Eli Lilly 2007 Annual Report Download - page 123

Download and view the complete annual report

Please find page 123 of the 2007 Eli Lilly annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

PROXY STATEMENT
121121
9(c). The Stock Option will, to the extent and when surrendered, cease to be exercisable. A Stock Appreciation
Right granted in connection with a Stock Option hereunder will have a base price per share equal to the per
share exercise price of the Stock Option, will be exercisable at such time or times, and only to the extent,
that the related Stock Option is exercisable, and will expire no later than the related Stock Option expires. If a
related Stock Option is exercised in whole or in part, then the SAR related to the shares purchased terminates
as of the date of such exercise.
(c) Payment of Stock Appreciation Rights. A Stock Appreciation Right will entitle the holder, upon settlement or
exercise, as applicable, to receive payment of an amount determined by multiplying: (i) the excess of the fair
market value of a share of Lilly Stock on the date of settlement or exercise of the Stock Appreciation Right over
the base price of the Stock Appreciation Right, by (ii) the number of shares as to which the Stock Appreciation
Right is settled or exercised. Payment of the amount determined under the foregoing will be made in shares
of Lilly Stock valued at their fair market value on the date of settlement or exercise, as applicable, subject to
applicable tax withholding requirements.
(d) Limits on Individual Grants. No individual Grantee may be granted Stock Options or Stock Appreciation Rights,
considered together, under the 2002 Plan for more than 2,500,000 3,500,000 shares of Lilly Stock in any period
of three consecutive calendar years.
(e) Share Withholding. With respect to any Stock Appreciation Right, the Committee may, in its discretion and
subject to such rules as the Committee may adopt, permit or require the Grantee to satisfy, in whole or in
part, any withholding tax obligation which may arise in connection with the exercise or settlement of the right
by having the Company withhold shares of Lilly Stock having a fair market value equal to the amount of the
withholding tax.
10. Stock Unit Awards to Eligible Employees.
The Committee may grant Stock Unit Awards to Eligible Employees. A Stock Unit Award is an award of a number of
hypothetical share units with respect to shares of Lilly Stock that are granted subject to such vesting and transfer
restrictions and conditions of payment as the Committee shall determine and set forth in an award agreement.
The value of each unit under a Stock Unit Award is equal to the fair market value of the Lilly Stock on any applicable
date of determination. A Stock Unit Award shall be subject to such restrictions and conditions as the Committee
shall determine. A Stock Unit Award may be granted, at the discretion of the Committee, together with a dividend
equivalent right with respect to the same number of shares of Lilly Stock. The following provisions are applicable
to Stock Unit Awards:
(a) Vesting of Stock Unit Awards. On the Grant Date, the Committee shall determine any vesting requirements with
respect to a Stock Unit Award, which shall be set forth in the award agreement, provided that the Committee
may accelerate the vesting of a Stock Unit Award at any time. Vesting requirements may be based on the
continued employment of the Grantee with the Company for a specifi ed time period or periods. Vesting
requirements may also be based on the attainment of specifi ed performance goals or measures established by
the Committee. A Stock Unit Award may also be granted on a fully vested basis, with a deferred payment date.
(b) Payment of Stock Unit Awards. A Stock Unit Award shall become payable to a Grantee at the time or times
determined by the Committee and set forth in the award agreement, which may be upon or following the vesting
of the award. The payment with respect to each share unit under a Stock Unit Award shall be determined
by reference to the fair market value of Lilly Stock on each applicable payment date. Payment will be made
in shares of Lilly Stock or cash at the discretion of the Committee, subject to applicable tax withholding
requirements.
(c) Total Number of Shares Granted. Not more than 3,000,000 shares of Lilly Stock may be issued or transferred
under the 2002 Plan in the form of Restricted Stock Grants and Stock Unit Awards, considered together.
(d) (c) Share Withholding. With respect to any Stock Unit Award, the Committee may, in its discretion and subject
to such rules as the Committee may adopt, permit or require the Grantee to satisfy, in whole or in part, any
withholding tax obligation which may arise in connection with the payment of the award by having the Company
withhold shares of Lilly Stock having a fair market value equal to the amount of the withholding tax.
11. Amendment and Termination of the 2002 Plan.
(a) Amendment. The Board may amend or terminate the 2002 Plan, but no amendment shall (i) allow the repricing
of Stock Options or Stock Appreciation Rights at a price below the original Option Price or base price as
applicable; (ii) allow the grant of Stock Options or Stock Appreciation Rights at an Option Price (or base price
as applicable) below the fair market value of Lilly Stock on the Grant Date; (iii) increase the number of shares
authorized for issuance or transfer pursuant to Sections 4(a), 6(f)(ii), 7(e), or 10(c); or (iv) increase the maximum
limitations on the number of shares subject to Grants imposed under Sections 5(f), 5(g), 6(f)(i), or 9(d), unless in
any case such amendment receives approval of the shareholders of the Company.
(b) Termination of 2002 Plan; Resubmission to Shareholders. The 2002 Plan shall remain in effect until April 1420,
20202012 or until earlier terminated by the Board. To the extent required under Section 162(m) of the Code, the
material terms of the 2002 Plan will be submitted to the shareholders of the Company for reapproval not later
than the annual meeting of shareholders that occurs in 2007 2013 if the Plan has not been terminated at that
time.
(c) Termination and Amendment of Outstanding Grants. A termination or amendment of the 2002 Plan that occurs
after a Grant is made shall not result in the termination or amendment of the Grant unless the Grantee
consents or unless the Committee acts under Section 13(e). The termination of the 2002 Plan shall not impair
the power and authority of the Committee with respect to outstanding Grants. Whether or not the 2002 Plan has