Exhibit 10.89


 


Prospect Medical Holdings, Inc.


2008 Omnibus Equity
Incentive Plan


 


Restricted Stock Award Agreement


 


General Terms and Conditions


 


WHEREAS,
the Company has adopted the Plan (as defined below), the terms of which are
hereby incorporated by reference and made a part of this Agreement; and


 


WHEREAS,
the Committee has determined that it would be in the best interests of the
Company and its stockholders to grant the Shares of Restricted Stock provided
for herein to the Participant pursuant to the Plan and the terms set forth
herein.


 


NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth, the
parties agree as follows:


 


1.             Definitions. Whenever the
following terms are used in this Agreement, they shall have the meanings set forth
below.  Capitalized terms not otherwise
defined herein shall have the same meanings as in the Plan.


 


(a)           “Cause”
includes (and is not limited to) dishonesty with respect to the Company or any
Affiliate, insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, and conduct substantially
prejudicial to the business of the Company or any Subsidiary.  The determination of the Committee as to the
existence of “Cause” will be conclusive on the Participant and the Company.


 


(b)           “Disability”
means, “Disability” as defined in an employment agreement between the Company
or any of its Affiliates and the Participant or, if not defined therein or if
there shall be no such agreement, “disability” of the Participant shall have
the meaning ascribed to such term in the Plan.


 


(c)           “Good Reason”
means (i) a breach by the Company or any Subsidiary of any employment or
consulting agreement to which the Participant is a party and (ii) following
a Change in Control, (x) the failure of the Company to pay or cause to be
paid the Participant’s base salary or annual bonus when due or (y) any
substantial and sustained diminution in the Participant’s authority or
responsibilities materially inconsistent with the Participant’s position;
provided that either of the events described in clauses (x) and (y) will
constitute Good Reason only if the Company fails to cure such event within 30
days after receipt from the Participant of written notice of the event which
constitutes Good Reason; provided, further, that “Good Reason” will cease to
exist for an event on the sixtieth (60th) day following the later of its
occurrence or the Participant’s knowledge thereof, unless the Participant has
given the Company written notice of his or her termination of employment for
Good Reason prior to such date.


 


(d)           “Plan”
means the Prospect Medical Holdings, Inc. 2008 Omnibus Equity Incentive
Plan, as the same may be amended, supplemented or modified from time to time.


 


(c)           “Restriction
Period” means the period set forth in the Notice (as defined below).


 

















 


(f)            “Vesting Date”
means each vesting date set forth in the Notice.


 


2.             Grant of Shares. The Company
hereby grants to the Participant (the “Award”), on the
terms and conditions hereinafter set forth, the number of Shares (the “Restricted Shares”) set forth on the Notice of Grant of
Restricted Stock (the “Notice”). Such
Shares shall cease to be considered Restricted Shares once the Shares have
vested pursuant to Section 5 of this Agreement.


 


3.             Restricted
Shares. The Restricted Shares will be represented by a Share certificate, or
other evidence of ownership (a “stock certificate”),
registered in the name of the Participant and will constitute issued and
outstanding Shares for all corporate purposes. 
Each stock certificate will be issued bearing a restrictive legend in
substantially the form as follows:


 


“The shares represented by
this certificate are subject to the restrictions, terms and conditions
(including forfeiture and restrictions against transfer) contained in the Plan
and the Agreement) between the registered holder hereof and Prospect Medical
Holdings, Inc.  Copies of the Plan
and Agreement are on file in the Office of the Secretary of Prospect Medical
Holdings, Inc.”


 


4.             Restriction Period; Rights of
Participant; Custody of Stock Certificates; and Retained Distributions. Until the end of the
Restriction Period with respect to each portion of the Award, the Participant:


 


(a)           will not have the right to
vote the Restricted Shares registered in his or her name unless such voting
rights are required by applicable law; and


 


(b)           will not be entitled to take
possession of the stock certificate(s) representing the Restricted Shares
covered by that portion of the Award; and


 


(c)           may not sell, transfer,
encumber or otherwise dispose of the Restricted Shares covered by that portion
of the Award; and


 


(d)           will not receive
distributions made or declared with respect to the Restricted Shares covered by
that portion of the Award which the Board or the Committee shall in its sole
discretion designate as retained distributions (“Retained
Distributions”) if such distributions are required by law.  Retained Distributions will not bear interest
or be segregated in a separate account and will be subject to the same
restrictions as the Restricted Shares to which they relate.


 


During
the Restriction Period with respect to each portion of the Award, the
Participant will generally be entitled to exercise all other rights, powers and
privileges of a holder of a Share, not otherwise limited, restricted or
eliminated by this paragraph 4.


 


5.             Vesting and
Delivery of Vested Securities. Subject to the terms and
provisions of the Plan and this Agreement (and any Performance Vesting Terms
set forth in Attachment A hereto), on each Vesting Date with respect to
the Award, all of the Restricted Shares and the Retained Distributions, if any,
covered by the portion of the Award related to such Vesting Date shall 


 


2

















 


become unconditionally vested. Except as otherwise provided in
paragraphs 7 and 8, the vesting of such Restricted Shares, and any Retained
Distributions relating thereto shall occur only if the Performance Vesting
Terms have been met and the Participant has continued in Employment of the
Company or any of its Affiliates on the Vesting Date and has continuously been
so employed since the Date of Grant (as defined in the Notice).


 


Reasonably promptly following the Participant’s
satisfaction of all requirements under paragraph 10 hereof, after Restricted
Shares and Retained Distributions vest, the Company will issue and deliver to
the Participant new Share certificates or other evidence of ownership of the
vested securities, registered in the name of the Participant or, if deceased,
his or her legatees, personal representatives or distributees without the
legend set forth in paragraph 3 of this Agreement.


 


6.             Power of
Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the sole purpose of carrying out the provisions of this
Agreement and taking any action and executing any instruments which such
attorney-in-fact may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with
an interest.  The Company as
attorney-in-fact for the Participant may in the name and stead of the
Participant, make and execute all conveyances, assignments and transfers
(including to the Company) of the Restricted Shares and Retained Distributions
relating thereto held by the Company during the Restriction Period and the
Participant hereby ratifies and confirms all that the Company, as said
attorney-in-fact, shall do by virtue hereof, provided that the foregoing shall
be solely for the purpose of carrying out the provisions of this
Agreement.  Nevertheless, the Participant
shall, if so requested by the Company, execute and deliver to the Company all
such instruments as may, in the reasonable judgment of the Company, be
advisable for the purpose.


 


7.             Termination of
Employment.


 


(a)           If the Participant’s
Employment with the Company and its Affiliates is (i) terminated by the
Participant for any reason other than those described in clauses (b) and (c) below
prior to the Vesting Date with respect to any portion of the Award, then the
Restricted Shares covered by any such portion of the Award and all Retained
Distributions relating thereto shall be completely forfeited on the date of any
such termination, unless otherwise provided in an employment agreement between
the Participant and the Company or a Subsidiary.


 


(b)           If the Participant’s
Employment terminates as a result of his or her (i) death or (ii) Disability,
then the Restricted Shares for which a Vesting Date has not yet occurred and
all Retained Distributions relating thereto shall fully vest on the date of any
such termination.


 


(c)           If the Participant’s
Employment is terminated by the Company and its Affiliates for any reason other
than for Cause (unless such termination is due to death or Disability), then a
pro rata portion of the Restricted Shares that would vest on the next Vesting
Date, and any Retained Distributions relating thereto, shall become vested as
follows:


 


(x)            the number of Restricted Shares covered by
the portion of the Award that would vest on the next Vesting Date multiplied
by;


 


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(y)           a fraction, the numerator of which shall be
the number of days from June 14, 2008 through the date of such
termination, and the denominator of which shall be the number of days from June 14,
2008 through the next succeeding Vesting Date.


 


If the product of (x) and (y) results in a
fractional share, such fractional share shall be rounded to the next higher
whole share.


 


The Restricted Shares and any Retained Distributions
related thereto  that have not vested
shall be completely forfeited on the date of any such termination.


 


For purposes of this paragraph 7, a temporary leave
of absence shall not constitute a termination of Employment or a failure to be
continuously employed by the Company or any Affiliate regardless of the
Participant’s payroll status during such leave of absence if such leave of
absence is approved in writing by the Company or any Affiliate, subject to the
other terms and conditions of this Agreement and the Plan.


 


In the event the Participant’s Employment with the
Company or any of its Affiliates is terminated, the Participant shall have no
claim against the Company with respect to the Restricted Shares and related
Retained Distributions, if any, other than as set forth in this paragraph 7,
the provisions of this paragraph 7 being the sole remedy of the Participant
with respect thereto.


 


8.             Acceleration of
Vesting Date. In the event a Change in Control, subject to
paragraph 9, has occurred, the Committee, in its discretion, may elect to accelerate the vesting
of any or all unvested Awards as of the date of such Change in Control.  Unless the Committee establishes terms to the
contrary, upon such discretionary acceleration the Award will vest in full upon
the earlier of (i) the expiration of the one-year period immediately
following the Change in Control, provided the Participant’s Employment with the
Company and its Affiliates has not terminated, (ii) the original Vesting
Date with respect to each portion of the Award, or (iii) the termination
of the Participant’s Employment by the Company or any of its Affiliates (A) by
the Company other than for Cause (unless such termination is due to death or
Disability) or (B) by the Participant for Good Reason.  In the event of any such vesting as described
in clauses (i) and (iii) of the preceding sentence, the date
described in such clauses shall be treated as the Vesting Date.


 


9.             Limitation on
Acceleration. Notwithstanding any provision to the contrary in
the Plan or this Agreement, if the Payment (as hereinafter defined) due to the
Participant hereunder as a result of the acceleration of vesting of the
Restricted Shares pursuant to paragraph 8 of this Agreement, either alone or
together with all other Payments received or to be received by the Participant
from the Company or any of its Affiliates (collectively, the “Aggregate Payments”), or any portion thereof, would be
subject to the excise tax imposed by Section 4999 of the Code (or any
successor thereto), the following provisions shall apply:


 


(a)           If the net amount that would
be retained by the Participant after all taxes on the Aggregate Payments are
paid would be greater than the net amount that would be retained by the
Participant after all taxes are paid if the Aggregate Payments were limited to
the largest amount 


 


4

















 


that would result in no portion of the Aggregate Payments being subject
to such excise tax, the Participant shall be entitled to receive the Aggregate
Payments.


 


(b)           If, however, the net amount
that would be retained by the Participant after all taxes were paid would be
greater if the Aggregate Payments were limited to the largest amount that would
result in no portion of the Aggregate Payments being subject to such excise
tax, the Aggregate Payments to which the Participant is entitled shall be
reduced to such largest amount.


 


The term “Payment” shall
mean any transfer of property within the meaning of Section 280G of the
Code.


 


The determination of whether any reduction of
Aggregate Payments is required and the timing and method of any such required
reduction in Payments under this Agreement or in any such other Payments otherwise
payable by the Company or any of its Affiliates consistent with any such
required reduction, shall be made by the Participant, including whether any
portion of such reduction shall be applied against any cash or any shares of
stock of the Company or any other securities or property to which the
Participant would otherwise have been entitled under this Agreement or under
any such other Payments, and whether to waive the right to the acceleration of
the Payment due under this Agreement or any portion thereof or under any such
other Payments or portions thereof, and all such determinations shall be
conclusive and binding on the Company and its Affiliates.  To the extent that Payments hereunder or any
such other Payments are not paid as a consequence of the limitation contained
in this paragraph 9, then the Restricted Shares and Retained Distributions
related thereto (to the extent not so accelerated) and such other Payments (to
the extent not vested) shall be deemed to remain outstanding and shall be subject
to the provisions hereof and of the Plan as if no acceleration or vesting had
occurred.  Under such circumstances, if
the Participant terminates Employment for Good Reason or is terminated by the
Company or any of its Affiliates without Cause, the Restricted Shares and
Retained Distributions related thereto (to the extent that they have not
already become vested) shall become immediately vested in their entirety upon
such termination subject to the provisions relating to Section 4999 of the
Code set forth herein.


 


The Company shall promptly pay, upon demand by the
Participant, all legal fees, court costs, fees of experts and other costs and
expenses which the Participant incurred in any actual, threatened or
contemplated contest of the Participant’s interpretation of, or determination
under, the provisions of this paragraph 9.


 


10.           Withholding
Taxes. The Participant agrees that, subject to paragraph 11 hereof,


 


(a)           Obligation to Pay
Withholding Taxes. Upon the vesting of any portion of the Award of
Restricted Shares and the Retained Distributions relating thereto, the
Participant will be required to pay to the Company any applicable Federal,
state, local or foreign withholding tax due as a result of such vesting.  The Company’s obligation to deliver the Restricted
Shares or Retained Distributions shall be subject to such payment of
withholding taxes.  The Company and its
Affiliates shall, to the extent permitted by law, have the right to deduct from
any payment of any kind otherwise due to the Participant the amount of any
Federal, state, local or foreign withholding taxes due with respect to such
vesting.


 


5

















 


(b)           Payment of Taxes with Stock. Subject to
the Committee’s right to disapprove any such election and require the
Participant to pay the required withholding tax in cash and subject to
paragraph 11 hereof, the Participant shall have the right to elect to pay the
required withholding tax associated with Shares to be received upon vesting or
which are otherwise owned by the Participant. 
Unless the Company shall permit another valuation method to be elected
by the Participant, Shares used to pay any required withholding taxes shall be
valued at the mean between the high and low sales price of a Share as reported
on the principal market for the Company’s common stock on the date the
withholding tax becomes due (hereinafter called the “Tax Date”).


 


(c)           Conditions to Payment of
Taxes with Stock. Any election to pay withholding taxes with stock
must be made on or prior to the Tax Date and will be irrevocable once
made.  Any such election must be made in
conformity with conditions established by the Committee from time to time.


 


11.           Section 83(b) Election. If the
Participant properly elects (which, apart from any other notice required by
law, shall require that the Participant notify the Company of such election at
the time it is made) within 30 days after the Date of Grant or, in certain
circumstances, within 30 days after the date any condition precedent to the Award
is satisfied, to include in gross income for Federal income tax purposes an
amount equal to the fair market value of such Restricted Shares on the Date of
Grant, the holder shall promptly pay to the Company any Federal, state, local
or foreign withholding taxes due with respect to such Restricted Shares.  If the Participant fails to make such
payment, the Company and its Affiliates shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due to the
Participant any Federal, state, local or foreign withholding taxes due with
respect to such Restricted Shares. 
Participants may use Shares otherwise owned by them to pay such
withholding taxes provided such Participants comply with the provisions of
paragraph 10 hereof, including paragraph 10(c).


 


12.           Changes in
Capitalization and Government and Other Regulations. The Award
shall be subject to all of the terms and provisions as provided in this
Agreement and in the Plan, which are incorporated by reference herein and made
a part hereof, including, without limitation, the provisions of Section 10
of the Plan (generally relating to adjustments to the number of Shares subject
to the Award, upon certain changes in capitalization and certain
reorganizations and other transactions).


 


13.           Forfeiture. The Company and the Participant agree that a breach
of any of the foregoing restrictions or a breach of any of the other
restrictions, terms and conditions of the Plan or this Agreement, with respect
to any of the Restricted Shares or any Retained Distributions relating thereto,
except as waived by the Board or the Committee, will cause a forfeiture of such
Restricted Shares and any Retained Distributions relating thereto.


 


14.           Right of
Company to Terminate Employment. Nothing contained in the
Plan or this Agreement shall confer on any Participant any right to continue in
the employ of the Company or any of its Affiliates and the Company and any such
Affiliate shall have the right to terminate the Employment of the Participant at
any such time, with or without cause, notwithstanding the fact that some or all
of the Restricted Shares and Retained Distributions covered by this Agreement
may be forfeited as a result of such termination.


 


6

















 


15.           Notices. Any notice
which either party hereto may be required or permitted to give the other shall
be in writing and may be delivered personally or by mail, postage prepaid,
addressed to the Company in care of its Corporate Secretary at the principal
executive office of the Company, with a copy to the Director, Human Resources,
at the principal executive office of the Company, and to the Participant at his
or her address, as it is shown on the records of the Company or its Affiliate,
or in either case to such other address as the Company or the Participant, as
the case may be, by notice to the other may designate in writing from time to
time.


 


16.           Interpretation
and Amendments. The Committee has plenary authority to interpret
this Agreement and the Plan, to prescribe, amend and rescind rules relating
thereto and to make all other determinations in connection with the
administration of the Plan.  The
Committee may from time to time modify or amend this Agreement in accordance
with the provisions of the Plan, provided that no such amendment shall
adversely affect the rights of the Participant under this Agreement without his
or her consent.


 


17.           Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of the Company and its successors and
assigns, and shall be binding upon and inure to the benefit of the Participant
and his or her legatees, distributees and personal representatives.


 


18.           Copy of the
Plan. By entering into the Agreement, the Participant agrees and
acknowledges that he or she has received and read a copy of the Plan.


 


19.           Governing Law. The Agreement
shall be governed by, and construed in accordance with, the laws of the State
of Delaware without regard to any choice of law rules thereof which might
apply the laws of any other jurisdiction.


 


20.           Waiver of Jury
Trial. To the extent not prohibited by applicable law which cannot be
waived, each party hereto hereby waives, and covenants that it will not assert
(whether as plaintiff, defendant or otherwise), any right to trial by jury in
any forum in respect of any suit, action, or other proceeding arising out of or
based upon this Agreement.


 


21.           Submission to
Jurisdiction; Service of Process. Each of the parties
hereto hereby irrevocably submits to the jurisdiction of the state courts of
the State of Delaware and the jurisdiction of the United States District Court
for the District of Delaware for the purposes of any suit, action or other
proceeding arising out of or based upon this Agreement.  Each of the parties hereto to the extent
permitted by applicable law hereby waives, and agrees not to assert, by way of
motion, as a defense, or otherwise, in any such suit, action or proceeding
brought in such courts, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that its property is exempt or immune
from attachment or execution, that such suit, action or proceeding in the
above-referenced courts is brought in an inconvenient forum, that the venue of
such suit, action or proceedings, is improper or that this Agreement may not be
enforced in or by such court.  Each of
the parties hereto hereby consents to service of process by mail at its address
to which notices are to be given pursuant to paragraph 15 hereof.


 


22.           Personal Data. The Company,
the Participant’s local employer and the local employer’s parent company or
companies may hold, collect, use, process and transfer, in electronic or other
form, certain personal information about the Participant for the exclusive
purpose of 


 


7

















 


implementing, administering and managing the Participant’s
participation in the Plan.  Participant
understands that the following personal information is required for the above
named purposes: his/her name, home address and telephone number, office address
(including department and employing entity) and telephone number, e-mail
address, date of birth, citizenship, country of residence at the time of grant,
work location country, system employee ID, employee local ID, employment status
(including international status code), supervisor (if applicable), job code,
title, salary, bonus target and bonuses paid (if applicable), termination date
and reason, tax payer’s identification number, tax equalization code, US Green
Card holder status, contract type (single/dual/multi), any shares of stock or
directorships held in the Company, details of all awards of Restricted Shares
(including number of grants, grant dates, price, vesting type, vesting dates,
and any other information regarding Restricted Shares that have been granted,
canceled, vested, or forfeited) with respect to the Participant, estimated tax
withholding rate, brokerage account number (if applicable), and brokerage fees
(the “Data”). 
Participant understands that Data may be collected from the Participant
directly or, on Company’s request, from Participant’s local employer.  Participant understands that Data may be
transferred to third parties assisting the Company in the implementation,
administration and management of the Plan, including the brokers approved by
the Company, the broker selected by the Participant from among such
Company-approved brokers (if applicable), tax consultants and the Company’s
software providers (the “Data Recipients”).  Participant understands that some of these
Data Recipients may be located outside the Participant’s country of residence,
and that the Data Recipient’s country may have different data privacy laws and
protections than the Participant’s country of residence.  Participant understands that the Data
Recipients will receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and
managing the Participant’s participation in the Plan, including any requisite
transfer of such Data as may be required for the administration of the Plan
and/or the subsequent holding of shares of common stock on the Participant’s
behalf by a broker or other third party with whom the Participant may elect to
deposit any shares of common stock acquired pursuant to the Plan.  Participant understands that Data will be
held only as long as necessary to implement, administer and manage the
Participant’s participation in the Plan. 
Participant understands that Data may also be made available to public
authorities as required by law, e.g., to the U.S. government.  Participant understands that the Participant
may, at any time, review Data and may provide updated Data or corrections to
the Data by written notice to the Company. 
Except to the extent the collection, use, processing or transfer of Data
is required by law, Participant may object to the collection, use, processing
or transfer of Data by contacting the Company in writing.  Participant understands that such objection
may affect his/her ability to participate in the Plan.  Participant understands that he/she may
contact the Company’s Human Resources Director to obtain more information on
the consequences of such objection.


 


23.           Consent of
Spouse. If the Participant is married as of the date of this Agreement, the
Participant’s spouse shall execute a Consent of Spouse in the form of Exhibit A
hereto, effective as of the date hereof. 
Such consent shall not be deemed to confer or convey to the spouse any
rights in the Restricted Shares that do not otherwise exist by operation of law
or the agreement of the parties.  If the
Participant marries or remarries subsequent to the date hereof, the Participant
shall, not later than 60 days thereafter, obtain the new spouse’s
acknowledgement of and consent to the existence and binding effect of all
restrictions contained in this Agreement by such spouse’s executing and
delivering a Consent of Spouse in the form of Exhibit A.


 


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24.           Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be considered
an original and shall become effective when one or more counterparts have been
signed by each of the parties hereto and delivered to the other party hereto.
Execution and delivery shall be deemed effective whether made via hard copy
with manual signatures or via email or fax transmission with facsimile
signatures.


 


(Signature Page Follows)


 


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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the 15th day of August,
2008 at Los Angeles, California.


 


	
  COMPANY

  	
   

  
	
   

  	
   

  
	
  PROSPECT MEDICAL HOLDINGS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Samuel S. Lee

  	
   

  
	
   

  	
  Name: Samuel S. Lee

  	
   

  
	
   

  	
  Title: Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PARTICIPANT

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
    /s/ Mike Heather

  	
   

  
	
  Name: Mike Heather

  	
   

  



 

















 


Prospect Medical Holdings, Inc.


2008 Omnibus Equity Incentive Plan


 


Notice of Grant of Restricted Stock


 


PROSPECT MEDICAL HOLDINGS, INC. (the “Company”),
pursuant to the Company’s 2008 Omnibus Equity Incentive Plan (the “Plan”), hereby grants (the “Award”)
to the undersigned Participant the following restricted Shares (the “Restricted Shares”), subject to the terms and conditions of
this Notice, the 2008 Restricted Stock Award Agreement (the “Restricted Stock Agreement”) and the Plan. The Plan and
the Restricted Stock Agreement are both incorporated into and made a part of
this Notice.


 


1.             Participant’s Name:
Mike Heather


 


2.             Grant Information for
this Award:


 


Date of Grant: August 15, 2008


 


Total Number of Restricted Shares Granted: 200,000


 


3.             The vesting dates
shall be:


 


	
  Shares

  	
   

  	
  Vesting Date

  	
   

  	
  Performance Vesting (Yes/No)

  
	
  133,333

  	
   

  	
  August 15,
  2008

  	
   

  	
  No

  
	
  66,667

  	
   

  	
  June 14,
  2009

  	
   

  	
  No

  



 


subject to earlier forfeiture of unvested Shares in certain
circumstances, including termination of Employment, and accelerated vesting, as
provided in the Restricted Stock Agreement and the Plan. If Performance Vesting
terms apply, they will be set forth in Attachment A to this Notice and the
Restricted Stock Agreement.


 


4.             Restriction Period.


 


The Restriction Period for the Restricted Shares granted hereunder
shall be (i) the period commencing on the Date of Grant and ending at the
close of business on the Vesting Date with respect to the portion of the
Restricted Shares corresponding to such Vesting Date.


 


5.             I acknowledge that I
have read and will comply with the Company’s Insider Trading Policy, which I
understand may be updated from time to time.


 


6.             I acknowledge and
agree that if I do not make a valid Section 83(b) election, I will
owe withholding taxes at each Vesting Date on the portion of the Restricted
Shares for which the Restriction Period has lapsed and that I must elect the
method of payment of such withholding taxes in advance of the Vesting Date in
accordance with the procedures established by the Company, and that such
procedures may change and be updated over time.


 

















 


7.             This Notice may be
executed in one or more counterparts, each of which shall be considered an
original and shall become effective when one or more counterparts have been
signed by each of the parties hereto and delivered to the other party hereto.
Execution and delivery shall be deemed effective whether made via hard copy
with manual signatures or via email or fax transmission with facsimile signatures.


 


IN WITNESS WHEREOF, the Company has caused this Notice to be signed by
its duly authorized officer or agent as of the 15th day of August, 2008.


 


	
   

  	
  Prospect Medical Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Linda Hodges

  
	
   

  	
   

  	
  Linda Hodges

  
	
   

  	
   

  	
  Executive Vice President

  



 


Accepted and Agreed to:


 


	
  Participant:

  	
    /s/ Mike Heather

  	
   

  
	
   

  	
    (Signature)

  	
   

  
	
   

  	
   

  
	
  Home Address:

  	
   

  	
  Business Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    1920 E. 17th Street Ste. 200

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Santa Ana, CA 92705