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EXHIBIT 99.4
ENDOCARE, INC.
OUTSIDE DIRECTOR FIRST OPTION AGREEMENT
ENDOcare, Inc., a Delaware corporation (the "Company"), has granted to
____________ (the "Optionee"), an option to purchase a total of _________
(_____) shares of the Company's Common Stock (the "Option"), at the price
determined as provided herein, and in all respects subject to the terms of the
Company's 1995 Director Option Plan, as amended (the "Plan") adopted by the
Company, which is incorporated herein by reference. Any terms used in this
Option that are not defined herein shall have the meanings set forth in the
Plan.
1. NATURE OF THE OPTION. This Option is a nonstatutory option and is not
intended to qualify for any special tax benefits to the Optionee. Accordingly,
Optionee understands that, upon exercise of this Option, he or she will
recognize income for tax purposes in an amount equal to the excess of the then
Fair Market Value of the Shares purchased over the exercise price paid for such
Shares.
2. DATE OF GRANT. The date of grant of this Option is ______________,
which is the date on which the Optionee was first elected or appointed as an
Outside Director.
3. EXERCISE PRICE. The exercise price is $__________ for each share of
Common Stock, which is one hundred percent (100%) of the Fair Market Value of
the Stock on the date of grant of this Option. If the date of this Option is not
a Trading Day, the exercise price shall be the Fair Market Value on the next
Trading Day immediately following the date of the grant of the Option.
4. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the provisions of Section 9 of the Plan as follows:
a. RIGHT TO EXERCISE.
i. This Option shall become exercisable and vest with
respect to ___________ (_______) Shares on the first (1st)
anniversary of the Outside Director's appointment or election to
the Board if the Outside Director continues as an Outside
Director through such date, and shall become exercisable and
vest with respect to the remaining _______ (_____) Shares on the
second (2nd) anniversary of the Outside Director's appointment
or election to the Board if the Outside Director continues as an
Outside Director through such date. In addition, this Option may
become exercisable on accelerated basis upon the occurrence of
an Extraordinary Event, as defined in Section 12 of the Plan.
ii. This Option may not be exercised for a fraction of a
share.
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iii. To the extent this Option becomes exercisable under
subparagraph i. above, this Option shall remain so exercisable
while the Optionee is a Director. In the event Optionee ceases
to be a Director, the Optionee shall be entitled to exercise the
Option for three (3) months after that date. This period is
extended to twelve (12) months in the case the Optionee ceases
to be a Director by reason of death or total and permanent
disability. However, in no event may the Option be exercised
later than the expiration of the term of the Option.
b. METHOD OF EXERCISE. This Option shall be exercisable by
written notice that states the election to exercise the Option and the number of
Shares in respect of which the Option is being exercised. Such written notice,
in the form attached hereto as Exhibit A, shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the exercise
price.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
a. cash;
b. check; or
c. surrender of other Shares which (i) have been owned by the
Optionee for more than six (6) months on the date of surrender and (ii) have a
Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised; or
d. delivery of a properly executed exercise notice together with
such other documentation as the Company and the broker, if applicable, shall
require to effect an exercise of the Option and the delivery to the Company of
the sale or loan proceeds required to pay the exercise price.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, or if such issuance
would not comply with the requirements of any stock exchange upon which the
Shares may then be listed. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation or warranty to the
Company as may be required by any applicable law or regulation.
7. LIMITED TRANSFERABILITY. This option may, in connection with the
Optionee's estate plan, be assigned in whole or in part during Optionee's
lifetime to one or more Family Members of the Optionee or to a trust established
for the exclusive benefit of the Optionee and/or one or more such Family
Members. The assigned portion shall be exercisable only by the person or persons
who acquire a proprietary interest in the option pursuant to such assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for this option
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immediately prior to such assignment. Should the Optionee die while holding this
option, then this option shall be transferred in accordance with Optionee's will
or the laws of descent and distribution.
For purposes of this Section 7, a Family Member shall be limited
to the Optionee's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, former spouse, siblings, nieces, nephews, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, a trust in which any of the foregoing
individuals have more than a fifty percent (50%) beneficial interest, a
foundation in which any of the foregoing individuals (or the Optionee) control
the management of assets, and any other entity in which any of the foregoing
individuals (or Optionee) own more than fifty percent (50%) of the voting
interests.
8. TERM OF OPTION. This Option shall be exercisable only while the
Optionee is a Director and for certain other limited periods. However, in no
event may this Option be exercised more than ten (10) years from the date of
grant of this Option in accordance with the Plan and Section 4 of this Option.
9. NO RIGHTS AS A SHAREHOLDER. Optionee shall have no rights as a
shareholder of any Shares covered by this Option until the date that this Option
has been properly exercised to purchase Shares.
10. ADJUSTMENTS. In the event of any change in the capitalization of the
Company affecting its Common Stock (e.g., a stock split, reverse stock split,
stock dividend, recapitalization, combination, or reclassification), there shall
be an adjustment to (a) the number and/or kind of Shares covered by this Option
and (b) the exercise price per Share under this Option.
11. INTERPRETATION OF OPTION. This Option is made under the provisions
of the Plan and shall be interpreted in a manner consistent with it. Any
provision in this Option that is inconsistent with the Plan shall be superseded
and governed by the Plan. A copy of the Plan is attached hereto as Exhibit B.
12. LEGENDS ON CERTIFICATES. Optionee acknowledges that the certificates
representing the Shares issued upon exercise of this Option may bear such
legends and be subject to such restrictions on transfer as the Company may deem
necessary to comply with all applicable state and federal securities laws and
regulations.
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13. AMENDMENTS. This Option may be amended at any time with the consent
of the Company and Optionee.
ENDOcare, INC.
a Delaware corporation
By:
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Title: CEO & Chairman
Optionee acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto as Exhibit B, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan.
Dated: _______________________
______________________________
Optionee
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EXHIBIT A
OUTSIDE DIRECTOR FIRST OPTION EXERCISE NOTICE
ENDOcare, Inc.
7 Studebaker
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
1. EXERCISE OF OPTION. The undersigned ("Optionee") hereby elects to
exercise Optionee's option to purchase ______ shares of the Common Stock (the
"Shares") of ENDOcare, Inc. (the "Company") under and pursuant to the Company's
1995 Director Option Plan, as amended, and the Director First Option Agreement
dated _______________ (the "Agreement").
2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Agreement.
3. FEDERAL RESTRICTIONS ON TRANSFER. Optionee understands that the
Shares must be held indefinitely unless they are registered under the Securities
Act of 1933, as amended (the "1933 Act"), or unless an exemption from such
registration is available, and that the certificate(s) representing the Shares
may bear a legend to that effect. Optionee understands that the Company is under
no obligation to register the Shares and that an exemption may not be available
or may not permit Optionee to transfer Shares in the amounts or at the times
desired by Optionee.
4. TAX CONSEQUENCES. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase and/or disposition
of the Shares. Optionee represents that Optionee has consulted with any tax
consultant(s) Optionee deems advisable in connection with the purchase and/or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
5. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the
aggregate purchase price for the Shares that Optionee has elected to purchase
and has made provision for the payment of any federal or state withholding taxes
required to be paid or withheld by the Company.
6. ENTIRE AGREEMENT. The Agreement is incorporated herein by reference.
This Exercise Notice and the Agreement constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements of
the Company and Optionee with respect to the subject matter hereof. This
Exercise Notice and the Agreement are governed by the laws of the State of
California, without regard to its principles of choice of law.
Optionee: ENDOcare, Inc.
Signature:_______________________ By:______________________________________
Print Name:______________________ Its:_____________________________________
Address: ________________________
_________________________________
Dated:____________ Dated: _________________
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EXHIBIT B
ENDOCARE, INC. 1995 DIRECTOR OPTION PLAN