ENDOCARE INC, S-8, 1999-06-02

ENDOCARE INC
S-8, 1999-06-02
ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS

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<PAGE> 1

As filed with the Securities and Exchange Commission on June 2, 1999
Registration No. 333-_____________
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933

ENDOCARE, INC.
(Exact name of issuer as specified in its charter)

DELAWARE 33-0618093
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)

7 STUDEBAKER, IRVINE, CALIFORNIA 92618
(Address of principal executive offices) (Zip Code)

ENDOCARE, INC.
1995 STOCK PLAN
1995 DIRECTOR OPTION PLAN
(Full title of the plans)

PAUL W. MIKUS
CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN OF THE BOARD
ENDOCARE, INC.
7 STUDEBAKER
IRVINE, CALIFORNIA 92618
(Name and address of agent for service)
(949) 595-4770
(Telephone number, including area code, of agent for service)

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
Offering
Title of Securities to be Amount to be Price Aggregate Amount of
Registered Registered(1) per Share Offering Price Registration Fee
=========================================================================================================
<S> <C> <C> <C> <C>
1995 Stock Plan 1,313,000 shares $4.31 $5,659,030.00 $1,573.21(2)
Common Stock, $0.001 par value

1995 Director Option Plan 150,000 shares $4.31 $ 646,500.00 $ 179.73(2)
Common Stock, $0.001 par value
Aggregate Registration Fee $1,752.94
=========================================================================================================
</TABLE>

(1) This Registration Statement shall also cover any additional shares of
Registrant's Common Stock which become issuable under the Registrant's
1995 Stock Plan and 1995 Director Option Plan by reason of any stock
dividend, stock split, recapitalization or other similar transaction
effected without the Registrant's receipt of consideration which results
in an increase in the number of the Registrant's outstanding shares of
Common Stock.

(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the
high and low selling prices per share of the Registrant's Common Stock
on May 27, 1999, as reported by the Nasdaq SmallCap Market.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Certain Documents by Reference

Endocare, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):

(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 filed with the SEC on March 31, 1999;

(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 filed with the SEC on May 17, 1999; and

(c) The Registrant's Registration Statement on Form 10-SB/A filed
with the SEC on January 5, 1996 pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), in
which there is described the terms, rights and provisions
applicable to the Registrant's outstanding Common Stock.

All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 (the "1934 Act") after the date of this Registration Statement and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any subsequently filed document which also is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.

Item 4. Description of Capital Stock

Inapplicable.

Item 5. Interests of Named Experts and Counsel

Inapplicable.

Item 6. Indemnification of Directors and Officers

Section 145 of the Delaware Corporation Law provides that a
Delaware corporation may indemnify any person against expenses, judgments, fines
and settlements actually and reasonably incurred by any such person in
connection with a threatened, pending or completed action, suit or proceeding in
which he is involved by reason of the fact that he is or was a director,
officer, employee or agent of such corporation, provided that (i) he acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation and (ii) with respect to any criminal action
or proceeding, he had no reasonable cause to believe his conduct was unlawful.
If the action or suit is by or in the name of the corporation, the corporation
may indemnify any such person against expenses actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect to any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation for negligence or
misconduct in the performance of his duty to the corporation, unless and only to
the extent that the Delaware Court

II-1
<PAGE> 3
of Chancery or the court in which the action or suit is brought determines upon
application that, despite the adjudication of liability but in view of all of
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.

The Company's Certificate of Incorporation provides that to the
fullest extent permitted by the Delaware Corporation Law, no director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director. The Certificate of
Incorporation also provides that no amendment or repeal of such provision shall
apply to or have any effect on the right to indemnification permitted thereunder
with respect to claims arising from acts or omissions occurring in whole or in
part before the effective date of such amendment or repeal, whether asserted
before or after such amendment or repeal.

The Company's Bylaws provide that the Company shall to the full extent
authorized by law, indemnify each of its directors and officers against expenses
incurred in connection with any proceeding arising by reason of the fact that
such person is or was an agent of the corporation.

The Registrant maintains a directors' and officers' liability insurance
policy that, subject to certain limitations, terms and conditions, will insure
the directors and officers of the Registrant against losses arising from
wrongful act (as defined by the policy) in their capacity as a director or
officer.

Item 7. Exemption from Registration Claimed

Inapplicable.

Item 8. Exhibits

<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statement on Form 10-SB/A, and
the exhibits thereto, which are incorporated herein by
reference pursuant to Item 3(c) of this Registration
Statement.

5 Opinion of Brobeck, Phleger & Harrison LLP.

23.1 Consent of KPMG LLP, Independent Auditors.

23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.

24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.

99.1 Endocare, Inc. 1995 Stock Plan (as amended and restated
through March 2, 1999).

99.2 Form of Stock Option Agreement.

99.3 Endocare, Inc. 1995 Director Option Plan (as amended and
restated through March 2, 1999).

99.4 Form of Stock Option Agreement (Non-Employee Director -
Initial Grant).

99.5 Form of Stock Option Agreement (Non-Employee Director -
Subsequent Grant).
</TABLE>

II-2
<PAGE> 4
Item 9. Undertakings.

A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement; (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act"),
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration Statement,
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement; provided,
however, that clauses (1)(i) and (1)(ii) shall not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the 1934 Act that are incorporated by reference into the
registration statement; (2) that for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold upon the termination of the 1995 Stock Plan or the 1995 Director Option
Plan.

B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

C. Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6
above, or otherwise the Registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the 1933 Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE> 5
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Irvine, State of California, on this 2nd day of
June, 1999.

ENDOCARE, INC.

By /s/ PAUL W. MIKUS
---------------------------------------
Paul W. Mikus
Chief Executive Officer and President

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

That the undersigned officers and directors of Endocare, Inc., a
Delaware corporation, do hereby constitute and appoint Paul W. Mikus and William
R. Hughes, the lawful attorneys and agents, with full power and authority to do
any and all acts and things and to execute any and all instruments which said
attorney and agent determines may be necessary or advisable or required to
enable said corporation to comply with the Securities Act of 1933, as amended,
and any rules or regulations or requirements of the Securities and Exchange
Commission in connection with this Registration Statement. Without limiting the
generality of the foregoing power and authority, the powers granted include the
power and authority to sign the names of the undersigned officers and directors
in the capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or any of them, shall do or cause to be done
by virtue hereof. This Power of Attorney may be signed in several counterparts.

IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ PAUL W. MIKUS Chief Executive Officer, President, June 2, 1999
- ----------------------- and Chairman of the Board
Paul W. Mikus (Principal Executive Officer)
</TABLE>

II-4
<PAGE> 6
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ WILLIAM R. HUGHES Senior Vice President and June 2, 1999
- ----------------------- Chief Financial Officer (Principal
William R. Hughes Financial and Accounting Officer)

/s/ PETER F. BERNARDONI Director June 2, 1999
- -----------------------
Peter F. Bernardoni

Director June _, 1999
- ------------------------
Robert F. Byrnes

Director June _, 1999
- ------------------------
Benjamin Gerson

/s/ ALAN L. KAGANOV Director June 2, 1999
- ------------------------
Alan L. Kaganov

/s/ MICHAEL J. STRAUSS Director June 2, 1999
- ------------------------
Michael J. Strauss
</TABLE>

II-5
<PAGE> 7

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

EXHIBITS

FORM S-8

UNDER

SECURITIES ACT OF 1933

ENDOCARE, INC.

<PAGE> 8
EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------ -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statement No. 000-21958 on Form 8-A,
and the exhibits thereto, which are incorporated herein by
reference pursuant to Item 3(b) of this Registration Statement.

5 Opinion of Brobeck, Phleger & Harrison LLP.

23.1 Consent of KPMG LLP, Independent Auditors.

23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.

24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.

99.1 Endocare, Inc. 1995 Stock Plan (as amended and restated through
March 2, 1999).

99.2 Form of Stock Option Agreement.

99.3 Endocare, Inc. 1995 Director Option Plan (as amended and restated
through March 2 1999).

99.4 Form of Stock Option Agreement (Non-Employee Director - Initial
Grant).

99.5 Form of Stock Option Agreement (Non-Employee Director -
Subsequent Grant).
</TABLE>

<PAGE> 1

EXHIBIT 5
OPINION OF BROBECK, PHLEGER & HARRISON LLP

June 2, 1999

Endocare, Inc.
7 Studebaker
Irvine, CA 92618

Re: Endocare, Inc. Registration Statement on Form S-8 for an
aggregate of 1,463,000 Shares of Common Stock

Ladies and Gentlemen:

We have acted as counsel to Endocare, Inc., a Delaware
corporation (the "Company"), in connection with the registration on Form S-8
(the "Registration Statement") under the Securities Act of 1933, as amended, of
an aggregate of an additional 1,463,000 shares of common stock (the "Common
Stock") and related stock options under (i) the Company's 1995 Stock Plan and
(ii) the 1995 Director Option Plan (together the "Plans").

This opinion is being furnished in accordance with the
requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.

We have reviewed the Company's charter documents and the
corporate proceedings taken by the Company in connection with the establishment
and amendment of the Plans. Based on such review, we are of the opinion that if,
as and when the shares of Common Stock are issued and sold (and the
consideration therefor received) pursuant to the provisions of the option
agreements or direct stock issuances duly authorized under the Plans and in
accordance with the Registration Statement, such shares will be duly authorized,
legally issued, fully paid and non-assessable.

We consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement.

This opinion letter is rendered as of the date first written
above and we disclaim any obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company, the Plans or the shares of Common Stock issuable under such Plans.

Very truly yours,

/s/ BROBECK, PHLEGER & HARRISON LLP
-----------------------------------
BROBECK, PHLEGER & HARRISON LLP

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Endocare, Inc.

We consent to the incorporation by reference in the registration statement on
Form S-8 of Endocare, Inc. of our report dated February 15, 1999, except as to
the second paragraph of Note 7, the fourth paragraph of Note 8, and Note 15,
which are as of March 10, 1999, March 26, 1999 and March 5, 1999, respectively,
relating to the balance sheets of Endocare, Inc. as of December 31, 1998 and
1997, and the related statements of operations, shareholders'/division equity
(deficiency) and cash flows for each of the years in the three-year period ended
December 31, 1998, and the related schedule, which report appears in the
December 31, 1998 annual report on Form 10-K of Endocare, Inc.

/s/ KPMG LLP
- ------------
KPMG LLP

Orange County, California
June 2, 1999

<PAGE> 1
EXHIBIT 99.1

ENDOCARE, INC.
1995 STOCK PLAN

(AS AMENDED AND RESTATED EFFECTIVE MARCH 2, 1999)

1. PURPOSES OF THE PLAN. The purposes of this Stock Plan are to:

(a) Attract and retain the best available personnel for positions
of substantial responsibility,

(b) Provide additional incentives to Employees and Consultants,
and

Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Committee at the time of grant.
Stock Purchase Rights may also be granted under the Plan.

2. DEFINITIONS. As used herein, the following definitions shall apply:

(a) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under federal and state corporate and
securities laws and the Code.

(b) "Board" means the Board of Directors of the Company.

(d) "Committee" means a committee appointed by the Board in
accordance with Section 4 of this Plan.

(e) "Common Stock" means the Common Stock of the Company.

(f) "Company" means Endocare, Inc., a Delaware corporation.

(g) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services in a non-employee
capacity and who is compensated for such services.

(h) "Continuous Status as an Employee, Consultant or Outside
Director" means that the employment, consulting or director relationship with
the Company, any Parent, or Subsidiary, is not interrupted or terminated.
Continuous Status as an Employee, Consultant or Outside Director shall not be
considered interrupted in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. A leave of absence
approved by the

<PAGE> 2
Company shall include sick leave, military leave, or any other personal leave
approved by an authorized representative of the Company. If reemployment upon
expiration of a leave of absence approved by the Company is not guaranteed by
statute or contract, at the end of the three (3)-month period measured from the
ninety-first (91st) day of such leave any Incentive Stock Option held by the
Participant shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option.

(i) "Director" means a member of the Board.

(j) "Disability" means total and permanent disability as defined
in Code Section 22(e)(3).

(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

(i) If the Common Stock is admitted to trading or listed
on a national securities exchange, Fair Market Value shall be the last
reported sale price regular way, or if no such reported sale takes place
on that day, the average of the last reported bid and ask prices regular
way, in either case on the principal national securities exchange on
which the Common Stock is admitted to trading or listed.

(ii) If not admitted to trading or listed on any national
securities exchange, Fair Market Value shall be the last sale price on
that day of the Common Stock reported on the Nasdaq National Market or
the Nasdaq SmallCap Market ("Nasdaq Stock Market") or, if no such
reported sale takes place on that day, the average of the closing bid
and ask prices on that day.

(iii) If not included on the Nasdaq Stock Market, Fair
Market Value shall be the average of the closing bid and ask prices of
the Common Stock on that day reported by the Nasdaq electronic bulletin
board, or any comparable system on that day.

(iv) If the Common Stock is not included on the Nasdaq
electronic bulletin board or any comparable system, Fair Market Value
shall be the closing bid and ask prices on that day as furnished by any
member of the National Association of Securities Dealers, Inc. selected
from time to time by the Company for that purpose.

2.
<PAGE> 3

(n) "Family Member" means 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.

(o) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.

(p) "Nonstatutory Stock Option" means an Option that is not
intended to qualify as an Incentive Stock Option.

(q) "Notice of Grant" means a written notice evidencing certain
terms and conditions of an individual Option or Stock Purchase Right grant. The
Notice of Grant is part of the Option Agreement or Restricted Stock Purchase
Agreement (whichever is applicable).

(r) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

(s) "Option" means a stock option granted pursuant to the Plan.

(t) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of
this Plan.

(u) "Optioned Stock" means the Common Stock subject to an Option
or Stock Purchase Right.

(v) "Optionee" means an Employee, Consultant or Outside Director
who holds an outstanding Option or Stock Purchase Right.

(w) "Outside Director" means a Director who is not an Employee.

(x) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

(y) "Plan" means this Endocare, Inc. 1995 Stock Plan.

(z) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 of this Plan.

3.
<PAGE> 4

(aa) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to Common Stock purchased under a Stock Purchase Right.
The Restricted Stock Purchase Agreement is subject to the terms and conditions
of this Plan.

(bb) "Rule 16b-3" means Rule 16b-3 under the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

(cc) "Section 16(b)" means Section 16(b) of the Exchange Act.

(dd) "Share" means a share of the Common Stock.

(ee) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of this Plan, as evidenced by a Restricted Stock
Purchase Agreement.

(ff) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.

3. STOCK SUBJECT TO THE PLAN.

(a) Subject to the provisions of Section 13 of this Plan, the
maximum aggregate number that may be issued under the Plan is three million
three hundred twelve thousand (3,312,000) Shares. The Shares may be authorized
but unissued, or reacquired Common Stock. Such share reserve includes (i) the
one million (1,000,000)-share increase authorized by the Board in April 1998,
and approved by the stockholders on June 4, 1998 at the 1998 Annual Meeting, and
(ii) three hundred twelve thousand (312,000) additional Shares added to the
reserve on January 4, 1999, pursuant to the automatic increase provision of
Section 3(b) below.

(b) The number of Shares available for issuance under the Plan
shall automatically increase on the first trading day of each calendar year
during the term of the Plan, beginning with the 1999 calendar year, by an amount
equal to three percent (3%) of the total number of shares of the Corporation's
Common Stock outstanding on the last trading day of the immediately preceding
calendar year, but in no event shall any such annual increase exceed five
hundred thousand (500,000) Shares.

(c) If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, the unpurchased Shares
which were subject thereto shall become available for future grant or sale under
the Plan (unless the Plan has terminated).

4. ADMINISTRATION OF THE PLAN.

(a) PROCEDURE.

(i) Multiple Administrative Bodies. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
(A) Directors, Officers who are not Directors, and as to (B) Employees
who are neither Directors nor Officers.

4.
<PAGE> 5
(ii) Administration With Respect to Directors and Officers
Subject to Section 16(b). With respect to Option or Stock Purchase Right
grants made to Employees who are also Officers or Directors subject to
Section 16(b) of the Exchange Act, the Plan shall be administered by (A)
the Board, if the Board may administer the Plan under Rule 16b-3 or (B)
a committee designated by the Board to administer the Plan, which
committee shall be constituted to comply with the rules under Rule
16b-3. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. The Board may
increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan. Additionally, to the extent
possible and advisable, the Committee shall be composed of "Outside
Directors" as that term is used in Section 162(m) of the Code.

(b) ADMINISTRATION WITH RESPECT TO OTHER PERSONS. With respect to
Option or Stock Purchase Right grants made to Employees or Consultants who are
neither Directors nor officers of the Company, the Plan shall be administered by
(A) the Board or (B) a committee designated by the Board, which committee shall
be constituted to satisfy Applicable Laws. Once appointed, such Committee shall
serve in its designated capacity until otherwise directed by the Board. The
Board may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by
Applicable Laws.

(c) POWERS OF THE COMMITTEE. Subject to the provisions of this
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Committee shall have the authority, in its
discretion to:

(i) Determine the Fair Market Value of the Common Stock in
accordance with Section 2(m) of this Plan;

(ii) Select the Employees, Consultants and Outside
Directors to whom Options and Stock Purchase Rights may be granted
hereunder;

(iii) Determine whether and to what extent Options and
Stock Purchase Rights or any combination thereof, are granted hereunder;

(iv) Determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;

(v) Approve forms of agreement for use under the Plan;

5.
<PAGE> 6

(vi) Determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder. Such terms
and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised
(which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the shares of Common
Stock relating thereto, based in each case on such factors as the
Committee, in its sole discretion, shall determine;

(vii) Construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

(viii) Prescribe, amend and rescind rules and procedures
relating to the Plan;

(ix) Modify or amend each Option or Stock Purchase Right
(subject to the limits of Section 16 of this Plan), including the
discretionary authority to extend the post-termination exercisability
period of Options longer than is otherwise provided for in the Plan;

(x) Authorize any person to execute on behalf of the
Company the Notice of Grant;

(xi) Determine the terms and restrictions applicable to
Options and Stock Purchase Rights and any Restricted Stock; and

(xii) Take all other actions deemed necessary or advisable
for administering the Plan.

(d) EFFECT OF COMMITTEE'S DECISION. The Committee's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.

5. ELIGIBILITY. Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Employees, Consultants and Outside Directors. Incentive Stock
Options may be granted only to Employees. If otherwise eligible, an Employee,
Consultant or Outside Director who has been granted an Option or Stock Purchase
Right may be granted additional Options or Stock Purchase Rights.

6. LIMITATIONS.

(a) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds one hundred
thousand dollars ($100,000), such Options shall be treated as Nonstatutory Stock

6.
<PAGE> 7

Options. For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.

(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
employment, consulting or director relationship with the Company, nor shall they
interfere in any way with the Optionees right or the Company's right to
terminate such employment, consulting or director relationship at any time, with
or without cause.

(i) No Participant shall be granted in any fiscal year of the
Company (commencing in fiscal year 1996) Options and Stock Purchase
Rights to purchase more than one hundred thousand (100,000) Shares.

(ii) In connection with his or her initial employment by the
Company or a Parent or Subsidiary, a Participant may be granted Options
and Stock Purchase Rights to purchase up to an additional one hundred
thousand (100,000) Shares which shall not count against the limit set
forth in Subsection (i) immediately above.

(iii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as
described in Section 13 of this Plan.

(d) In the event that the date of grant of an Option is not a
trading day, the exercise price per Share shall be the Fair Market Value on the
next trading day immediately following the date of grant of the Option.

7. TERM OF PLAN. The Plan became effective on October 31, 1995. It shall
continue in effect for a term of ten (10) years (October 30, 2005) unless
terminated earlier under Section 16 of this Plan. If the number of shares that
can be issued under the Plan and/or the class of individuals eligible to receive
Incentive Stock Options is changed, stockholder approval must again be obtained.

8. TERM OF OPTION. The term of each Option shall be stated in the Notice
of Grant. However, in the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Notice of Grant. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary (determined using
the constructive ownership rules of Section 424(d) of the Code), the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Notice of Grant.

7.
<PAGE> 8

9. OPTION EXERCISE PRICE AND CONSIDERATION.

(a) EXERCISE PRICE. The per Share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Committee, subject to the following limits:

(i) In the case of an Incentive Stock Option:

(A) Granted to an Employee who, at the time the
Incentive Stock option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price shall be no
less than one hundred ten percent (110%) of the Fair Market Value per
Share on the date of grant; and

(B) Granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise
price shall be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.

(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Committee, but in any
event shall not be less than eighty-five percent (85%) of the Fair
Market Value per Share on the date of grant.

(b) WAITING PERIOD AND EXERCISE DATES. At the time an Option is
granted, the Committee shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In so doing, the Committee may specify that an Option
may not be exercised until the completion of a service period.

(c) FORM OF CONSIDERATION. The Committee shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Committee shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist of:

(i) Cash;

(ii) Check;

(iii) Promissory note;

(iv) Other Shares which (A) have been owned by the Optionee for
more than six months on the date of surrender and (B) 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;

8.
<PAGE> 9

(v) Delivery of a properly executed exercise notice together with
such other documentation as the Committee and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the
Company of the sale or the loan proceeds required to pay the exercise
price;

(vi) Any combination of the foregoing methods of payment; or

(vii) Such other consideration and method of payment for the
issuance of Shares selected by the Board of Directors that is
permissible under Applicable Law.

10. EXERCISE OF OPTION.

(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Committee and set
forth in the Option Agreement.

(b) An Option may not be exercised for a fraction of a Share.

(c) An Option shall be deemed exercised when the Company receives
(i) written notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Committee and permitted by
the Option Agreement and the Plan. Shares issued upon exercise of an Option
shall be issued in the name of the Optionee or, if requested by the Optionee, in
the name of the Optionee and his or her spouse. Until the stock certificate
evidencing such Shares is issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock certificate
promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued.

(d) Exercising an Option in any manner shall decrease the number
of Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

(e) TERMINATION OF EMPLOYMENT, CONSULTING OR DIRECTOR
RELATIONSHIP. Upon termination of an Optionee's Continuous Status as an
Employee, Consultant or Director, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Notice of Grant, and only to the extent
that the Optionee was entitled to exercise it at the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Notice of Grant). In the absence of a specified time in the Notice of Grant,
the Option shall remain exercisable for three (3) months following the
Optionee's termination. In the case of an Incentive Stock Option, such period of
time for exercise shall not exceed three (3) months from the date of
termination. If, on the date of

9.
<PAGE> 10
termination, the Optionee is not entitled to exercise the Option for all the
Shares, then the Option shall immediately terminate with respect to the Shares
covered by the unexercisable portion of such Option, and those Shares shall
immediately revert to the Plan. If, after the date of Optionee's termination,
the Optionee does not, within the time specified in the Option, exercise his or
her Option for all the Shares for which that Option is exercisable on such
termination date, then the Option shall terminate with respect to those
remaining Shares, and such Shares shall revert to the Plan.

(f) Notwithstanding the above, in the event of an Optionee's
change in status from Consultant, Employee or Outside Director to another
classification an Optionee's Continuous Status as an Employee, Consultant or
Outside Director shall not automatically terminate solely as a result of such
change in status. However, in such event, an Incentive Stock Option held by the
Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option at the end of the three
(3)-month period measured from the day of such change in status.

(g) DISABILITY OF OPTIONEE. In the event that an Optionee's
Continuous Status as an Employee, Consultant or Outside Director terminates as a
result of the Optionee's Disability, the Optionee may exercise his or her Option
at any time within twelve (12) months from the date of such termination, but
only to the extent that the Optionee was entitled to exercise it at the date of
such termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee is not entitled to exercise the Optionee is not entitled to exercise
the Option for all the Shares, then the Option shall immediately terminate with
respect to the Shares covered by the unexercisable portion of such Option, and
those Shares shall immediately revert to the Plan. If, after the date of
Optionee's termination, the Optionee does not, within the time specified in the
Option, exercise his or her Option for all the Shares for which that Option is
exercisable on such termination date, then the Option shall terminate with
respect to those remaining Shares, and such Shares shall revert to the Plan.

(h) DEATH OF OPTIONEE. In the event of the death of an Optionee,
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate nor by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, at the time of death, the Optionee was not entitled to
exercise the Option for all the Shares, then the Option shall immediately
terminate with respect to the Shares covered by the unexercisable portion of
such Option, and those Shares shall immediately revert to the Plan. If, after
Optionee's death, the Optionee's estate or a person who acquired the right to
exercise the Option by bequest or inheritance does not, within the time
specified in the Option, exercise the Option for all the Shares for which that
Option is exercisable on the date of Optionee' death, then the Option shall
terminate with respect to those remaining Shares, and such Shares shall revert
to the Plan.

10.
<PAGE> 11
11. STOCK PURCHASE RIGHTS.

(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Committee determines
that it will offer a Stock Purchase Right under the Plan, it shall advise the
Optionee in writing, by means of a Notice of Grant, of the terms, conditions and
restrictions related to the offer, including the number of Shares that the
Optionee shall be entitled to purchase, the price to be paid, and the time
within which the Optionee must accept such offer. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Committee.

(b) REPURCHASE OPTION. Unless the Committee determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
Optionee's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
Optionee and may be paid by cancellation of any indebtedness of the Optionee to
the Company. The repurchase option shall lapse at the rate set forth in the
Restricted Stock Purchase Agreement.

(c) OTHER PROVISIONS. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Committee in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each Optionee.

(d) RIGHTS AS A STOCKHOLDER. Once the Stock Purchase Right is
exercised, the Optionee shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised.

12. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, Incentive Stock Options shall be exercisable only by the Optionee and
shall not be assignable or transferable other than by will or by the laws of
descent and distribution following the Optionee's death. Nonstatutory Options
shall be subject to the same restrictions, except that a Nonstatutory Option
may, in connection with the Optionee's estate plan, be assigned in whole or in
part during the Optionee's lifetime to one or more Family Members of the
Optionee or to a trust established exclusively for one or more such Family
Members. The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to the assignment. The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Committee may deem appropriate.

11.
<PAGE> 12

13. ADJUSTMENTS.

(a) 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:

(i) The maximum number and/or kind of Shares that may be granted
under this Plan;

(ii) The maximum number and/or kind of Shares for which any
Participant may be granted Options and Stock Purchase Rights per fiscal
year;

(iii) The number and/or kind of Shares covered by each
outstanding Option or Stock Purchase Right; and

(iv) The exercise price per Share in respect of each outstanding
Option or Stock Purchase Right.

(b) The Committee may also make such adjustments in the event of
a spin-off or other distribution of Company assets to stockholders (other than
normal cash dividends).

14. EXTRAORDINARY EVENTS.

(a) The Plan as well as each outstanding Option and Stock
Purchase Right shall terminate upon the occurrence of any of the following
events ("Extraordinary Events"):

(i) The dissolution, liquidation, or sale of all (or
substantially all) of the assets of the Company;

(ii) Any reorganization, merger, or consolidation in which the
Company does not survive;

(iii) The acquisition by any person or group (as defined in
Section 13D of the Exchange Act) of beneficial ownership of more than
fifty percent (50%) of the Company Stock; or

(iv) Any reorganization, merger, or consolidation in which the
Company does survive but the Shares outstanding immediately preceding
the transaction are converted by virtue of the transaction into other
property, whether in the form of securities, cash, or otherwise.
However, in no case will an Extraordinary Event be deemed to have
occurred as a result of a sale of stock to the Company or to a holding
company established by the Company.

12.
<PAGE> 13

(b) If an Extraordinary Event occurs, all Options shall become
fully exercisable and all limitations, restrictions and repurchase rights
applicable to any outstanding Restricted Stock shall terminate, and the
Restricted Stock shall immediately vest upon the occurrence of such
Extraordinary Event. Each Participant shall have the right to exercise any
unexpired Option(s) and/or Stock Purchase Right prior to the Extraordinary
Event, however, the effectiveness of any such exercise shall be:

(i) Conditioned upon:

(A) The Extraordinary Event actually occurring; and

(B) The Committee's receipt of the notice of exercise
within the time period established by the Committee; and

(ii) Delayed until immediately prior to the Extraordinary
Event.

15. DATE OF GRANT. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Committee makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Committee. The Notice of Grant shall be provided to
each Optionee within a reasonable time after the date of such grant.

16. AMENDMENT AND TERMINATION.

(a) AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate the Plan.

(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan, Option, or Stock Purchase Right shall
impair the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Committee.

17. CONDITIONS UPON ISSUANCE OF SHARES.

(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act as well as the rules and
regulations promulgated thereunder, Applicable Laws, and the requirements of any
stock exchange or quotation system upon which the Shares may then be listed or
quoted, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.

(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.

13.
<PAGE> 14
18. LIABILITY OF COMPANY.

(a) INABILITY TO OBTAIN AUTHORITY. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

(b) GRANTS EXCEEDING ALLOTTED SHARES. If the Optioned Stock
covered by an Option or Stock Purchase Right exceeds, as of the date of grant,
the number of Shares which may be issued under the Plan without additional
stockholder approval, such Option or Stock Purchase Right shall be void with
respect to such excess Optioned Stock, unless stockholder approval of an
amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained.

19. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

14.

<PAGE> 1
EXHIBIT 99.2

ENDOCARE, INC.

1995 STOCK PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

I. NOTICE OF STOCK OPTION GRANT

[Name]

- --------------------------------

You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

Grant Number -----------------------------------------

Date of Grant -----------------------------------------

Vesting Commencement Date -----------------------------------------

Exercise Price Per Share -----------------------------------------

Total Number of Shares Granted -----------------------------------------

Total Exercise Price -----------------------------------------

Type of Option Incentive Stock Option
-----
Nonstatutory Stock Option
-----

Term/Expiration Date -----------------------------------------

-----------------------------------------

Vesting Schedule:

This Option may be exercised, in whole or in part, in accordance with
the following schedule:

25% of the Shares subject to the Option shall vest upon Optionee's
completion of twelve (12) months of Service measured from the Vesting
Commencement Date, and an additional 1/48 of the Shares shall vest upon
Optionee's completion of each additional month of Service thereafter.

<PAGE> 2
For purposes of this Agreement, "Service" shall mean the Optionee's
performance of services for the Company (or any Parent or Subsidiary) in the
capacity of an Employee, Director or Consultant.

Termination Period:

This Option may be exercised for sixty (60) days after termination of
the Optionee's Service for any reason other than death or Disability. However,
upon the death or Disability of the Optionee, this Option may be exercised for
such longer period as provided in the Plan. In no event shall this Option be
exercised later than the Term/Expiration Date specified above.

II. AGREEMENT

1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").

2. Exercise of Option.

(a) Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, Disability or other termination of Optionee's Service, the
exercisability of the Option is governed by the applicable provisions of the
Plan and this Option Agreement.

(b) Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.

2.
<PAGE> 3
No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with all relevant provisions of law and the
requirements of any stock exchange or quotation service upon which the Shares
are then listed. Assuming such compliance, for income tax purposes the Exercised
Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:

(a) cash; or

(b) check; or

(c) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price; or

(d) 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 Exercised Shares; or

(e) to the extent expressly authorized by the Plan Administrator,
delivery of Optionee's promissory note (the "Note") in the form attached hereto
as Exhibit C, in the amount of the aggregate Exercise Price of the Exercised
Shares together with the execution and delivery by the Optionee of the Security
Agreement attached hereto as Exhibit B. The Note shall bear interest at a rate
no less than the "applicable federal rate" prescribed under the Code and its
regulations at time of purchase, and shall be secured by a pledge of the Shares
purchased by the Note pursuant to the Security Agreement.

4. Limited Transferability of Option. This Option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee. However, if this Option is designated a
Non-Statutory Option in Part I of this Agreement, then 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 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 immediately prior to such assignment.

For purposes of this Section 4, 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

3.
<PAGE> 4
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.

5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

6. Tax Consequences. Some of the federal and Delaware tax consequences
relating to this Option, as of the date of this Option, are set forth below.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.

(a) Exercising the Option.

(i) Nonstatutory Stock Option. The Optionee may incur
regular federal tax liability upon exercise of a NSO. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

(ii) Incentive Stock Option. If this Option qualifies as
an ISO, the Optionee will have no regular federal income tax liability upon its
exercise, although the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price will be
treated as an adjustment to alternative minimum taxable income for federal tax
purposes and may subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee undergoes a change of status from
Employee to Consultant or Outside Director, any Incentive Stock Option of the
Optionee that remains unexercised three (3) months following such change in
status shall cease to qualify as an Incentive Stock Option and will be treated
for tax purposes as a Nonstatutory Stock Option.

(b) Disposition of Shares.

(i) NSO. If the Optionee holds NSO Shares for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.

4.
<PAGE> 5

(ii) ISO. If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price.

(c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by Delaware law except for that body of law
pertaining to conflict of laws.

By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

OPTIONEE: ENDOCARE, INC, Inc.

- -------------------------
Signature By:
----------------------------
Title: CFO & Corporate Secretary
Address:

- -------------------------

5.
<PAGE> 6
CONSENT OF SPOUSE

The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement. In consideration of
the Company's granting his or her spouse the right to purchase Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.

------------------------------------
Spouse of Optionee

<PAGE> 1
EXHIBIT 99.3

ENDOCARE, INC.
1995 DIRECTOR OPTION PLAN

(AS AMENDED AND RESTATED EFFECTIVE MARCH 2, 1999)

1. PURPOSES OF THE PLAN. The purposes of this 1995 Director Option Plan
are to attract and retain the best available personnel for service as Outside
Directors (as defined in this Plan) of the Company, to provide additional
incentives to the Outside Directors of the Company to serve as Directors, and to
encourage their continued service on the Board.

All options granted hereunder shall be nonstatutory stock options.

2. DEFINITIONS. As used herein, the following definitions shall apply:

(a) "Board" means the Board of Directors of the Company.

(b) "Code" means the Internal Revenue Code of 1986, as amended.

(d) "Company" means Endocare, Inc., a Delaware corporation.

(e) "Director" means a member of the Board.

(f) "Employee" means any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.

(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

(h) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

<PAGE> 2
(iii) If not listed on the Nasdaq Stock Market, Fair
Market Value shall be the average of the closing bid and ask prices of
the Common Stock on that day reported by the Nasdaq electronic bulletin
board, or any comparable system on that day.

(i) "Family Member" means 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.

(j) "Inside Director" means a Director who is an Employee.

(k) "Option" means a stock option granted pursuant to the Plan.

(l) "Optioned Stock" means the Common Stock subject to an Option.

(m) "Optionee" means a Director who holds an Option.

(n) "Outside Director" means a Director who is not an Employee.

(o) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

(p) "Plan" means this 1995 Director Option Plan.

(q) "Share" means a share of the Common Stock.

(r) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

(s) "Trading Day" shall mean a day on which national stock
exchanges and the NASDAQ Stock Market are open for trading.

2
<PAGE> 3
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11 of
this Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is three hundred thousand (300,000) Shares of Common Stock. Such
share reserve includes the 150,000-share increase authorized by the Board in
April 1998, and approved by the stockholders on June 4, 1998 at the 1998 Annual
Meeting. The Shares authorized for issuance under the Plan may be drawn from
authorized but unissued, or reacquired, shares of Common Stock.

If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated).

4. ADMINISTRATION AND GRANTS OF OPTIONS UNDER THE PLAN. All grants of
Options to Outside Directors under this Plan shall be automatic and
nondiscretionary and shall be made strictly in accordance with the following
provisions:

(a) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.

(b) Each Outside Director shall be automatically granted an
Option to purchase twenty thousand (20,000) Shares (the "First Option") on the
date on which such person first becomes an Outside Director, whether through
election by the stockholders of the Company or appointed by the Board to fill a
vacancy. However, an Inside Director who ceases to be an Inside Director but who
remains a Director shall not receive a First Option.

(c) Each Outside Director shall be automatically granted an
Option to purchase five thousand (5,000) Shares (a "Subsequent Option") on
January 1 of each year provided he or she is then an Outside Director and if as
of such date, he or she shall have served on the Board for at least the
preceding six (6) months.

(d) The terms of a First Option granted hereunder shall be as
follows:

(i) The term of the First Option shall be ten (10) years.

(ii) The First Option shall be exercisable while the
Outside Director remains a Director of the Company, and as set forth in
Sections 9 and 12 of this Plan.

(iii) The exercise price per Share shall be one hundred
percent (100%) of the Fair Market Value per Share on the date of grant
of the First Option. In the event that the date of grant of the First
Option is not a Trading Day, the exercise price per Share shall be the
Fair Market Value on the next Trading Day immediately following the date
of grant of the First Option.

3
<PAGE> 4

(iv) The First Option shall become exercisable and vest
with respect to ten thousand (10,000) 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 ten thousand (10,000) 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.

(e) The terms of a Subsequent Option granted hereunder shall be
as follows:

(i) The term of the Subsequent Option shall be ten (10)
years.

(ii) The Subsequent Option shall be exercisable while the
Outside Director remains a Director of the Company, and as set forth in
Sections 9 and 12 of this Plan.

(iii) The exercise price per Share shall be one hundred
percent (100%) of the Fair Market Value per Share on the date of grant
of the Subsequent Option. In the event that the date of grant of the
Subsequent Option is not a Trading Day, the exercise price per Share
shall be the Fair Market Value on the next Trading Day immediately
following the date of grant of the Subsequent Option.

(iv) Subject to Section 12 of this Plan, the Subsequent
Option shall become fully exercisable and vest on the first anniversary
of its date of grant, provided the Outside Director continues as an
Outside Director through such date.

(f) In the event that any Option granted under the Plan would
cause the number of Shares subject to outstanding Options plus the number of
Shares previously purchased under Options to exceed the number of Shares
available under the Plan, then the remaining Shares available for Option grants
shall be granted under Options to the Outside Directors on a pro rata basis. No
further grants shall be made until such time, if any, as additional Shares
become available for grant under the Plan through action of the Board or the
stockholders to increase the number of Shares which may be issued under the Plan
or through cancellation or expiration of Options previously granted hereunder.

(g) If stockholder approval of this Plan, as amended and
restated, is obtained, all outstanding Options will be treated, effective as of
the date of such stockholder approval, as if they had been issued under this
Plan, as so amended and restated.

5. ELIGIBILITY. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4 of this Plan.

6. NO CREATION OF ADDITIONAL RIGHTS. The Plan shall not confer upon any
Optionee any right with respect to continuation of service as a Director or
nomination to serve as a Director, nor shall it interfere in any way with any
rights which the Director or the Company may have to terminate the Director's
relationship with the Company at any time.

4
<PAGE> 5

7. TERM OF PLAN. The Plan became effective on October 31, 1995. It shall
continue in effect for a term of ten (10) years (October 30, 2005) unless sooner
terminated under Section 13 of this Plan.

8. FORM OF CONSIDERATION. The consideration to be paid for the Shares to
be issued upon exercise of an Option, including the method of payment, shall
consist of:

(a) Cash;

(b) Check;

(c) Other Shares which (A) have been owned by the Optionee for
more than six (6) months on the date of surrender, and (B) 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;

(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 delivery to the Company of the
sale or loan proceeds required to pay the exercise price;

(e) Any combination of the foregoing methods of payment; or

(f) Such other consideration and method of payment for the
issuance of Shares selected by the Board of Directors that is permissible under
Applicable Law.

9. EXERCISE OF OPTION. Subject to Section 12 of this Plan, the following
rules shall apply regarding the exercise of Options.

(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted under this Plan shall be exercisable at such times as are set forth in
Section 4 of this Plan.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8 of this Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued.

5
<PAGE> 6
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

(b) Termination of Continuous Status as a Director. In the event
an Optionee's status as a Director terminates (other than upon the Optionee's
death or total and permanent disability (as defined in Section 22(e)(3) of the
Code)), the Optionee may exercise his or her Option, but only within three (3)
months following the date of such termination and only to the extent that the
Optionee was entitled to exercise it on the date of such termination (but in no
event later than the expiration of its ten (10) year term). To the extent that
the Optionee was not entitled to exercise an Option for one or more Shares on
the date of such termination, the Option shall immediately terminate and cease
to be outstanding with respect to those Shares. To the extent that the Optionee
does not, within the time period specified in the Option, exercise such Option
for any Shares for which the Option is exercisable on the date of his or her
termination, the Option shall terminate with respect to those Shares upon the
expiration of such time period.

(c) Disability of Optionee. In the event Optionee's status as a
Director terminates as a result of total and permanent disability (as defined in
Section 22(e)(3) of the Code), the Optionee may exercise his or her Option, but
only within twelve (12) months following the date of such termination, and only
to the extent that the Optionee was entitled to exercise it on the date of such
termination (but in no event later than the expiration of its ten (10) year
term). To the extent that the Optionee was not entitled to exercise an Option
for one or more Shares on the date of such termination, the Option shall
immediately terminate and cease to be outstanding with respect to those Shares.
To the extent that the Optionee does not, within the time period specified in
the Option, exercise such Option for any Shares for which the Option is
exercisable on the date of such termination, the Option shall terminate with
respect to those Shares upon the expiration of such period.

(d) Death of Optionee. In the event of an Optionee's death, the
Optionee's estate or a person who acquires the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within twelve (12)
months following the date of death, and only to the extent that the Optionee was
entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
entitled to exercise an Option for one or more Shares on the date of death, the
Option shall immediately terminate and cease to be outstanding with respect to
those Shares. To the extent that the Optionee's estate or a person who acquired
the right to exercise such Option does not, within the time period specified in
the Option, exercise such Option for any Shares for which the Option is
exercisable on the date of Optionee's death, the Option shall terminate with
respect to those Shares upon the expiration of such period.

10. LIMITED TRANSFERABILITY. An 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

6
<PAGE> 7
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the Option immediately prior to such assignment. Should the
Optionee die while holding the Option, then the Option shall be transferred in
accordance with Optionee's will or the laws of descent and distribution.

11. ADJUSTMENTS.

(i) The maximum number and/or kind of Shares may be
granted under this Plan;

(ii) The number and/or kind of Shares covered by each
outstanding Option;

(iii) The exercise price per Share in respect of each
outstanding Option; and

(iv) The number and/or kind of Shares subject to each
First Option and Subsequent Option granted after such change.

(b) The Committee may also make such adjustments in the event of
a spin-off or other distribution of Company assets to stockholders (other than
normal cash dividends).

12. EXTRAORDINARY EVENTS

(a) The Plan and each outstanding Option shall terminate upon the
occurrence of any of the following events ("Extraordinary Events"):

(i) The dissolution, liquidation, or sale of all (or
substantially all) of the assets of the Company;

(ii) Any reorganization, merger, or consolidation in which
the Company does not survive;

(iii) The acquisition by any person or group (as defined
in Section 13d of the Exchange Act) of beneficial ownership of more than
fifty percent (50%) of the Company Stock; or

However, in no case will an Extraordinary Event be deemed to have
occurred as a result of a sale of stock to the Company or to a holding company
established by the Company.

7
<PAGE> 8

(b) If an Extraordinary Event occurs, all Options shall become
fully exercisable. Each Participant shall have the right to exercise any
unexpired Option(s) for fully-vested shares prior to the Extraordinary Event.
However, the effectiveness of any such exercise shall be:

(i) Conditioned upon:

(A) The Extraordinary Event actually occurring; and

(B) The Committee's receipt of the notice of exercise
within the time period established by the Committee; and

(ii) Delayed until immediately prior to the Extraordinary
Event.

13. AMENDMENT AND TERMINATION. The Board may at any time amend, alter,
suspend, or terminate the Plan, but no amendment, alteration, suspension, or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent.

14. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4 of this Plan.

15. CONDITIONS UPON ISSUANCE OF SHARES.

(a) Shares shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, state securities
laws, and the requirements of any stock exchange upon which the Shares may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

(b) As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the previously mentioned relevant provisions of law.

(c) Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

16. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

8
<PAGE> 9

17. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Committee shall approve.

<PAGE> 1
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.

<PAGE> 2

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

2
<PAGE> 3
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.

3
<PAGE> 4

13. AMENDMENTS. This Option may be amended at any time with the consent
of the Company and Optionee.

ENDOcare, INC.
a Delaware corporation

By:
--------------------------------------
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

4
<PAGE> 5
EXHIBIT A
OUTSIDE DIRECTOR FIRST OPTION EXERCISE NOTICE

ENDOcare, Inc.
7 Studebaker
Irvine, California 92618
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: _________________

<PAGE> 6
EXHIBIT B
ENDOCARE, INC. 1995 DIRECTOR OPTION PLAN

<PAGE> 1
EXHIBIT 99.5

ENDOCARE, INC.
OUTSIDE DIRECTOR SUBSEQUENT OPTION AGREEMENT

ENDOcare, Inc., a Delaware corporation (the "Company"), has granted to
_____________________________ (the "Optionee"), an option to purchase a total of
five thousand (5,000) 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.

2. DATE OF GRANT. The date of grant of this Option is January 1, 199__,
which is at least six (6) months after 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 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 fully exercisable on the
first anniversary of its grant if Optionee continues as an
Outside Director through such date, and may become exercisable
earlier 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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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 s, 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 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.

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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.

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.

13. AMENDMENTS. This Option may be amended at any time with the consent
of the Company and Optionee.

ENDOcare, INC.
a Delaware corporation

By:______________________________________
Title: CEO & Chairman

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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
Irvine, California 92618
Attention: Corporate Secretary

2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Agreement.

Optionee: ENDOcare, Inc.

Signature:_______________________ By:______________________________________

Print Name:______________________ Its:_____________________________________

Address: _______________________
_________________________________
Dated:___________________
Dated:______________

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EXHIBIT B
ENDOCARE, INC. 1995 DIRECTOR OPTION PLAN