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

 

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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 employment under the Employment Agreement is
terminated prior to the Expiry Date 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 Company) but not governed by
section 6 of this Award Agreement above, 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 first anniversary of the
Termination Date and shall remain exercisable until the earlier of (x) one
hundred and twenty (120) days following the Termination Date and (y) the Expiry
Date.

 

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8.   Termination

If the Participant ceases to be employed under the Employment Agreement before
the Expiry Date, then except as otherwise provided in sections 6 and 7 above,
the vesting of all Options shall stop immediately upon the Termination Date, and
any Options that have vested as at the Termination Date shall remain in force
and can be exercised by the Participant in accordance with the following
provisions:

  (a)   If the Termination Date occurs for any reason other than the reasons
described in sections 6 and 7 above, then the Participant will have 30 days
after the Termination Date or until the Expiry Date (whichever is earlier) to
exercise all or any portion of his vested Options.     (b)   If the Termination
Date occurs by reason of death or Disability (as defined in the Employment
Agreement), then the Participant (or his personal legal representative) will
have one hundred and eight (180) days after the Termination Date or until the
Expiry Date (whichever is earlier) to exercise all or any portion of his vested
Options.

At the end of the periods specified above or the Expiry Date, whichever is
earlier, all of the Options shall terminate and be of no further force or
effect. “Termination Date” is defined in section 6 above, and in no event shall
any period during which the Participant is in receipt of or entitled to be in
receipt of severance pay serve to extend the Termination Date.

9.   Method of Exercise of Options and Payment

The Options shall be exercised (in accordance with the provisions of this Award
Agreement and the Plan) from time to time by giving notice in writing to the
Company and setting forth the number of Options being exercised. Such notice
shall be accompanied by cash or certified check payable to the Company, or any
other form of payment satisfactory to the Company, in the full amount of the
purchase price for the Optioned Shares being purchased (such purchase price
being equal to the number of Options being exercised times the Option Price)
plus payment of any applicable federal, state, provincial or local taxes, or any
other taxes which the Company may be obligated to collect as a result of the
issue or transfer of Optioned Shares upon such exercise of the Options. The
Participant shall provide the Company with any additional documents that the
Company may require. As soon as reasonably practicable after the proper exercise
of any Options, the Company shall issue to the Participant a share certificate
representing the Optioned Shares acquired.

10.   Certain Adjustments

  (a)   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 Participant’s exercise of all of the
Options, appropriate adjustments shall be made in the number or kind of
securities subject to this Option, and/or in the exercise price or other terms
and conditions applying to this Option, so as to avoid dilution or enlargement
of the rights of the Participant under this Option and of the value represented
by it.     (b)   If the Company is a party to a merger or reorganization with
one or more other corporations, whether or not the Company is the surviving or
resulting entity, or if the Company consolidates with or into one or more other
corporations, or if the Company is liquidated or sells or otherwise disposes of
substantially all of its assets to another corporation (hereinafter referred to
as a “Transaction”), in any case while any Options remain outstanding, (i) after
the effective date of the Transaction this Option shall remain

 

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      outstanding and shall be exercisable in Common Shares or, if applicable,
shares of such stock or other securities, cash or property as the holders of
Common Shares received pursuant to the terms of the Transaction; and (ii) the
Company’s Board may, in its sole discretion subject to the applicable provisions
of Code section 409A, accelerate the time for exercise of this Option, so that
from and after a date prior to the effective date of the Transaction this Option
shall be exercisable in full.

11.   General Matters

  (a)   Options are not transferable or assignable.     (b)   This Award
Agreement is not an employment contract and nothing in this Award 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)   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 and the number of
Options granted. If required by applicable securities legislation, regulations,
rules, policies or orders or by any securities commission, the Exchange or other
regulatory authority, the Participant 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 Options 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.     (d)   This Award Agreement, the Employment Agreement and the Plan
constitute the entire agreement between the parties relating to the grant of
Options to the Participant and supersede all prior communications,
representations and negotiations in respect thereto.     (e)   For the grant of
the Options to be effective, this Award Agreement must be executed by the
Participant and returned to the Company.     (f)   This Award Agreement shall be
governed by the laws of the Province of Alberta. The parties agree that any
disputes under this Award 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.     (g)   Time shall be of the essence of this Award Agreement.     (h)
  The Participant acknowledges that neither the Plan nor this Award 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 Options.

 

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  (i)   The Participant shall not have any of the rights and privileges of a
shareholder of the Company by virtue of being granted Options.

The Company and the Participant have executed this Award Agreement on the ___day
of May, 2008.
NUCRYST PHARMACEUTICALS CORP.

         
By:
       
 
  Carol L. Amelio, Vice President General   David B. Holtz (Participant)
 
  Counsel & Corporate Secretary