Eli Lilly 2010 Annual Report Download - page 142

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PROXY STATEMENT
those excise taxes as well as any income and excise taxes payable by the employee as a result of the
reimbursement. The amounts in the table are based on a 280G excise tax rate of 20 percent and a 40 percent
federal, state, and local income tax rate. To reduce the company’s exposure to these reimbursements, the
employee’s severance will be cut back by up to 5 percent if the effect is to avoid triggering the excise tax under
Section 280G. Beginning in October 2012, excise taxes will no longer be reimbursed.
Payments Upon Change in Control Alone. In general, the CIC plan is a “double trigger” plan, meaning payments are
made only if the employee suffers a covered termination of employment within two years following the change in
control. Employees do not receive payments upon a change in control alone, except that upon consummation of a
change in control a partial payment of outstanding PAs would be made, reduced to reflect the portion of the
performance period worked prior to the change in control. Likewise, in the case of a change in control in which Lilly
is not the surviving entity, SVAs will pay out based on the change-in-control stock price and be prorated for the
portion of the three-year performance period elapsed.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table contains information as of December 31, 2010, about our compensation plans under which
shares of company stock have been authorized for issuance.
Plan category
(a) Number of securities to be
issued upon exercise of
outstanding options,
warrants, and rights
(b) Weighted-average exercise
price of outstanding options,
warrants, and rights
(c) Number of securities
remaining available for future
issuance under equity
compensation plans (excluding
securities reflected in (a))
Equity compensation plans approved by security
holders 49,479,780 $68.19 82,072,966
Equity compensation plans not approved by
security holders 15,984,210 $76.12 0
Total 55,463,990 $69.04 82,072,966
1Represents shares in the Lilly GlobalShares Stock Plan, which permitted the company to grant stock options to
nonmanagement employees worldwide. The plan was administered by the senior vice president responsible for
human resources. The stock options are nonqualified for U.S. tax purposes. The option price cannot be less than
the fair market value at the time of grant. The options shall not exceed 11 years in duration and shall be subject to
vesting schedules established by the plan administrator. There are provisions for early vesting and early
termination of the options in the event of retirement, disability, or death. In the event of stock splits or other
recapitalizations, the administrator may adjust the number of shares available for grant, the number of shares
subject to outstanding grants, and the exercise price of outstanding grants.
48