Eli Lilly 2012 Annual Report Download - page 155

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51
At any time prior to payment, the committee can adjust the performance goals and/or the payment computation for
the effect of significant events or circumstances that have a substantial effect on the performance goals and would
otherwise make application of the performance goals unfair. However, the committee may not increase the amount
that would otherwise be payable to individuals who are subject to Section 162(m) of the Internal Revenue Code.
Restricted Stock Grants and Stock Units
The committee may issue or transfer shares under a restricted stock grant. The grant will set forth a restriction
period during which the shares may not be transferred. If the grantee's employment terminates during the
restriction period, the grant terminates and the shares are returned to the company. However, the committee can
provide complete or partial exceptions to that requirement as it deems equitable. If the grantee remains employed
beyond the end of the restriction period, the restrictions lapse and the shares become freely transferable.
The committee may grant stock unit awards subject to vesting and transfer restrictions and conditions of payment
determined by the committee. The value of each stock unit equals the fair market value of Lilly stock and may (but
need not) include the right to receive the equivalent of dividends on the shares granted. Payment is made in the
form of Lilly stock.
Authority of Committee
The 2002 Lilly Stock Plan is administered and interpreted by the committee, each member of which must be a
“nonemployee” director within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended,
and an “outside director” within the meaning of section 162(m) of the Internal Revenue Code. As to grants to
employees, the committee selects persons to receive grants from among the eligible employees, determines the
type of grants and number of shares to be awarded, and sets the terms and conditions of the grants. The committee
may establish rules for administration of the 2002 Lilly Stock Plan and may delegate authority to others for plan
administration, subject to limitations imposed by SEC and IRS rules and state law.
Other Information
The 2002 Lilly Stock Plan remains effective until April 20, 2020, unless earlier terminated by the board. The board
may amend the 2002 Lilly Stock Plan as it deems advisable, except that shareholder approval is required for any
amendment that would
(i) allow the repricing of stock options below the original option price, (ii) allow the grant of stock options at an
option price below fair market value of Lilly stock on the date of grant, (iii) increase the number of shares
authorized for issuance or transfer, or (iv) increase any of the maximum limits established for stock options and
PAs.
The committee may provide in the grant agreement, or by subsequent action, that any or all of the following shall
occur in the event of a change in control (as defined in Article 12 of the 2002 Lilly Stock Plan), in order to preserve
all of the grantee's rights: (i) any outstanding stock option not already vested shall become immediately exercisable;
(ii) any restriction periods on restricted stock grants shall immediately lapse; and (iii) outstanding PAs and SVAs will
be vested and paid out based on a payout level up to the maximum, prorated for the number of months elapsed and
compared to the number of months in the award period.
The future amounts that will be received by grantees under the 2002 Plan are not determinable. In 2012, the named
executive officers received PA and SVA grants as set forth on page 39 in the "Grants of Plan-Based Awards During
2012" table. The executive officers as a group (14 officers) received grants for approximately 776,000 shares (50/50
split between PAs and SVAs) and all other employees (approximately 6,650 employees) received grants for
approximately 3,435,000 shares (comprised of approximately 1,388,000 RSUs, 1,175,500 SVAs, and 871,500 PAs).
Securities Authorized for Issuance Under Equity Compensation Plans
The following table presents information as of December 31, 2012, regarding our compensation plans under which
shares of Lilly common stock have been authorized for issuance.