Document:

Exhibit

Exhibit 10.13

RESTRICTED STOCK UNIT AGREEMENT

(Officer Restricted Stock Unit)

This Restricted Stock Unit Agreement (this “Agreement”), effective as of February ___, 201__ (the “Grant Date”), is by and between Lexicon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and «FirstName» «LastName» (“Employee”).

To carry out the purposes of the Company’s Equity Incentive Plan (the “Plan”) and the determination of the compensation committee (the “Compensation Committee”) of the Company’s board of directors (the “Board”) to award Employee a Phantom Stock Award (as defined in the Plan) under the Plan, subject to the terms and conditions of this Agreement, of shares of the Company’s Common Stock, par value $0.001 per share (“Stock”), in order to provide Employee with incentives to exert maximum efforts for the Company’s success by providing Employee the opportunity to benefit from increases in the value of the Stock, and in consideration of the mutual agreements and other matters set forth herein and in the Plan, the Company and Employee hereby agree as follows:

1.Grant of Phantom Stock Award.  The Company hereby grants to Employee a Phantom Stock Award, on the terms and conditions set forth in this Agreement and in the Plan, consisting of the right to receive an aggregate of «RestrictedShares» shares of Stock (the “Shares”).  

2.Vesting.  (a) Subject to the terms and conditions set forth in this Agreement and the Plan, the right of Employee to receive the Shares shall vest with respect to (i) 25% of the total number of Shares on February 28, 201__ and (ii) an additional 25% of the total number of Shares on February 28 of each of the three succeeding years thereafter; provided that, if not already vested in accordance with the foregoing, the right of Employee to receive the Shares shall become vested upon (i) a termination of Employee’s Continuous Service (as defined in the Plan) by the Company without Cause (as defined below) or by Employee for Good Reason (as defined below) that occurs after the occurrence of a Change in Control (as defined below) or (ii) the termination of Employee’s Continuous Service as a result of Employee’s death or Disability (as defined in the Plan).

(b)    For purposes of the foregoing:

(i)A “Change in Control” shall be deemed to have occurred if any of the following shall have taken place: (A) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) other than Invus, L.P. and its affiliates (collectively, “Invus”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, or any successor provisions thereto), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then-outstanding voting securities; (B) Invus becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, or any successor provisions thereto), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then-outstanding voting securities; (C) the consummation of a reorganization, merger, or consolidation, in each case with respect to which persons who were stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own or control more than 50% of the combined voting power of the reorganized, merged or consolidated Company’s then-outstanding securities entitled to vote generally in the election of directors in substantially the same proportions as their ownership of the Company’s outstanding voting securities prior to such reorganization, merger or consolidation; (D) a liquidation or dissolution of the Company or the sale of all or substantially all of the Company’s assets; or (E) following the election or removal of directors, a majority of the Board consists of individuals who were not members of the Board two years before such election or removal, unless the election of each director who is not a director at the beginning of such two-year period has been approved in advance by directors representing at least a majority of the directors then in office who were directors at the beginning of the two-year period; provided, that notwithstanding the foregoing, neither the execution by the Company of the Securities Purchase Agreement and Stockholders’ Agreement with Invus, L.P., each dated June 15, 2007 (as amended, supplemented or 

otherwise modified, the “Invus Transaction Agreements”), nor the consummation of the transactions contemplated in the Invus Transaction Agreements, including, without limitation, the acquisition by Invus of the Initial Shares and the Rights Shares (as defined in the Invus Transaction Agreements), the election of any representatives of Invus to the board of directors of the Company, or the acquisition by Invus of additional shares of Stock, as permitted or contemplated under the Invus Transaction Agreements, will constitute a “Change in Control.”  The Compensation Committee, in its discretion, may deem any other corporate event affecting the Company to be a “Change in Control” hereunder.

(ii)“Cause” means a termination of Employee’s employment directly resulting from (A) Employee having engaged in intentional misconduct causing a material violation by the Company of any state or federal laws, (B) Employee having engaged in a theft of Company funds or Company assets or in a material act of fraud upon the Company, (C) an act of personal dishonesty taken by Employee that was intended to result in personal enrichment of Employee at the expense of the Company, (D) Employee’s final conviction (or the entry of any plea other than not guilty) in a court of competent jurisdiction of a felony, or (E) a breach by Employee of any contractual or fiduciary obligation to the Company, if such breach results in a material injury to the Company.

(iii)“Good Reason” means the occurrence of any of the following events without Employee’s express written consent: (A) a material diminution in Employee’s base salary, (B) a material diminution in Employee’s authority, duties, or responsibilities, or (C) any other action or inaction that constitutes a material breach by the Company of any contractual obligation to Employee.

3.Forfeiture upon Termination of Service.  Simultaneously with termination of Employee’s Continuous Service for any reason other than as a result of Employee’s death or Disability (as defined in the Plan) prior to the vesting of Employee’s rights to receive the Shares in accordance with Section 2 of this Agreement, Employee shall automatically forfeit all rights to receive the Shares, unless and except to the extent otherwise agreed by the Company, in its sole discretion.  

4.Issuance of Shares upon Vesting.  Subject to the provisions of Sections 3 and 6 of this Agreement, upon vesting of the Shares in accordance with Section 2 of this Agreement, the Company shall (a) provide Employee with prompt notice of such vesting event and (b) issue the Shares to Employee for no additional consideration.

5.Non-Transferability.  Employee’s rights under this Agreement, including with respect to any Shares as to which the interest of Employee has not vested in accordance with Section 2 of this Agreement, may not be transferred by Employee otherwise than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder).

6.Withholding of Tax.   Employee shall be liable for any and all federal, state or local taxes, including withholding taxes, arising out of the grant or vesting of Shares hereunder.  Unless Employee elects otherwise as provided below, Employee shall satisfy such withholding tax obligation by forfeiting to the Company that number of Shares having a Fair Market Value (as defined in the Plan) equal to the Company’s withholding obligation relating to such grant or vesting of Shares hereunder.  Employee may alternatively elect to satisfy such withholding tax obligation by making a cash payment to the Company equal to the Company’s withholding obligation, in which case Employee shall (a) provide the Company with written notice of such election and (b) pay to the Company in immediately available funds an amount equal to the Company’s withholding obligation, in each case by no later than the date giving rise to such withholding tax obligation.  No Shares shall be issued to Employee unless and until Employee shall have paid or otherwise satisfied the withholding tax obligations with respect thereto.

7.Dividend Equivalents; Voting.  If the Board declares any dividends with respect to the Stock prior to the vesting of Employee’s rights to receive the Shares in accordance with Section 2 of this Agreement, dividend equivalents shall be credited to Employee in respect of the Shares and shall be converted into additional shares of Stock covered by this Agreement and such additional shares shall be subject to all of the terms and conditions of the 

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underlying Shares.  Employee shall have no voting rights with respect to the Phantom Stock Award or the Shares subject thereto until such time as the Shares are issued to Employee pursuant to Section 4 of this Agreement.

8.No Right to Continued Employment. Nothing in this Agreement or the Plan shall confer upon Employee any right to continue in the employ of the Company or shall interfere with or restrict in any way the right of the Company, which is hereby expressly reserved, to terminate Employee’s employment at any time for any reason whatsoever, with or without cause and with or without advance notice.

9.Equity Incentive Plan.  The Plan, a copy of which is available for inspection by Employee at the Company’s principal executive office during business hours, is incorporated by reference in this Agreement.  This Agreement is subject to, and the Company and Employee agree to be bound by, all of the terms and conditions of the Plan. In the event of a conflict between this Agreement and the Plan, the terms of the Plan shall control.  Subject to the terms of the Plan, the administrator of the Plan shall have authority to construe the terms of this Agreement, and the determinations of the administrator of the Plan shall be final and binding on Employee and the Company.  

10.Binding Agreement.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Employee. 

11.Governing Law.  This Agreement and all actions taken hereunder shall be governed by and construed in accordance with the laws of the State of Delaware. 
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and Employee has executed this Agreement effective for all purposes as of the Grant Date.

Lexicon Pharmaceuticals, Inc.

By:                        
Lonnel Coats
President and Chief Executive Officer

Employee

                        
«FirstName» «LastName»

3Exhibit

Exhibit 10.5.4

INTER-COMPANY LOAN AGREEMENT
This Inter-Company Loan Agreement (the “Agreement”) is entered into as of this 1st day of January, 2012 (the “Effective Date”), by and among Employers Mutual Casualty Company (“EMCC”), Union Insurance Company of Providence, Hamilton Mutual Insurance Company, EMC Property & Casualty Company (the foregoing three (3) companies are hereinafter collectively referred to as the “EMCC Subsidiaries”), EMCASCO Insurance Company, Illinois EMCASCO Insurance Company, Dakota Fire Insurance Company and EMC Reinsurance Company (the foregoing four (4) companies are hereinafter collectively referred to as the “Group Subsidiaries”) (EMCC and each undersigned company are hereinafter collectively called the “Companies” or, individually, the “Company”).
WHEREAS, one or more of the Companies may, from time to time, have funds available for short-term investment purposes or have a short-term need for general working capital; and
WHEREAS, the Companies desire to enter into a written agreement, in accordance with the terms and conditions set forth herein, by which the Companies may lend to and borrow from one another; and
WHEREAS, the Companies are authorized by their respective Boards of Directors to lend to and borrow from one another and to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises hereinafter contained, the Companies agree as follows:
I.    AMOUNT AND TERMS OF ADVANCES AND BORROWINGS
		
	A.
	Intercompany Loans.  The Companies agree on the terms and conditions set forth in this Agreement to lend to and borrow monies from one another (each borrowing a “Loan”) from time to time from the date hereof until this Agreement is terminated.

		
	B.
	Limitation on Loans.  No Loans may:

		
	a.
	Exceed, in the aggregate (which shall include both principal and accrued interest), more than five percent (5%) of the lending Company’s admitted assets as of December 31 of the preceding year; or 

		
	b.
	Cause the lending Company, at the time such Loan is made, to violate any applicable law or regulation regarding the solvency of an insurance company.

		
	C.
	Interest on Loans.  

		
	a.
	Subject to the other provisions of this Section I.C., interest shall accrue on each Loan at the rate of 125 basis points over the 1 month LIBOR Ask Rate in effect as of 4:00 p.m. Central Time on the date of the Loan.  Interest shall be calculated on the basis of a 365-day year from the actual number of days elapsed.  The outstanding principal balance of any Loan, together with all interest accrued thereon, shall be due and payable within ten (10) business days of a demand by the lending Company.  

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	b.
	Any interest payment due and payable hereunder by any Company is independent of any interest payments required to be made by the other parties to this Agreement.  EMCC shall calculate the amount of interest payable by the borrowing Company to the lending Company and, upon request, shall provide supporting documentation as to the calculation thereof.

		
	D.
	Conditions of Loans.

		
	a.
	Each lending Company, in its sole discretion, shall determine if it will make a Loan to a borrowing Company based on whether it has sufficient funds for its daily operations and whether such Loan will be an appropriate investment under state regulations and its corporate investment policy limitations.  No Company is obligated to make a Loan to another Company.  

		
	b.
	The maximum term of a Loan shall be one hundred eighty (180) days.  Each  borrowing  Company may, from time to time,  prepay  all, or any  part, of any  outstanding  unpaid  principal amount without  penalty or premium.  All Loan payments shall be applied to accrued and outstanding interest first, with the balance, if any, applied to principal.

		
	E.
	Loan Requests.  Each request for a Loan shall be made in writing by the Treasurer of the borrowing Company and approved by the Chief Financial Officer of the lending Company.

		
	F.
	Repayment.  The borrowing Company shall repay to the lending Company, within ten (10) business days of the lending Company’s demand or at the end of the one hundred eighty (180) day maximum lending term, whichever comes first, the outstanding principal of any Loan amount, together with any interest accumulated thereon.

		
	G.
	Default.  

		
	a.
	Any delay in the payment of principal or interest due on a Loan made by a lending Company to a borrowing Company, in accordance with the terms and conditions of this Agreement, which continues for ten (10) or more business days shall constitute an Event of Default under this Agreement.

		
	b.
	If an Event of Default occurs, is continuing, and is not waived by the lending Company; then, in each and every case, all principal outstanding, together with interest accrued thereon, shall become immediately due and payable without further notice to the borrowing Company.  If the borrowing Company fails to cure any Event of Default within ten (10) business days, the lending Company shall have the option to terminate this Agreement with such borrowing Company.  In the event that this Agreement is terminated with respect to such borrowing Company pursuant to this Section I.G., all Loans then outstanding between such borrowing Company and  all other parties to this Agreement shall also become immediately due and payable, without further notice to the borrowing Company, together with accrued interest thereon. 

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	H.
	Documentation.  

		
	a.
	The obligations of any Company to repay all Loans made to it pursuant to this Agreement, together with interest thereon, shall be fully binding and enforceable without the execution of any promissory note or other evidence of indebtedness.  Nevertheless, if any lending Company so requests, a borrowing Company hereby agrees to duly execute and deliver to the lending Company a negotiable promissory note satisfactory to the lending Company evidencing the Loan outstanding hereunder.  Expenses incurred and payments received shall be allocated to each applicable Company in conformity with customary accounting practices consistently applied, and the books, accounts and records of each applicable party shall be maintained to clearly and accurately disclose the precise nature and details of the transaction, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties.

		
	b.
	The records of all Loans that are made pursuant to this Agreement shall be kept by EMCC on behalf of all of the parties.

		
	I.
	Intercompany Account.  EMCC shall maintain a ledger in which all Loans and all repayments shall be recorded.  EMCC shall give each Company access to such ledger and other records related to the Loans involving such Company.  All transfers of funds for any Loan will be conducted through the trust accounts of the respective Companies at Mellon Bank, or any successor thereto.

		
	J.
	Covenants.  At all times that there is an outstanding Loan pursuant to this Agreement, each Company shall:

		
	a.
	Maintain its corporate existence in good standing under the laws of the jurisdiction of its incorporation or organization and conduct and operate its business in a lawful manner; and

		
	b.
	Comply, in all material respects, with all applicable laws, rules, regulations and orders, including, but not limited to, the insurance laws, rules, regulations and orders of each jurisdiction in which the Company is licensed to do business.   

II.    MISCELLANEOUS
		
	A.
	Disputes.  Any disputes arising out of (i) the interpretation of this Agreement; or (ii) any Loans shall be submitted for final and binding resolution as follows:

		
	a.
	With respect to disputes (1) between or among EMCC and/or one or more of the EMCC Subsidiaries; or (2) between or among two or more of the Group Subsidiaries, to the Vice President – Treasurer, Chief Financial Officer and General Counsel of such Company(ies) engaged in the dispute; or

		
	b.
	With respect to disputes between EMCC and one or more of the Group Subsidiaries, to the Inter-Company Committees of the Boards of Directors of EMCC and EMC 

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Insurance Group Inc., respectively, pursuant to the terms of the joint Charter of the two Inter-Company Committees then in effect.
		
	B.
	Limitation of Liability.  No party shall have any liability under this Agreement, including liability for its own negligence, for damages, losses or expenses suffered by the other party(ies) as a result of the performance or non-performance of such party’s obligations hereunder, unless such damages, losses or expenses are caused by or arise out of the willful misconduct or gross negligence of such party or a breach by such party.  In no event shall any party have any liability to the other parties for indirect, incidental or consequential damages that such other party or any third party may incur or experience on account of the performance or non-performance of such party’s obligations hereunder.  The provisions of this Section II.B. shall survive the termination of this Agreement.

		
	C.
	Term.  This Agreement shall commence on the Effective Date and will continue in effect until terminated as follows; provided, however, that prior to the effective date of the termination of the Agreement, EMCC shall provide notice of such termination to the applicable regulatory authorities in the States of Iowa and/or North Dakota:

		
	a.
	By EMCC, upon ninety (90) days prior written notice to all other Companies;

		
	b.
	By any Company, but only with respect to such party, upon ninety (90) days prior written notice to all other Companies; 

		
	c.
	By any Company, immediately upon notice to a breaching Company, if the breaching Company’s material breach of this Agreement, other than an Event of Default, continues uncured for thirty (30) days after both the nature of that breach and the necessary cure or correction has been agreed upon by the parties or otherwise determined by the dispute resolution procedure set forth in Section II.A., above; provided that if all of the parties to this Agreement agree, or it is determined by the dispute resolution procedure that the material breach is not capable of being cured or corrected, the termination shall be effective immediately upon notice;

		
	d.
	By any party, but only with respect to such party, immediately upon notice to all other parties, if it determines that performance of its rights or obligations under this Agreement is, or becomes, illegal; or

		
	e.
	By any party, but only with respect to such party, if that party determines that its compliance with any law or regulation or any guideline or request from any governmental authority would create a cost or increase the cost of providing a Loan to another party under this Agreement, unless the other party agrees to pay amounts sufficient to indemnify for such cost or increase in total cost.

		
	D.
	Entire Agreement.  This Agreement constitutes the entire agreement of the parties on this subject matter and shall replace and supersede any prior agreement or understanding of the parties, whether written or oral, on this subject not expressed or referred to in this Agreement.

		
	E.
	Amendment.  This Agreement may not be amended except by written instrument signed by all parties hereto.  Any amendments hereto shall be subject to approval by the applicable 

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regulatory authorities in the States of Iowa and/or North Dakota, if such approval is required pursuant to applicable law.
		
	F.
	Waivers.  Any party hereto may (a) extend the time for performance of any obligation or other act or (b) waive compliance with any of the agreements contained herein.  No wavier of any term shall be construed as a waiver of the same term in any other situation or a waiver of any other term of this Agreement.  The failure of any party to assert any of its rights hereunder will not constitute a waiver of any such rights.

		
	G.
	Severability.  If any provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, such provision shall be deemed severable and all other provisions of this Agreement shall nevertheless remain in full force and effect.

		
	H.
	Governing Law.  This Agreement shall be governed by and construed with the substantive laws of the State of Iowa, without giving effect to any choice-of-law rules that may require the application of the laws of another jurisdiction.

		
	I.
	Regulatory Approval.  Notwithstanding anything to the contrary contained in this Agreement, this Agreement shall not become effective until approved by the applicable regulatory authorities in the States of Iowa and North Dakota, if such approval is required pursuant to applicable law.

Remainder of page intentionally left blank.

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In WITNESS WHEREOF, the parties hereto, by their respective duly authorized officers, have executed this Agreement on the dates recorded below.
	
						
	EMPLOYERS MUTUAL CASUALTY
	 
	UNION INSURANCE COMPANY OF

	COMPANY
	 
	PROVIDENCE
	 

	 
	 
	 
	 
	 
	 

	By:
	/s/ Bruce G. Kelley
	 
	By:
	/s/ Lisa A. Stange
	 

	 
	 
	 
	 
	 
	 

	Print Name:
	Bruce G. Kelley
	 
	Print name
	Lisa A. Stange
	 

	 
	 
	 
	 
	 
	 

	Its:
	President & CEO
	 
	Its:
	V.P., CIO & Treasurer
	 

	 
	 
	 
	 
	 
	 

	Date:
	01/03/2012
	 
	Date:
	01/03/2012
	 

	
						
	EMC PROPERTY & CASUALTY
	 
	EMCASCO INSURANCE COMPANY

	COMPANY
	 
	 
	 

	 
	 
	 
	 
	 
	 

	By:
	/s/ Richard W. Hoffmann
	 
	By:
	/s/ Ronald W. Jean
	 

	 
	 
	 
	 
	 
	 

	Print Name:
	Richard W. Hoffmann
	 
	Print name
	Ronald W. Jean
	 

	 
	 
	 
	 
	 
	 

	Its:
	V.P., General Counsel & Secretary
	 
	Its:
	Executive Vice President
	 

	 
	 
	 
	 
	 
	 

	Date:
	01/03/2012
	 
	Date:
	01/03/2012
	 

	
						
	ILLINOIS EMCASCO INSURANCE
	 
	DAKOTA FIRE INSURANCE COMPANY

	COMPANY
	 
	 
	 

	 
	 
	 
	 
	 
	 

	By:
	/s/ Jason R. Bogart
	 
	By:
	/s/ Kevin J. Hovick
	 

	 
	 
	 
	 
	 
	 

	Print Name:
	Jason R. Bogart
	 
	Print name
	Kevin J. Hovick
	 

	 
	 
	 
	 
	 
	 

	Its:
	Vice President
	 
	Its:
	Executive Vice President
	 

	 
	 
	 
	 
	 
	 

	Date:
	01/03/2012
	 
	Date:
	01/03/2012
	 

	
						
	HAMILTON MUTUAL INSURANCE
	 
	EMC REINSURANCE COMPANY

	COMPANY
	 
	 
	 

	 
	 
	 
	 
	 
	 

	By:
	/s/ Mark E. Reese
	 
	By:
	/s/ Ronnie Hallenbeck
	 

	 
	 
	 
	 
	 
	 

	Print Name:
	Mark E. Reese
	 
	Print name
	Ronnie Hallenbeck
	 

	 
	 
	 
	 
	 
	 

	Its:
	Senior Vice President & CFO
	 
	Its:
	President & COO
	 

	 
	 
	 
	 
	 
	 

	Date:
	01/03/2012
	 
	Date:
	01/03/2012
	 

183

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