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                                                                    EXHIBIT 10.2

                    ENDOCARE, INC. 1995 DIRECTOR OPTION PLAN

         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.

            (c) "COMMON STOCK" means the Common Stock of the Company.

            (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:

                (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.

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                (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.

                (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.

            (i) "INSIDE DIRECTOR" means a Director who is an Employee.

            (j) "OPTION" means a stock option granted pursuant to the Plan.

            (k) "OPTIONED STOCK" means the Common Stock subject to an Option.

            (l) "OPTIONEE" means a Director who holds an Option.

            (m) "OUTSIDE DIRECTOR" means a Director who is not an Employee.

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

            (o) "PLAN" means this 1995 Director Option Plan.

            (p) "SHARE" means a share of the Common Stock.

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

            (r) "TRADING DAY" shall mean a day on which national stock exchanges
         and the NASDAQ Stock Market are open for trading.

         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 one hundred fifty thousand (150,000) Shares of Common
Stock. The Shares may be authorized but unissued, or reacquired 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).


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         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 ten thousand (10,000) Shares (the "First Option") on the
         date on which the later of the following events occurs: (i) the
         effective date of this Plan, as determined in accordance with Section 7
         of this Plan, or (ii) 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; provided, however that the exercise price per
            Share shall be one hundred ten percent (110%) of the Fair Market
            Value per Share on the date of grant of the First Option if the
            Optionee, at the time the First Option is granted, owns stock
            possessing more than ten percent (10%) of the total combined voting
            power of all classes of stock of the Company or any Parent or
            Subsidiary. 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.

                (iv)  The First Option shall be immediately exercisable.

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


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         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; provided, however that the exercise price per
            Share shall be one hundred ten percent (110%) of the Fair Market
            Value per Share on the date of grant of the Subsequent Option if the
            Optionee, at the time the Subsequent Option is granted, owns stock
            possessing more than ten percent (10%) of the total combined voting
            power of all classes of stock of the Company or any Parent or
            Subsidiary. 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 on the first anniversary of its date
            of grant.

            (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.

            (h) Notwithstanding anything herein to the contrary, all Options
         shall vest with respect to at least 20% of the total number of Shares
         subject to the Option per year over a period of not longer than five
         years from the date the Option is granted.

         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.

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         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.

         7. TERM OF PLAN. The Plan became effective on October 31, 1995. It
shall continue in effect for a term of ten (10) (October 30, 2005) years 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:

            (i)   Cash;

            (ii)  Check;

            (iii) 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;

            (iv)  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;

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

            (vi)  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


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         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.

            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 on the date of such
         termination, or to the extent that the Optionee does not exercise the
         full amount of such Option (to the extent otherwise so entitled) within
         the time specified in the Option, the Option shall terminate.

            (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 on the date of
         termination, or if he or she does not exercise the full amount of such
         Option (to the extent otherwise so entitled) within the time specified
         in the Option, the Option shall terminate.

            (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 on the date of death, or to the extent that the Optionee's
         estate or a person who acquired the right to exercise such Option does
         not exercise the full amount of such Option (to the extent otherwise so
         entitled) within the time specified in the Option, the Option shall


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         terminate.

         10. NON-TRANSFERABILITY OF OPTIONS. The Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.

         11. 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 number and/or kind of Shares covered by each
            outstanding Option;

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

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

            (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

                (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. 

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         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.

            (b) If an Extraordinary Event occurs, all Options shall become fully
         exercisable. Each Participant shall have the right to exercise any
         unexpired Option(s) 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 


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         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.

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

         18. FINANCIAL STATEMENTS. Each Optionee shall receive financial
statements of the Company at least annually.


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