SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
INNOVATIVE MEDICAL SERVICES
---------------------------
(Exact name of Registrant as specified in its charter)
CALIFORNIA
- ---------- 33-0530289
(State of Incorporation) (I.R.S. Employer ID No.)
1725 Gillespie Way,
El Cajon, California 92020
--------------------------
(Address of Principal Offices)
Innovative Medical Services Amended 1998 Directors and
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Officers Stock Option Plan
--------------------------
(Full Title of the Plans)
Michael L. Krall
INNOVATIVE MEDICAL SERVICES
1725 Gillespie Way
El Cajon, CA 92020
------------------
(Name and address of Agent for Service)
(619)596 8600
-------------
(Telephone number, including area code of Agent for Service)
CALCULATION OF REGISTRATION FEE
Title of Amount of Max. Off. Maximum Amount of
Securities Securities Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
- ---------- ---------- --------- -------- ------------
Common Stock(1) 2,000,000 $2.25(2) $4,500,000 $1,251.00
(1) Issuable pursuant to options granted pursuant to the plans.
(2) Estimated Price in accordance with Rule 457(h)and based upon the last
reported sale on the NASDAQ SmallCap Market on December 22, 1998.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information related to the Innovative
Medical Services Amended 1998 Directors and Officers Stock Option Plan
which are not being filed as part of this Registration Statement (the
"Registration Statement") and documents incorporated by reference in
response to Item 3 of Part II of this Registration Statement, which taken
together constitute a prospectus that meets the requirements of Section
10(a) of the Securities Act of 1933 (the "Securities Act") will be sent or
given to the participant by the Registrant as specified by Rule 428(b)(1)
of the Securities Act.
Item 2. Registrant Information and Employee Plan Annual Information.
As required by this Item, the Registrant shall provide to the
participant a written statement advising them of the availability without
charge, upon written or oral request, of documents incorporated by
reference in Item 3 of Part II hereof and of documents required to be
delivered pursuant to Rule 428(b) under the Securities Act. The statement
shall include the address listing the title or department and telephone
number to which the request is to be directed.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant incorporates the following documents filed with the
Securities and Exchange Commission by reference in this Registration
Statement:
(a) The Registrant's Annual Report on Form 10-KSB for the fiscal
year ended July 31, 1998.
(b) The Registrant's Quarterly Report on Form 10-QSB for the three
month period ended October 31, 1998.
(c) Description of the Common Stock as incorporated in the
Registration Statement on Form SB-2 dated August 8, 1996, SEC
file no. 333-000434
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(d) All other documents filed by Registrant after the date of this
Registration Statement under Section 13(a), 13(c), 14 and 15(d)
of the Securities Exchange Act of 1934, (the Exchange Act) are
incorporated by reference herein and in in the Section 10
Prospectus to be a part thereof from the date of filing of such
documents.
Item 4. Not Applicable.
Item 5. Interests of Named Experts and Counsel: Not applicable.
Item 6. Indemnification of Officers and Directors.
The Company's Certificate of Incorporation provides the Company's
Officers and Directors the full extent of the protection offered by the
General Corporation Law of the State of California.
The General Corporation Law of the State of California provides that
a corporation may include a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for
any breach of the directors' duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under the
Corporation Law dealing with the liability of directors for unlawful
payment of dividend or unlawful stock purchase or redemption, or (iv) for
any transaction from which the director derived an improper personal
benefit. No such provision shall eliminate or limit the liability of a
director for any act or omission occurring prior to the date when such
provision becomes effective.
The Company's Bylaws provide that the Company may indemnify its
Officers and Directors to the full extent permitted by the General
Corporation Law of the State of California.
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The General Corporation Law of the State of California provides that
a corporation may indemnify its directors and officers against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and incurred by them in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the rights
of the corporation), by reason of being or having been directors or
officers, if such directors or officers acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, they
had no reasonable cause to believe their conduct was unlawful. The
indemnification provided the General Corporation Law of the State of
California is not exclusive of any other rights arising under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
Item 7. Exemption from Registration Claimed: Not Applicable
Item 8. Exhibits.
5.1 Opinion of Dennis Brovarone, regarding legality of shares
being issued.
23.1 Consent of Dennis Brovarone,(See Opinion).
23.2 Consent of Steven Holland, Certified Public Accountant
99.3 The Innovative Medical Services Amended 1998 Directors and
Officers Stock Option Plan
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 the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental
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change in the information in the Registration Statement;
(iii) To include any material information with respect to the Plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do 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 Securities
Exchange Act of 1934, as amended that are incorporated by reference into
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement to the securities offered therein, and
the offering of such securities offered at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
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
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions described
in Item 6, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 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
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counsel that matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the questions whether such
indemnification is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
6
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 El Cajon, California on this 19th
Day of December, 1998.
INNOVATIVE MEDICAL SERVICES
By: /s/MICHAEL L. KRALL
--------------------
Michael L. Krall, President, CEO
and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/GARY BROWNELL Director, December 19, 1998
- -------------------- Chief Financial Officer
Gary Brownell
/s/EUGENE S. PEISER Director December 19, 1998
- --------------------
Eugene S. Peiser
/s/ PATRICK GALUSKA Director December 19, 1998
- --------------------
Patrick Galuska
/s/ DENNIS BROVARONE Director December 19, 1998
- --------------------
Dennis Brovarone
/s/ DONNA SINGER Director December 19, 1998
- --------------------
Donna Singer
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EXHIBIT 5.1
DENNIS BROVARONE
ATTORNEY AND COUNSELOR AT LAW
11249 West 103rd Drive
Westminster, Colorado 80021
phone: 303 466 4092 / fax: 303 466 4826
December 19, 1998
Board of Directors
Innovative Medical Services
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
You have requested my opinion as to the legality of the issuance by
Innovative Medical Services, (the "Corporation") of up to 2,000,000 shares
of Common Stock (the "Shares") pursuant to a Registration Statement on Form
S-8 (the "Registration Statement") to be filed on or before December 23,
1998.
Pursuant to your request I have reviewed and examined:(1).The Articles
of Incorporation of the Corporation, as amended (the "Articles"); (2). The
Bylaws of the Corporation, as certified by the Secretary of the
Corporation; (3). The minute book of the Corporation; (4). A copy of
certain resolutions of the Board of Directors of the Corporation; (5). The
Registration Statement; (6). The Corporation's Stock Option Plans covered
by the Registration Statement; and (7).Such other matters as I have deemed
relevant in order to form my opinion.
Based upon the foregoing, and subject to the qualifications set forth
below, I am of the opinion that the Shares, if issued as described in the
Registration Statement will have been duly authorized, legally issued,
fully paid and non-assessable.
This opinion is furnished by me as counsel to the Corporation and is
solely for your benefit. Neither this opinion nor copies hereof may be
relied upon by, delivered to, or quoted in whole or in part to any
governmental agency or other person without our prior written consent. My
opinion is subject to the qualification that no opinion is expressed herein
as to the application of state securities or Blue Sky laws.
Not withstanding the above, I consent to the use of this opinion in
the Registration Statement. In giving my consent, I do not admit that I
come without the category of persons whose consent is required under
Section 7 of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
DENNIS BROVARONE
Dennis Brovarone
EXHIBIT 23.2
STEVEN HOLLAND, CPA
3914 MURPHY CANYONRD., STE. A126
SAN DIEGO, CA. 92123
(619) 279-1640
I have prepared the attached audited financial statements for Innovative
Medical Services for the fiscal years ended July 31, 1998 and 1997
contained in the Company's annual report on Form 10-ksb for the fiscal year
ended July 31, 1998 and do hereby consent to their inclusion with the
company's intended registration statement on Form
S-8.
/s/STEVEN HOLLAND
- -----------------
Steven Holland, CPA
December 21, 1998
EXHIBIT 99.3
INNOVATIVE MEDICAL SERVICES
AMENDED 1998 DIRECTORS AND OFFICERS
STOCK OPTION PLAN
ARTICLE I
DEFINITIONS
As used herein, terms have the meaning hereinafter set forth unless
the context should clearly indicate the contrary:
(a) "Board" shall mean the Board of Directors of the Company;
(b) "Days" shall mean for calculation purposes the days of the week
in which the NASDAQ System conducts and is open for regular
trading activity;
(c) "Company" shall mean Innovative Medical Services, a California
corporation;
(d) "Director" shall mean a member of the Board;
(e) "Fair Market Value" shall mean the average closing low bid price
for the Company's common stock for the previous five (5) trading
days ending on the date of grant;
(f) "Grant" means the issuance of an Option hereunder to an Optionee
entitling such Optionee to acquire Stock on the terms and
conditions set forth in a Stock Option Agreement to be entered
into with the Optionee;
(g) "Officer" shall mean a Executive Officer of the Company and any
Employee, Consultant or Advisor which has been confirmed by the
Board as eligible to participate under this Plan;
(h) "Option" shall mean the right granted to an Optionee to acquire
Stock of the Company pursuant to the Plan;
(i) "Optionee" shall mean an Officer of the Company or a Director of
the Company to whom a Grant hereunder has been made;
(j) "Plan" shall mean the Innovative Medical Services 1998 Directors
and Officers Stock Option Plan, the terms of which are herein set
forth;
(k) "Stock" shall mean the common stock of the Company or, in the
event the outstanding shares of stock are hereafter changed into
or exchanged for shares of different stock or securities of the
Company or some other corporation, such other stock or
securities;
(l) "Stock Option Agreement" shall mean the agreement between the
Company and an Optionee under which an Optionee may acquire Stock
pursuant to the Plan.
<PAGE>
ARTICLE II
THE PLAN
2.1 NAME. The plan shall be known as the "Innovative Medical
Services 1998 Directors and Officers Stock Option Plan."
2.2 PURPOSE. The purpose of the Plan is to advance the business and
development of the Company and its shareholders by affording to the
Directors and Officers of the Company the opportunity to acquire a
propriety interest in the Company by the grant of Options to such persons
under the terms herein set forth. By doing so, the Company seeks to
motivate, retain and attract highly competent, highly motivated Executive
Officers and Directors to lead the Company through this critical time in
its evolution and ensure the success of the Company. The Options to be
granted hereunder are non-statutory Options made available to Directors and
Officers of Innovative Medical Services.
2.3 EFFECTIVE DATE. The Plan shall become effective upon its
adoption by the Board of the Company and approval by the company's
shareholders.
2.4 TERMINATION DATE. The Plan shall terminate ten (10) years from
the date the Plan is adopted by the Board of the Company and at such time
any Options granted hereunder shall be void and of no further force or
effect.
ARTICLE III
PARTICIPANTS
Only Officers and Directors of the Company shall be eligible to be
granted an Option under the Plan. The Board may grant Options to any
Director or Officer in accordance with such determinations as the Board
may, from time to time, in its sole discretion make.
ARTICLE IV
ADMINISTRATION
4.1 The Plan shall be administered by an Administrative Committee of
the Board of Directors of the Company consisting of a majority of
independent directors. Subject to the express provisions of the Plan, the
Administrative Committee shall have the sole discretion and authority to
determine from among eligible persons those to whom and the time or times
at which Options may be granted and the number of shares of Stock to be
subject to each Option. Subject to the express provisions of the Plan, the
Administrative Committee shall also have complete authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations related to
it and to determine the details and provisions of each Stock Option
Agreement and to make all other determinations necessary or advisable in
the administration of the Plan. The Administrative Committee shall also
have the authority to modify outstanding Options and the provisions therein
subject to the agreement of the Optionee.
4.2 RECORDS OF PROCEEDINGS. The Administrative Committee shall
maintain written minutes of its actions which shall be maintained among the
records of the Company.
<PAGE>
4.3 COMPANY ASSISTANCE. The Company shall supply full and timely
information to the Board in all matters relating to eligible Optionees,
their status, death, retirement, disability and such other pertinent facts
as the Board may require. The Company shall furnish the Administrative
Committee with such clerical and other assistance as is necessary in the
performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO THE PLAN
5.1 LIMITATION. The number of shares of Stock which may be issued
and sold hereunder shall not exceed 2,000,000 shares.
5.2 OPTIONS GRANTED UNDER THE PLAN. Shares of stock with respect to
which an Option is granted hereunder, but which lapses prior to exercise,
shall be considered available for grant hereunder. Therefore, if Options
granted hereunder shall terminate for any reason without being wholly
exercised, new Options may be granted hereunder covering the number of
shares to which such terminated Options related.
5.3 OPTIONS TO BE GRANTED. Upon election or appointment to the
Company's Board of Directors, or appointment as an Executive Officer, such
individual shall receive an option to acquire 100,000 shares of stock per
position exercisable at the fair market value on the date of appointment.
Upon each anniversary of such date, the individual shall receive an option
to acquire 50,000 shares of stock exercisable at the fair market value on
the date thereof. The foregoing not withstanding, the Administrative
Committee shall have the discretion to award additional options to
individuals subject to the terms and conditions of the Plan.
5.4 ANTI-DILUTION. In the event the Stock subject to this Plan is
changed into or exchanged for a different number or kind of stock or other
securities of the Company or of another organization by reason of merger,
consolidation or reorganization, recapitalization, reclassification,
combination of shares, stock split or stock dividend;
(a) The aggregate number and kind of shares of Stock subject to the
Plan shall be adjusted appropriately;
(b) The Option price of any outstanding Option issued pursuant to the
Plan shall be adjusted appropriately;
(c) Where dissolution or liquidation of the Company or any merger of
consolidation in which the Company is not a surviving corporation is
involved, the Optionee holding any Option issued pursuant to the Plan shall
have the right immediately prior to such dissolution, liquidation, merger
or combination to exercise the Option, in whole or in part, to the extent
that it shall not have been exercised without regard to any installment
exercise provision.
<PAGE>
ARTICLE VI
OPTION PROVISIONS
6.1 OPTIONS. Each Option granted hereunder shall be evidenced by
minutes of a meeting of or the written consent of the Administrative
Committee and by a written Stock Option Agreement dated as of the date of
grant and executed by the Company and the Optionee, which agreement shall
set forth such terms and conditions as may be determined by the Board
consistent with the Plan.
6.2 LIMITATIONS.
(a) The maximum number of shares for which an Option or Options may
be granted under the Plan to any one Director or Officer shall be 200,000
in any twelve month period.
(b) The Options granted hereunder are non-statutory Options which do
not satisfy the requisites of Section 422 of the Internal Revenue Code, as
amended.
6.3 OPTION PRICE. The per share Option price for the stock subject
to each Option shall not be less than the fair market value per share on
the effective date of grant or such other price as the Administrative
Committee may determine.
6.4 OPTION PERIOD. Each Option granted hereunder must be granted
within five (5) years from the effective date of the Plan. The period for
the exercise of each Option shall be determined by the Administrative
Committee, but in no instance shall such period exceed five (5) years from
the date of grant of the Option.
6.5 OPTION EXERCISE.
(a) Options granted hereunder may not be exercised until and unless
the Optionee shall meet the conditions precedent established by the
Administrative Committee for the Officers or Directors.
(b) Options may be exercised by the officer or director in whole or
in part. Optionees may exercise their Option at any time by giving written
notice to the Company with respect to the specified option, delivered to
the Company at its principal office together with payment in full to the
Company of the amount of the Option price for the number of shares with
respect to which the Option(s) are then being exercised.
6.6 STOCK APPRECIATION RIGHTS. Each Option granted hereunder
shall carry with it Stock Appreciation Rights (SARs) for each share of
stock underlying the Option. Each SAR entitles the holder thereof to
receive without payment of the cash exercise price, as many shares of
stock as equals the difference between fair market value of the stock on
the date of exercise and the exercise price of an Option times the number
of SARs exercised divided by the fair market value on the date of exercise.
For example assume an Option is granted for 100,000 shares with 100,000
SARS with an exercise price of $1.00 per share, the fair market value on
the date of grant. Then assume the fair market value of the common stock
appreciates to $2.00 per share. If the holder of the Option/SAR chooses to
exercise the 100,000 Options/SARs, the holder receives 50,000 shares
without payment of the exercise price. [($2 - $1) X 100,000 / $2 =
50,000]. The foregoing notwithstanding, the holder of an Option/SAR may
choose to exercise the option as set forth in paragraph 6.5 above. The
foregoing paragraph shall be severed from the Plan and null and void in
<PAGE>
the event that the SARs are determined to have a material adverse effect
upon the earnings of the Company as determined by a written opinion of an
independent certified public accountant to be obtained by the Company on or
before January 18, 1999.
6.7 NON-TRANSFERABILITY OF OPTION. No Option or any right relative
thereto shall be transferred by an Optionee otherwise than by will or by
the laws of descent and distribution. During the lifetime of an Optionee,
the Option shall be exercisable only by him or her.
6.8 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT OR
DIRECTORSHIP.
(a) If the Officer or Director's relationship with the Company shall
be terminated, with or without cause, or by the act of the Officer or
Director, the Optionee's right to exercise such Options shall terminate
and all rights thereunder shall cease three (3) days after the date on
which such person's association is terminated, unless this provision is
modified by the Option Agreement for the Options. Provided however, that
if the Optionee shall die or become permanently and totally disabled while
employed by or serving as a non-employee Director of the Company, as solely
determined by the Board in accordance with its policies, then either his or
her personal representatives or a transferee under the Optionee's will or
pursuant to the laws of descent and distribution, or the disabled Optionee
may exercise the Option in full six (6) months from the date of such death
or disability unless this provision is modified by the Option Agreement for
the Options. In the case of an Optionee's retirement in accordance with
the Company's established retirement policy, such Option shall remain
exercisable by the Optionee for three (3) days from the date of such
retirement unless this provision is modified by the Option Agreement for
the Options.
(b) No transfer of an Option by the Optionee by will or the laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with a written notice thereof and an
authenticated copy of the will and/or such other evidence as the Committee
may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of
such Option.
6.9 RIGHTS AS A SHAREHOLDER.
(a) An Optionee or a transferee of an Option shall have no rights as
a shareholder of the Company with respect to any shares subject to any
unexercised Options.
(b) Unless this provision is modified by the Option Agreement for the
Options, ownership rights shall vest with the Officer or Director according
to the following schedule with respect to the total number of shares
exercised:
Initial Appointment/Election Grant: 100% upon exercise or the
first anniversary of grant,
which ever is later;
Anniversary exercise of this option: 100% upon exercise
6.10 REQUIRED FILINGS. An Optionee to whom an Option is granted
under the terms of the Plan is required to file appropriate reports with
the Internal Revenue Service. As a condition of the receipt of an Option
hereunder, Optionees shall agree to make necessary filings with the
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Internal Revenue Service. The Company shall assist and cooperate with
Optionees by providing the necessary information required for compliance of
this condition.
ARTICLE VII
STOCK CERTIFICATES
7.1 ISSUANCE. The Company shall issue and deliver any certificate for
shares of Stock purchased upon the exercise of any Option granted
hereunder.
7.2 TRANSFER RESTRICTIONS. Unless a registration statement covering
the shares underlying the Options is in effect at the time of execution of
an Option Agreement, the Board shall instruct the Secretary of the
Corporation to impose restrictions of the subsequent transferability of
Stock issued pursuant to Options to be granted hereunder. The Stock of the
Company to be issued pursuant to the exercise of an Option shall have such
restrictions prominently displayed as a legend on such certificate.
ARTICLE VIII
TERMINATION, AMENDMENT, OR MODIFICATION OF THE PLAN
The Board may at any time terminate the plan, and may at any time and
from time to time and in any respect amend or modify the Plan. Provided,
however, if the Plan has been submitted to and approved by the shareholders
of the Company no such action by the Board may be taken without approval of
the majority of the shareholders of the Company which: (a) increases the
total number of shares of Stock subject to the Plan, except as contemplated
in Section 5.1 hereof; (b) changes the manner of determining the Option
price; or (c) withdraws the administration of the Plan from the
Administrative Committee.
ARTICLE IX
EMPLOYMENT
9.1 EMPLOYMENT. Nothing in the Plan or any Option granted hereunder
or in any Stock Option Agreement shall confer upon a non-employee Director
receiving such Option or Stock Option Agreement the status as an employee
of the Company. Further, nothing in the Plan or any Option granted
hereunder shall in any manner create in any Optionee the right to continue
their relationship with the Company or create any vested interest in such
relationship, including employment.
9.2 OTHER COMPENSATION PLANS. The adoption of the Plan shall not
effect any other stock option, incentive, or other compensation plan in
effect for the Company or any of its subsidiaries, nor shall the Plan
preclude the Company or any subsidiary thereof from establishing any other
forms of incentive or other compensation for employees or non-employee
Directors of the Company, or any subsidiary thereof.
9.3 PLAN EFFECT. The Plan shall be binding upon the successors and
assigns of the Company.
<PAGE>
9.4 TENSE. When used herein nouns in the singular shall include the
plural.
9.5 HEADINGS OF SECTIONS ARE NOT PART OF THE PLAN. Headings of
articles and sections hereof are inserted for convenience and reference and
constitute no part of the Plan.
INNOVATIVE MEDICAL SERVICES
By: /s/ MICHAEL L. KRALL
-------------------------------
Michael L. Krall, President
December 19, 1998
By: /s/ DENNIS ATCHLEY
--------------------------------
Dennis Atchley, Secretary
December 19, 1998
