Document:

exv10w3

Exhibit 10.3

Eli Lilly and Company

Performance Award

(for Executive Officers)

This Performance Award has been granted for the period of January 1, 2010 through December 31,
2011 by Eli Lilly and Company, an Indiana corporation with its principal offices in Indianapolis,
Indiana (“Lilly” or the “Company”), to Grantee.

 

 

Eli Lilly and Company Performance Award
 

Table of Contents

	 	 	 	 	 
	A. Recitals
	 	 	3	 
	B. Performance Award
	 	 	3	 
	Section 1. Statement of Award Period
	 	 	3	 
	Section 2. Number of Shares
	 	 	3	 
	Section 3. Computation of Cumulative EPS
	 	 	3	 
	Section 4. Determination and Announcement of Award
	 	 	4	 
	Section 5. Committee Election to Pay Cash
	 	 	4	 
	Section 6. Issuance or Transfer of Performance Shares and Payment of Cash Award
	 	 	4	 
	Section 7. Restricted Stock Units
	 	 	5	 
	Section 8. Consideration for Continued Employment Requirement
	 	 	5	 
	Section 9. Adjustments for Certain Employment Status Changes
	 	 	5	 
	Section 10. Compensation Recovery
	 	 	6	 
	Section 11. Notices, Payments and Electronic Delivery and Participation
	 	 	7	 
	Section 12. Waiver
	 	 	7	 
	Section 13. Revocation or Modification
	 	 	7	 
	Section 14. Withholding Tax
	 	 	7	 
	Section 15. Section 409A Compliance
	 	 	8	 
	Section 16. Non-Transfer of Performance Award
	 	 	8	 
	Section 17. Severability and Section Headings
	 	 	8	 
	Section 18. Determinations by Committee
	 	 	9	 
	Section 19. Change in Control
	 	 	9	 
	Section 20. Nature of 2002 Plan and Performance Award
	 	 	9	 
	Section 21. Data Privacy
	 	 	11	 
	Section 22. Effective Date
	 	 	11	 
	Section 23. Governing Law
	 	 	12	 
	Section 24. Language
	 	 	12	 
	Section 25. Imposition of Other Requirements
	 	 	12	 

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Eli Lilly and Company Performance Award
 

	A.	 	Recitals
	 
	 	 	Under the 2002 LILLY STOCK PLAN (“2002 Plan”), the Compensation Committee (“Committee”)
has determined the form of this Performance Award and selected the Grantee, an Eligible
Employee of the Company, to receive a Performance Award for the Award Period January 1, 2010,
through December 31, 2011. The applicable terms of the 2002 Plan are incorporated in this
Performance Award by reference, including the definitions of terms contained in the 2002 Plan.
	 
	B.	 	Performance Award
	 
	 	 	Lilly grants to the Grantee the right to acquire Lilly Stock by issuance or transfer to
the Grantee of the Performance Shares to which he or she is entitled under this Performance
Award upon the following
terms and conditions, including any special terms and conditions set forth in the appendix for
the Grantee’s country of residence, if any, as provided in Section 25:
	 
	 	 	Section 1. Statement of Award Period
	 
	 	 	The Award Period shall begin January 1, 2010 and end December 31, 2011.
	 
	 	 	Section 2. Number of Shares
	 
	 	 	The target number of Performance Shares for the Award Period shall be the Performance
Share portion of the value as approved by the Grantee’s supervisor, divided by the grant fair
value of $30.88 rounded to the nearest full share. Target shares are set at an EPS growth rate
of 8%. The actual cumulative EPS will be used to determine the actual number of shares awarded
at payout, subject to adjustment as provided below in this Section or in Section 9. Grantees
may view their
Performance Award by logging on to the Merrill Lynch website at
http://benefits.ml.com after
March 31 of each grant year.
	 
	 	 	The number of Performance Shares for the Award Period and the cumulative EPS as described in
Section 3 below, shall be subject to adjustment in accordance with the provisions of Section
4(b) of the 2002 Plan for certain corporate recapitalizations and other events. A fractional
share resulting from such adjustment shall in the discretion of the Committee either be paid in
cash or rounded.
	 
	 	 	Section 3. Computation of Cumulative EPS
	 
	 	 	The cumulative EPS for the Award Period shall be computed in accordance with Section 18
and using the following procedures:

	 	a.	 	A determination of adjusted consolidated net income ascertained from the
Company’s audited consolidated financial statements shall be made for each fiscal
year in the Award Period in accordance with accounting principles currently
applicable in the United States, adjusted to the extent deemed appropriate by the
Committee for any unusual items deemed significant by the Committee.
	 
	 	b.	 	The number of shares of outstanding Lilly Stock used to compute consolidated
earnings per share shall be determined as of the end of each fiscal year in the
Award Period on a

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Eli Lilly and Company Performance Award
 

	 	 	 	diluted basis or its equivalent in accordance with accounting principles currently
applicable in the United States.
	 
	 	c.	 	To calculate consolidated earnings per share for each fiscal year in the
Award Period, the adjusted consolidated net income shall be divided by the number
of shares of outstanding Lilly Stock as computed in accordance with subsection (b)
above and the quotient rounded to the nearest cent.
	 
	 	d.	 	To determine the cumulative EPS for the Award Period, the EPS amounts for
each fiscal year as determined above shall be added.

	 	 	Section 4. Determination and Announcement of Award
	 
	 	 	After the cumulative EPS for the Award Period is computed, the cumulative EPS and the
resulting number of Performance Shares for Grantee (determined in accordance with Sections 2
and 9), together with the Committee’s election between cash and shares of Lilly Stock under
Section 5, shall be communicated to Grantee.
	 
	 	 	Section 5. Committee Election to Pay Cash
	 
	 	 	At any time until the determination of cumulative EPS and the resulting number of
Performance Shares, the Committee may, if it so elects, determine to pay part or all of any
Performance Award in cash in lieu of issuing or transferring Performance Shares. The amount of
cash shall be based upon the fair market value of Lilly Stock on a valuation date to be
determined by the Committee.
	 
	 	 	Section 6. Issuance or Transfer of Performance Shares and Payment of Cash Award
	 
	 	 	Subject to the condition relating to withholding tax stated in Section 14, Lilly shall
issue or transfer to the Grantee any Performance Shares to be issued or transferred under
Section 4 and pay to the Grantee any cash determined to be payable under that section within a
sixty day period starting the day after the Award Period expiration (as stated in Section 1)
and ending on the sixtieth day after the Award Period expiration, but not later than December
31 of the year after the Award Period expires. Grantee shall have no rights as a shareholder
of Lilly with respect to the shares of Lilly Stock until the shares are issued or transferred
on the books of Lilly.

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Eli Lilly and Company Performance Award
 

	 	 	Section 7. Restricted Stock Units
	 
	 	 	Any shares issued or transferred under this grant shall be in the form of restricted stock
units that will be governed by the provisions of Section 10 of the 2002 Plan and the restricted
stock unit grant document to be provided to the Grantee. In the event Grantee is entitled to a
fractional restricted stock unit, the fraction may be paid in cash or rounded, in the
Committee’s discretion. The Restriction Period shall be approximately one year from the date
of valuation, as specified in the restricted stock unit grant document. The restrictions shall
lapse upon the earliest of (a) the expiration of the Restriction Period if all conditions
related to the Restriction Period have been met; (b) the date of Grantee’s death, disability or
separation from service (as defined in the restricted stock unit grant document to be provided
to the Grantee); or (c) a change in control as provided
under Section 12(a)(v) of the 2002 Plan, unless the Committee specifies in the restricted stock
unit grant document that Section 12 (a)(v) shall not apply.
	 
	 	 	Notwithstanding the foregoing, if the status of the Grantee as an Eligible Employee, as defined
in the 2002 Plan, terminates before the issuance of the restricted stock units for any of the
reasons specified in Section 9(c), then Lilly shall issue or transfer to the Grantee shares of
Lilly stock or the cash equivalent, as described in Section 5 above, subject to the withholding
tax provisions in accordance with Section 14 below. The shares may be newly issued shares or
treasury shares, unless
otherwise required by local law. In the event Grantee is entitled to a fractional share, the
fraction may be paid in cash or rounded, in the Committee’s discretion.
	 
	 	 	Section 8. Consideration for Continued Employment Requirement
	 
	 	 	If the status of the Grantee as an Eligible Employee, as defined in the 2002 Plan,
terminates before the end of the Award Period except as outlined in Section 9 (c), then all
rights of the Grantee under this Performance Award shall terminate with respect to the Award
Period. The Company shall incur no liability to Grantee under this Performance Award by
terminating Grantee’s status as an Eligible Employee whether by action with respect to Grantee
individually, either with or without cause, or by dissolution or liquidation of Lilly or merger
or consolidation of Lilly with a corporation in which Lilly is not the surviving corporation,
or otherwise.
	 
	 	 	Section 9. Adjustments for Certain Employment Status Changes
	 
	 	 	The number of Performance Shares described in Section 2 is based on the assumption that
the Grantee is an employee in good standing throughout the entire Award Period. Unless
otherwise required by law, the number of Performance Shares shall be adjusted for changes in
employment status during the Award Period as follows:

	 	a.	 	Leaves of Absence. The number of Performance Shares shall be
reduced proportionally for any portion of the total days in the Award Period
during which the Grantee is on an approved unpaid leave of absence longer than
ninety (90) days.
	 
	 	b.	 	Demotions and Disciplinary Actions. The Committee may, at its
discretion, reduce the number of Performance Shares, prorated according to time,
for any portion of the Award Period during which the Grantee has been (i) demoted
to a job classification below those considered by the Committee to be eligible for
Performance Awards, or (ii) subject to

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Eli Lilly and Company Performance Award
 

	 	 	 	disciplinary action by the Company. In the
case of disciplinary action during the Award Period, the Committee may also, in
its discretion, withhold payment of this Performance Award entirely.
	 
	 	c.	 	Retirement, death, disability or termination due to a plant closing or
reduction in workforce. In the event the Grantee’s employment is terminated
due to retirement as a
retiree, death, disability, plant closing or reduction in workforce (as defined
below), the number of Performance Shares shall be reduced proportionally for the
portion of the total days during the Award Period in which the Grantee was not an
active employee. Any payment of Performance Shares that have been reduced by
operation of this Section 9.c. shall be paid following the Award Period expiration as
described in Section 6. A retiree is a person who is (i) a retired employee under
the Lilly Retirement Plan; (ii) a retired employee under the retirement plan or
program of a Lilly subsidiary; or (iii) a retired employee under a retirement program
specifically approved by the Committee. Plant closing means the closing of a plant
site or other corporate location that directly results in
termination of employment. Reduction in workforce means the elimination of a work
group, functional or business unit or other broadly applicable reduction in job
positions that directly results in termination of employment. The Committee will be
responsible for approving, in its discretion, what is classified as disability, a
plant closing, or a reduction in workforce.

	 	 	Section 10. Compensation Recovery
	 
	 	 	The Company reserves the right to and, in appropriate cases, will seek restitution of all
or part of any performance shares or cash paid under this Performance Award if:

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

	 	 	In the event that the Company determines to seek restitution under this section at a time when
the Performance Shares are still subject to the restrictions set forth in Section 7, then,
notwithstanding any contrary language in the restricted stock unit grant, the conditions of the
restriction shall be deemed to have been breached by the Grantee, and all interest of the
grantee in the restricted performance shares shall immediately terminate and be forfeited.
	 
	 	 	This section is not intended to limit the Company’s power to take such action as it deems
necessary to remedy the misconduct, prevent its reoccurrence and, if appropriate, based on all
relevant facts and circumstances, punish the wrongdoer in a manner it deems appropriate.

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Eli Lilly and Company Performance Award
 

	 	 	Section 11. Notices, Payments and Electronic Delivery and Participation
	 
	 	 	Any notice to be given by the Grantee or Successor Grantee shall be in writing, and any
notice or payment shall be deemed to have been given or made only upon receipt thereof by the
Treasurer of Lilly at Lilly Corporate Center, Indianapolis, Indiana 46285, U.S.A. Any notice
or communication by Lilly in writing shall be deemed to have been given in the case of the
Grantee if mailed or delivered to the Grantee at any address specified in writing to Lilly by
the Grantee and, in the case of any Successor Grantee, at the address specified in writing to
Lilly by the Successor Grantee. In addition, Lilly may, in its sole discretion, decide to
deliver any documents related to the Performance Award and participation in the 2002 Plan by
electronic means or request the Grantee’s consent to participate in the 2002 Plan by electronic
means. By accepting this Performance Award, the Grantee
hereby consents to receive such documents by electronic delivery and agrees to participate in
the 2002 Plan through an on-line or electronic system established and maintained by Lilly or
another third party designated by Lilly.
	 
	 	 	Section 12. Waiver
	 
	 	 	The waiver by Lilly of any provision of this instrument at any time or for any purpose
shall not operate as or be construed to be a waiver of that provision or any other provision of
this instrument at any subsequent time or for any other purpose.
	 
	 	 	Section 13. Revocation or Modification
	 
	 	 	This Performance Award shall be irrevocable except that Lilly shall have the right to
revoke or modify this Performance Award under Section 13(e) of the 2002 Plan.
	 
	 	 	Section 14. Withholding Tax
	 
	 	 	Regardless of any action Lilly and/or the Grantee’s employer (the “Employer”) takes with
respect to any or all income tax (including federal, state, local and non-U.S. tax), social
insurance, payroll tax, payment on account or other tax-related 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 that Lilly and the Employer (a) make no representations or
undertakings regarding the treatment of any Tax Related Items in connection with any aspect of
the Performance Award, including the grant of the Performance Award, the expiration of the
Award Period, the transfer and issuance of any Performance Shares or the receipt of any cash
payment pursuant to this Performance Award, the
receipt of any dividends and the sale of any Performance Shares acquired pursuant to this
Performance Award; and (b) do not commit to and are under no obligation to structure the terms
of the grant or any aspect of the Performance Award to reduce or eliminate the Grantee’s
liability for Tax Related Items. Furthermore, if the Grantee has become subject to tax in more
than one jurisdiction between the date of grant and the date of any relevant taxable or tax
withholding event, 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.
	 
	 	 	Prior to the applicable taxable or tax withholding event, the Grantee shall pay, or make
adequate arrangements satisfactory to Lilly and/or the Employer to satisfy all Tax Related
Items. In this

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Eli Lilly and Company Performance Award
 

	 	 	regard, the Grantee authorizes Lilly and/or the Employer to withhold all
applicable Tax Related Items legally payable by the Grantee from the Grantee’s wages or other
cash compensation payable to the Grantee by Lilly and/or the Employer or from any cash payment
received upon expiration of the Award Period in accordance with Section 6. Alternatively, or
in addition, if permissible under local law, the Grantee authorizes Lilly and/or the Employer,
or their respective agents, at their discretion, to (i) withhold from the proceeds of the sale
of Performance Shares acquired pursuant to this Performance Award, (ii) arrange for the sale of
Performance Shares to be issued upon the
expiration of the Award Period (at the Grantee’s behalf and at the Grantee’s direction pursuant
to this authorization), and/or (iii) withhold in Performance Shares otherwise issuable to the
Grantee pursuant to this Performance Award, provided that Lilly and/or the Employer may
withhold or account for Tax Related Items by considering applicable minimum statutory
withholding amounts or other applicable withholding rates. If the obligation for Tax Related
Items is satisfied by withholding Performance Shares as described in (iii) herein, the Grantee
will be deemed to have been issued the full number of Performance Shares to which he or she is
entitled pursuant to this Performance Award, notwithstanding that a number of Performance
Shares are withheld to satisfy the obligation for Tax Related Items. The Grantee shall pay to
Lilly and/or the Employer any amount of Tax Related
Items that Lilly and/or the Employer may be required to withhold or account for as a result of
any aspect of this Performance Award that cannot be satisfied by the means previously
described. Lilly may refuse to deliver Performance Shares or any cash payment to the Grantee
if the Grantee fails to comply with the Grantee’s obligation in connection with the Tax Related
Items as described herein.
	 
	 	 	Section 15. Section 409A Compliance
	 
	 	 	To the extent applicable, it is intended that this Performance Award comply with the
requirements of Section 409A of the U.S. Internal Revenue Code of 1986, as amended and the
Treasury Regulations and other guidance issued thereunder (“Section 409A”), and this
Performance Award shall be interpreted and applied by the Committee in a manner consistent with
this intent in order to avoid
the imposition of any additional tax under Section 409A. This Performance Award is subject to
Section 13(k) of the 2002 Plan concerning Section 409A.
	 
	 	 	Section 16. Non-Transfer of Performance Award
	 
	 	 	No right in or under this Performance Award is transferable except by operation of law to
a duly appointed guardian of the estate of Grantee or upon the death of the Grantee by will or
the applicable laws of descent and distribution and then only subject to the provisions of
Sections 8 and 9.
	 
	 	 	Section 17. Severability and Section Headings
	 
	 	 	If one or more of the provisions of this instrument shall be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and the invalid, illegal or
unenforceable provisions shall be deemed
null and void; however, to the extent permissible by law, any provisions which could be deemed
null and void shall first be construed, interpreted or revised retroactively to permit this
instrument to be construed so as to foster the intent of this Performance Award and the 2002
Plan.
	 
	 	 	The section headings in this instrument are for convenience of reference only and shall not be
deemed a part of, or germane to, the interpretation or construction of this instrument.

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Eli Lilly and Company Performance Award
 

	 	 	Section 18. Determinations by Committee
	 
	 	 	Determinations by the Committee pursuant to any provision of the 2002 Plan, pursuant to
rules, regulations and procedures adopted by the Committee or pursuant to this instrument,
including without limitation the determination of the amount and method of computation of EPS,
whether to
make an exception to the rule of Section 8, or adjustments under Section 2 or Section 3, shall
be final and binding on the Grantee and any Successor Grantee.
	 
	 	 	Section 19. Change in Control
	 
	 	 	The provisions of Section 12(a)(iii) of the 2002 Plan apply to this Performance Award with
the following modifications:

	 	a.	 	The only Change in Control event that shall result in a payment under
Section 12(a)(iii) of the 2002 Plan shall be consummation of a change in ownership
of the Company as defined in Section 12(b)(i) of the 2002 Plan (a “Transaction”).
	 
	 	b.	 	On the date of the consummation of such Transaction, the Grantee will be
paid an amount equal to the product of (a) the Grantee’s award opportunity for the
Performance Award based on the Company’s expected results for the Award Period (as
determined by the company’s last approved forecast prior to the consummation of
the Transaction, not considering the impact of the Transaction) and (b) a
fraction, the numerator of which is the number of days that have elapsed since the
beginning of the Award Period to the date of the consummation of the Transaction
and the denominator of which is the total number of days in the Award Period. The
payment will be deemed to have been made immediately prior to the consummation of
the Transaction in order to allow the Performance Shares
paid to be deemed outstanding and eligible to receive the consideration being paid to
Lilly shareholders in the Transaction.

	 	 	Section 20. Nature of 2002 Plan and Performance Award
	 
	 	 	In accepting this Performance Award, the Grantee acknowledges, understands and agrees
that:

	 	a.	 	the 2002 Plan is established voluntarily by Lilly, it is discretionary in
nature and may be modified, amended, suspended or terminated by Lilly at any time,
as provided in the 2002 Plan;
	 
	 	b.	 	the Performance Award is voluntary and occasional and does not create any
contractual or other right to receive future Performance Awards, or benefits in
lieu of Performance Awards even if Performance Awards have been granted repeatedly
in the past;
	 
	 	c.	 	all decisions with respect to future grants of Performance Awards, if any,
will be at the sole discretion of Lilly;
	 
	 	d.	 	the Grantee’s participation in the 2002 Plan is voluntary;

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Eli Lilly and Company Performance Award
 

	 	e.	 	the Performance Award and any shares of Lilly Stock subject to the Award are
an extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to Lilly or the Employer and which is outside the
scope of the Grantee’s employment contract, if any;
	 
	 	f.	 	the Performance Award and any shares of Lilly Stock subject to the Award are
not part of normal or expected compensation or salary for any purposes, including,
but not limited to, calculation of any severance, resignation, termination,
redundancy, end of service payments, bonuses, long-service awards, pension or
welfare or retirement benefits or
similar payments and in no event should be considered as compensation for, or
relating in any way to, past services for Lilly or the Employer;
	 
	 	g.	 	neither the Performance Award nor any provision of this instrument, the 2002
Plan or the policies adopted pursuant to the 2002 Plan confer upon the Grantee any
right with respect to employment or continuation of current employment, and in the
event that the Grantee is not an employee of Lilly or any subsidiary of Lilly, the
Performance Award shall not be interpreted to form an employment contract or
relationship with Lilly or any subsidiary of Lilly;
	 
	 	h.	 	the future value of the underlying Performance Shares is unknown and cannot
be predicted with certainty;
	 
	 	i.	 	the value of any Performance Shares acquired upon expiration of the Award
Period may increase or decrease in value, even below the tax valuation price;
	 
	 	j.	 	no claim or entitlement to compensation or damages shall arise from
forfeiture of the Performance Award or from any diminution in value of the
Performance Award or
Performance Shares acquired upon expiration of the Award Period resulting from
termination of the Grantee’s employment by Lilly or the Employer (for any reason
whatsoever and whether or not in breach of local labor laws) and, in consideration of
the grant of the Performance Award to which the Grantee is otherwise not entitled,
the Grantee agrees never to institute any claim against the Company or the Employer,
waives the ability, if any, to bring any such claim and releases the Company and the
Employer from any such claim; if, notwithstanding the foregoing, any such claim is
allowed by a court of competent jurisdiction, then, by participating in the Plan, the
Grantee will be
deemed irrevocably to have agreed not to pursue such claim and agrees to execute any
and all documents necessary to request dismissal or withdrawal of such claims;
	 
	 	k.	 	in the event of termination of the Grantee’s employment (whether or not in
breach of local labor laws), the Grantee’s right to receive Performance Shares
upon expiration of the Award Period will terminate effective as of the date the
Grantee is no longer actively employed (unless one of the adjustments in Section 9
applies) and will not be extended by any notice period mandated under local law
(e.g., active employment would not include a period of “garden leave” or similar
period pursuant to local law); the Committee

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Eli Lilly and Company Performance Award
 

	 	 	 	shall have the exclusive discretion to determine when the Grantee is no longer
actively employed for purposes of the Performance Award;
	 
	 	l.	 	Lilly is not providing any tax, legal or financial advice, nor is Lilly
making any recommendations regarding the Grantee’s participation in the 2002 Plan
or the Grantee’s acquisition or sale of the underlying Performance Shares; and
	 
	 	m.	 	the Grantee is hereby advised to consult with his or her own personal tax,
legal and financial advisors regarding the Grantee’s participation in the 2002
Plan before taking any action related to the 2002 Plan.

	 	 	Section 21. Data Privacy
	 
	 	 	The Grantee hereby explicitly and unambiguously consents to the collection, use and
transfer, in electronic or other form, of the Grantee’s personal data as described in this
Performance Award by and among, as applicable, the Employer, Lilly, its subsidiaries and its
affiliates for the exclusive purpose of implementing, administering and managing the Grantee’s
participation in the 2002 Plan.
	 
	 	 	The Grantee understands that Lilly may hold certain personal information about the Grantee,
including, but not limited to, the Grantee’s name, home address and telephone number, date of
birth, social insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in Lilly, details of all Performance Awards or any
other entitlement to shares awarded, canceled, vested, unvested or outstanding in the Grantee’s
favor, for the purpose of implementing, administering and managing the 2002 Plan (“Data”). The
Grantee understands that Data may be transferred to any third parties assisting in the
implementation, administration and management of the 2002 Plan, that these recipients may be
located in the Grantee’s country, or elsewhere, and that the recipient’s country may have
different data privacy laws and protections
than the Grantee’s country. The Grantee authorizes the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of implementing,
administering and managing the Grantee’s participation in the 2002 Plan, including any
requisite transfer of such Data as may be required to a broker, escrow agent or other third
party with whom any shares received upon expiration of the Award Period may be deposited. The
Grantee understands that Data will be held only as long as is necessary to implement,
administer and manage the Grantee’s participation in the 2002 Plan. The Grantee understands
that the Grantee may, at any time, request an equity award transaction statement, request any
necessary amendments to Data or refuse or withdraw the consents herein, in any case without
cost, by contacting in writing the Grantee’s local human
resources representative. The Grantee understands that refusal or withdrawal of consent may
affect the Grantee’s ability to participate in the 2002 Plan. For more information on the
consequences of the Grantee’s refusal to consent or withdrawal of consent, the Grantee
understands that the Grantee may contact the Grantee’s local human resources representative.
	 
	 	 	Section 22. Effective Date
	 
	 	 	The effective date of this instrument shall be the date of grant.

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Eli Lilly and Company Performance Award
 

	 	 	Section 23. Governing Law
	 
	 	 	The validity and construction of this Performance Award shall be governed by the laws of
the State of Indiana, U.S.A. without regard to laws that might cause other law to govern under
applicable principles of conflict of laws. For purposes of litigating any dispute that arises
under this
Performance Award, the parties hereby submit to and consent to the jurisdiction of the State of
Indiana, and agree that such litigation shall be conducted in the courts of Marion County,
Indiana, or the federal courts for the United States for the Southern District of Indiana, and
no other courts, where this Performance Award is granted and/or to be performed.
	 
	 	 	Section 24. Language
	 
	 	 	If the Grantee has received this instrument or any other document related to the 2002 Plan
translated into a language other than English and if the translated version is different than
the English version, the English version will control.
	 
	 	 	Section 25. Imposition of Other Requirements
	 
	 	 	If the Grantee relocates to another country, any special terms and conditions applicable
to Performance Awards granted in such country will apply to the Grantee, to the extent the
Company determines that the application of such terms and conditions is necessary or advisable
in order to comply with local law or facilitate the administration of the Plan.
	 
	 	 	In addition, the Company reserves the right to impose other requirements on the Performance
Awards and any shares of Lilly Stock acquired under the Plan, to the extent the Company
determines it is necessary or advisable in order to comply with local law or facilitate the
administration of the
Plan, and to require the Grantee to sign any additional agreements or undertakings that may be
necessary to accomplish the foregoing.
	 
	 	 	IN WITNESS WHEREOF, Lilly has caused this Performance Award to be executed and granted in
Indianapolis, Indiana, by its proper officer.

	 	 	 	 	 
	 	ELI LILLY AND COMPANY

 	 
	 	By:  	
 	 
	 	 	John Lechleiter 	 
	 	 	Chairman of the Board and

Chief Executive Officer 	 
	 

Page 12exv10w4

Exhibit 10.4

Eli Lilly and Company

Restricted Stock Unit

(for Executive Officers)

This Restricted Stock Unit Award has been granted on January 26, 2010, by Eli Lilly and
Company, an Indiana corporation, with its principal offices in Indianapolis, Indiana (“Lilly” or
the “Company”), to Grantee.

	 	 	 
	Number of Shares:

	 	Log into Merrill Lynch account at

http://www.benefits.ml.com
	 
	 	 
	Restriction Lapse:

	 	February 1, 2011

(or earlier in certain circumstances)

 

 

Eli Lilly and Company Restricted Stock Unit 

Table of Contents

	 	 	 	 	 
	A. Recitals
	 	 	3	 
	B. Restricted Stock Unit
	 	 	3	 
	Section 1. Number of Restricted Stock Units
	 	 	3	 
	Section 2. Rights of the Grantee
	 	 	3	 
	Section 3. Restriction Period
	 	 	4	 
	Section 4. Retirement
	 	 	4	 
	Section 5. Record of the Award
	 	 	5	 
	Section 6. Conditions During Restriction Period
	 	 	5	 
	Section 7. Consequences of Breach of Conditions
	 	 	5	 
	Section 8. Committee Election to Pay Cash
	 	 	5	 
	Section 9. Lapse of Restrictions
	 	 	6	 
	Section 10. Revocation or Modification of Award
	 	 	6	 
	Section 11. Prohibition Against Transfer
	 	 	6	 
	Section 12. Notices, Payments and Electronic Delivery and Participation
	 	 	7	 
	Section 13. Waiver
	 	 	7	 
	Section 14. Withholding Tax
	 	 	7	 
	Section 15. Section 409A Compliance
	 	 	8	 
	Section 16. Severability and Section Headings
	 	 	8	 
	Section 17. Determinations by Committee
	 	 	9	 
	Section 18. Change in Control
	 	 	9	 
	Section 19. Nature of 2002 Plan and Award
	 	 	10	 
	Section 20. Data Privacy
	 	 	11	 
	Section 21. Effective Date
	 	 	12	 
	Section 22. Governing Law
	 	 	12	 
	Section 23. Language
	 	 	12	 
	Section 24. Adjustments to Number of Shares
	 	 	12	 
	Section 25. Imposition of Other Requirements
	 	 	12	 

Page 2

 

Eli Lilly and Company Restricted Stock Unit 

	A.	 	Recitals
	 
	 	 	Under the 2002 LILLY STOCK PLAN (“2002 Plan”), the Compensation Committee (“Committee”) has
determined the form of this Restricted Stock Unit Award (“Award”) and selected the Grantee, an
Eligible Employee of the Company, to receive a Restricted Stock Unit Award. The applicable terms
of the 2002 Plan are incorporated in this Restricted Stock Unit Award by reference, including the
definitions of terms contained in the 2002 Plan.
	 
	B.	 	Restricted Stock Unit
	 
	 	 	Lilly grants to the grantee this Award of Restricted Stock Units, with each Restricted
Stock Unit representing the right to receive one share of Eli Lilly and Company Common Stock
(“Lilly Stock”), plus an amount of cash pursuant to Section 2 (b), subject to certain
restrictions and on the terms and conditions contained in this Award and the 2002 Plan. In the
event of any conflict between the terms of the 2002 Plan and this Award, the terms of the 2002
Plan shall govern, except as provided in Sections 3 and 6. Any terms not defined
herein shall have the meaning set forth in the 2002 Plan. This Award is made under the terms
and conditions noted below:
	 
	 	 	Section 1. Number of Restricted Stock Units
	 
	 	 	Subject to adjustment as provided in Section 24, the Grantee may receive the number of
shares of Lilly Stock as outlined on the first page of this document.
	 
	 	 	Section 2. Rights of the Grantee

	 	a.	 	No Shareholder Rights. The Restricted Stock Units granted pursuant
to this Award do not and shall not entitle Grantee to any rights of a
shareholder of Lilly Stock until such time as the Restricted Stock Units vest
and shares of Lilly Stock are issued or transferred. No shares of Lilly Stock
shall be issued or transferred
to Grantee prior to the date on which the Restricted Stock Units vest and the
restrictions with respect to the Restricted Stock Units lapse. The rights of
Grantee with respect to the Restricted Stock Units shall remain forfeitable at all
times prior to the date on which the Restricted Stock Units become vested and the
restrictions with respect to the Restricted Stock Units lapse.
	 
	 	b.	 	Dividend Equivalent Units. 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 Lilly Stock,
Dividend Equivalent Units 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 of Lilly Stock by the Company on such date. Dividend
Equivalent Units 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 Units shall be sent to the Grantee periodically, as
determined by the Company. The accrued Dividend Equivalent 

Page 3

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	 	Units shall be subject
to the same restrictions as the Restricted Stock Units to which the Dividend
Equivalent Units relate, and the Dividend Equivalent Units
shall be forfeited in the event that the Restricted Stock Units with respect to
which such Dividend Equivalent Units were credited are forfeited.

	 	c.	 	No Trust; Grantee’s Rights Unsecured. Neither this Award nor any
action pursuant to or in accordance with this Award shall be construed to create
a trust of any kind. The right of Grantee to receive payments of cash or Lilly
Stock under this Award shall be an unsecured claim against the general assets of
the Company.

	 	 	Section 3. Restriction Period
	 
	 	 	The period of restriction (“Restriction Period”) under this Award shall commence on the
effective date of the Award and expire at the close of business on the earliest of the
following dates:

	 	a.	 	February 1, 2011,
	 
	 	b.	 	the date of death of the Grantee while in the active service of the
Company,
	 
	 	c.	 	the date the Grantee’s employment is terminated by reason of
“disability,” within the meaning of Section 409A of the Internal Revenue Code
(the “Code”), or
	 
	 	d.	 	the date the Grantee suffers a “separation from service” from Lilly or
the Employer, within the meaning of Section 409A of the Code, and such
separation from service is due to a plant closing or reduction in workforce as
defined below.

	 	 	Plant closing means the closing of a plant site or other corporate location that directly
results in termination of employment. Reduction in workforce means the elimination of a work
group, functional or business unit or other broadly applicable reduction in job positions that
directly results in termination of employment.
	 
	 	 	The Committee’s determination whether the Grantee’s employment has been terminated by reason of
disability, whether a leave of absence constitutes a termination of employment or whether a
Grantee’s termination is a direct result of either a plant closing or a reduction in workforce
shall be final and binding on the Grantee. Notwithstanding anything in Section 10(a) of the
2002 Plan to the contrary, the Committee shall not modify the expiration dates set forth in
this Award so as to accelerate the termination of the Restriction Period.
	 
	 	 	Section 4. Retirement
	 
	 	 	In the event the Grantee’s employment is terminated due to retirement, the Award will
continue pursuant to the established Restriction Period and Dividend Equivalent Unit accrual
schedule. The Award will be paid in full to the retiree upon the lapse of all
restrictions as noted in Section 9. A retiree is a person who is (i) a retired employee under
the Lilly Retirement Plan; (ii) a retired employee under the retirement plan or program of a
Lilly subsidiary; or (iii) a retired employee under a retirement program specifically approved
by the Committee.

Page 4

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	A Grantee who has not received a year-end individual performance rating and (i) is on
employment probation (or its equivalent outside the United States, as determined by the
Committee) for unsatisfactory performance and takes retirement in lieu of a termination of
employment; or (ii) takes retirement in lieu of termination of employment because of an
immediately terminable offense (e.g., absence of three days without notice, insubordination,
violation of substance abuse policy, possession of firearms, misconduct) will not be considered
to have terminated due to retirement as described herein.
	 
	 	 	Section 5. Record of the Award
	 
	 	 	During the Restriction Period, records of the Award and accumulated Dividend Equivalent
Units will reside in an account at the Company or an Equity Administration Agent designated by
the Company.
	 
	 	 	Section 6. Conditions During Restriction Period
	 
	 	 	During the entire Restriction Period, the employment of the Grantee with the Company must
not terminate except for reasons specified in Sections 3.b, 3.c, 3.d, or 4. “Termination of
employment” shall mean the cessation for any reason of the relation of employer and employee
between the Grantee and the Company (or, if different, the Grantee’s employer).
	 
	 	 	Furthermore, for any year or portion of a year that falls within the Restriction Period, the
Grantee must not receive a year-end individual performance rating of unsatisfactory.
	 
	 	 	Section 7. Consequences of Breach of Conditions
	 
	 	 	If any of the conditions that must continue to be satisfied during the Restriction Period
under Section 6 is breached during the Restriction Period, either by act of the Grantee or
otherwise, the Grantee, by accepting this Award, agrees that upon such breach all interest of
the Grantee in the Restricted Stock Units and associated Dividend Equivalent Units shall
terminate and be forfeited. The Committee’s determination shall be final and binding on the
Grantee. The Company shall incur no liability to the Grantee under this Award by terminating
the Grantee’s status as an Eligible Employee, whether by action with respect to the Grantee
individually, either with or without cause, or by dissolution or liquidation of Lilly or merger
or consolidation of Lilly with a corporation in which Lilly is not the surviving corporation,
or otherwise. Notwithstanding anything in Section 10(a) of the 2002 Plan to the contrary, the
Committee shall not waive the breach of the conditions set forth in Section 6.
	 
	 	 	Section 8. Committee Election to Pay Cash
	 
	 	 	At any time during the Restriction Period or until paid in accordance with Section 9, the
Committee may, if it so elects, determine to pay part or all of this Award in cash in lieu of
issuing or transferring shares of Lilly Stock. The amount of cash shall be based upon the fair
market value of Lilly Stock at the end of the Restriction Period as outlined in Section 9.

Page 5

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	Section 9. Lapse of Restrictions
	 
	 	 	At the end of the Restriction Period, if the conditions specified in Section 6 have not
been breached during the Restriction Period, all restrictions shall terminate. The Award shall
be paid to Grantee within a sixty day period starting the day after the end of the Restriction
Period and ending on the sixtieth day after the end of the Restriction Period, but no later than
December 31 of the year in which the Restriction Period ends, as follows:

	 	a.	 	Lilly shall issue or transfer to the Grantee shares of Lilly Stock or the
cash equivalent, as described in Section 8 above, equal to one share per
Restricted Stock Unit subject to the withholding tax provisions in Section 14
below. The shares may be newly issued shares or treasury shares, unless otherwise
required by local law. In the event Grantee is entitled to a fractional share,
the fraction may be paid in cash or rounded, in the Committee’s discretion.
	 
	 	b.	 	Lilly shall pay to the Grantee in cash all accrued Dividend Equivalent
Units following deduction for all applicable withholding tax in accordance with
Section 14 below.

	 	 	In the event that the Restriction Period ends by reason of death of the Grantee, the payments
as described above shall be made to the Successor Grantee. Notwithstanding anything in Section
10(a) of the 2002 Plan to the contrary, the Committee shall not direct that the restrictions on
this Award will lapse other than as expressly set forth in this Award. Notwithstanding the
foregoing, if the Grantee is treated as a “specified employee” within the
meaning of Section 409A of the Code as of the date of any payment hereunder, the commencement
of any payment shall be delayed in accordance with Section 15 hereof.
	 
	 	 	Section 10. Revocation or Modification of Award
	 
	 	 	Lilly may revoke this Award at any time during the Restriction Period if it is contrary to
law and, in that event, shall give notice to the Grantee. Lilly may also modify this Award and
the issuance or transfer of the Lilly Stock pursuant to this Award to the extent necessary to
bring the Award and the issuance or transfer of the shares of Lilly Stock into compliance with
any applicable law or regulation now or hereafter promulgated by any governmental agency having
jurisdiction. By accepting this Award and the issuance or transfer of shares of Lilly
Stock under this Award, the Grantee agrees that Lilly may change the number of shares of Lilly
Stock issued or transferred as Lilly deems necessary to comply with the law.
	 
	 	 	Section 11. Prohibition Against Transfer
	 
	 	 	The right of a Grantee to receive payments of Lilly Stock and/or cash under this Award may
not be transferred except to a Successor Grantee by will or applicable laws of descent and
distribution. A Grantee may not assign, sell, pledge, or otherwise transfer Lilly Stock or
cash to which he or she is entitled hereunder prior to transfer or payment thereof to the
Grantee, and any such attempted assignment, sale, pledge or transfer shall be void.

Page 6

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	Section 12. Notices, Payments and Electronic Delivery and Participation
	 
	 	 	Any notice to be given by the Grantee or Successor Grantee shall be in writing, and any
notice or payment shall be deemed to have been given or made only upon receipt thereof by the
Treasurer of Lilly at Lilly Corporate Center, Indianapolis, Indiana 46285, U.S.A. Any notice
or communication by Lilly in writing shall be deemed to have been given in the case of the
Grantee if mailed or delivered to the Grantee at any address specified in writing to Lilly by
the Grantee and, in the case of any Successor Grantee, at the address specified in writing to
Lilly by the Successor Grantee. In addition, Lilly may, in its sole discretion, decide to
deliver any documents related to the Award and participation in the 2002 Plan by electronic
means or request the Grantee’s consent to participate in the 2002 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 2002 Plan through an on-line or electronic system
established and maintained by Lilly or another third party designated by Lilly.
	 
	 	 	Section 13. Waiver
	 
	 	 	The waiver by Lilly of any provision of this instrument at any time or for any purpose
shall not operate as or be construed to be a waiver of the same or any other provision of this
instrument at any subsequent time or for any other purpose.
	 
	 	 	Section 14. Withholding Tax
	 
	 	 	Regardless of any action Lilly and/or the Grantee’s employer (the “Employer”) takes with
respect to any or all income tax (including federal, state, local and non-U.S. tax), social
insurance, payroll tax, payment on account or other tax-related 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 that Lilly and the Employer (a) make no representations or
undertakings regarding the treatment of any Tax Related Items in connection with any aspect of
the Restricted Stock Units, including the grant of the Restricted Stock Units, the accrual of
Dividend Equivalent Units, the vesting of the Restricted
Stock Units and the lapse of restrictions, the transfer and issuance of any shares of Lilly
Stock or the receipt of any cash payment pursuant to this Award, the receipt of any dividends
and the sale of any shares of Lilly Stock acquired pursuant to this Award; and (b) do not
commit to and are under no obligation to structure the terms of the grant or any aspect of the
Restricted Stock Units to reduce or eliminate the Grantee’s liability for Tax Related Items.
Furthermore, if the Grantee has become subject to tax in more than one jurisdiction between the
date of grant and the date of any relevant taxable or tax withholding event, 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.
	 
	 	 	Prior to the applicable taxable or tax withholding event, the Grantee shall pay or make
adequate arrangements satisfactory to Lilly and/or the Employer to satisfy all Tax Related
Items. In this regard, the Grantee authorizes Lilly and/or the Employer to withhold all

Page 7

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	applicable Tax Related Items legally payable by the Grantee from the Grantee’s wages or other
cash compensation payable to the Grantee by Lilly and/or the Employer or from any cash payment
received upon expiration of the Restriction Period in accordance with Section
9. Alternatively, or in addition, if permissible under local law, the Grantee authorizes Lilly
and/or the Employer, or their respective agents, at their discretion, to (i) withhold from the
proceeds of the sale of shares of Lilly Stock acquired pursuant to this Award, (ii) arrange for
the sale of shares of Lilly Stock to be issued upon the expiration of the Restriction Period
(at the Grantee’s behalf and at the Grantee’s direction pursuant to this authorization), and/or
(iii) withhold in shares of Lilly Stock otherwise issuable to the Grantee pursuant to this
Award, provided that Lilly and/or the Employer may withhold or account for Tax Related Items by
considering applicable minimum statutory withholding amounts or other applicable withholding
rates. If the obligation for Tax Related Items is satisfied by
withholding shares of Lilly Stock as described in (iii) herein, the Grantee will be deemed to
have been issued the full number of shares of Lilly Stock to which he or she is entitled
pursuant to this Award, notwithstanding that a number of shares of Lilly Stock are withheld to
satisfy the obligation for Tax Related Items. The Grantee shall pay to Lilly and/or the
Employer any amount of Tax Related 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 of Lilly Stock or any cash
payment to the Grantee if the Grantee fails to comply with the Grantee’s obligation in
connection with the Tax Related Items as described herein.

	 	 	Section 15. Section 409A Compliance
	 
	 	 	To the extent applicable, it is intended that this 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. Notwithstanding anything elsewhere in
this Award to the contrary, if a Grantee is treated as a “specified employee” as of the date of
any payment under this Award, as determined by the Company in accordance with its procedures,
then, to the extent required, the commencement of any payment under this Award shall be delayed
until the date that is six (6) months following the date of the
Grantee’s separation from service. This Award is subject to Section 13(k) of the 2002 Plan
concerning Section 409A.
	 
	 	 	Section 16. Severability and Section Headings
	 
	 	 	If one or more of the provisions of this instrument shall be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and the invalid, illegal or
unenforceable provisions shall be deemed null and void; however, to the extent permissible by
law, any provisions which could be deemed null and void shall first be construed, interpreted
or revised retroactively to permit this instrument to be construed so as to foster the intent
of this Award and the 2002 Plan.

Page 8

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	The section headings in this instrument are for convenience of reference only and shall not be
deemed a part of, or germane to, the interpretation or construction of this instrument.
	 
	 	 	Section 17. Determinations by Committee
	 
	 	 	Determinations by the Committee pursuant to any provision of the 2002 Plan, pursuant to
rules, regulations, and procedures adopted by the Committee, or pursuant to this instrument
shall be final and binding on the Grantee and any Successor Grantee.
	 
	 	 	Section 18. Change in Control
	 
	 	 	The provisions of Section 12(a)(v) of the 2002 Plan do not apply to this Award.

Page 9

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	Section 19. Nature of 2002 Plan and Award
	 
	 	 	In accepting this Award, the Grantee acknowledges, understands and agrees that:

	 	a.	 	the 2002 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 2002 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, or benefits
in lieu of Restricted Stock Units, even if Restricted Stock Units have been
granted repeatedly in the past;
	 
	 	c.	 	all decisions with respect to future awards of Restricted Stock Units, if
any, will be at the sole discretion of the Committee;
	 
	 	d.	 	the Grantee’s participation in the 2002 Plan is voluntary;
	 
	 	e.	 	the Award and any shares of Lilly Stock subject to the Award are an
extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to Lilly or the Employer and which is outside the
scope of Grantee’s employment contract, if any;
	 
	 	f.	 	the Award and any shares of Lilly Stock subject to the Award are not part
of normal or expected compensation or salary for any purposes, including, but
not limited to, calculating any severance, resignation, termination, redundancy, end
of service payments, bonuses, long-service awards, pension or welfare or
retirement benefits or similar payments and in no event should be considered as
compensation for, or relating in any way to, past services for Lilly or the
Employer;
	 
	 	g.	 	neither the Award nor any provision of this instrument, the 2002 Plan or
the policies adopted pursuant to the 2002 Plan confer upon the Grantee any right
with respect to employment or continuation of current employment, and in the
event that the Grantee is not an employee of Lilly or any subsidiary of Lilly,
the Award shall not be interpreted to form an employment contract or relationship with
Lilly or any subsidiary of Lilly;
	 
	 	h.	 	the future value of the underlying shares of Lilly Stock is unknown and
cannot be predicted with certainty;
	 
	 	i.	 	the value of shares of Lilly Stock acquired upon lapse of the Restriction
Period may increase or decrease in value, even below the tax valuation price;
	 
	 	j.	 	no claim or entitlement to compensation or damages shall arise from
forfeiture of the Award resulting from termination of the Grantee’s employment
by Lilly or the Employer (for any reason whatsoever and whether or not in breach
of local labor laws) and, in consideration of the grant of the Award to which the Grantee
is otherwise not entitled, the Grantee agrees never to institute any claim against
the Company or the Employer, waives the ability, if any, to bring any such claim
and releases the Company and the Employer from any such claim; if, notwithstanding
the foregoing, any such claim is allowed by a court of competent jurisdiction,
then, by participating in the Plan, the Grantee will be deemed 

Page 10

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	 	irrevocably to
have agreed not to pursue such claim and agrees to execute any and all documents
necessary to request dismissal or withdrawal of such claims;
	 
	 	k.	 	in the event of termination of the Grantee’s employment (whether or not
in breach of local labor laws), the Grantee’s right to receive or vest in the
Award, if any, will terminate effective as of the date the Grantee is no longer
actively employed and will not be extended by any notice period mandated under
local law (e.g., active employment would not include a period of “garden leave”
or similar period pursuant to local law); the Committee shall have the exclusive
discretion to determine when the Grantee is no longer actively employed for
purposes of the Award;
	 
	 	l.	 	Lilly is not providing any tax, legal or financial advice, nor is Lilly
making any recommendations regarding the Grantee’s participation in the 2002
Plan or the Grantee’s acquisition or sale of the underlying shares of Lilly
Stock; and
	 
	 	m.	 	the Grantee is hereby advised to consult with his or her own personal
tax, legal and financial advisors regarding the Grantee’s participation in the
2002 Plan before taking any action related to the Plan.

	 	 	Section 20. Data Privacy
	 
	 	 	The Grantee hereby explicitly and unambiguously consents to the collection, use and
transfer, in electronic or other form, of the Grantee’s personal data as described in this
Award by and among, as applicable, the Employer, Lilly, its subsidiaries and its affiliates for
the exclusive purpose of implementing, administering and managing the Grantee’s participation
in the 2002 Plan.
	 
	 	 	The Grantee understands that Lilly may hold certain personal information about the Grantee,
including, but not limited to, the Grantee’s name, home address and telephone number, date of
birth, social insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in Lilly, details of all Awards or any other
entitlement to shares awarded, canceled, vested, unvested or outstanding in the Grantee’s
favor, for the purpose of implementing, administering and managing the 2002
Plan (“Data”). The Grantee understands that Data may be transferred to any third parties
assisting in the implementation, administration and management of the 2002 Plan, that these
recipients may be located in the Grantee’s country, or elsewhere, and that the recipient’s
country may have different data privacy laws and protections than the Grantee’s country. The
Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and managing the
Grantee’s participation in the 2002 Plan, including any requisite transfer of such Data as may
be required to a broker, escrow agent or other third party with whom any shares received upon
lapse of the Restriction Period may be deposited. The Grantee
understands that Data will be held only as long as is necessary to implement, administer and
manage the Grantee’s participation in the 2002 Plan. The Grantee understands that the Grantee
may, at any time, request an equity award transaction statement, request any necessary
amendments to Data or refuse or withdraw the consents herein, in any case without cost, by
contacting in writing the Grantee’s local human resources representative. The Grantee
understands that refusal or withdrawal of consent may affect the Grantee’s 

Page 11

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	ability to
participate in the 2002 Plan. For more information on the consequences of the Grantee’s
refusal to consent or withdrawal of consent, the Grantee understands that the Grantee may
contact the Grantee’s local human resources representative.

	 	 	Section 21. Effective Date
	 
	 	 	The effective date of this instrument shall be the date of grant.
	 
	 	 	Section 22. Governing Law
	 
	 	 	The validity and construction of this Award shall be governed by the laws of the State of
Indiana, U.S.A. without regard to laws that might cause other law to govern under applicable
principles of conflict of laws. For purposes of litigating any dispute that arises under this
Award, the parties hereby submit to and consent to the jurisdiction of the State of Indiana,
and agree that such litigation shall be conducted in the courts of Marion County, Indiana, or
the federal courts for the United States for the Southern District of Indiana, and no other
courts, where this Award is granted and/or to be performed.
	 
	 	 	Section 23. Language
	 
	 	 	If the Grantee has received this instrument or any other document related to the 2002 Plan
translated into a language other than English and if the translated version is different than
the English version, the English version will control.
	 
	 	 	Section 24. Adjustments to Number of Shares
	 
	 	 	The number of shares of Lilly stock subject to this Award shall be subject to adjustment
in accordance with the provisions of Section 4(b) of the 2002 Plan for certain corporate
recapitalizations and other events.
	 
	 	 	Section 25. Imposition of Other Requirements
	 
	 	 	If the Grantee relocates to another country, any special terms and conditions applicable
to Restricted Stock Units granted in such country will apply to the Grantee, to the extent the
Company determines that the application of such terms and conditions is necessary or advisable
in order to comply with local law or facilitate the administration of the Plan.
	 
	 	 	In addition, the Company reserves the right to impose other requirements on the Restricted
Stock Units and any shares of Lilly Stock acquired under the Plan, to the extent the Company
determines it is necessary or advisable in order to comply with local law or facilitate the
administration of the Plan, and to require the Grantee to sign any additional agreements or
undertakings that may be necessary to accomplish the foregoing.

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

Page 12

 

Eli Lilly and Company Restricted Stock Unit 

	 	 	 	 	 
	 	ELI LILLY AND COMPANY

 	 
	 	By:  	
 	 
	 	 	John Lechleiter 	 
	 	 	Chairman of the Board and

Chief Executive Officer 	 
	 

Page 13

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