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Exhibit 10.49
  NUCRYST
    PHARMACEUTICALS 
    Employee Incentive Program
   Revised 2007




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Contents
  Overview
  How the
    Employee Incentive Program Works
  
    Plan Objective
    Performance Period
    Corporate Performance Measure
    Performance Levels  How
    Payouts are Made
  
    Individual Payout Levels
    Receiving Your Annual Award  Tax
    Implications
  More
    Program Details
  
    Whos Eligible
    Whos Eligible to Receive a Payout
    Sale of Part of Business
    The Last Word
    Key Dates  Questions
    and Answers




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Overview
  Employee Incentive
    Program 
  How the
    Employee Incentive Program Works
  Plan
    Objective
    Performance
    Period
    Company
    Performance Measures
    Individual
    Payout Levels
    Threshold

  the minimum level of performance necessary to
    earn a payout  there will be no payout for performance below
    Threshold  there is an 80% probability of attaining at
    least Threshold performance measuresTarget

  the expected level of performanceStretch

  the level of performance beyond Target that
    earns the maximum payout  the largest payout opportunity; there is a 20%
    probability of attaining Stretch performance measures     How
    Payouts are Made
  Annual
    Award Calculation
    Incentive Payout(as a % of base salary)Threshold

Target

StretchVice Presidents

20%

40%

70%Directors/Associate Directors

10%

20%

40%Manager/Professional

5%

10%

20%  includes those who have attained full
    professional status, or are employed in a profession and have
    equivalent knowledge through direct field experienceTechnical/Operating

2.5%

5%

10%  includes technologists, technicians,
    operators, clerks, secretaries, analysts, material processors,
    production assistants and developing professionals




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Base Salary Defined:
    Receiving
    Your Annual Award
    Tax
    Implications
    More
    Program Details
  Whos
    Eligible
      Employee Incentive Program.
  Whos
    Eligible to Receive a Payout
      Sale of
    Part of the Business
    The Last
    Word
    Key
    Dates
  Corporate Performance Measures Set

Fourth Quarter for next Program yearIndividual Performance Measures Set

Fourth Quarter for next Program yearPerformance Updates

QuarterlyIncentive Program Payouts

Prior to February 28




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Questions
    and Answers
  Q: Who
    is eligible to participate in the Program?
  A: Eligibility
    for participation in the Incentive Program is established as
    follows:
  
    Employees:Designated employees of the Company
    New hires:  prorated based on start date
    Regular part-time:  prorated based on time
    worked in a given year
    Leave of Absence:  prorated based on time
    worked in a given year
    Involuntary Leave-Short Term
    Disability:prorated for any absence that exceeds
    2 months of continuous absence or 40 working days in a
    calendar year
    Eligible Retirement:  prorated based on time
    worked
    Resignation or Termination (with or without
    cause):  no payout
    Death:prorated based on time worked during
    the year; payout to eligible beneficiary or estate
    Employment:must be on company payroll on
    payout date
    Temporary and casual, including summer
    students:  not eligible to participate
    Contract employees:  not eligible to
    participate (the incentive may be built into a long term
    contract at the time of hire)  Q: How
    does the plan work?
  A:
    The Employee Incentive Program features the setting of specific
    Annual Goals (from 1 to 6 goals) each year that support the
    achievement of the overall business strategy. Three levels of
    measurements are established for each goal: Threshold,
    Target, and Stretch. The plan is designed so company performance
    must meet at least the Threshold level for each goal in order
    for employees to receive payouts.  Q: Is
    there a chance the Employee Incentive Program will not pay
    out?
  A:
    Yes. If the Threshold corporate measure is not attained in
    respect of each Annual Goal, you will not receive a payout.  Q: Will
    all employees receive the same payout?
  A:
    The amount of payout an employee receives is based on two
    circumstances  first, how well the corporation
    performed relative to the measures set. Second, the actual
    payout amount received will depend on the employees
    position within the Company: Vice President (from 20% to 70% of
    their base earnings), Director/Associate Director (from 10% to
    40% of their base earnings) Manager/Professional (from 5% to 20%
    of their base earnings), or Technical/Operating/Clerical (from
    2.5% to 10% of their base earnings).  Q: How
    much can I expect to earn?
  A:
    The payout will be a percentage of your base salary and will be
    determined based on the level of results attained for each of
    the Annual Goals set by the Company and on your position within
    NUCRYST, as follows:  Threshold

Target

StretchVice President

20%

40%

70%Manager/Professional

10%

20%

40%Manager/Professional

5%

10%

20%Technical/Operating

2.5%

5%

10     Q How
    will my payout be calculated if I receive a salary increase
    during the year?
  A
    Your regular earnings as reported on your paystub will be used
    to calculate your payout. Regular earnings at the end of the
    year will have taken into account any changes to your regular
    earnings, such as a salary increase. Regular earnings excludes
    any overtime, premiums, bonuses or taxable benefits.




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Q What
    if my variable pay level changes during the year?
  A
    Your payout will be prorated for the time spent at each level.
    So, if you were at a 5% Technical/Operating level and were
    increased to the Manager/Professional Level of 10% on
    July 1st, your payout would be prorated 6 months at
    the 5% level and 6 months at the 10% level.  Q: How
    many decimal points will we use on our calculations for variable
    pay?
  A:
    The percentage payout will be calculated using 1 decimal point.
    Eg. (5.32% will be 5.3%) and (5.35% will be 5.4%).  Q: Why
    are there two levels of payout based on the position of the
    employee?
  A:
    If we hit at least the minimum Threshold level and there is a
    payout, the amount each employee receives will depend on their
    position within the Company. This decision was made based on
    comparative market practices. We went to the external market and
    looked at our comparator companies to see what they were doing
    in terms of distributing a payout.    Q: How
    are the actual numbers established for each of the three
    measures (Threshold, Target and Stretch)?
  A:
    The measures are set based on input from a variety of sources:
    industry data, financial reports, past performance, senior
    business leaders, the Executive team, the Board of Directors
    and, of course, employees.  Q: How
    are the numbers finalized?
  A: The
    measures are finalized based on the probability of actually
    attaining the set measures, as follows:
  
    Threshold  there is an 80% probability the measure
    will be attained
    Target  the expected outcome
    Stretch  there is a 20% probability the measure will
    be attained  Q: How
    will the plan payout for measures attained between the three
    levels  Threshold, Target and Stretch?
  A:
    As an example, if the goal is to increase revenue by 5%
    (Threshold), 10% (Target), and 25% (Stretch), we see that the
    plan will payout as long as the revenue increases anywhere from
    5% to 25%. The plan is designed so that performance levels
    attained between the Threshold, Target and Stretch measures will
    be interpolated to determine the payout levels.    Q: Will
    the measures change each year?
  A:
    Most Likely. As our business strategy changes, it may be
    necessary to change the corporate measure to support our
    corporate objectives. The intent is to set measures that are
    appropriate for the business strategy, measures that may change
    as the strategy changes.    Q: How
    will we know how well we are doing?
  A:
    We are committed to timely, effective communication to ensure
    that all employees know exactly where we stand relative to our
    targets. Business unit/subsidiaries will provide updates with
    respect to their performance. In this way, we can support our
    collective efforts to reach our maximum payout targets.  Q: Will
    I receive cash?
  A:
    Payout will be cash paid out by separate cheque in addition to
    your regular paycheque. Applicable income taxes will be withheld.




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Q: When
    will I get paid?
  A:
    NUCRYST will make every effort to pay out before the end of
    February following the completion of the previous years
    plan. This will allow enough time for the financial results to
    be calculated and cheques to be issued before the close of the
    RRSP season.  Q: What
    happens if I take a voluntary leave of absence?
  A:
    If you take a voluntary leave of absence, retire as defined by
    the Company pension plans, or die during the Program year, you
    will receive a payout based on your regular earnings as reported
    on your pay stub.  Q What
    happens if I go on Short Term Disability during the
    year?
  A
    When an employees total accumulated involuntary leave or
    short term disability exceeds 2 months of continuous
    absence or 40 working days in the calendar year, an
    employees Variable Pay will be prorated. In the event that
    the employee returns to work on a partial work schedule, the
    Variable Pay will be prorated to the work schedule. It is the
    Manager/Supervisors responsibility to track and maintain
    accurate records of the absence.  Q: What
    happens if I terminate my employment near the end of the Program
    year, or in early January?
  A:
    You must be actively at work on the Company payout date. If you
    have resigned or you have been terminated, whether with or
    without cause, from employment prior to the payout date you will
    not receive any payout. The exceptions are outlined in the
    previous question.  Q: What
    happens if part of the business I work in is sold or spun out
    during the year?
  A:
    You will receive a payout at the Target level. The payout will
    be for the portion of the year you were an employee of NUCRYST.
    For example, if the sale or spin out transaction is effective
    May 1, you will receive 4/12 X the Target level X your
    regular earnings as on your pay stub.  Q: How
    will the plan be maintained?
  A:
    The plan and its outcomes will be reviewed at the end of each
    year by the Executive Team to ensure it continues to reflect
    business performance and priorities.