Q1 2012 10-Q Exhibit 10.1





Exhibit 10.1



NPS Pharmaceuticals, Inc.



Nonemployee Director Compensation Program








Article 1.    Establishment,
Purpose, and Duration



1.1    Establishment of this Program.  NPS Pharmaceuticals, Inc. ("NPS" or the
"Company") hereby establishes this compensation program for its Nonemployee Directors under the NPS Pharmaceuticals,
Inc. 2005 Omnibus Incentive Plan ("Omnibus Plan") to be known as the "NPS Pharmaceuticals, Inc. 2007
Nonemployee Director Compensation Program" (the "Program"), as set forth in this document. 


1.2   Purpose of this Program.  The Company has implemented this Program for its
Nonemployee Directors, which consists of the payment of nonretainer fees, retainer fees and meeting fees in the form of Deferred
Stock Units. A description of Nonemployee Director Compensation currently in effect is attached hereto as Appendix A. The purpose of
this Program is to advance the interests of the Company and its stockholders by compensating its Nonemployee Directors with
Deferred Stock Units instead of cash.

1.3   Duration of this Program.  This Program shall commence on January 1, 2007 and shall
remain in effect, until terminated by the Board of Directors pursuant to Article 10. 




Article 2.
Definitions


Capitalized terms not otherwise defined in this Program or an Award
Agreement between the Company and a Nonemployee Director will have the meanings set forth in the Omnibus Plan.


For purposes of this Program, the following definitions will control:


2.1   "Common Stock" means a share of common stock of the Company, par value of
$.001 per share.  

2.2   "Compensation" means all remuneration payable to a Nonemployee Director for
services to the Company as a Nonemployee Director, other than reimbursement for expenses, and shall include (a) nonretainer fees for
serving on the Board in general and is not tied to committee appointments, meeting attendance or specific services, (b) retainer fees for
service on the Board, (c) fees for serving as chairman of the board, (d) fees for serving as chairman of a committee of the Board, (e)
fees for attendance at meetings of the Board, (f) fees for attendance at meetings of any board committees of which the director is a
member, or the visiting chairman of the board, (g) compensation for work performed in connection with service on a committee of the
Board or at the request of the Board, any committee thereof or a member of the Company's Chief Executive Office or the Chairman of
the Board, and (h) any other kind or category of fees or payments which may be put into effect in the future. 

2.3   "Deferred Stock Unit" or "DSU" represents an obligation of the
Company to issue a share of Common Stock to a Nonemployee Director in the future.










2.4   "Disabled" or "Disability" means a
Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12)
months, or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan covering employees of the Participant's employer.

2.5    "Fair Market Value" for purposes of this Program means the closing price of a
share of Common Stock as reported on the Nasdaq Stock Market.

2.6    "Participant" means a Nonemployee Director of the Company. 

2.7   "Restricted Stock Unit" or "RSU" represents an obligation of the
Company to issue a share of Common Stock to a Nonemployee Director after a one year vesting term. 

2.8   "Specified Participant" means a Participant described in Code Section 416(i) without regard to paragraph (5)
thereof.




Article 3.
Administration



3.1General.  The Program shall be administered by or under
the direction of the Board unless and until the Board delegates administration to a committee of the Board.  The Board may employ
attorneys, consultants, accountants, agents, and other individuals, any of whom may be an Employee, and the Board, the Company,
and its officers and Directors shall be entitled to rely upon the advice, opinions, or valuations of any such individuals. All actions taken
and all interpretations and determinations made by the Board shall be final and binding upon the Participants, the Company, and all
other interested individuals. 


3.2Authority of the Board.  The Board shall have full and exclusive discretionary power to
interpret the terms and the intent of this Program and any Award Agreement or other agreement or document ancillary to or in
connection with this Program, to determine eligibility for Awards and to adopt such rules, regulations, forms, instruments, and guidelines
for administering this Program as the Board may deem necessary or proper. Such authority shall include, but not be limited to, selecting
Award recipients, establishing all Award terms and conditions, including the terms and conditions set forth in Award Agreements,
granting Awards as an alternative to or as the form of payment for grants or rights earned or due under compensation plans or
arrangements of the Company, construing any ambiguous provision of the Program or any Award Agreement, and adopting
modifications and amendments to this Program or any Award Agreement, including without limitation, any that are necessary to comply
with the laws of the countries and other jurisdictions in which the Company, its Affiliates, and/or its Subsidiaries operate.


3.3Delegation. 


(a)The Board may delegate administration of the Plan to a Board committee composed of
not fewer than two members. All members of such committee shall be Nonemployee Directors, to the extent necessary to comply with
the applicable provisions of Rule 16b-3, Section 162(m) and the listing requirements of the Nasdaq Stock Market.  If administration is
delegated to a committee, the committee shall have, in connection with the administration of the Program, the powers theretofore
possessed by the Board (and references in this Program to the Board shall in such event, be to the committee), subject, however, to
such resolutions, not inconsistent with the provisions of the





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Program, as may be adopted from time to time by the Board. The Board
may abolish the committee at any time and revest in the Board the administration of the Program.


(b)The Board may delegate to one or more of its members or to one or more officers of the
Company, and/or its Subsidiaries and Affiliates or to one or more agents or advisors such administrative duties or powers as it may
deem advisable, and the Board or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more
individuals to render advice with respect to any responsibility the Board or such individuals may have under this Program. 





Article 4.
Participation


 Every Nonemployee Director shall participate in
this Program.  Each Nonemployee Director may elect to receive 100 percent of the
retainer fees in Deferred Stock Units instead of cash.  To be effective, such election shall be made no later than December 31 of the
calendar year preceding the calendar year in which the annual retainer fees are payable.  Such election is irrevocable with respect to
the annual retainer fees payable in the next calendar year.  A new Nonemployee Director may elect to receive 50 percent of the pro-rated
annual fees payable in his initial year on the Board in Deferred Stock Units instead of cash only if the election is made prior to his
appointment to the Board.


Article 5.
Compensation



5.1Issuance of Deferred Stock
Units.


(a)Retainer Fees.  Retainer fees for service on the Board and/or a Committee of the Board
shall be payable in cash, except that in the case of a Nonemployee Director who has made an election under
Article 4 to receive 100% of the retainer fees in DSUs.  The number of DSUs issuable to a
Nonemployee Director for retainer fees shall be equal to the quotient obtained by dividing the amount of the retainer fees payable in DSUs by the Fair Market Value of a share of Common Stock on the date such
fees are due and payable.  Retainer fees are due and payable on the next business day after the
Company's annual meeting of stockholders.  New Nonemployee Directors shall receive prorated retainer
fees valued on the date of appointment to the Board.  The retainer fees shall be paid quarterly on January 15th, April
15th, July 15th, and October 15th. If the 15th is a weekend or holiday, then
the DSUs will be valued and awarded on the next business day.


(b)Nonretainer Fees. Nonretainer fees shall be paid
in RSUs, except that in the case of a Nonemployee Director who has made an election under Article 4 to receive 100% of the retainer
fees in DSUs.  The Nonretainer Fees awarded to each Nonemployee Director shall be awarded annually.  New Nonemployee
Directors shall receive prorated nonretainer equity compensation valued on the date of appointment to the Board.


The number of RSUs or DSUs issuable annually to a Nonemployee Director for his or her Nonretainer
Equity Compensation shall be equal to the quotient obtained by dividing the total annual installment payable in DSUs for that year by
the Fair Market Value of a share of Common Stock on the installment due date. 





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Article 6.    Restricted Stock
Units and Deferred Stock Units



6.1Award Agreement.  Each Nonemployee Director who receives Restricted Stock Units
and/or Deferred Stock Units shall execute and deliver to the Company an agreement evidencing acceptance of the terms, conditions
and restrictions applicable to such RSU and/or DSUs.


6.2Dividends.  If the Company pays a cash dividend with respect to the Common Stock
at any time while RSUs and/or DSUs are credited to a Nonemployee Director's account, there shall be credited to the Nonemployee
Director's account additional RSUs and/or DSUs equal to the cash dividend the Nonemployee Director would have received had he or
she been the actual owner of shares of Common Stock equal to the number of RSUs and/or DSUs then credited to the Nonemployee
Director's account, divided by the Fair Market Value of one share of Common Stock on the dividend payment date.

6.3Unfunded and Nonassignable.   The Company's obligation with respect to RSUs or
DSUs shall not be funded or secured in any manner, nor shall a Nonemployee Director's right to receive payment be assignable or
transferable, voluntarily or involuntarily, except as expressly provided herein.

6.4Voting Rights.  A Nonemployee Director shall not be entitled to any voting or other
stockholder rights as a result of the credit of RSUs or DSUs to the Nonemployee Director's account until certificates representing
shares of Common Stock are delivered to the Nonemployee Director (or his or her designated beneficiary or estate) hereunder.




Article 7.
Distributions



7.1Form of Distribution.  All distributions of Restricted Stock Units and Deferred Stock Units shall be paid in a single
distribution of Common Stock.


7.2Distributions of DSUs.  Compensation under this Program for
DSUs shall be distributed within 30 days of the earliest to occur of the
following:


(a)separation from service (as determined by the Secretary of the United States Treasury), except
that in the case of Specified Participants, distributions may not be made earlier than the date which is six (6) months after the date of
separation from service (or, if earlier, the date of death of the Participant); 

(b) the date the Participant becomes disabled pursuant to Section 2.3; 

(c) death; or 

(d) to the extent provided by the Secretary of the United States Treasury, a sale of substantially
all the assets of the company.






Compensation under this Program for RSUs shall be distributed within 30 days of vesting of such
RSUs.


7.4Disability.  A distribution payable by reason of a Participant's Disability shall be paid within
30 days following the date the Participant's Disability occurs.


7.5Death.  If a Participant dies before complete distribution of his or her Deferred Stock Units under this Program has occurred, the Participant's
undistributed Deferred Stock Units shall be paid in a single distribution of
Common Stock to his or her designated beneficiary.  If there is no designated beneficiary, the
Common Stock shall be paid to the Participant's estate.




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7.6No Acceleration of Distributions.  Notwithstanding anything to the contrary herein, this
Program does not permit the acceleration of the time or schedule of any distribution under this Program, except as provided by the
Secretary of the United States Treasury for purposes of meeting the requirements of Code Section 409A.




Article 8.    Source of Shares
of Common Stock Issuable Under this Program


The Shares of Common Stock payable in settlement of RSUS or DSUs to Nonemployee Directors
under this Program shall be paid from shares of Common Stock reserved or available for issuance under the Omnibus Plan or any
other plan approved by stockholders under which Nonemployee Directors are eligible to be granted shares.


Article 9.
Amendment


This Program may be amended at any time and from time to time by resolution of the Board as the
Board shall deem advisable; provided, however, that no amendment shall become effective without stockholder approval if such
stockholder approval is required by law, rule or regulation and no such amendment shall result in a failure to meet the requirements of
Code Section 409A. No amendment of this Program shall materially and adversely affect any right of any Participant with respect to any
RSUs or DSUs theretofore credited without such Participant's written consent, except that the Board may amend this Program to take
effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming this Program to any present or future
law relating to plans of this or similar nature (including, but not limited to, Code Section 409A), and to the administrative regulations and
rulings promulgated thereunder. 


Article 10.
Termination


This Program shall terminate upon the adoption of a resolution of the Board terminating this Program.
No termination of this Program shall materially and/or adversely affect any of the rights or obligations of any Nonemployee Director
without his or her consent with respect to any DSUs theretofore credited under this Program. In addition, no such termination shall
result in a failure to meet the requirements of Code Section 409A.


Article 11.  Inclusion in
Income


If at any time during a taxable year this Program fails to meet the requirements of a nonqualified
deferred compensation plan pursuant to the Internal Revenue Code and Treasury regulations thereunder and results in the assessment
of the additional tax and/or interest under Code Section 409A, all Compensation deferred under this Program to which such additional
tax and/or interest is applied shall be distributed in a single sum as soon as practicable.


Article 12.  Tax Withholding


12.1   Tax Withholding.  The Company shall have the power and the right to require the Participant or
beneficiary to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law
or regulation to be withheld with respect to any taxable event arising as a result of this Program.


12.1   Stock Withholding.  With respect to withholding required upon any other taxable event arising as
a result of the RUSs and DSUs granted hereunder, the Participant may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold RSUs or DSUs, as applicable, having a Fair Market Value
on the date the tax is to be




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determined equal to the minimum statutory total tax which could be withheld on the transaction. All such
elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.






Article 13.
Miscellaneous Provisions



13.1   Neither this Program nor any action taken hereunder shall be construed as giving any Nonemployee
Director any right to be retained in the service of the Company. 


13.2   A Participant's rights and interest under this Program may not be assigned or transferred,
hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise (except in the event of a Participant's
death, by will or the laws of descent and distribution), including, but not by way of limitation, execution, levy, garnishment, attachment,
pledge, bankruptcy or in any other manner, and no such right or interest of any Participant in this Program shall be subject to any
obligation or liability of such Participant. 


13.3   No shares of Common Stock shall be issued hereunder unless counsel for the Company shall be
satisfied that such issuance will be in compliance with applicable federal, state, local and foreign securities, securities exchange and
other applicable laws and requirements.


13.4   The expenses of this Program shall be borne by the Company.


13.5   This Program shall be unfunded. The Company shall not be required to establish any special or
separate fund or reserve or to make any other segregation of assets to assure the issuance of shares of Common Stock
hereunder.


13.6   By accepting any RSUs or DSUs hereunder, each Participant and each person claiming under or
through him or her shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action
taken under this Program by the Company or the Board.


13.7   The appropriate officers of the Company shall cause to be filed any registration statement required by
the Securities Act of 1933, as amended, and any reports, returns or other information regarding any shares of Common Stock issued
pursuant hereto as may be required by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any other applicable statute, rule or regulation.


13.8   The provisions of this Program shall be governed by and construed in accordance with the laws of the
State of Delaware.


13.9   Headings are given to the sections of this Program solely as a convenience to facilitate reference.
Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of this
Program or any provisions thereof. The use of the singular shall also include within its meaning the plural, where appropriate, and vice
versa.




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                                 APPENDIX A

                  to the

                  NPS PHARMACEUTICALS, INC.

                  Nonemployee Director Deferred Compensation Program





      2012 NONEMPLOYEE DIRECTOR FEES
 


	
I.	
Fees	
 	
 	
 
	
 	
 	
 	
 	
 	
 
	
 	
A.  	
Retainer Fees.	
 	
 	
 
	
 	
 	
 	
 	
 	
 
	
 	
 	
Annual Retainer (payable quarterly in cash or DSUs)	
 	
$	
              60,000 
	
 	
 	
Board Chairman Annual Retainer (payable quarterly in cash or DSUs)	
 	
$	
              30,000 
	
 	
 	
Committee Chair Annual Retainer (payable quarterly in cash or DSUs)	
 	
$	
              10,000 
	
 	
 	
 	
 	
 	
 
	
 	
B.  	
Nonretainer Fees.	
 	
 	
 
	
 	
 	
Nonretainer fees (payable annually in RSUs or DSUs)	
 	
$	
            125,000 
	
 	
 	
 	
 	
 	
 
	
 	
 	
 	
 	
 	
 
	
II.	
Award Dates	
 	
 	
 
	
 	
 	
 	
 	
 	
 
	
 	
A.  	
Retainer Fees. Retainer fees are due and payable on the 15th day of the month following the 	
 	
 	
 
	
 	
 	
quarter in which they were earned. If the 15th is not a business day, then such fees are due and	
 	
 	
 
	
 	
 	
payable the following business day.	
 	
 	
 
	
 	
 	
 	
 	
 	
 
	
 	
B.  	
Nonretainer Fees.  Nonretainer fees are due and payable annually at such time as the Board .	
 	
 	
 
	
 	
 	
decides in its sole discretion.	
 	
 	
 



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