FORM OF RESTRICTED STOCK UNIT AWARD AGREEMENT

Exhibit 10.12

NUCRYST PHARMACEUTICALS CORP.

RESTRICTED STOCK UNIT AWARD AGREEMENT

GRANT of Restricted Stock Units made effective as of ######## (the “Grant Date”)

TO:		## (the “Participant”)
BY:		NUCRYST Pharmaceuticals Corp. (the “Company”)

     WHEREAS, on December 21, 2005, the Board of Directors of the Company (the “Board”) approved and adopted the Company’s 1998 Equity Incentive Plan (as amended) (the “Plan”) and the Plan was subsequently approved by the Toronto Stock Exchange; and

     WHEREAS, by resolution of the Board made on ########, the Board granted the Restricted Stock Unit award provided for herein to the Participant, such grant to be effective the Grant Date and subject to the terms set forth herein;

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

1.

Equity Incentive Plan

The grant by the Company to the Participant of Restricted Stock Units by this Agreement is made pursuant to the terms and conditions of the Plan. This Agreement and the terms and conditions of the grant of Restricted Stock Units are subject in all respects to the terms and conditions of the Plan, which is made a part of this Agreement. The Participant, by acceptance of this Agreement, agrees to be bound by the Plan (and any regulations that may be established under the Plan) and acknowledges receipt of a copy of the Plan and this Agreement. Terms that are defined in the Plan and not otherwise defined in this Agreement shall have the same meaning when used in this Agreement as in the Plan.

2.

Grant of Restricted Stock Units

The Company hereby grants to the Participant, effective as of the Grant Date, #### Restricted Stock Units (defined in the Plan and this Agreement as “Restricted Stock Units” or individually as a “Restricted Stock Unit”), subject to the terms and conditions of this Agreement and the Plan.

3.

Vesting

Unless otherwise set forth in this Agreement, the Restricted Stock Units shall vest:

	(a)		as to one third (1/3) on the first anniversary of the Grant Date;
	(b)		as to one third (1/3) on the second anniversary of the Grant Date; and
	(c)		as to one third (1/3) on the third anniversary of the Grant Date.

4.

Restrictions

(a)

No portion of the Restricted Stock Units or rights granted hereunder may be sold, exchanged, transferred, assigned, pledged, hypothecated, or otherwise encumbered or disposed of by the Participant, whether voluntarily, involuntarily or by operation of law (collectively, “Prohibited Dispositions”) until such portion of the Restricted Stock Units becomes vested and are paid out in accordance with Section 6 of this Agreement.

(b)

If the Participant ceases to be employed by the Company for any reason whatsoever before all of the Restricted Stock Units have vested in accordance with Section 3, then the vesting of all Restricted Stock Units shall stop immediately upon the Termination Date, and the balance of the Restricted Stock Units subject to the provisions of this Agreement which have not vested as of the Termination Date shall be forfeited automatically without further notice to the Participant and no compensation shall be paid therefore.

5.

Issuance of Com