Exhibit 10.2

 

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Elanco Animal Health Incorporated

Restricted Stock Unit Award Agreement

 

This Restricted Stock Unit Award has been granted on March 1, 2019 (“Grant
Date”) by Elanco Animal Health Incorporated, an Indiana corporation (“Elanco” or
the “Company”), to the Eligible Individual who has received this Restricted
Stock Unit Award Agreement (the “Grantee”).

 

Number of Shares:

Log into UBS account at

 

http://equity.elancodirect.com

 

 

Grantee:

 

 

 

Vesting Date(s):

 

 

33% on 1st Anniversary of Grant Date

 

33% on 2nd Anniversary of Grant Date

 

34% on 3rd Anniversary of Grant Date

 

 

 

(except as otherwise provided in this Restricted Stock Unit Award Agreement)

 

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Elanco 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

7

Section 9.

Nature of Grant

7

Section 10.

Data Privacy

9

Section 11.

Additional Terms and Conditions

11

Section 12.

Governing Law and Choice of Venue

11

Section 13.

Miscellaneous Provisions

11

Section 14.

Award Subject to Acknowledgement of Acceptance

12

 

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Section 1.                                                Grant of Restricted
Stock Units

 

Elanco, an Indiana corporation (“Elanco” 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 Elanco Common Stock (the
“Shares”) referenced on page 1 of this document, pursuant to and subject to the
terms and conditions set forth in the 2018 Elanco Stock Plan (the “Plan”) and to
the terms and conditions set forth in this Restricted Stock Unit Award
Agreement, including any appendices, exhibits and addenda hereto (the “Award
Agreement”). Unless otherwise stated in the Plan where the terms in this Award
Agreement may govern in the event of any conflict between the terms of the Plan
and this Award Agreement, in the event of any such conflict, the terms of the
Plan shall otherwise 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.              The Award shall vest as to all or a portion of the Award at the
close of business in Greenfield, Indiana, U.S.A. on the earliest of the
following dates (each, a “Vesting Date”):

 

i.                  the Vesting Date(s) set forth on page 1 of this document;

 

ii.               a Qualifying Termination, as defined below.

 

b.              In the event the Grantee’s Service is terminated due to the
Grantee’s death, any unvested portion of the Award will accelerate and vest in
full.

 

c.               In the event the Grantee’s Service is terminated due to a
Qualifying Termination for a reason other than death, a pro-rata portion of the
Award will accelerate and vest based on the ratio of (x) the number of full or
partial months worked by the Grantee from the Grant Date to the Qualifying
Termination to (y) the total number of months from the Grant Date to the next
scheduled Vesting Date set forth on page 1 of this document.

 

d.              In the event the Grantee’s Service is terminated prior to a
Vesting Date for any reason or in any circumstance other than those specified in
Section 2(a), 2(b) or 2(c) above, any unvested portion of the Award shall be
forfeited.

 

e.               For purposes of this Award Agreement, a “Qualifying
Termination” means any one of the following:

 

i.                        the date of the Grantee’s Retirement;

 

ii.                     the date the Grantee’s Service is terminated due to the
Grantee’s death;

 

iii.                  the date the Grantee’s Service is terminated by reason of
Disability;

 

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iv.                 the date the Grantee’s Service is terminated due to a
closing of a plant site or other corporate location;

 

v.                    the date the Grantee’s Service is terminated due to the
elimination of a work group, functional or business unit or other broadly
applicable reduction in job positions; or

 

vi.                 the date the Grantee’s Service is terminated 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.

 

“Retirement” for purposes of this Award Agreement means either (A) age sixty
(60) or (B) thirty (30) years of Service with the Company or an Affiliate,
including any years of Service with Eli Lilly & Company (“Lilly”) prior to the
Company’s spin-off from Lilly.

 

The Committee, in its sole discretion, shall determine whether and when a
Qualifying Termination has occurred and/or if a leave of absence or transfer of
employment between the Company and an Affiliate or between Affiliates
constitutes a termination of Service.  Such determination shall be final and
binding on the Grantee.

 

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
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 Qualifying
Termination, 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 Elanco Animal Health, Inc. 2018 Change in Control Severance Pay Plan
for Employees or the Elanco Animal Health, Inc. 2018 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.

 

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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 in no event later than sixty days, following the
applicable Vesting Date, or, if earlier, a vesting event contemplated under
Section 3 above.

 

b.              If the Award is considered an item of non-qualified deferred
compensation subject to Section 409A of the Code (“NQ Deferred Compensation”)
and the settlement date or period is on by reference to the date of the
termination of the Grantee’s Service, (i) the Award shall not be paid unless and
until the Grantee experiences a “separation from service” within the meaning of
Section 409A of the Code (a “Section 409A Separation”) and (ii) if the Grantee
is a “specified employee” within the meaning of Section 409A of the Code as of
the  date of the Grantee’s Section 409A Separation, the vested portion of the
Award shall instead be paid on the earliest of (1) the Vesting Dates set forth
in Section 2(a)(i) with respect to the portion of the Award that was scheduled
to vest on such Vesting Dates, (2) the first day following the six (6) month
anniversary of the Grantee’s Section 409A Separation, (3) the date of a
Section 409A CIC, and (4) the date of the Grantee’s death.  If the Award is
considered NQ Deferred Compensation and the vesting event is a Transaction that
does not constitute a “change in control event” within the meaning of
Section 409A of the Code (a “Section 409A CIC”), the Award shall instead be
settled on the earliest of (A) the Vesting Dates set forth in
Section 2(a)(i) with respect to the portion of the Award that was scheduled to
vest on such Vesting Dates, (B) the date of a Section 409A CIC, and (C) the date
of the Grantee’s death.

 

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

 

d.              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 based on the Fair Market Value
of the Shares on the applicable Vesting Date.

 

e.               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 the Company until such
time as the Restricted Stock Units vest and Shares are issued or transferred to
the Grantee.

 

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b.              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 the Company 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, 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 the Company or the Employer.  The Grantee further
acknowledges that the Company 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
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, 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 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
the Company and/or the Employer to satisfy all Tax Related Items.

 

c.               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.

 

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d.              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 the Company and/or the
Employer, or their respective agents, at their discretion, to (i) withhold from
the Grantee’s wages or other cash compensation paid to the Grantee by the
Company and/or the Employer, (ii) 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 the Company or its designated broker in
order for such sale to be effectuated) and withhold from the proceeds of such
sale, and/or (iii) withhold in Shares otherwise issuable to the Grantee pursuant
to this Award.

 

e.               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, the Company will withhold in Shares otherwise issuable to the
Grantee pursuant to this Award, unless the use of such withholding method is
prevented by applicable law 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(d)(i) and (ii) above.

 

f.                Depending on the withholding method, the Company and/or the
Employer may withhold or account for Tax Related Items by considering applicable
minimum statutory withholding amounts or other applicable withholding rates,
including maximum applicable rates, in which case the Grantee may receive a
refund of any over-withheld amount in cash as soon as practicable and without
interest and will not be entitled 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 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.

 

g.     The Company may require the Grantee to pay the Company and/or the
Employer any amount of Tax Related Items that the Company 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.  The Company
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.                                                Nature of Grant

 

In accepting the grant, Grantee acknowledges, understands and agrees that:

 

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a.              the Plan is established voluntarily by the Company, it is
discretionary in nature and it may be modified, amended, suspended or terminated
by the Company 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,
or benefits in lieu thereof, even if Restricted Stock Units have been granted in
the past;

 

c.               all decisions with respect to future awards of Restricted Stock
Units 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 the Company, 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;

 

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 the Company or any subsidiary
of the Company, the Award shall not be interpreted to form an employment
contract or relationship with the Company 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 the Company 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 vest
in 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.,

 

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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 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 Stock 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 UBS Financial Services Inc. and/or its affiliated companies
(“UBS”), 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.

 

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. For
example, the European Commission has issued a limited adequacy finding with
respect to the United States that applies

 

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only to the extent companies register for the EU-U.S. Privacy Shield program,
which is open to companies subject to Federal Trade Commission jurisdiction and
in which the Company participates with respect to employee data. The Company’s
legal basis, where required, for the transfer of Data is the 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.               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 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.

 

f.                 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.

 

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 adduce an adequate level of protection from a European
(or other non-U.S.) data protection law perspective, for the purposes described
above.

 

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Section 11.                                         Additional Terms and
Conditions

 

a.              Country-Specific Conditions. The Award shall be subject to any
special terms and conditions set forth in any Appendix to this Award Agreement
for the Grantee’s country.  Moreover, if the Grantee relocates to one of the
countries included in the Appendix, the special terms and conditions for 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 for legal or
administrative reasons.  The Appendix constitutes part of this Award Agreement.

 

b.              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.

 

c.               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.

 

Section 12.                                         Governing Law and Choice of
Venue

 

The validity and construction 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.  For
purposes of litigating any dispute that arises under this Award Agreement, 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
Hancock 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

 

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to have been given or made only upon receipt thereof by the Corporate Secretary
of the Company at the Elanco Animal Health Global Headquarters,
Greenfield, Indiana 46140, U.S.A.  Any notice or communication by the Company 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 the Company
by the Grantee and, in the case of any successor Grantee, at the address
specified in writing to the Company by the successor Grantee.  In addition, the
Company 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 the Company or a third party designated by
the Company.

 

b.              Language. 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 the Company 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.

 

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.  The Company is not providing any
tax, legal or financial advice, nor is the Company 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.                                         Award Subject to
Acknowledgement of Acceptance

 

Notwithstanding any provisions of this Award Agreement, the Award is subject to
acknowledgement of acceptance by the Grantee on or prior to 4:00 PM (EDT) on the
60th day after the Grant Date, through the website of UBS, the Company’s stock
plan

 

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administrator. If the Grantee does not acknowledge acceptance of the Award prior
to 4:00 PM (EDT) on or prior to the 60th day after the Grant Date, the Award
will be cancelled, subject to the Committee’s discretion for unforeseen
circumstances.

 

IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed
in Greenfield, Indiana, by its proper officer.

 

 

ELANCO ANIMAL HEALTH INCORPORATED

 

 

 

 

 

By:

/s/Jeffrey N. Simmons

 

 

Jeffrey N. Simmons

 

 

President, Chief Executive Officer and Director

 

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