Exhibit 10.1

 

NPS PHARMACEUTICALS, INC.

 

CHANGE IN CONTROL SEVERANCE PAY PLAN

 

AS AMENDED THROUGH

 

JANUARY 11, 2015

 

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1.                                      Introduction.  The purpose of the NPS
Pharmaceuticals, Inc. Change in Control Severance Pay Plan (the “Plan”) is to
provide severance benefits to eligible employees of NPS Pharmaceuticals, Inc.
and its subsidiaries (the “Company”) when there has been a “change in control”
of the Company followed by the eligible employee’s termination of employment
without “cause” or the resignation of the eligible employee following eligible
employee’s job prospects being “materially altered.”  This Plan replaces any
prior severance policy or other policy or practice under which severance
benefits have been provided to employees of the Company following a “change in
control” (including, without limitation, the prior version of this Plan and the
NPS Pharmaceuticals, Inc. Change in Control Severance Pay Plan for Employees in
Grades 8 through 10 Hired After August 31, 2012); provided, however, that to the
extent that a Non-U.S. Covered Employee is entitled under applicable law or an
agreement with the Company to severance payments or benefits that are more
favorable to the employee, the employee will be entitled to such greater
payments or benefits.  This document constitutes both the written instrument
under which the Plan is maintained and the summary plan description for the
Plan.

 

2.                                      Effective Date.  The original effective
date of the Plan was January 1, 2005.  The effective date of the Plan as set
forth herein is January 11, 2015.

 

3.                                      Term.  The Plan shall be in effect until
terminated by the Company in accordance with Section 11 hereof.

 

4.                                      ERISA.  For Covered Employees in the
United States, this Plan is intended to be a “welfare benefit plan” within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”) and to meet the descriptive requirements of a plan
constituting a “severance pay plan” within the meaning of regulations published
by the Secretary of Labor at Title 29, Code of Federal Regulations,
Section 2510.2(b).

 

5.                                      Definitions.  The following words and
phrases shall have the following respective meanings:

 

5.1                               “Administrator” means the Senior Vice
President of Human Resources of the Company or his/her designee.

 

5.2                               “Base Pay” means the Covered Employee’s annual
regular straight-time salary or annualized regular rate of compensation as in
effect on the date of termination of employment or, if greater, as in effect
immediately prior to the Change in Control.  For Non-U.S. Covered Employees who
are part-time employees and who participate in the Plan pursuant to clause
(ii) of Section 5.10, such amount shall be determined based upon the
individual’s typical work schedule as in effect immediately prior to the
termination of the employee’s employment (or, if greater, immediately prior to
the Change in Control).

 

5.3                               “Beneficial Owner” shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.

 

5.4                               “Board” means the Board of Directors of the
Company.

 

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5.5                               “Cash Compensation Target” means, for a
Covered Employee, the amount yielded by the formula set forth on Exhibit A.

 

5.6                               “Cause” means (i) an act of material
dishonesty by the Covered Employee in connection with the Covered Employee’s
responsibilities as an employee, (ii) the Covered Employee’s conviction of, or
plea of nolo contendere to, a felony (or an equivalent offense in a jurisdiction
outside of the United States), (iii) the Covered Employee’s gross misconduct in
connection with the Covered Employee’s responsibilities as an employee, (iv) the
Covered Employee’s material violation of the Company’s or a subsidiaries’
written policies and procedures; or (v) the Covered Employee’s material and
continued failure to perform his or her responsibilities as an employee after
the Covered Employee has received a written demand for such performance.
Notwithstanding the forgoing, for Non-U.S. Covered Employees, the definition of
“Cause” shall be deemed to be modified to the extent that the definition (or an
element thereof) is impermissible under applicable law, to the minimum extent
required to comply with any such law.

 

5.7                               “Change in Control” means (i) the stockholders
of the Company approve a plan of complete liquidation or dissolution of the
Company or there is consummated a sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition by
the Company of all or substantially all of the Company’s assets to an entity, at
least 50% of the combined voting power of the voting securities of which are
owned by stockholders of the Company in substantially the same proportions as
their ownership of the Company immediately prior to such sale; (ii) there is
consummated a merger or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at least 50% of the
combined voting power of the securities of the Company or such surviving entity
or any parent thereof outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities Beneficially Owned by such Person any
securities acquired directly from the Company or its “Affiliates” (as defined in
Rule 12b-2 promulgated under Section 12 of the Exchange Act) representing 25% or
more of the combined voting power of the Company’s then outstanding securities;
(iii) any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 25% or more of either the then
outstanding shares of common stock of the Company or the combined voting power
of the Company’s then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in sub-clause
(A) of clause (ii) above; or (iv) a transaction which the Board determines in
its sole discretion to constitute a Change in Control.  A Change in Control does
not include the occurrence of an event described above where the sole parties to
the event are the Company and one of its subsidiaries.

 

5.8                               “Code” means the Internal Revenue Code of
1986, as amended.

 

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5.9                               “Company” means NPS Pharmaceuticals, Inc., a
Delaware corporation, and, except as the context otherwise requires, any of its
wholly owned subsidiaries and any successor by merger, acquisition,
consolidation or otherwise that assumes the obligations of the Company under the
Plan.

 

5.10                        “Covered Employee” means (i) each Full-Time Employee
of the Company and (ii) each employee of the Company primarily providing
services outside of the United States.  An individual who is providing services
as a probationary or fixed-term employee (or pursuant to any similar initial
employment evaluation arrangement) shall, notwithstanding such probationary
status, be eligible to participate in the Plan, if such individual is described
in the preceding sentence.

 

5.11                        “Determination Period” means the time period, not to
exceed twenty-four (24) months, beginning on the date of the Change in Control,
which time period is set forth for such Covered Employee’s position or grade on
Exhibit A hereto.

 

5.12                        “Exchange Act” shall mean the Securities Exchange
Act of 1934, as amended from time to time.

 

5.13                        “Excise Tax” shall mean the excise tax imposed by
Section 4999 of the Code, and any interest or penalties incurred by the Covered
Employee with respect to such excise tax

 

5.14                        “Full-Time Employee” means those employees employed
by the Company in the United States who are regularly scheduled to perform 30 or
more hours of work per week, without giving effect to any decrease in such
regular work schedule following a Change in Control.

 

5.15                        “Involuntary Termination” means (i) the Company’s or
an Affiliate’s termination of employment of the Covered Employee after a Change
in Control other than for Cause or (ii) to the extent permitted by applicable
local law, death or permanent disability.

 

5.16                        “Materially Altered” or “Material Alteration” means
except as otherwise provided pursuant to Exhibit A hereto, without the Covered
Employee’s written consent, (i) a material reduction in the Covered Employee’s
authority, duties or responsibilities relative to the Covered Employee’s
authority, duties or responsibilities in effect prior to such reduction where
such reduction was imposed without Cause, (ii) a material diminution in the
Covered Employee’s base compensation or target incentive opportunity, where such
reduction was imposed without Cause, or (iii) a material change in the
geographical location at which the Covered Employee must perform his or her
duties as an employee of the Company; provided that a change to such location
which increases the Covered Employee’s commuting distance by more than 35 miles
from that in effect immediately prior to the change shall be deemed to be a
material change for purposes of this clause (iii).  Notwithstanding the
forgoing, for Non-U.S. Covered Employees, the definition of “Materially Altered”
shall be deemed to be modified to the extent that the definition (or an element
thereof) is impermissible under applicable law, to the minimum extent required
to comply with any such law.

 

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5.17                        “Non-U.S. Covered Employee” means each Covered
Employee primarily providing services outside of the United States.

 

5.18                        “Person” shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include (i) the Company or any of
its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

 

5.19                        “Plan” means the NPS Pharmaceuticals, Inc. Change in
Control Severance Pay Plan, as set forth in this document, and as hereafter
amended from time to time.

 

5.20                        “Release Period” means the forty-five (45) day
period (or, for Non-US Employees, such other period required by applicable law),
commencing on the date of the Covered Employee’s Separation from Service, by
which he or she must sign the Release in order to receive a Severance Benefit,
as provided in Exhibit B.

 

5.21                        “Section 409A” means Section 409A of the Code.

 

5.22                        “Separation from Service” means the Covered
Employee’s termination of employment with the Company and its Affiliates (which
shall be interpreted in accordance with the requirements of Section 409A to the
extent required).

 

5.23                        “Severance Benefits” means the compensation and
other benefits the Covered Employee will be provided with pursuant to Section 7
and Exhibit A.

 

5.24                        “Severance Period” means the time period set forth
on Exhibit A with respect to the Covered Employee’s position or job
classification beginning on the date of a Covered Employee’s Separation from
Service as a result of an Involuntary Termination or the Covered Employee’s job
prospects being Materially Altered as a result of a Change in Control.

 

5.25                        “Short Term Incentive” means an amount equal to the
target percentage of the Covered Employee’s Base Pay which the Covered Employee
is eligible to earn under the Company’s annual incentive guideline approved by
the Board in effect on the date of termination of employment or, if higher, such
target percentage as was in effect immediately prior to the occurrence of a
Change in Control.

 

6.                                      Eligibility for Severance Benefit.  An
individual is eligible for the Severance Benefit under the Plan, in the amount
and for the duration set forth in Exhibit A, only if he or she is a Covered
Employee on the effective date of a Change in Control and on such date is in a
position or pay grade included on Exhibit A.

 

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7.                                      Severance Payments and Benefits.

 

7.1                               Severance Benefit.

 

7.1.1                     Termination Following a Change in Control.  If at any
time within the Determination Period for a Covered Employee following a Change
in Control (i) the Covered Employee’s job prospects are Materially Altered
followed by the termination of the Covered Employee’s employment in accordance
with the notice and cure requirements of this Section 7.1.1, or (ii) the Covered
Employee’s employment is Involuntarily Terminated then the Covered Employee
shall be entitled to his or her Severance Benefits, subject to the terms of the
Plan.

 

In the instance of the Involuntarily Termination of the Covered Employee, the
Covered Employee shall be entitled to receive the Severance Benefit described on
Exhibit A from the Company, provided the Covered Employee signs the Release in a
timely manner as provided in Section 7.2. Any adverse change in the Covered
Employee’s position or job grade after a Change in Control shall be disregarded
for purposes of determining the Covered Employee’s entitlement to Severance
Benefits pursuant to Exhibit A.

 

In the instance of the Covered Employee’s job prospects being Materially
Altered, the Covered Employee must exercise his or her rights under the Plan by
providing the Company with written notice that his or her job prospects have
been Materially Altered within ninety (90) days of the date of such Material
Alteration (which such notice shall also constitute notice of termination of
employment, to the extent such notice is required by applicable law or the terms
of any employment contract), upon the notice of which the Company will have a
period of thirty (30) days during which it may remedy the condition giving rise
to the Material Alteration of the Covered Employee’s job prospects.  Unless the
Company remedies such Material Alternation within such thirty (30) day period
(in which case, the Covered Employee’s notice of termination of employment shall
be deemed to be withdrawn if it has not already expired), the Covered Employee’s
employment with the Company shall terminate immediately following the expiration
of such thirty (30) day cure period following which the Covered Employee signs
the Release in a timely manner as provided in Section 7.2, the Covered Employee
will be entitled to receive the applicable Severance Benefit from the Company.

 

To the extent permitted by applicable law, any cash Severance Benefit payable
under the Plan shall, except to the extent otherwise provided on Exhibit A, be
reduced by (i) any Base Pay paid to the Covered Employee for any statutory or
contractual notice period (including any payment in lieu of notice or payment
made in any such notice period during which the Covered Employee is not
providing active services) and (ii) any statutory severance amounts paid to the
Covered Employee (the aggregate amount of any such reduction being referred to
hereinafter as, the “Offset”).  The Administrator may modify, in good faith, the
notice and cure procedure set forth in this Section 7.1.1 for Non-U.S. Covered
Employees to the minimum extent necessary to comply with applicable local law;
provided that such modifications shall, to the maximum extent permissible under
applicable local law, be no less favorable to such Non-U.S. Covered Employee
than those set forth herein.

 

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7.1.2                     Cash Compensation Target.  Sixty (60) days following
the Covered Employee’s Separation from Service, if the Covered Employee has
become eligible for benefits hereunder pursuant to the first paragraph of
Section 7.1.1 and has executed and not revoked the Release as required by
Section 7.2 herein (if permitted by applicable law in the case of a Non-U.S.
Covered Employee), the Covered Employee will be paid a lump sum single payment
equal to his or her Cash Compensation Target; provided, however, that if the
Covered Employee is a specified employee (as defined under Section 409A) as of
his or her date of Separation from Service and the lump sum single payment equal
to his or her Cash Compensation Target is determined to be nonqualified deferred
compensation subject to Section 409A, then, to the extent required to comply
with Section 409A, such payment (or the applicable portion thereof) shall be
made on date which is the earlier of: (a) the date six months after the Covered
Employee’s Separation from Service, or (b) the date of the Covered Employee’s
death.

 

7.1.3                     Continued Medical Benefits for Employees.  If the
Covered Employee has become eligible for benefits hereunder pursuant to the
first paragraph of Section 7.1.1 and is employed in the United States and such
Covered Employee or any spouse and/or dependents of the Covered Employee
(“Family Members”) has medical or dental coverage on the date of Covered
Employee’s termination of employment under a group health plan sponsored by the
Company, the Company will pay the total applicable premium and related
administrative fee costs for medical and dental coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1986, 29 U.S.C. Sections 11611168; 26
U.S.C. Section 4980B(f), as amended, and all applicable regulations (referred to
collectively as “COBRA”) for the Covered Employee and his Family Members during
the full term of the Severance Period (to the extent COBRA coverage lasts for
the full term); provided, that the Company shall have no obligation to pay the
premium and fee costs of COBRA coverage on and after the date Covered Employee
and his applicable Family Members first become eligible to obtain comparable
benefits from a subsequent employer.  Notwithstanding the foregoing, the Company
reserves the right to restructure the foregoing continued coverage arrangement
in any manner reasonably necessary or appropriate to avoid penalties or negative
tax consequences to the Company or the Covered Employee, as determined by the
Company in its good faith discretion.  For Non-U.S. Covered Employees who become
eligible for benefits hereunder pursuant to the first paragraph of
Section 7.1.1, benefits coverage will be provided during the Severance Period
(or a longer period that is expressly required by applicable statute) at the
level provided to the Non-U.S. Covered Employee by the Company prior to
termination (or, if greater, at the level required by statute).

 

7.1.4                     Stock Option Accelerated Vesting and Extended Exercise
Period.  Provisions for acceleration of vesting upon a Change in Control as
defined above may be found in the Company’s equity compensation plans and in
awards previously granted thereunder.  Those plans and options granted
thereunder may also provide for an extended time for exercise of such options in
certain circumstances.  The terms of such plans and grants made thereunder
remain in full force and effect and govern such equity awards.

 

7.1.5                     Short Term Incentive For Year of Termination.  If the
Covered Employee has become eligible for benefits hereunder pursuant to the
first paragraph of Section 7.1.1 and the

 

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Covered Employee’s date of termination is prior to the date that the amount of
short term incentive earned by employees of the Company for the year of
termination is paid, the Covered Employee will be entitled to receive (subject
to Section 7.2), in addition to the Cash Compensation Target, a pro rata share
of his or her short term incentive target for such year.  For example, if the
Covered Employee’s date of termination is July 1, he or she will be entitled to
receive 50% of the Short-Term Incentive for the Covered Employee.  Such pro rata
short term incentive payment will be paid at the same time as the payment
described in Section 7.1.2.

 

7.1.6                     Outplacement Counseling Services.  If the Covered
Employee has become eligible for benefits hereunder pursuant to the first
paragraph of Section 7.1.1 hereof, the Covered Employee shall be entitled to
outplacement counseling services at a frequency and cost as determined by the
Plan Administrator in his or her sole discretion for a period of time as set
forth on Exhibit A.  A Covered Employee may begin utilizing outplacement
counseling services upon termination of employment (subject to the effectiveness
of the Release, if applicable), and in no event may begin utilizing such
services more than eight (8) weeks after the termination date (or the
effectiveness of the Release, if applicable).  If a Covered Employee does not
use all or any portion of the outplacement counseling services made available,
the Covered Employee shall not be entitled to receive cash or other
consideration in lieu of such services.  Notwithstanding the foregoing and the
provisions of Exhibit A, the period of time during which outplacement services
are provided to Non-U.S. Covered Employees may be shortened by the Plan
Administrator to the extent the Plan Administrator determines, in its good faith
discretion, that a shorter period would be consistent with market practice in
the applicable jurisdiction, subject to compliance with applicable law.

 

7.1.7                     Additional Limitation.  Anything in this Plan to the
contrary notwithstanding,  in the event that any payment or benefit received or
to be received by the Covered Employee (including any payment or benefit
received in connection with a Change in Control or the termination of the
Covered Employee’s employment, whether pursuant to the terms of the Plan or any
other plan, arrangement or agreement) (all such payments and benefits, including
the Severance Benefits, being hereinafter referred to as the “Total Payments”)
would be subject (in whole or part), to the Excise Tax, then, after taking into
account any reduction in the Total Payments provided by reason of Section 280G
of the Code in such other plan, arrangement or agreement, the Severance Benefits
shall be reduced to the extent necessary so that no portion of the Total
Payments is subject to the Excise Tax but only if (A) the net amount of such
Total Payments, as so reduced (and after subtracting the net amount of federal,
state and local income taxes on such reduced Total Payments and after taking
into account the phase out of itemized deductions and personal exemptions
attributable to such reduced Total Payments) is greater than or equal to (B) the
net amount of such Total Payments without such reduction (but after subtracting
the net amount of federal, state and local income taxes on such Total Payments
and the amount of Excise Tax to which the Covered Employee would be subject in
respect of such unreduced Total Payments and after taking into account the phase
out of itemized deductions and personal exemptions attributable to such
unreduced Total Payments).  In such event, the Total Payments shall be reduced
in the following order:  (1) cash payments not subject to Section 409A; (2) cash
payments subject to Section 409A; (3)

 

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equity-based payments and acceleration; and (4) non-cash forms of benefits.  To
the extent any payment is to be made over time (e.g., in installments, etc.),
then the payments shall be reduced in reverse chronological order.  The
preceding provisions of this Section 7.1.7 shall not apply in the case of a
Covered Employee who is a party to an agreement with the Company that provides
for a different treatment in the event that payments to the Covered Employee are
subject to the Excise Tax.

 

The calculations contemplated by this Section 7.1.7 shall be done by such
accounting or tax experts as may be designated by the Company prior to a Change
in Control and shall be binding on the Company and the Covered Employee.

 

7.2                               Release.  As a condition to receiving
Severance Benefits under this Plan, each Covered Employee will be required to
sign, within the Release Period, a waiver and release of all claims arising out
of the termination of the Covered Employee’s employment with the Company and its
subsidiaries and affiliates in the form set forth on Exhibit B (the “Release”). 
Notwithstanding the foregoing, a Non-U.S. Covered Employee shall not be required
to execute a Release as a condition to receiving Severance Benefits to the
extent such a condition is prohibited by applicable law.  The Administrator may
modify, in good faith, the form of Release for Non-U.S. Covered Employees to the
minimum extent necessary to comply with applicable local law and preserve the
intent of the Release.

 

7.3                               Accrued Benefits and Compensation; PTO Days. 
The Company shall pay or cause to be paid to each Covered Employee covered under
the Plan such Covered Employee’s Base Pay through the date of termination,
together with all compensation and benefits payable to the Covered Employee
through the date of termination (including any short term incentives which have
been accrued but not paid for any year completed prior to such termination,
which amounts shall be paid without any discretionary reduction) in accordance
with applicable laws. Any unused paid time off (“PTO”) pay accrued as of a
Covered Employee’s date of Involuntary Termination will be paid at or before the
time the Covered Employee receives his or her Cash Compensation Target payment
and otherwise in accordance with applicable law.

 

8.                                      Withholding.  The Company will withhold
from any Severance Benefit all federal, state, local and other taxes required to
be withheld therefrom and any other required payroll deductions.

 

9.                                      Administration.  The Plan will be
administered and interpreted by the Administrator (in the Administrator’s
reasonable, good faith discretion). The Administrator has the authority to act
for the Company (in a non-fiduciary capacity) as to any matter pertaining to the
Plan; provided, however, that this authority does not apply with respect to
(a) the Company’s power to amend or terminate the Plan or (b) any action that
could reasonably be expected to increase significantly the cost of the Plan, the
authority to take such actions is subject to the prior approval of the Board. 
For Covered Employees providing services in the United States, the Administrator
is the “named fiduciary” of the Plan for purposes of ERISA and will be subject
to the fiduciary standards of ERISA when acting in such capacity.

 

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10.                               Eligibility to Participate.  An employee
acting as the Administrator will not be excluded from participating in the Plan
if otherwise eligible, but he or she is not entitled to act or pass upon any
matters pertaining specifically to his or her own benefit or eligibility under
the Plan.  The chief executive officer of the Company will act upon any matters
pertaining specifically to the benefit or eligibility of the Administrator under
the Plan.

 

11.                               Amendment or Termination.  The Plan (and its
exhibits) may not be terminated or adversely amended (1) at any time when the
Company is party to an agreement, the consummation of which will result in a
Change in Control, (2) within the two (2) year period immediately following a
Change in Control, and (3) with respect to Non-U.S. Covered Employees, to the
extent otherwise restricted by applicable law.  In addition, if at the time of
any proposed termination of or amendment of or to the Plan there are any
outstanding Determination Periods or Severance Periods, then the Plan will
remain in effect without adverse amendment with respect to each Covered Employee
for whom there is an outstanding Determination Period or Severance Period in
effect until all Severance Benefits have been paid with respect to such
Determination Period and/or Severance Period.  Except as set forth above in this
Section 11 (which provisions are not subject to amendment), the Company reserves
the right to terminate or amend the Plan at any time, including amending its
exhibits; provided, however, that any amendment or termination of the Plan shall
require three months’ advance notice of each individual who is a Covered
Employee.

 

12.                               Claims Procedure.  Any employee or other
person who believes he or she is entitled to any payment under the Plan may
submit a claim in writing to the Administrator or his or her designee.  If the
claim is denied (in full or in part), the claimant will be provided a written
notice explaining the specific reasons for the denial and referring to the
provisions of the Plan on which the denial is based.  The notice will also
describe any additional information needed to perfect the claim, an explanation
as to why such information is necessary and an explanation of the Plan’s claims
procedure and the time limits applicable to such procedures, including a
statement of the claimant’s right to bring a civil action under section
502(a) of ERISA following an adverse benefit determination on appeal, if
applicable.  The denial notice will be provided within 90 days after the claim
is received.  If special circumstances require an extension of time (up to 90
days), written notice of the extension will be given within the initial 90-day
period.

 

13.                               Appeal Procedure.  If the claimant’s claim is
denied, the claimant (or his or her authorized representative) may apply in
writing to the Administrator for a review of the decision denying the claim. 
Review must be requested within 60 days following the date the claimant received
the written notice of their claim denial or else the claimant loses the right to
review.  The claimant (or representative) then has the right to review pertinent
documents and to submit issues and comments in writing.  The Administrator will
provide written notice of his or her decision on review within 60 days after it
receives a review request.  If additional time (up to 60 days) is needed to
review the request, the claimant (or representative) will be given written
notice of the reason for the delay.  If the claimant’s appeal is denied (in full
or in part), the claimant will be provided a written notice explaining the
specific reasons for the denial and referring to the provisions of the Plan on
which the denial is based.  The notice will also describe the claimant’s right
to

 

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receive, upon request and without charge, reasonable access to, and copies of,
all documents, records and other information relevant to the claim for
benefits.  The notice will also include a statement of the claimant’s right to
bring a civil action under section 502(a) of ERISA, if applicable.  No person
may bring an action for any alleged wrongful denial of Plan benefits in a court
of law unless the claims procedures set forth above are exhausted and a final
determination is made by the Administrator.  If a Covered Employee or another
interested person challenges a decision of the Administrator, a review by the
court of law will be limited to the facts, evidence and issues presented to the
Administrator during the claims procedure set forth above.  Facts and evidence
that become known to a Covered Employee or the other interested person after
having exhausted the claims procedure must be brought to the attention of the
Administrator for reconsideration of the claims determination.  Issues not
raised with the Administrator will be deemed waived.  Notwithstanding the
forgoing, Sections 12 and 13 shall be deemed to be modified to the extent
necessary to comply with laws governing claim procedures applicable to Non-U.S.
Covered Employees.

 

14.                               Source of Payments.  All Severance Benefits
will be paid in cash from the general funds of the Company; no separate fund
will be established under the Plan; and the Plan will have no assets.  No right
of any person to receive any payment under the Plan will be any greater than the
right of any other general unsecured creditor of the Company.

 

15.                               Inalienability.  In no event may any current
or former employee of the Company or any of its subsidiaries or affiliates sell,
transfer, anticipate, assign or otherwise dispose of any right or interest under
the Plan.  At no time will any such right or interest be subject to the claims
of creditors nor liable to attachment, execution or other legal process.

 

16.                               No Enlargement of Employment Rights.  Neither
the establishment nor maintenance of the Plan, any amendment of the Plan, nor
the making of any benefit payment hereunder, will be construed to confer upon
any individual any right to be continued as an employee of the Company.  The
Company expressly reserves the right to discharge any of its employees,
including Covered Employees, at any time, with or without cause, in accordance
with the employee’s contract of employment, if any, and any applicable laws.

 

17.                               Section 409A Compliance.  This Plan is
intended to comply with or be exempt from all of the requirements of
Section 409A and any regulatory, administrative or judicial guidance thereunder
and shall be administered and interpreted in accordance with that intention. 
This Plan is intended to meet the requirements of the short term deferral or
separation pay plan exemptions under Section 409A.  Any payment from the Plan
that is subject to the requirements of Section 409A may only be made in a manner
and upon an event permitted by Section 409A, including the requirement that
deferred compensation payable to a “specified employee” of a publicly traded
company be postponed for six months after separation from service.  Payments
upon termination of employment subject to the requirements of Section 409A may
only be made upon a Separation from Service.  Each payment under the Plan shall
be treated as a separate payment for purposes of Section 409A and a series of
installment payments shall be treated as a series of separate payments.  In no
event may an employee, directly or indirectly, designate the calendar year of
any payment to be made under the Plan.  If the maximum period during which an

 

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employee has the ability to consider and revoke the Release hereunder would span
two taxable years of the employee, then, regardless of when the employee signs
the Release and the revocation period expires, payment of severance benefits
hereunder will be made or commence in the second of such taxable years.

 

18.                               Applicable Law and Choice of Forum.  The
provisions of the Plan will be construed, administered and enforced in
accordance with ERISA and, to the extent applicable, the laws of the State of
New Jersey and any action brought under the Plan will be brought in the State of
New Jersey, in each case, except as otherwise required by the laws or mandatory
rules of a jurisdiction outside the United States in which a Non-U.S. Covered
Employee is employed (in which such case the applicable law and choice of forum
required in such jurisdiction shall apply).

 

19.                               Severability.  If any provision of the Plan is
held invalid or unenforceable, its invalidity or unenforceability will not
affect any other provision of the Plan, and the Plan will be construed and
enforced as if such provision had not been included.

 

20.                               Headings.  Headings in this Plan document are
for purposes of reference only and will not limit or otherwise affect the
meaning hereof.

 

21.                               Indemnification.  The Company hereby agrees to
indemnify and hold harmless the officers and employees of the Company, and the
members of its boards of directors, from all losses, claims, costs or other
liabilities arising from their acts or omissions in connection with the
administration, amendment or termination of the Plan, to the maximum extent
permitted by applicable law.  This indemnity will cover all such liabilities,
including judgments, settlements and costs of defense.  The Company will provide
this indemnity from its own funds to the extent that insurance does not cover
such liabilities.  This indemnity is in addition to and not in lieu of any other
indemnity provided to such person by the Company by written agreement, by-laws,
incorporation documents or state law.

 

22.                               Attorneys’ Fees.  The Company shall pay to the
Covered Employee all reasonable legal fees and expenses incurred by the Covered
Employee in disputing in good faith any issue hereunder relating to the
termination of the Covered Employee’s employment, in seeking in good faith to
obtain or enforce any benefit or right provided by this Plan or in connection
with any tax audit or proceeding to the extent attributable to the application
of Section 4999 of the Code.  Such payments shall be made within five
(5) business days after delivery of the Covered Employee’s written requests for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require. In order for the Covered Employee to be entitled
to reimbursement hereunder, the Covered Employee must submit the written
reimbursement request described above within 180 days following the date upon
which the applicable fee or expense is incurred.

 

23.                               Representations by the Company.  Except as
provided in Section 11 above, no employee, officer, director, or agent of the
Company has the authority to alter, vary, modify, or waive the terms and
conditions of the Plan.  No verbal or written

 

12

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representations that are in addition to or contrary to the terms of the Plan and
its written amendments shall be binding on the Plan, the Administrator or the
Company.

 

24.                               Additional Information.

 

Plan Name:

 

NPS Pharmaceuticals, Inc. Change in Control Severance Pay Plan

 

 

 

Plan Sponsor:

 

NPS Pharmaceuticals, Inc.

 

 

550 Hills Drive, 3rd Floor

 

 

Bedminster, NJ 07921

 

 

(908) 450-5300

 

 

 

Identification Numbers:

 

EIN: 87-0439579

 

 

PLAN: 501

 

 

 

Plan Year:

 

Calendar year

 

 

 

Plan Administrator:

 

NPS Pharmaceuticals, Inc.

 

 

Attention: General Counsel

 

 

 

 

 

550 Hills Drive, 3rd Floor

 

 

Bedminster, New Jersey 07921

 

 

(908) 450-5300

 

 

 

Agent for Service of Legal Process:

 

NPS Pharmaceuticals, Inc.

 

 

Attention: General Counsel

 

 

NPS Pharmaceuticals, Inc.

 

 

550 Hills Drive, 3rd Floor

 

 

Bedminster, NJ 07921

 

 

(908) 450-5300

 

13

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EXHIBIT A

 

Employee Level

 

Determination
Period

 

Severance Period

 

Cash Compensation
Target

 

Benefit
Continuation

 

Outplacement

 

 

 

 

 

 

 

 

 

 

 

Grade 1-5

 

12 Months

 

12 weeks minimum + 2 weeks/ for each full or partial year of service greater
than 1(1)

 

Base Pay/52 *Severance Period

 

Equal to the Severance Period

 

3 Month Program

 

 

 

 

 

 

 

 

 

 

 

Grade 6-7 (Includes C6 & C7)

 

12 Months

 

16 weeks minimum + 2 weeks/for each full or partial year of service greater than
1(2)

 

Base Pay / 52* Severance Period

 

Equal to the Severance Period

 

3 Month Program

 

 

 

 

 

 

 

 

 

 

 

Grade 8-10 Hired before 9/1/12

 

24 months

 

9 Months

 

((Base Pay + Target STI (3))
/12) * Severance Period

 

Equal to the Severance Period

 

6 Month Program

 

 

 

 

 

 

 

 

 

 

 

Grade 8-10 Hired after 8/31/12

 

24 months

 

9 Months

 

(Base Pay/12) * Severance Period

 

Equal to the Severance Period

 

6 Month Program

 

 

 

 

 

 

 

 

 

 

 

Grade 11-12

 

24 months

 

12 Months

 

((Base Pay + Target STI)/12) * Severance Period

 

Equal to the Severance Period

 

6 Month Program

 

 

 

 

 

 

 

 

 

 

 

Executive Team Members (4)

 

24 months

 

18 Months

 

((Base Pay + Target STI)/12) * Severance Period

 

Equal to the Severance Period

 

12 Month Program

 

 

 

 

 

 

 

 

 

 

 

CEO

 

24 months

 

24 Months

 

((Base Pay + Target STI /12)* Severance Period

 

Equal to the Severance Period

 

12 Month Program

 

Clause (i) of the definition of “Materially Altered” will not apply to employees
in Grades 1-7.

 

Covered Employees promoted into Grade 8-10 after 8/31/2012 will be eligible for
the benefits set forth in the row entitled “Grade 8-10 Hired after 8/31/2012,”
regardless of date of hire.

 

--------------------------------------------------------------------------------

(1)         Notwithstanding the provision of Section 7.1.1 of the Plan which
provides for the Offset, the minimum Severance Benefit to be paid to Covered
Employees in Grades 1-5 shall be 12 weeks Base Pay.  The maximum Severance
Benefit to be paid to Covered Employees in Grades 1-5 shall be 52 weeks Base
Pay.

 

(2)         Notwithstanding the provision of Section 7.1.1 of the Plan which
provides for the Offset, the minimum Severance Benefit to be paid to Covered
Employees in Grades 6-7 shall be 16 weeks Base Pay.  The maximum Severance
Benefit to be paid to Covered Employees in Grades 6-7 shall be 52 weeks Base
Pay.

 

(3)         All references to “STI” are references to “Short Term Incentive” as
defined in the Plan.

 

(4)         For purposes of Exhibit A, Executive Team Members consists of the
following executives:  Luke M. Beshar, Paul Firuta, Robin D. Friedman, Roger
Garceau, M.D., Susan E. Graf, Christine Mikail Cvijic, Eric Pauwels, Joseph J.
Rogus.

 

14

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EXHIBIT B

 

WAIVER AND RELEASE AGREEMENT

 

1.                                      For good and valuable consideration (as
provided in paragraph 2 below),                      (hereinafter the
“Employee”), with the intention of binding himself or herself and his or her
heirs, executors, administrators and assigns, does hereby release NPS
Pharmaceuticals, Inc. (the “Company”) and its affiliates and subsidiaries and
their affiliated companies, divisions, subsidiaries, successors, predecessors
and assigns, and their respective present and former officers, directors,
executives, agents, attorneys and employees (collectively the “Released
Parties”), of and from any and all claims, actions, causes of action, demands,
attorneys’ fees and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, federal or state, which the Employee,
individually or as a member of a class, now has, owns or holds, or has at any
time heretofore had, owned or held, against any Released Party arising out of or
in any way connected with the Employee’s employment relationship with the
Released Parties, or the termination thereof, up to the date of this Waiver and
Release Agreement (“Release”).  Such claims include without limitation, any
claims for severance or paid time off or other benefits, unpaid wages, salary or
incentive payment, breach of contract, wrongful discharge, or employment
discrimination under any applicable federal, state or local statute, provision,
order or regulation including, but not limited to, any claim under the Age
Discrimination in Employment Act (“ADEA”).  The Employee specifically waives any
and all claims for back pay, front pay, or any other form of compensation,
except as set forth herein.

 

Notwithstanding the foregoing, the Employee does not waive (a) rights, if any,
the Employee may have to unemployment insurance benefits or workers’
compensation benefits (b) any claims or rights under the ADEA which may arise
from events occurring after the date of this Agreement (c) Employee’s rights to
accrued and vested benefits (other than severance benefits) as of the date of
termination under any other employee benefit plan, policy or arrangement
maintained by the Company or its subsidiaries or under Section 4980B of the
Internal Revenue Code, (d) any rights of Employee to indemnification in
connection with his employment or service with the Company or any subsidiary,
(e) any rights of the Employee under an employment agreement with the Company or
a subsidiary which are intended to survive termination of the Employee’s
employment, (f) any rights of the Employee as a stockholder of the Company
and/or (g) any claims or rights that cannot be waived under applicable law.

 

2.                                      In reliance on the releases and
agreements set forth herein and pursuant to the NPS Pharmaceuticals, Inc. Change
in Control Severance Pay Plan (“Plan”), the Employee

 

15

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shall receive the gross amount of
                                                       ($          ), less
applicable federal and state withholding taxes, in accordance with Section 7.1.1
of the Plan, as well as the healthcare continuation and outplacement benefits
described in the Plan.  The Employee acknowledges that he or she would not be
entitled to the total amount provided herein without signing this Release.

 

3.                                      The Employee acknowledges and agrees
that neither the Plan nor this Release is to be construed in any way as an
admission of any liability whatsoever by any Released Party under any federal or
state statute or the principles of common law, any such liability having been
expressly denied.

 

4.                                      The Employee acknowledges and agrees
that he or she has not, with respect to any transaction or state of facts
existing prior to the date of execution of this Release, filed any complaints,
charges or lawsuits against any of the Released Parties with any governmental
agency or any court or tribunal, and that he or she will not do so at any time
hereafter.  The parties to this Release understand that the Employee does not
waive any rights or claims that may arise after the date that this Release is
executed.

 

5.                                      The Employee acknowledges and agrees
that it continues to be bound by the confidentiality provisions of the Employee
Agreement Concerning Invention Assignment, Non-Disclosure and Non-Competition.

 

6.                                      In the event that the Employee breaches
this Release, to the fullest extent permitted by law (including the Employment
Standards Act), the Company shall be entitled to pursue all legal remedies
against the Employee and the Employee shall be liable to the Company for its
reasonable attorneys’ fees and costs incurred in pursuing such legal remedies.

 

7.                                      The Employee acknowledges that he or she
has forty-five (45) days, commencing on the first day after his or her
Separation from Service with the Company, to sign this Release.  In addition,
once the Employee has signed this Release, he or she shall have an additional
period of seven days during which he or she may revoke the executed Release (the
“Revocation Period”), even if this has the effect of extending the seven-day
revocation period beyond the 45-day period referenced in the preceding
sentence.  If this Release is signed and not subsequently revoked, this Release
becomes effective and enforceable on the first business day after the expiration
of the Revocation Period.

 

8.                                      The Employee further declares and
represents that he or she has carefully read and fully understands the terms of
this Release and the Plan, that he or she has been given not less than
forty-five (45) days, commencing on the date of the Employee’s Separation from
Service, to consider this Release and, if applicable, the statistical data
provided to him or her, that he or she has been advised to seek, and has had the
opportunity to seek, the advice and assistance of counsel with regard to this
Release and the terms of the Plan, and that he or she knowingly and voluntarily,
of his or her own free will, without any duress, being fully informed and after
due deliberate thought and action, accepts the terms of and signs this Release
as his or her own free act.  In addition, the Employee understands that once he
or she has signed this Release, he or she shall have an additional

 

16

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period of seven days during which he or she may revoke the executed Release,
even if this has the effect of extending the seven-day revocation period beyond
the above-referenced 45-day period.

 

17

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9.                                      The Employee acknowledges and
understands that he or she may revoke a signed Release at any time within the
Revocation Period by sending a written notice of revocation to General Counsel,
NPS Pharmaceuticals, Inc., 550 Hills Drive, 3rd Floor, Bedminster, NJ 07921 New
Jersey 07054.  The Employee further understands that if he or she revokes this
Release, it shall not be effective or enforceable and he or she will not receive
any payments or other benefits provided for in the Plan.  A signed and unrevoked
Release shall not become effective or enforceable until the Revocation Period
has expired, but shall be final and binding on the next day after the last day
of the Revocation Period.

 

DATED this      day of       , 20  .

 

 

 

 

 

[Employee]

 

 

The foregoing instrument was acknowledged before me this      day of      ,
20  , by [Employee].

 

 

 

 

 

NOTARY PUBLIC

 

 

 

Residing at:

 

 

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