NUCRYST PHARMACEUTICALS CORP. STOCK OPTION AWARD AGREEMENT

Exhibit 10.54

NUCRYST PHARMACEUTICALS CORP.

STOCK OPTION AWARD AGREEMENT

GRANT of Options made as of May 8, 2008 (the “Grant Date”)

TO:		David B. Holtz (the “Participant”)
BY:		NUCRYST Pharmaceuticals Corp. (the “Company”)

     WHEREAS, on March 19, 2008, the Board of Directors of the Company (the “Board”) approved and adopted the Company’s 1998 Equity Incentive Plan (as amended) (the “Plan”) and such Plan is subject to approval by the shareholders of the Company and the Toronto Stock Exchange (the “TSX”); and

     WHEREAS, pursuant to the Plan, awards of Options may be granted to persons including executives of subsidiaries of the Company; and

     WHEREAS, the Participant and NUCRYST Pharmaceuticals Inc. (“NPI”), the Company’s wholly owned subsidiary, are parties to an Employment Agreement, dated as of May 7, 2008 to be effective May 8, 2008 (the “Employment Agreement”), whereby the Participant has agreed to serve, and the NPI has agreed to engage the Participant, as the Vice President and Chief Financial Officer of NPI and the Company, subject to the terms of the Employment Agreement; and

     WHEREAS, pursuant to the Employment Agreement and by resolution of the Board made on May 7, 2008, the Board approved a grant of Options provided for herein to the Participant, such grant to be effective on the Grant Date , subject to shareholder and TSX approval of the Plan 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 Options by this Award Agreement is made subject to shareholder and TSX approval of the Plan. Upon approval of the Plan by shareholders and the TSX, this Award Agreement and the terms and conditions of the grant of Options are subject in all respects to the terms and conditions of the Plan, which is made a part of this Award Agreement. The Participant, by acceptance of this Award 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 Award Agreement. Terms that are defined in the Plan and not otherwise defined in this Award Agreement shall have the same meaning when used in this Award Agreement as in the Plan.

2.

Grant of Options

Subject to shareholder and TSX approval of the Amendments to the Plan, the Company grants to the Participant, effective the Grant Date, 240,000 options (defined in the Plan and this Award Agreement as “Options” or individually as an “Option”) to purchase Common Shares of the Company (which Common Shares, when purchased by the exercise of Options, are defined as “Optioned Shares”), subject to the

terms and conditions of this Award Agreement and the Plan. The grant of Options herein is intended to be a grant of non-qualified stock options and shall not be treated or construed as a grant of an “incentive stock option” as that term is used in Code Section 422, or any successor provision thereof.

3.

Option Price

The exercise price of each Option (which is defined in the Plan as the “Option Price”) is $1.09.

4.

Expiry Date

The Options shall terminate on, and may not be exercised in whole or in part after, 5:00 p.m. (Edmonton, Alberta, Canada time) on May 8, 2018 (the “Expiry Date”), unless earlier terminated in accordance with the terms of the Plan or this Award Agreement.

5.

Vesting

Unless otherwise set forth in this Award Agreement, the Options shall vest and shall become exercisable:

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

6.

Change of Control

Notwithstanding section 5 above, in the event that the Participant’s employment under the Employment Agreement is terminated prior to the Expiry Date and within 12 months following, a Change of Control in a termination governed by Section 4, 6(d) or 6(e) of the Employment Agreement (relating to terminations without cause or non-extension of the Employment Agreement by the NPI), the Options shall immediately become fully vested and exercisable to the extent that such Options were then scheduled to become vested or exercisable on or before the second anniversary of the Termination Date and shall remain exercisable until the earlier of: (x) one hundred and twenty (120) days following the date on which the Participant’s employment under the Employment Agreement terminates (the “Termination Date”); and (y) the Expiry Date. “Change of Control” shall have the meaning ascribed to such term in the Employment Agreement.

7.

Other Accelerated Vesting

Notwithstanding section 5 above, in the event that the Participant’s employment under the Employment Agreement terminates prior to the Expiry Date due to his death or Disability (as such term is defined in the Employment Agreement), or in the event that the Participant’s employm