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Exhibit 10.2
6698156-v3\GESDMS
Elanco Animal Health, Inc.
Directors' Deferral Plan
Form of Annual Deferred Stock Award Agreement
This annual deferred stock award has been granted on [___________] (“Grant
Date”) by Elanco Animal Health, Inc., an Indiana corporation (“Elanco” or the
“Company”), to the Director who has received this agreement.
Number of Shares:     [________]

Vesting Date:     100% on Grant Date

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6698156-v3\GESDMS
Table of Contents
Section 1.    Grant of Annual Deferred Stock Award    1
Section 2.    Vesting and Deferral    1
Section 3.    Distribution    1
Section 4.    Rights of the Director    1
Section 5.    Taxes    1
Section 6.    Capitalization Adjustments    2
Section 7.    Section 409A Compliance    2
Section 8.    Miscellaneous Provisions    3

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6698156-v3\GESDMS

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Section 1.
Grant of Annual Deferred Stock Award

Elanco has granted to the Director who has received this Award Agreement an
annual deferred share allocation award (the “Deferred Stock Award”) with respect
to the number of shares of Elanco Common Stock (the “Shares”) set forth on page
1 of this document, pursuant to and subject to the terms and conditions set
forth in the Elanco Animal Health, Inc. Directors’ Deferral Plan, as may be
amended from time to time (the “Plan”), and to the terms and conditions set
forth in this document (the “Award Agreement”). This Deferred Stock Award
represents a grant of Shares as contemplated under Section 5(c) of the Plan. In
the event of any conflict between the terms of the Plan and this Award
Agreement, the terms of the Plan shall govern.
Any capitalized terms used but not defined in this Award Agreement shall have
the meanings set forth in the Plan.
Section 2.
Vesting and Deferral

The Deferred Stock Award shall be fully vested on the Grant Date and settlement
of the Shares subject to the Deferred Stock Award shall be deferred
automatically pursuant to Section 5(c) of the Plan and credited to the
Director's Deferred Stock Account maintained by the Company.
Section 3.
Distribution

a.
Except as otherwise set forth in the Plan, the Deferred Stock Award shall be
distributed in a single lump sum on the earlier of the Director's Separation
from Service and the Director's death in accordance within the payment periods
specified in the Plan.

b.
Except as otherwise provided in Section 6(b) and Section 6(f) of the Plan, the
Deferred Stock Award shall be distributed in whole Shares.

Section 4.Rights of the Director
a.
Except as otherwise set forth in Section 4(b) below, the Director shall have no
rights as a shareholder of the Company with respect to any Shares subject to the
Deferred Stock Award until the Shares are actually issued or transferred to the
Director and held of record by the Director on the books of the Company.

b.
If cash dividends are paid on Company Shares, dividend equivalents, in the form
of Shares, shall be credited to the Director in accordance with the provisions
of Section 5(e) of the Plan.

c.
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
Director 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 5.Taxes
The Director acknowledges that the Director will consult with his or her
personal tax advisor regarding any income tax, social security contributions,
payroll taxes or other tax-related items (“Taxes”) that arise in connection with
the Deferred Stock Award, including, for the avoidance of doubt, the receipt of
any dividends and/or dividend equivalent rights. The Director is relying solely
on such advisor and is not relying in any part on any statement or
representation of the Company or any of its agents. The Company shall not be
responsible for withholding any applicable Taxes, unless required by applicable
law. The Company may take such action as it deems appropriate to ensure that all
Taxes, which are the Director’s sole and absolute responsibility, are withheld
or collected from the Director, if and to the extent required by applicable law.
In this regard, the Company will have the power and the right to require the
Director to remit to the Company, the amount necessary to satisfy any Taxes that
are legally required to be paid by the Director in connection with the Deferred
Stock Award. Notwithstanding the foregoing, unless otherwise determined by the
Board of Directors, any obligation to withhold Taxes from the Director shall be
satisfied by the Company by withholding from the Shares to be issued upon
settlement of the Deferred Stock Award or any dividend equivalent right a number
of Shares having a fair market value on the date that the withholding
obligations for the Taxes is determined equal to the amount of the Taxes
required to be withheld, calculated at rates, including rates of up to the
maximum individual tax rate for the tax jurisdiction applicable to the Director,
that would not result in adverse accounting consequences, as determined by the
Company in its sole

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discretion. The Company may refuse to settle the Deferred Stock Award if the
Director fails to comply with his or her obligations for Taxes described in this
Section 5.
Section 6.
Capitalization Adjustments

In the event of a capitalization event described in Section 5(f) of the Plan,
the Shares subject to the Deferred Stock Award shall be subject to adjustment as
provided in Section 5(f) of the Plan.
Section 7.
Section 409A Compliance

To the extent applicable, it is intended that this Deferred Stock 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 Deferred Stock Award shall be interpreted and applied
by the Board of Directors in a manner consistent with this intent in order to
avoid the imposition of any additional tax under Section 409A. Notwithstanding
any provision of the Plan to the contrary, the Board may, but shall not be
obligated to, adopt such amendments to the Plan and the Award Agreement or adopt
other policies and procedures (including amendments, policies and procedures
with retroactive effect), or take any other actions, in each case, without the
consent of the Director, that the Board of Directors determines are necessary or
appropriate to ensure that the Deferred Stock Award complies with the
requirements of Section 409A and related U.S. Department of Treasury guidance
and thereby avoid the application of any penalty taxes under such Section 409A
or to mitigate any additional tax, interest and/or penalties or other adverse
tax consequences that may apply under Section 409A if compliance is not
practical. Nothing in the Plan or in the Award Agreement shall provide a basis
for any person to take any action against the Company or any affiliate based on
matters covered by Section 409A, including the tax treatment of the Deferred
Stock Awards, and neither the Company nor any affiliate will have any liability
under any circumstances to the Director or any other party if the Deferred Stock
Award that is intended to be compliant with Section 409A is not compliant or for
any action taken by the Board of Directors with respect thereto.
Section 8.
Miscellaneous Provisions

a.
The Director may be subject to insider trading restrictions and/or market abuse
laws in applicable jurisdictions, including but not limited to the United
States, which may affect the Director’s ability to directly or indirectly, for
the Director or for a third party, acquire or sell, or attempt to sell, or
otherwise dispose of Shares under the Plan during such times as the Director 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 Director acknowledges that it is his or her responsibility to comply
with any applicable restrictions, and the Director should consult with his or
her personal legal advisor on this matter.

b.
If the Director 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.
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.

d.
The Company is not providing any tax, legal or financial advice, nor is the
Company making any recommendations regarding the Director's participation in the
Plan or the Director's acquisition or sale of the underlying Shares. The
Director should consult with his or her own personal tax, legal and financial
advisors regarding the Director's participation in the Plan before taking any
action related to the Plan.

e.
The Company may, in its sole discretion, deliver any documents related to the
Deferred Stock Award by electronic means or request the Director’s consent to
participate in the Plan by electronic means.

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The Director hereby consents to receive all applicable documentation by
electronic delivery and to participate in the Plan through an on-line (and/or
voice activated) system established and maintained by the Company or a third
party vendor designated by the Company.
f.
Any notice to be given under the terms of this Award Agreement shall be in
writing and addressed to the Company at its principal office to the attention of
the Secretary, and to the Director at the Director’s last address reflected on
the Company’s records, or at such other address as either party may hereafter
designate in writing to the other. Any such notice shall be given only when
received, but if the Director is no longer a member of the Board of Directors,
shall be deemed to have been duly given by the Company when enclosed in a
properly sealed envelope addressed as aforesaid, registered or certified, and
deposited (postage and registry or certification fee prepaid) in a post office
or branch post office regularly maintained by the United States Government.

g.
The Deferred Stock Award and all rights of the Director under this Award
Agreement are subject to the terms and conditions of the provisions of the Plan,
incorporated herein by reference. The Director agrees to be bound by the terms
of the Plan and this Award Agreement. The Director acknowledges having read and
understood the Plan and this Award Agreement. Unless otherwise expressly
provided in other sections of this Award Agreement, provisions of the Plan that
confer discretionary authority on the Board of Directors do not (and shall not
be deemed to) create any rights in the Director unless such rights are expressly
set forth herein or are otherwise in the sole discretion of the Board of
Directors so conferred by appropriate action of the Board of Directors under the
Plan after the date hereof.

h.
This Award Agreement and the Plan together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The Plan and this
Award Agreement may be amended pursuant to Section 15 of the Plan. Such
amendment must be in writing and signed by the Company. The Company may,
however, unilaterally waive any provision hereof in writing to the extent such
waiver does not adversely affect the interests of the Director hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the
same provision or a waiver of any other provision hereof.

i.
This Award Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

j.
The Company reserves the right to impose other requirements on the Director’s
participation in the Plan, on the Deferred Stock Award and on any Shares
acquired under the Deferred Stock Award, to the extent the Company determines it
is necessary or advisable for legal or administrative reasons, and to require
the Director to sign any additional agreements or undertakings that may be
necessary to accomplish the foregoing.

IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed
in Indianapolis, Indiana, by its proper officer.
ELANCO ANIMAL HEALTH, INC.

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By: signature2.jpg [signature2.jpg]
Jeffrey N. Simmons
President, Chief Executive Officer and Director