Document:

exv10w41

 

Exhibit 10.41

ENDOCARE, INC.

NON-EMPLOYEE DIRECTOR

RESTRICTED STOCK UNIT PROGRAM

UNDER 2004 STOCK INCENTIVE PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE OF THE PROGRAM

1.01 Establishment of Program

The Endocare, Inc. Non-Employee Director Restricted Stock Unit Program (the “Program”) is adopted
pursuant to the Endocare, Inc. 2004 Stock Incentive Plan (the “Plan”) and, in addition to the terms
and conditions set forth below, is subject to the provisions of the Plan.

1.02 Purpose of Program

The purpose of the Program is to enhance the ability of the Company to attract and retain directors
who are not Employees (“Non-Employee Directors”) through a program of automatic grants of
restricted stock units (“RSUs”).

1.03 Effective Date of the Program

The Program is effective December 20, 2007, the date on which the Company’s Board of Directors
approved the Program. The Program supersedes and replaces the 2004 Non-Employee Director Option
Program, which was terminated by the Company’s Board of Directors effective December 20, 2007.

ARTICLE II

DEFINITIONS

Capitalized terms in this Program, unless otherwise defined herein, have the meaning given to them
in the Plan.

ARTICLE III

RESTRICTED STOCK UNIT TERMS

3.01 Date of Grant and Number of Shares

Each Non-Employee Director initially elected or initially appointed to the Board after the
effective date of the Program shall be granted $60,000 worth of RSUs (the “Initial Grant”). Each
Initial Grant will be made to the applicable Non-Employee Director on the first trading day after
such Non-Employee Director first becomes a Non-Employee Director. The number of Shares underlying the Initial Grant shall equal $60,000, divided by the Fair Market Value per Share on the date of grant.

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In addition, on the date of the Company’s Annual Meeting of Stockholders each year (the
“Annual Meeting Date”) beginning with the Annual Meeting Date in 2008, each Non-Employee Director
elected by the Company’s stockholders on such Annual Meeting Date shall be granted $40,000 worth of
RSUs (a “Subsequent Grant”) on such Annual Meeting Date; provided that no Subsequent Grant shall be
made to any Non-Employee Director who has not served as a director of the Company, as of such
Annual Meeting Date, for at least six (6) months. The number of Shares underlying each Subsequent
Grant shall equal $40,000, divided by the Fair Market Value per Share on the date of grant.

To address the fact that there is a period of time between the Company’s prior annual director
equity grant date of January 10 and the new director equity grant date (i.e., the Annual Meeting
Date), on January 10, 2008 each Non-Employee Director serving as a Non-Employee Director on such
date shall be granted $13,333 worth of RSUs (a “Transition Grant”). The number of Shares
underlying each Transition Grant shall equal $13,333, divided by the Fair Market Value per Share on
the date of grant.

3.02 Vesting

Subject to the Non-Employee Director’s continued service as a Board member through the applicable
date, each Initial Grant under the Program shall vest as to 50% of the Shares underlying the
Initial Grant twelve (12) months after the grant date and an additional 50% of the Shares
underlying the Initial Grant shall vest twenty-four (24) months after the grant date, such that the
Initial Grant will be fully vested two (2) years after its date of grant. Subject to the
Non-Employee Director’s continued service as a Board member through the applicable date, each
Subsequent Grant under the Program will vest as to 100% of the Shares underlying the Subsequent
Grant twelve (12) months after the grant date. Subject to the Non-Employee Director’s continued
service as a Board member through the applicable date, each Transition Grant under the Program will
vest as to 100% of the Shares underlying the Transition Grant twelve (12) months after the grant
date. In each case, the number of Shares that vest shall be delivered to the Non-Employee Director
on the earliest of (a) the Non-Employee Director’s cessation of service as a director, (b) an event
described in Section 3.04 below, or (c) the time elected by the Non-Employee Director to the extent
permitted by the RSU Agreement described in Section 3.03 below.

3.03 Form of RSU Agreement

All grants under the Program shall be made using a form of RSU Agreement approved by the
Administrator for use under the Program, which form of RSU Agreement may be modified from time to
time by the Administrator.

3.04 Corporate Transaction/Change in Control

Upon a Change in Control or Corporate Transaction that occurs before the Grantee’s Continuous
Service has ceased, all RSUs granted under the Program shall become fully vested and the Shares underlying such RSUs shall be delivered to the Grantee.

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3.05 Other Terms

The Administrator shall determine the remaining terms and conditions of the RSUs awarded under the
Program.

3.06 Amendment, Suspension or Termination of the Program

The Administrator may at any time amend, suspend or terminate the Program without the approval of
the Company’s stockholders.

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Exhibit 10.42

	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 

ENDOCARE, INC.

RESTRICTED STOCK UNIT AGREEMENT

UNDER THE

ENDOCARE, INC. 2004 STOCK INCENTIVE PLAN

     This Restricted Stock Unit Agreement (the “Agreement”) is made effective the ___ day of
_________, 200__ between ENDOCARE, INC. (the “Company”), and _________ (the “Grantee”), a
non-employee director of the Company, under the following terms and conditions. The Agreement is
issued pursuant to the Non-Employee Director Restricted Stock Unit Program and the Endocare, Inc.
2004 Stock Incentive Plan (the “Plan”). Unless otherwise specifically defined in this Agreement,
capitalized terms used herein have the meanings designated in the Plan.

I

GRANT OF RESTRICTED STOCK UNIT

     The Company has, as of _________ ___, 200__ (hereinafter referred to as the “Date of Grant”),
granted to the Grantee Restricted Stock Units with respect to _________ shares of Common Stock in
accordance with the Plan.

II

PERIOD OF RESTRICTION

     The Restricted Stock Units shall vest as follows: [insert vesting schedule]. In addition,
upon a Change in Control or Corporate Transaction that occurs before the Grantee’s Continuous
Service has ceased, the Restricted Stock Unites shall become fully vested. Upon the earliest of
the following to occur upon or after all or a portion of an award of Restricted Stock Units
vesting, one share of Common Stock shall be issuable for each Restricted Stock Unit that has vested
(the “RSU Shares”): (a) the director’s cessation of service as a director for any reason; (b) a
Change in Control or Corporate Transaction involving the Company occurs before the Grantee’s
Continuous Service has ceased; or (c) the time elected by the director that is irrevocable as of
the last day of the year preceding the Date of Grant or such later time as permitted pursuant to
Section 409A of the Code and permitted by the Administrator (the “Payment Date”). Effective on the
Payment Date, the Company will issue such RSU Shares to the Grantee. By delivering a written
election to the Company prior to the Payment Date, the Grantee may elect to have the Company pay
out up to fifty percent (50%) of the Restricted Stock Units in cash on the Payment Date (based on
the Fair Market Value of the Common Stock on the Payment Date) to facilitate the Grantee’s payment
of applicable taxes. If the Grantee makes such election, then the number of RSU Shares to be issued
to the Grantee on the Payment Date shall be the net number of RSU Shares after taking into account
the amount of such cash pay out. No fractional shares shall be issued. Any fractional portion of
vested Restricted Stock Units shall be paid to the Grantee in cash, based on the Fair Market Value
of the Common Stock on the applicable Payment Date.

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III

TERMINATION OF CONTINUOUS SERVICE

     Unless otherwise determined by the Administrator in its sole discretion, in the event that the
Grantee’s Continuous Service shall cease for any reason before all or any portion of the Restricted
Stock Units have vested, the Grantee shall immediately forfeit to the Company the unvested
Restricted Stock Units, and no shares of Common Stock shall be issued nor shall any cash be paid
with respect to such Restricted Stock Units.

IV

THE PLAN

     The grant of Restricted Stock Units pursuant to this Agreement is subject to the
terms and conditions set forth herein as well as the provisions of the Plan. In the event of a
conflict between the terms of this Agreement and the Plan, the Plan shall control.

V

NO ASSIGNMENT

     Except as specifically provided in the Plan, Restricted Stock Units granted hereunder may not
be sold, transferred, pledged, assigned, exchanged, encumbered or otherwise alienated or
hypothecated until the Restricted Stock Units have vested and the underlying shares of Common Stock
have been issued. In the event of any violation of this provision, the Restricted Stock Units will
be automatically forfeited to the Company and neither the Grantee nor any other person shall be
entitled to receive any shares of Common Stock or cash in respect of Restricted Stock Units.

VI

VOTING RIGHTS

     There are no voting rights with respect to any Restricted Stock Units or the Common Stock
issuable in respect of the Restricted Stock Units prior to the vesting of such Restricted Stock
Units and the issuance of Common Stock in respect thereof, if applicable. Subsequent to the
vesting of Restricted Stock Units and the issuance of shares of Common Stock in respect thereof, if
any, the Grantee may exercise voting rights with respect to such shares of Common Stock, as a
stockholder of the Company, for as long as the Grantee holds such shares.

VII

DIVIDENDS

     Prior to vesting of the Restricted Stock Units, subject to the following, the Grantee shall be
entitled to receive all dividends and other distributions paid with respect to the shares of Common
Stock issuable in respect of such Restricted Stock Units. If the stockholders of the Company
receive dividends paid in cash, in lieu of a cash payment, the Grantee shall automatically receive
additional Restricted Stock Units equal in value to such cash dividend otherwise payable. For such
purposes, the value of the number of additional Restricted Stock Units to be issued shall be deemed
to equal the number of shares of Common Stock, valued at the Fair Market Value of a share of Common

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Stock on the date such dividend is paid, equal in value to such cash dividend; provided,
however that the Company shall not issue fractional Restricted Stock Units, and any amount that
would have otherwise been payable as a fractional unit shall be paid in cash to the Grantee. If
any such dividends or distributions are paid to the stockholders of the Company in shares of Common
Stock, the Grantee shall receive a number of Restricted Stock Units equal to the number of shares
of Common Stock the Grantee would have received if the Restricted Stock Units with respect to which
the Grantee is receiving the dividend had already been settled in shares of Common Stock. In each
case, any such additional Restricted Stock Units shall be subject to the same vesting requirements,
payment conditions and restrictions on transferability as the Restricted Stock Units with respect
to which they were distributed.

VIII

VENUE AND WAIVER OF JURY TRIAL

     The Company and the Grantee (the “parties”) agree that any suit, action, or
proceeding arising out of or relating to the Plan or this Agreement shall be brought in the United
States District Court for the Central District of California (or should such court lack
jurisdiction to hear such action, suit or proceeding, in a California state court in the County of
Orange) and that the parties shall submit to the jurisdiction of such court. The parties
irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the
laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO
EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR
PROCEEDING. If any one or more provisions of this Section VIII shall for any reason be held
invalid or unenforceable, it is the specific intent of the parties that such provisions shall be
modified to the minimum extent necessary to make it or its application valid and enforceable.

IX

MISCELLANEOUS

     In the event that any provision of this Agreement is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if
possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted,
and the remainder of this Agreement shall not be affected except to the extent necessary to reform
or delete such illegal, invalid or unenforceable provision.

     The captions used in this Agreement are inserted for convenience and shall not be deemed a
part of this Agreement for construction or interpretation. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the singular. Use of
the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

     Neither the Plan nor this Agreement shall confer upon the Grantee any right with respect to
continuance of service as a director with the Company, nor shall it interfere in any way with the
Grantee’s right, or the Company’s right, to terminate the Grantee’s service at any time.

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     This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective permitted heirs, beneficiaries, successors and assigns.

     The Grantee acknowledges that a copy of the Plan, the Plan prospectus and a copy of the
Company’s most recent annual report to its stockholders has been delivered to the Grantee.

     The Plan and this Agreement shall be governed, construed, interpreted and administered solely
in accordance with the laws of the state of California, without regard to principles of conflicts
of law.

     As of the date hereof, the Company has an effective registration statement on file with the
Securities and Exchange Commission with respect to the offer and sale of the Restricted Stock Units
and the shares of Common Stock issuable upon vesting of the Restricted Stock Units. The Company
intends to maintain the effectiveness of this registration statement but has no obligation to do
so. In the event the registration statement ceases to be effective, the Grantee will not be able
to transfer or sell any shares of Common Stock issued to him or her upon the vesting of the
Restricted Stock Units unless exemptions from registration under applicable securities laws are
available. Such exemptions from registration are very limited and might be unavailable.

     All questions arising under the Plan or under this Agreement shall be decided by the
Administrator in its total and absolute discretion. The resolution of such question or dispute by
the Administrator shall be final and binding on all persons.

     IN WITNESS WHEREOF, the Company has caused this Restricted Stock Unit Agreement to be duly
executed by its officers thereunto duly authorized, and the Grantee has hereunto set his or her
hand as of the date first above written.

	 	 	 	 	 
	ENDOCARE, INC.	 	 
	 

	 	 	 	 
	 

	 	 	 	Grantee Signature
	By
	 	 	 	 
	 

	 	 	 	 
	Title:

	 	 	 	Address (please print):
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 

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