Exhibit 10.71
NUCRYST PHARMACEUTICALS CORP.
DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT
GRANT of Restricted Stock Units made effective as of (the “Grant Date”)

TO:    (the “Participant” or “Director”)   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, pursuant to the Plan, awards of Restricted Stock Units may be
granted to persons including members of the Board; and
     WHEREAS, by resolution of the Board made on                               ,
the Board granted the Restricted Stock Unit award provided for herein to the
Director, 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 Director, effective as of the Grant Date, 3,000
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 interest of the Director in
the Restricted Stock Units shall vest as to 50% of the Restricted Stock Units on
the first anniversary of the Grant Date and as to the remaining 50% of the
Restricted Stock Units on the second anniversary of the Grant Date. If the date
for vesting and settlement of the Restricted Stock Units occurs during a
Blackout Period, the Company shall make such settlement of the Restricted Stock
Units within ten Non-Blackout Trading Days following the end of such Blackout
Period.

 

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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 Director, 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 serve as a
Director 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 Director and no compensation shall be paid therefore.

5.   Accelerated Vesting

Notwithstanding the vesting provisions contained section 3, in the event that a
Change of Control of the Company or an Elimination of the Public Float occurs
the Restricted Stock Units shall immediately become fully vested.

  (a)   Whenever used in this Agreement, the following terms shall have the
meanings set forth below:

  (i)   “Change of Control of the Company” means the occurrence of a transaction
or series of transactions, either alone or in combination with any other events
or transactions, as a result of which:

  (ii)   any Person (other than the Director or any of his Associates or
Westaim) acquires or becomes the beneficial owner of, or a combination of
Persons (not including the Director or any of his Associates or Westaim) acting
jointly or in concert acquires or becomes the beneficial owner of, directly or
indirectly, more than 50% of the voting securities of the Company, whether
through the acquisition of previously issued and outstanding voting securities,
or of voting securities that have not been previously issued, or any combination
thereof, or any other transaction having a similar effect;

  (iii)   the shareholders of the Company approve: (1) any plan or proposal for
the liquidation or dissolution of the Company; or (2) the sale, lease, exchange,
disposition or other transfer of all or substantially all of the assets of the
Company;

  (iv)   50% or more of the issued and outstanding voting securities of the
Company become subject to a voting trust in which neither the Director nor any
of his Associates nor Westaim participates;

  (v)   a majority of the directors of the Company are removed from office at
any annual or special meeting of shareholders, or a majority of the directors of
the Company (calculated not including the Director) resign form office over a
period of 60 days or less, unless the vacancies created thereby are either
(1) filled by appointments made by the remaining members of the Board of
Directors of the Company, (2) are filled by nominees proposed by the Board of
Directors, the Director or any of his Associates or Westaim, or (3) the Board of
Directors of the Company determines not to fill the vacancies in connection with
a reduction in the size of the Board of Directors of the Company approved by a
majority of directors of the Company then in officer;

  (vi)   any Person (other than the Director or any of his Associates or
Westaim) makes a bona fide take-over bid (as defined in the Securities Act
(Ontario) from time to time in effect) for the Common Shares, whether made by
way of a take-over bid circular or tender offer as required under any applicable
legislation, or by way of stock exchange take-over bid. Any such event is
referred to herein as a “Take-over Bid”; or

 

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  (vii)   a consolidation, share exchange or merger of the Company occurs:
(1) in which the shareholders of the Company immediately prior to such
transaction do not own at more than 50% of the voting securities of the entity
which survives/results from that transaction; or (2) in which a shareholder of
the Company who does not own more than 50% of the voting securities of the
Company immediately prior to such transaction, owns more than 50% of the
Company’s voting securities immediately after such transaction.

  (viii)   “Elimination of Public Float” means the occurrence of a transaction
or series of transactions, either alone or in combination with any other events,
as a result of which: (1) Westaim acquires or becomes the beneficial owner of,
directly or indirectly, 100% of the publicly-traded voting securities of the
Company; or (2) the voting securities of the Company cease to be publicly-traded
on a stock exchange or in the over-the-counter market.

  (b)   “Person” means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation with or without
share capital, unincorporated association, trust, trustee, executor,
administrator or other legal personal representative, regulatory body or agency,
government or governmental agency, authority or entity however designated or
constituted.

  (c)   “Associate” has the meaning attributed to such term in the Business
Corporations Act (Alberta) as the same may be amended from time to time and any
successor legislation thereto.

  (d)   “Westaim” means The Westaim Corporation and its Subsidiaries.

6.   Issuance of Common Shares

As soon as reasonably practicable after Restricted Stock Units become vested as
described in Section 3, the Company shall register the name of the Participant
as the owner of the Common Shares with respect to which the vested Restricted
Stock Units relate and subject to applicable withholding of taxes, deliver one
or more unlegended stock certificates in respect of the Restricted Stock Units
to the Participant. Notwithstanding any other provision of this Agreement, all
amounts payable to, or in respect of, a Participant in respect of Restricted
Stock Units shall be paid within three (3) years following the end of the year
in which the Restricted Stock Units were granted.

7.   Rights as a Stockholder; Dividends

The Director shall not have any rights or be entitled to exercise any voting
rights, receive dividends, or have or be entitled to any other rights as a
shareholder in respect of any Restricted Stock Units, other than the right to
receive such Common Shares upon the vesting of the Restricted Stock Units.

8.   Distributions and Adjustments

If there is any change in the number or character of the Common Shares (through
merger, consolidation, reorganization, recapitalization, stock split, stock
dividend, or otherwise), prior to the vesting of the Restricted Stock Units, the
Participant shall receive such number and type of securities or other
consideration on the same basis and at the same time as other shareholders,
provided that such securities or other consideration shall be subject to the
same vesting provisions, if any, as the Restricted Stock Units to which such
securities or other consideration relate.

 

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9.   Beneficiary

The Director may file with the Company a written designation of a beneficiary on
such form as may be prescribed by the Company and may, from time to time, amend
or revoke such designation. If no designated beneficiary survives the Director,
the executor or administrator of the Director’s estate shall be deemed to be the
Director’s beneficiary.

10.   General Matters

  (a)   Restricted Stock Units are not transferable or assignable

  (b)   This Agreement is not an employment contract and nothing in this
Agreement shall be deemed to create in any way whatsoever any obligation on the
Participant’s part to continue to work for the Company (or any subsidiary of the
Company), or of the Company (or any subsidiary of the Company) to continue to
employ the Participant.

  (c)   This Agreement and the Plan constitute the entire agreement between the
parties relating to the grant of Restricted Stock Units to the Participant
herein and supersedes all prior communications, representations and negotiations
in respect thereto provided that, for greater certainty, in the event of any
inconsistencies as between this Agreement and the Plan, such matters shall be
governed by the terms and provisions of the Plan.

  (d)   For the grant of the Restricted Stock Units to be effective, this
Agreement must be executed by the Participant and returned to the Company.

  (e)   The Participant acknowledges that the Company may be required to
disclose to the securities regulatory authorities, the Exchange or other
regulatory authorities duly authorized to make such request, the name, address
and telephone number of the Participant, the number of Restricted Stock Units
granted, and if required by applicable securities legislation, regulations,
rules, policies or orders or by any securities commission, the Exchange or other
regulatory authority, it will, in a timely manner, execute, deliver, file and
otherwise assist the company in filing, such reports, undertakings, and other
documents with respect to the Restricted Stock Units as may be required or
requested by the Company to enable the Company to comply with applicable
securities legislation, regulations, rules, policies or orders or the
requirements of any securities commission or other regulatory authority or the
Exchange.

  (f)   Time shall be of the essence of this Agreement.

  (g)   This Agreement shall be governed by the laws of the Province of Alberta.
The parties agree that any disputes under this Agreement shall be resolved by
the courts of Alberta and each of the parties irrevocably attorn to the
non-exclusive jurisdiction thereof with respect to all such matters and the
transactions contemplated herein.

  (h)   The Participant acknowledges that neither the Plan or this Agreement
restricts the Company’s ability to conduct its business (including, but not
limited to, such decisions as transactions with related parties, new product
development efforts, cancellation of existing products, mergers and
acquisitions, or corporate dissolution) regardless of the effect those decisions
may have on the value of Restricted Stock Units.

The Company and the Participant have executed this Agreement on the
                     day of to                           be effective as of the
Grant Date.
NUCRYST PHARMACEUTICALS CORP.

         
By:
 

 
   

 
Director