SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the Company
[ ] Filed by a party other than the Company
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Innovative Medical Services
----------------------------------------------------------------------------
(Name of Company as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
<PAGE>
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------
(3) Filing Party:
-------------------------
(4) Date Filed:
-------------------------
<PAGE>
INNOVATIVE MEDICAL SERVICES
1725 Gillespie Way
El Cajon, California 92020
(619) 596-8600
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held January 8, 2001
TO THE SHAREHOLDERS OF INNOVATIVE MEDICAL SERVICES
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of INNOVATIVE
MEDICAL SERVICES, a California corporation (the "Company"), will be held at The
Doubletree Hotel San Diego, 7450 Hazard Center Drive, San Diego, California
92108 on January 8, 2001, 10:00 a.m., Pacific Time, and at any and all
adjournments thereof, for the purpose of considering and acting upon the
following Proposals:
Proposal No. 1. ELECTION OF DIRECTORS
Proposal No. 2. APPROVAL OF THE INNOVATIVE MEDICAL SERVICES 2001 DIRECTORS AND
OFFICERS STOCK OPTION PLAN
This Annual Meeting is called as provided for by California law and the
Company's By-laws.
Only holders of the outstanding Common Stock of the Company of record at the
close of business on November 30, 2000 will be entitled to notice of and to vote
at the Meeting or at any adjournment or adjournments thereof.
All shareholders, whether or not they expect to attend the Annual Meeting of
Shareholders in person, are urged to sign and date the enclosed Proxy and return
it promptly in the enclosed postage-paid envelope which requires no additional
postage if mailed in the United States. The giving of a proxy will not affect
your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
DENNIS ATCHLEY
SECRETARY
El Cajon, California
November 30, 2000
<PAGE>
INNOVATIVE MEDICAL SERVICES
1725 Gillespie Way
El Cajon, California 92020
(619) 596-8600
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held January 8, 2001
GENERAL INFORMATION
-------------------
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
INNOVATIVE MEDICAL SERVICES, a California corporation (the "Company"), for use
at the Company's Annual Meeting of Shareholders to be held at The Doubletree
Hotel San Diego, 7450 Hazard Center Drive, San Diego, California 92108 on
January 8, 2001, at 10:00 a.m. Pacific Time, and at any adjournment thereof. It
is anticipated that this Proxy Statement and the accompanying Proxy will be
mailed to the Company's shareholders on or before December 8, 2000.
Any person signing and returning the enclosed Proxy may revoke it at any time
before it is voted by giving written notice of such revocation to the Company,
or by voting in person at the Meeting. The expense of soliciting proxies,
including the cost of preparing, assembling and mailing this proxy material to
shareholders, will be borne by the Company. It is anticipated that solicitations
of proxies for the Meeting will be made only by use of the mails; however, the
Company may use the services of its Directors, Officers and employees to solicit
proxies personally or by telephone without additional salary or compensation to
them. Brokerage houses, custodians, nominees and fiduciaries will be requested
to forward the proxy soliciting materials to the beneficial owners of the
Company's shares held of record by such persons, and the Company will reimburse
such persons for their reasonable out-of-pocket expenses incurred by them in
that connection.
All shares represented by valid proxies will be voted in accordance therewith at
the Meeting. Shares not voting as a result of a proxy marked to abstain will be
counted as part of total shares voting in order to determine whether or not a
quorum has been achieved at the Meeting. Shares registered in the name of a
broker-dealer or similar institution for beneficial owners to whom the
broker-dealer distributed notice of the Annual Meeting and proxy information and
which such beneficial owners have not returned proxies or otherwise instructed
the broker-dealer as to voting of their shares, will be counted as part of the
total shares voting in order to determine whether or not a quorum has been
achieved at the Meeting. Abstaining proxies and broker-dealer non-votes will not
be counted as part of the vote on any business at the Meeting on which the
shareholder has abstained.
The Company's Annual Report to Shareholders for the fiscal year ended July 31,
2000, has been previously mailed or is being mailed simultaneously to the
Company's shareholders, but does not constitute part of these proxy soliciting
materials.
SHARES OUTSTANDING AND VOTING RIGHTS
------------------------------------
All voting rights are vested exclusively in the holders of the Company's Common
Stock with each common share entitled to one vote. Only shareholders of record
at the close of business on November 30, 2000 are entitled to notice of and to
vote at the Meeting or any adjournment thereof. On November 30, 2000 the Company
had 6,235,594 shares of its Common Stock outstanding, each of which is entitled
to one vote on all matters to be voted upon at the Meeting, including the
election of Directors. No fractional shares are presently outstanding. A
majority of the Company's outstanding voting stock represented in person or by
proxy shall constitute a quorum at the Meeting. The affirmative vote of a
majority of the votes cast, providing a quorum is present, is necessary to elect
the Directors. Cumulative voting in the election of Directors is permitted.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND OF MANAGEMENT
-----------------------------------------------------------------
The following table sets forth the number of shares of the Company's Common
Stock beneficially owned as of November 30, 2000 by individual directors and
executive officers and by all directors and executive officers of the Company as
a group. Based upon a review of the Company's shareholders list as of November
30, 2000, there are no other registered holders of five percent or more of the
Company's Common Stock.
<TABLE>
<CAPTION>
Name and Address of
Beneficial Owner Title Common Stock Percentage of
Ownership Shares Outstanding (1)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dennis Atchley Secretary 97,940 1.6%
1725 Gillespie Way
El Cajon, CA 92020
Dennis Brovarone Director 313,983 5.0%
18 Mountain Laurel
Littleton, CO 80127
Gary Brownell Treasurer, CFO/Director 225,321 3.6%
1725 Gillespie Way
El Cajon, CA 92020
Patrick Galuska Director 160,690 2.6%
8137 S. Downing St.
Littleton, CO 80122
Michael L. Krall President, CEO/Chairman 1,103,560 17.7%
1725 Gillespie Way
El Cajon, CA 92020
Eugene Peiser Director 202,055 3.2%
1725 Gillespie Way
El Cajon, CA 92020
Donna Singer Executive VP, Director 153,356 2.5%
1725 Gillespie Way
El Cajon, CA 92020
Directors and Officers as a Group
(7 individuals) 2,256,905 36.2%
</TABLE>
(1)Assumes exercise of all Directors and Officers options to acquire up to
1,316,250 shares.
MANAGEMENT
----------
The executive officers and directors of the Company and their ages are as
follows:
Name Age Position
Michael L. Krall 48 President, CEO, Chairman, Director
Gary Brownell, CPA 52 Treasurer CFO, Director
Donna Singer 30 Executive Vice President, Director
Dennis Atchley, Esq. 48 Secretary
Eugene Peiser, PD 69 Director
Patrick Galuska 41 Director
Dennis Brovarone 44 Director
The Directors serve until their successors are elected by the shareholders.
Vacancies on the Board of Directors may be filled by appointment of the majority
of the continuing directors. The executive officers serve at the discretion of
the Board of Directors except as subject to the employment agreement with Mr.
Krall.
COMMITTEES: MEETINGS OF THE BOARD
The Company has a Compensation/Administration Committee and an Audit Committee.
The Compensation/Administration Committee and the Audit Committee were formed in
1995. Messrs. Brovarone, Galuska and Peiser comprise the
Compensation/Administration Committee and Messrs. Brownell, Galuska and Peiser,
are the Audit Committee. The Compensation/Administration Committee recommends to
the Board the compensation of executive officers and will serve as the
Administrative Committee for the Company's Stock Option Plans. The Audit
Committee serves as a liaison between the Board and the Company's auditor. The
Compensation/Administration Committee met once during the fiscal year ended July
31, 2000, and the Audit Committee met once during the fiscal year ended July 31,
2000.
<PAGE>
The Company's Board of Directors held six meetings during the fiscal year ended
July 31, 2000, at which time all the then Directors were present or consented in
writing to the action taken at such meetings. No incumbent Director attended
fewer than 100% of said meetings.
COMPLIANCE WITH SECTION 16(a) OF SECURITIES EXCHANGE ACT OF 1934
To the Company's knowledge, during the fiscal year ended July 31, 2000, the
Company's Directors and Officers complied with all applicable Section 16(a)
filing requirements. This statement is based solely on a review of the copies of
such reports furnished to the Company by its Directors and Officers and their
written representations that such reports accurately reflect all reportable
transactions.
FAMILY RELATIONSHIPS
There is no family relationship between any Director, executive or person
nominated or chosen by the Company to become a Director or executive officer.
EXECUTIVE COMPENSATION
----------------------
Summary Compensation Table
The following table shows for the fiscal year ending July 31, 2000, the
compensation awarded or paid by the Company to its Chief Executive Officer and
any of the executive officers of the Company whose total salary and bonus
exceeded $100,000 during such year (The "Named Executive Officers"):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------------------------
|
Annual Compensation | Awards Payouts
----------------------------------------------------------------------------------------------
Name and | Securities All Other
Principle Other Annual | Underlying Options Compensation
Position Year Salary ($) Compensation ($)| (#) ($)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Krall
President/CEO 2000 144,000 40,000 (1) 50,000 Common 0
----------------------------------------------------------------------------------------------
</TABLE>
(1) Option value based on the difference between the exercise price of $1.90
and the average closing price of $2.70 for the 30 trading days ending July
31, 2000.
No other executive officer earned more than $100,000 during the current fiscal
year.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Option Grants in Last Fiscal Year
Individual Grants
-------------------------------------------------------------------------------------------------------------------------
Name | Number of Common Shares |% of Total Options Granted to | |
|Underlying Options Granted (#) |Employees in Fiscal Year |Exercise Price ($/Sh)| Expiration Date
-------------------------------------------------------------------------------------------------------------------------
| | | |
| | | |
<S> <C> <C> <C> <C>
Michael L. Krall | | | |
President/CEO | 50,000 | 6.7 | 1.90 | 11/16/04
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION/VALUES
The following table sets forth the number and value of the unexercised options
held by each of the Named Executive Officers at July 31, 2000.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
Aggregate Option Exercises in Last Fiscal Year and FY-End Option Values
---------------------------------------------------------------------------------------------------------------------------
|Shares Acquired| Value Realized | Number of Securities Underlying | Value of Unexercised In-the Money
|on Exercise (#)| at FY-End ($) | Unexercised Options at FY-End (#) | Options at FY-End ($)
| | | |
Name | | | Exercisable/Unexercisable | Exercisable/Unexercisable
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michael L. Krall| | | |
President/CEO | 50,000 | 135,000 | 431,250 Common Shares/Exercisable | 767,400/Exercisable (1)
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Option value based on the difference between the exercise price of
unexercised options and the average closing price of $2.70 for the 30
trading days ending July 31, 2000.
EMPLOYMENT AGREEMENTS AND EXECUTIVE COMPENSATION
In April 1996, the Board of Directors approved a five-year employment agreement
for Michael Krall, its President. Mr. Krall receives a salary of $144,000 per
year, an amount equal to 3% of the Company's net income before taxes if any plus
other benefits
COMPENSATION OF DIRECTORS
Directors are entitled to receive $300 plus reimbursement for all out-of-pocket
expenses incurred for attendance at Board of Directors meetings.
OTHER ARRANGEMENTS
------------------
DIRECTORS AND OFFICERS STOCK OPTION PLAN: On April 17, 1996, the Company's Board
of Directors approved a Directors and Officers Stock Option Plan. 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 who are
ineligible to participate in the above Incentive Stock Option Plan, the
opportunity to acquire a propriety interest in the Company by the grant of
Options to acquire shares of the Company's common stock. The Plan is
administered by the entire Board of Directors. The Plan became effective on
April 17, 1996 by the Board of Directors, was not subject to Shareholder
approval and shall terminate on April 17, 2006. Subject to anti-dilution
provisions, the Plan may issue Options to acquire up to 1,000,000 shares to
Directors and Officers. The maximum number of shares subject to Options granted
to any one Director or Officer shall not exceed 200,000 shares in any 12-month
period. The exercise price for Options shall be set by the Board of Directors
but shall not be for less than eighty-five (85%) of the fair market value per
share on the date of grant. The period in which Options can be exercised shall
be set by the Board of Directors not to exceed five years from the date of
Grant. The Plan may be terminated, modified or amended by the Board of
Directors.
THE INNOVATIVE MEDICAL SERVICES 1998 DIRECTORS AND OFFICERS STOCK OPTION PLAN On
December 19, 1998, the Company's Shareholders Approved the Amended Innovative
Medical Services 1998 Officers and Directors Stock Option Plan. 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 acquire shares of the Company's common stock.
The Options granted are not "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended. The issuance of
such non-qualified options pursuant to this Plan is not expected to be a taxable
event for recipient until such time that the recipient elects to exercise the
option whereupon the recipient is expected to recognize income to the extent the
market price of the shares exceeds the exercise price of the option on the date
of exercise.
The Plan is administered by an Administrative Committee whom shall serve a one
year term. The Administrative Committee is composed of the Board's
Compensation/Administration Committee. Subject to anti-dilution provisions, the
Plan may issue Options to acquire up to 2,000,000 shares to Directors and
Officers. The exercise price for Options shall be set by the Administrative
Committee but shall not be for less than the fair market value of the shares on
the date the Option is granted. Fair market value shall mean the average of the
closing price for ten consecutive trading days at which the Stock is listed in
the NASDAQ quotation system ending on the day prior to the date an Option is
granted. The period in which Options can be exercised shall be set by the
<PAGE>
Administrative Committee not to exceed five years from the date of Grant.
Options granted to new executive officers or directors shall vest one year from
date of appointment or election. Shares issuable under options granted to
continuing officers or directors are immediately exercisable and vest upon
exercise. The maximum number of shares subject to Options granted to any on
Director of Officer shall not exceed 200,000 shares in any 12-month period.
The Executive Officers and Directors of the Company are eligible to participate
in the Plan. The Administrative Committee has granted the present Executive
Officers and Directors an option to purchase 100,000 shares of common stock at
$1.00 per share. The Administrative Committee shall grant to individuals newly
appointed as Executive Officers or as Directors, an option to purchase 100,000
shares of common stock at fair market value. Upon each subsequent anniversary
thereof, each such Officer and Director will receive an option to purchase
50,000 shares of common stock at fair market value. The plan also gives the
Administrative Committee discretion to award additional options. The aggregate
number and kind of shares within the Plan and the rights under outstanding
Options granted hereunder, both as to the number of shares and Option price,
will be adjusted accordingly in the event of a reverse split in the outstanding
shares of the Common Stock of the Company.
The Board may at any time terminate the plan. The approval of the majority of
shareholders is required to increase the total number of shares subject to the
plan, change the manner of determining the option price or to withdraw the
administration of the plan from the Administrative Committee.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT
There is no compensatory plan or arrangement with respect to any individual
named above which results or will result from the resignation, retirement or any
other termination of employment with the Company, or from a change in the
control of the Company.
TRANSACTIONS WITH MANAGEMENT
The Company did not enter into any transactions with Management during the
fiscal year ended July 31, 2000.
<PAGE>
PROPOSAL NO. 1. ELECTION AS DIRECTORS
--------------
The Articles presently provide for a Board of Directors of not more than nine
(9) members. The number of Directors of the Company has been fixed at six (6) by
the Company's Board of Directors. The Company's Board of Directors recommends
the election of Directors of the six (6) nominees listed below to hold office
until the next Annual Meeting of Shareholders and until their successors are
elected and qualified or until their earlier death, resignation or removal. The
persons named as "proxies" in the enclosed form of Proxy, who have been
designated by Management, intend to vote for the six (6) nominees for election
as Directors unless otherwise instructed in such proxy. If at the time of the
Meeting, any of the nominees named below should be unable to serve, which event
is not expected to occur, the discretionary authority provided in the Proxy will
be exercised to cumulatively vote for the remaining nominees, or for a
substitute nominee or nominees, if any, as shall be designated by the Board of
Directors.
Nominees
The following table sets forth the name and age of each nominee for Director,
indicating all positions and offices with the Company presently held by him, the
period during which he has served as such, and the class and term for which he
has been nominated:
<TABLE>
<CAPTION>
Year First
Name Age Position Director
-------------------- --- ---------------------------------- -------------
<S> <C> <C>
Dennis Brovarone 44 Director 1996
Gary Brownell, CPA 52 Treasurer CFO, Director 1996
Patrick Galuska 41 Director 1996
Michael L. Krall 48 President, CEO, Chairman, Director 1992
Eugene Peiser, PD 69 Director 1996
Donna Singer 30 Executive Vice President, Director 1999
</TABLE>
Business Experience of Nominees
-------------------------------
DENNIS BROVARONE Mr. Brovarone has been practicing corporate and securities law
since 1986 and as a solo practitioner since 1990. He was elected to the
Company's Board of Directors in April 1996. Since December 1997, Mr. Brovarone
has served as the President and Chairman of the Board of Directors of Ethika
Corporation, a publicly held, Mississippi corporation investment holding company
with its office in Littleton, Colorado. From January 1995 to March 1998 Mr.
Brovarone served as President (Chairman) of the Board of Directors of The
Community Involved Charter School, a four year old K-12 public school located in
Lakewood, Colorado, operating under an independent charter and serving
approximately 350 students in an individualized, experiential learning
environment. Prior to 1990, Mr. Brovarone served as in-house counsel to R.B.
Marich, Inc., a Denver, Colorado based brokerage firm. Mr. Brovarone lives and
works in Littleton, Colorado.
GARY W. BROWNELL Mr. Brownell is a Certified Public Accountant in a private
partnership practice. He is the partner in charge of taxes and municipal audits
for his firm. Mr. Brownell graduated from San Diego State University in 1973
with a Bachelor of Science degree in accounting. He received his Certified
Public Accountant designation in 1983. Mr. Brownell has been a partner in
Brownell and Duffy since 1985.
PATRICK GALUSKA Mr. Galuska is a consulting petroleum engineer in Denver,
Colorado. His practice focuses mainly on the acquisition and exploitation of
underdeveloped oil and gas assets in the Rocky Mountain area. He is a Registered
Professional Engineer and is a member of the Society of Petroleum Engineers. Mr.
Galuska earned his BS degree in petroleum engineering from the University of
Wyoming and received his MBA degree in Finance from the University of Denver.
Mr. Galuska resides in Littleton, Colorado with his wife and two children.
MICHAEL L. KRALL Mr. Krall is the President, CEO and Chairman of the Board of
Directors of Innovative Medical Services, a position he has held since 1993. He
is responsible for the strategic planning, product development, and day-to-day
operations of IMS. Previously, Mr. Krall was the President and CEO of
Bettis-Krall Construction, Inc. a successful building-development company of
custom homes and commercial property in San Diego County, California. He has
also held numerous positions in general management in the hospitality industry.
Mr. Krall attended Pepperdine University (economics, statistics mechanical
engineering). He previously served 4 years in the United States Marine Corps and
was elected, by general election, to a 4 year term on the Valle de Oro Planning
Board. Mr. Krall lives in El Cajon, California with his wife, Connie and two
children.
EUGENE S. PEISER, DOCTOR OF PHARMACY Dr. Peiser has been an independent
consultant to FDA regulated industries since 1974 and a Member of the Board of
Innovative Medical Services since 1994. He graduated from the University of
Tennessee College of Pharmacy with a Bachelor of Science in Pharmacy in 1951 and
<PAGE>
has received his Doctorate of Pharmacy. Dr. Peiser's consultancy advises on a
wide variety of subjects, including compliance with the Prescription Drug
Marketing Act and other government compliance matters, employee training and
drug repackaging. Dr. Peiser furnishes expert witness services and has provides
approved Pharmaceutical Continuing Education to several thousand attendees at
his seminars. Dr. Peiser is a Founding Director of the Association of Drug
Repackagers; is appointed as a Registered Arbitrator by the American Registry of
Arbitrators; serves as a member of the Surgeon General's Speakers Bureau; and is
President of the Southwest Chapter of the Association of Military Surgeons. Dr.
Peiser lives and works in Palm Harbor, FL.
DONNA SINGER Ms. Singer is the Executive Vice President of Innovative Medical
Services. From 1996-1998 Ms. Singer served as Vice President of Operations for
the Company. Ms. Singer is responsible for company operations, corporate
communications, investor relations, marketing and sales. Previously, Ms. Singer
served as the investor relations executive at Western Garnet International, a
Toronto Stock Exchange mining company. Ms. Singer graduated from Gonzaga
University with a Bachelor of Arts degree in English and lives in El Cajon,
California.
PROPOSAL NO. 2. APPROVAL OF THE INNOVATIVE MEDICAL SERVICES 2001 DIRECTORS AND
-------------- OFFICERS STOCK OPTION PLAN
On October 24, 2000, the Company's Board of Directors approved submitting the
Innovative Medical Services 2001 Officers Directors Stock Option Plan to the
shareholders for approval. The Board of Directors recommends approval of the
Plan. 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 acquire shares of the Company's common stock.
The Options granted are not "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended. The issuance of
such non-qualified options pursuant to this Plan is not expected to be a taxable
event for recipient until such time that the recipient elects to exercise the
option whereupon the recipient is expected to recognize income to the extent the
market price of the shares exceeds the exercise price of the option on the date
of exercise.
The Plan is administered by an Administrative Committee whom shall serve a
one-year term. The Administrative Committee is composed of the Board's
Compensation/Administration Committee. Subject to anti-dilution provisions, the
Plan may issue Options to acquire up to 1,000,000 shares to Directors and
Officers. The Company will not receive any consideration for the grant of
options under the Plan and approximate market value of the shares to be reserved
for the plan is $2,700,000 based upon the average thirty trading day closing
price for the Company's common stock for the period ending July 31, 2000. The
exercise price for Options shall be set by the Administrative Committee but
shall not be for less than the fair market value of the shares on the date the
Option is granted. Fair market value shall mean the average of the closing price
for ten consecutive trading days at which the Stock is listed in the Nasdaq
quotation system ending on the day prior to the date an Option is granted. The
period in which Options can be exercised shall be set by the Administrative
Committee not to exceed five years from the date of Grant. Options granted to
new executive officers or directors shall vest one year from date of appointment
or election. Shares issuable under options granted to continuing officers or
directors are immediately exercisable and vest upon exercise. The maximum number
of shares subject to Options granted to any on Director of Officer shall not
exceed 200,000 shares in any 12-month period.
The Executive Officers and Directors of the Company are eligible to participate
in the Plan. The Administrative Committee shall grant to individuals newly
appointed as Executive Officers or as Directors, an option to purchase 100,000
shares of common stock at fair market value. Upon each subsequent anniversary
thereof, each such Officer and Director will receive an option to purchase
50,000 shares of common stock at fair market value. The plan also gives the
Administrative Committee discretion to award additional options. The aggregate
number and kind of shares within the Plan and the rights under outstanding
Options granted hereunder, both as to the number of shares and Option price,
will be adjusted accordingly in the event of a reverse split in the outstanding
shares of the Common Stock of the Company.
<PAGE>
The Board may at any time terminate the plan. The approval of the majority of
shareholders is required to increase the total number of shares subject to the
plan, change the manner of determining the option price or to withdraw the
administration of the plan from the Administrative Committee.
2001 DIRECTORS AND OFFICERS PLAN BENEFITS
N No options have been granted under this plan as yet and no options are
anticipated for the existing executive officers and directors until November
2001.
REQUEST FOR COPY OF FORM 10KSB
Shareholders may request a copy of the Form 10KSB by writing to the Company's
offices, 1725 Gillespie Way, El Cajon, California 92020.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any proposal by a shareholder to be presented at the Company's next Annual
Meeting of Shareholders, including nominations for election as directors must be
received at the offices of the Company, 1725 Gillespie Way, El Cajon, California
92020, no later than July 31, 2001.
<PAGE>
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF INNOVATIVE MEDICAL SERVICES
The undersigned appoints Michael L. Krall (and Donna Singer, if Mr. Krall is
unable to serve), as the undersigned's lawful attorney and proxy, with full
power of substitution and appointment, to act for and in the stead of the
undersigned to attend and vote all of the undersigned's shares of the Common
Stock of INNOVATIVE MEDICAL SERVICES, a California corporation, at the Annual
Meeting of Shareholders to be held at Doubletree Hotel San Diego, 7450 Hazard
Center Drive, San Diego, California 92108 , at 10:00 am. Pacific Standard Time,
on January 8, 2000 and any and all adjournments thereof, for the following
purposes:
A SHAREHOLDER MAY USE CUMULATIVE VOTING FOR THE NOMINEES OF THAT PROPOSAL BY
VOTING THE NUMBER OF THE SHARES HELD TIMES THE NUMBER OF DIRECTORS BEING ELECTED
ON A SINGLE OR GROUP OF CANDIDATES. SHAREHOLDERS MAY ALSO WITHHOLD AUTHORITY TO
VOTE FOR A NOMINEE(S) BY DRAWING A LINE THROUGH THE NOMINEE'S NAME(S). [FOR
EXAMPLE A SHAREHOLDER WITH 1,000 SHARES MAY CAST A TOTAL OF 6,000 VOTES (# OF
SHARES X 6 DIRECTORS) FOR ALL, ONE OR A SELECT NUMBER OF CANDIDATES.]
PROPOSAL NO. 1 ELECTION TO THE BOARD OF DIRECTORS
[ ] FOR Management's nominees listed below equally among all the nominees OR
VOTED AS FOLLOWS:
Dennis Brovarone ________ Shares Gary Brownell ________ Shares
Patrick Galuska ________ Shares Michael L. Krall ________ Shares
Eugene Peiser ________ Shares Donna Singer ________ Shares
[ ] AGAINST Management's nominees for the Board of Directors,
MANAGEMENT INTENDS TO VOTE SHARES FOR ALL OF THE SIX (6) NOMINEES NAMED ABOVE
UNLESS OTHERWISE INSTRUCTED IN THIS PROXY. IF AT THE TIME OF THE MEETING, ANY OF
THE NOMINEES SHOULD BE UNABLE TO SERVE, THE DISCRETIONARY AUTHORITY PROVIDED IN
THE PROXY WILL BE EXERCISED TO CUMULATIVELY VOTE FOR THE REMAINING NOMINEES, OR
FOR A SUBSTITUTE NOMINEE OR NOMINEES, IF ANY, AS SHALL BE DESIGNATED BY THE
BOARD OF DIRECTORS.
PROOSAL NO. 2 APPROVAL OF THE INNOVATIVE MEDICAL SERVICES 2001 DIRECTORS AND
OFFICERS STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH
THE SHAREHOLDER'S SPECIFICATION ABOVE. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS FOR WHICH THE SHAREHOLDER HAS NOT INDICATED A
PREFERENCE OR IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
In the Shareholder's discretion the Proxy is authorized to vote on such other
business as may properly be brought before the meeting or any adjournment or
postponement thereof.
The undersigned revokes any proxies heretofore given by the undersigned and
acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement furnished herewith and the Annual Report to Shareholders previously
provided.
Dated: _______________, _____ _____________________________
_____________________________
Signature(s) should agree with the name(s) hereon. Executors, administrators,
trustees, guardians and attorneys should indicate when signing. Attorneys should
submit powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF INNOVATIVE
MEDICAL SERVICES. PLEASE SIGN AND RETURN THIS PROXY TO INNOVATIVE MEDICAL
SERVICES, C/O COMPUTERSHARE TRUST COMPANY, P.O. BOX 1596, DENVER, CO
80201. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ATTEND THE MEETING.
