Prepared and filed by St Ives Burrups


Exhibit 10.7







NPS Pharmaceuticals, Inc.

SEVERANCE PAY PLAN


  1.     Introduction.
    The purpose of this NPS Pharmaceuticals, Inc. Severance Plan (the “Plan”)
    is to provide assurances of specified severance benefits to eligible employees
    of the Company whose employment is subject to being involuntarily terminated
    (other than for Cause, death or permanent disability) or terminated for Good
    Reason following a Change in Control of the Company. This Plan replaces any
    prior severance or separation pay policies and/or practices of the Company
    with respect to employees eligible to participate in the Plan. This document
    constitutes both the written instrument under which the Plan is maintained
    and the summary plan description for the Plan.

  2.     Important
    Terms. To help you understand how this Plan works, it is important to
    know the following terms:




  2.1     “Administrator”
    means the Company, acting through its Manager, Human Resources or any person
    to whom the Administrator has delegated any authority or responsibility pursuant
    to Section 7, but only to the extent of such delegation.

  2.2     “Base
    Pay” means a Covered Employee’s regular straight-time salary.




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

  2.4     “Cause”
    means (i) an act of material dishonesty by a Covered Employee in connection
    with the Covered Employee’s responsibilities as an employee, (ii) a
    Covered Employee’s conviction of, or plea of nolo contendere
    to, a felony, (iii) a Covered Employee’s gross misconduct in connection
    with the performance or failure of performance of a material component of
    the Covered Employee’s responsibilities as an employee, or (iv) a
    Covered Employee’s continued substantial violations of his or her employment
    duties after the Covered Employee has received a written demand for performance
    from the Company which specifically sets forth the factual basis for the Company’s
    belief that the Covered Employee has not substantially performed such duties.




  2.5     “Change
    in Control” means (i) a dissolution or liquidation or sale of all
    or substantially all of the assets of the Company; (ii) a merger or consolidation
    in which the Company is not the surviving corporation; (iii) a reverse merger
    in which the Company is the surviving corporation but the shares of the Company’s
    common stock outstanding immediately preceding the merger are converted by
    virtue of the merger into other property, whether in the form of securities,
    cash, or otherwise; (iv) a strategic corporate event, such as a merger or
    acquisition, where the Company is technically the surviving entity, but where
    other elements of a change in control are present, i.e. change in management
    team or board composition; (v) a transaction which the Board determines in
    its sole discretion to constitute a Change in Control of the Company; or (vi)
    any other capital reorganization in which more than 50% of the shares of the
    Company entitled to vote are exchanged.

  2.6     “Company”
    means NPS Pharmaceuticals, Inc., a Delaware corporation, and any successor
    by merger, acquisition, consolidation or otherwise that assumes the obligations
    of the Company under the Plan.











  2.7     “Covered
    Employee” means a regular full-time employee of the Company who
    is an officer, professional or other senior employee who has been designated
    by the Administrator to participate in the Plan. As of February 19, 2003 each
    such designated employee is shown on Appendix A hereto as a “Covered
    Employee.”

  2.8     “Determination
    Period” means the time period, not to exceed twenty-four months,
    beginning on the date of the Change in Control and ending at the end of the
    time period set forth next to the Covered Employee’s name on Appendix
    A hereto.




  2.9     “ERISA”
    means the Employee Retirement Income Security Act of 1974, as amended.

  2.10     “Good
    Reason” means Covered Employee’s voluntary resignation within
    such Covered Employee’s Determination Period and (i) within one-hundred
    eighty (180) days after a material reduction in Covered Employee’s title,
    authority, status or responsibilities relative to the Covered Employee’s
    title, authority, status or responsibilities in effect immediately prior to
    such reduction where such reduction was imposed without Cause, (ii) within
    ninety (90) days after a reduction in Covered Employee’s annualized
    Base Pay, without Covered Employee’s written consent; (iii) within twelve
    (12) months after the relocation of Covered Employee’s principal place
    of performing his or her duties as an employee of the Company by more than
    thirty (30) miles, without Covered Employee’s written consent; or (iv)
    within twelve (12) months after a Change in Control, including without limitation
    an event that qualifies as a strategic corporate event, which leads to circumstances
    where a Covered Employee’s job prospects are materially altered. 




  2.11     “Involuntary
    Termination” means a termination of employment of a Covered Employee
    under the circumstances described in Section 4.1.

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




  2.13     “Severance
    Benefit” means the compensation and other benefits the Covered Employee
    will be provided pursuant to Section 4.

  2.14     “Severance
    Period” means the time period, not to exceed twenty-four months,
    beginning on the date of a Covered Employee’s termination of employment
    and ending at the end of the time period set forth next to the Covered Employee’s
    name on Appendix A hereto. As of February 19, 2003 the Severance Period for
    each Covered Employee is shown on attached Appendix A hereto.



3.     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 Section 4,
  only if he or she is a Covered Employee on the date he or she experiences
  an Involuntary Termination. 

4.     Severance
  Benefit.


  4.1     Involuntary
    Termination Following a Change in Control. If at any time within the Determination
    Period for a Covered Employee following a Change in Control (i) such Covered
    Employee terminates his or her employment with the Company (or any parent
    or subsidiary of the Company) for Good Reason, or (ii) the Company (or any
    parent or subsidiary of the Company) terminates such Covered Employee’s
    employment for other than Cause, death or



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permanent disability, then such Covered Employee
    shall receive the following Severance Benefit from the Company:




  4.1.1     Severance
    Benefit. During the Severance Period following the Covered Employee’s
    termination of employment, (i) the Covered Employee shall be paid continuing,
    periodic payments of severance pay (less applicable withholding taxes) at
    a rate equal to his or her rate of annual Base Pay, as in effect immediately
    prior to the date of Involuntary Termination, to be paid periodically in accordance
    with the Company’s normal payroll policies, or (ii) on mutual agreement
    of the Company and the Covered Employee, the Covered Employee shall be paid
    the aggregate of such payments of severance pay (computed as per paragraph
    4.1.1 (i) above) in a lump sum single payment to be made within the first
    90 days of said Covered Employee’s Severance Period. Payments shall
    note be terminated early or reduced in the event of death, disability or reemployment
    of the Covered Employee prior to receipt of the full amount of the required
    Severance Benefit.

  4.1.2     Continued
    Medical Benefits. If Covered Employee, and any spouse and/or dependents
    of Covered Employee (“Family Members”) has medical and dental
    coverage on the date of Covered Employee’s termination of employment
    under a group health plan sponsored by the Company, the Company will reimburse
    Covered Employee for the total applicable premium cost for medical and dental
    coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986,
    29 U.S.C. Sections 1161-1168; 26 U.S.C. Section 4980B(f), as amended, and
    all applicable regulations (referred to collectively as “COBRA”)
    for 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 reimburse Covered Employee for the
    premium cost of COBRA coverage beginning on or after the date Covered Employee
    and his Family Members first become eligible to obtain comparable benefits
    from a subsequent employer. 




  4.1.3     Stock
    Option Accelerated Vesting and Extended Exercise Period. Provisions for
    acceleration of vesting upon a Change in Control as defined above are found
    in the Company’s Employee Stock Option Plans in effect on February 19,
    2003 and options previously granted thereunder and then outstanding. Those
    Stock Option Plans and Options also provide for an extended time for exercise
    of such Options upon an Involuntary Termination initiated by the Covered Employee
    or a termination initiated by the Company in either case upon a Change in
    Control for Company employees generally and for Covered Employees in particular.
    




  4.2     Release.
    As a condition to receiving Severance Benefits under this Plan, each Covered
    Employee will be required to sign a waiver and release of all claims arising
    out of his or her Involuntary Termination and employment with the Company
    and its subsidiaries and affiliates, in a form satisfactory to the General
    Counsel of the Company.




  5.     Vacation
    Days. Any unused vacation pay accrued as of a Covered Employee’s
    date of Involuntary Termination will be paid at the time the Covered Employee
    receives his or her first Severance Benefit. No Covered Employee may use any
    accrued but unused vacation pay to extend his or her Involuntary Termination
    date or to postpone or delay the start of his or her Severance Period.

  6.     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.



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  7.     Administration.
    The Company is the administrator of the Plan (within the meaning of section
    3(16)(A) of ERISA). The Plan will be administered and interpreted by the Administrator
    (in his or her sole discretion). 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. Any decision made or other action taken
    by the Administrator with respect to the Plan, and any interpretation by the
    Administrator of any term or condition of the Plan, or any related document,
    will be conclusive and binding on all persons and be given the maximum possible
    deference allowed by law. 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 is subject to the prior approval of the senior officer of NPS
    Pharmaceuticals, Inc. The Administrator may delegate in writing to any other
    person all or any portion of his or her authority or responsibility with respect
    to the Plan.

  8.     Eligibility
    to Participate. 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 senior officer of NPS Pharmaceuticals, Inc.
    will act upon any matters pertaining specifically to the benefit or eligibility
    of the Administrator under the Plan.




  9.     Amendment
    or Termination. The Company reserves the right to amend or modify the
    Plan at any time, without advance notice to any Covered Employee. Notwithstanding
    the preceding, no amendment or modification of the Plan shall impair the rights
    of any Covered Employee, unless mutually agreed otherwise between the Covered
    Employee and the Company, which agreement must be in writing and signed by
    the Covered Employee and the Company. The Plan will automatically terminate
    on March 31, 2008 unless the Company determines otherwise; provided, however,
    if there are any outstanding Determination Period or Severance Period on March
    31, 2008, then the Plan will remain in effect until all Severance Benefits
    have been paid with respect to any such Determination Periods and Severance
    Periods. The Company shall not have the power to terminate the Plan prior
    to March 31, 2008 without the consent of the affected Covered Employees. 

  10.     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.
    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 support the claim. 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.




  11.     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.

  12.     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.



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  13.    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.

  14.     No
    Enlargement of Employment Rights. Neither the establishment or 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 at any time, with or without cause.




  15.     Applicable
    Law. 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 Utah.

  16.     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.




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

  18.     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.




  19.     Additional
    Information.





	 	Plan Name:	NPS Pharmaceuticals, Inc. Severance
      Pay Plan
	 	 	 
	 	Plan Sponsor: 	NPS Pharmaceuticals, Inc.
      420 Chipeta Way

      Salt Lake City, Utah 84108

	 	 	 
	 	Identification Numbers:	EIN: 87-0439579

      PLAN: 501

	 	 	 
	 	Plan Year:	Calendar year
	 	 	 
	 	Plan Administrator:	NPS Pharmaceuticals, Inc.

        Attention: Manager, Human Resources

        420 Chipeta Way

        Salt Lake City, Utah 84108

        (801) 583-4939
        




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Agent for Service of Legal Process:
	

      NPS
        Pharmaceuticals, Inc.

      

      Attention: General
        Counsel

      

      420 Chipeta Way

      

      

      Salt Lake City, Utah 84108
        

      

      

      

      (801) 583-4939

      




  20.     Statement
    of ERISA Rights. As a Covered Employee under the Plan, you have certain
    rights and protections under ERISA:




  (a)     You may
    examine (without charge) all Plan documents, including any amendments and
    copies of all documents filed with the U.S. Department of Labor, such as the
    Plan’s annual report (IRS Form 5500). These documents are available
    for your review in the Company’s Human Resources Department.

  (b)     You
    may obtain copies of all Plan documents and other Plan information upon written
    request to the Plan Administrator. A reasonable charge may be made for such
    copies.




  In addition to creating rights for Covered Employees,
    ERISA imposes duties upon the people who are responsible for the operation
    of the Plan. The people who operate the Plan (called “fiduciaries”)
    have a duty to do so prudently and in the interests of you and the other Covered
    Employees. No one, including the Company or any other person, may fire you
    or otherwise discriminate against you in any way to prevent you from obtaining
    a benefit under the Plan or exercising your rights under ERISA. If your claim
    for a severance benefit is denied, in whole or in part, you must receive a
    written explanation of the reason for the denial. You have the right to have
    the denial of your claim reviewed. (The claim review procedure is explained
    in Sections 10 and 11 above.)

  Under ERISA, there are steps you can take to
    enforce the above rights. For instance, if you request materials and do not
    receive them within 30 days, you may file suit in a federal court. In
    such a case, the court may require the Plan Administrator to provide the materials
    and to pay you up to $110 a day until you receive the materials, unless the
    materials were not sent because of reasons beyond the control of the Plan
    Administrator. If you have a claim which is denied or ignored, in whole or
    in part, you may file suit in a state or federal court. If it should happen
    that you are discriminated against for asserting your rights, you may seek
    assistance from the U.S. Department of Labor, or you may file suit in a federal
    court.




  In any case, the court will decide who will pay
    court costs and legal fees. If you are successful, the court may order the
    person you have sued to pay these costs and fees. If you lose, the court may
    order you to pay these costs and fees, for example, if it finds that your
    claim is frivolous.

  If you have any questions regarding the Plan,
    please consult the Company’s Human Resources Department. If you have
    any questions about this statement or about your rights under ERISA, you may
    contact the nearest area office of the Employee Benefits Security Administration
    (formerly the Pension and Welfare Benefits Administration), U.S. Department
    of Labor, listed in your telephone director, or the Division of Technical
    Assistance and Inquiries, Employee Benefits Security Administration, U.S.
    Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210.




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  21.     Execution.

  In Witness Whereof, the Company, by its
    duly authorized officer, has executed this Plan on the date indicated below.

  



	 	NPS
      PHARMACEUTICALS, INC. 
	 	 	 
	 	By: 	 

	 	Title: 	 

	 	Date:	 



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  Appendix A



	 	 	 
	Employee Name	Determination
      Period	Severance Period
	 	(e.g., 24 months)	(e.g., 24 months)
	 	(e.g., 12 months)	(e.g., 24 months)


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