation of assets will be made, to assure payment of such amount.

8.6Tax Withholding.  The Company will make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all federal, state, local, and other taxes required by law to be withheld with respect to Company Bonus and Additional Cash Award payments under the Plan, including, but not limited to, deducting the amount required to be withheld from the amount of cash otherwise payable under the Plan, or from salary or any other amount then or thereafter payable to an employee, Participant, beneficiary, or legal representative.

8.7Currency.  The Company Bonus and Additional Cash Award will be based on the currency in which the highest portion of base pay is regularly paid.  The Committee will determine the appropriate foreign exchange conversion methodology in its discretion.

8.8Effect of Plan on other Company plans.  Nothing contained in this Plan is intended to amend, modify, terminate, or rescind other benefit or compensation plans established or maintained by the Company.  Whether and to what extent a Participant’s Company 
- 11 -

Bonus and Additional Cash Award is taken into account under any other plan will be determined solely in accordance with the terms of such plan.

8.9Construction.  This Plan and all the rights thereunder will be governed by, and construed in accordance with, the laws of the state of Indiana, without reference to the principles of conflicts of law thereof.

8.10Notice.  Any notice to be given to the Company or Committee pursuant to the provisions of the Plan will be in writing and directed to Secretary, Loxo Oncology, Inc., Lilly Corporate Center, Indianapolis, IN 46285.

SECTION 9.  AMENDMENT, SUSPENSION, OR TERMINATION

The Board of Directors of the Company will have the right to amend, modify, suspend, revoke, or terminate the Plan, in whole or in part, at any time and without notice, by written resolution of the Board of Directors.  The Committee also will have the right to amend the Plan, except that the Committee may not amend this Section 9.  
- 12 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00340-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00340-of-00352.parquet"}]]