<PAGE>
DYNATRONICS CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
November 19, 1996
TO THE SHAREHOLDERS OF DYNATRONICS CORPORATION:
Please take notice that the Annual Meeting of
Shareholders of Dynatronics Corporation, a Utah corporation
(the "Company"), will be held at 7030 Park Centre Drive, Salt
Lake City, Utah, 84121, as provided by the bylaws of the
Company, as amended, on Tuesday, November 19, 1996, at 4:00
p.m., Mountain Standard Time, for the following purposes:
1. To elect a Board of six directors to hold office until the
next Annual Meeting of Shareholders or until their
respective successors have been elected or appointed;
2. To consider and act upon a proposal that the shareholders
ratify the appointment of KPMG Peat Marwick as the
Company's independent auditors for the 1997 fiscal year.
3. To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
Nominees for directors are set forth in the enclosed Proxy
Statement.
Only shareholders of record at the close of business on
Wednesday, October 2, 1996 will be entitled to vote at this
meeting. A list of shareholders entitled to vote will be
available for inspection at the offices of the Company for ten
days prior to the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Bob Cardon
----------------------------------------
Bob Cardon, Corporate Secretary
Salt Lake City, Utah
October 10, 1996
IMPORTANT
Whether or not you expect to attend the Annual Meeting in
person, to assure that your shares will be represented, please
complete, date, sign and return the enclosed proxy without
delay in the enclosed envelope. Your proxy will not be used
if you are present at the meeting and desire to vote your
shares personally.
<PAGE>
PROXY STATEMENT
DYNATRONICS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 19, 1996
This Proxy Statement is furnished pursuant to Regulation
14A under the Securities Exchange Act of 1934 in connection
with the Annual Meeting of Shareholders of Dynatronics
Corporation ("Dynatronics" or the "Company") to be held at
7030 Park Centre Drive, Salt Lake City, Utah 84121 at 4:00
p.m. (local time) on November 19, 1996, and at any and all
adjournments or postponements thereof. This Proxy Statement,
the Notice of Annual Meeting, and a copy of the Company's
Annual Report will be provided to shareholders of record as of
October 2, 1996 and will be mailed on or about October 18,
1996. The cost of disseminating this information will be paid
by the Company.
ANY SHAREHOLDER WHO EXECUTES A PROXY MAY REVOKE IT AT
ANYTIME BEFORE IT IS EXERCISED BY GIVING ANOTHER PROXY OR BY
LETTER OR TELEGRAM DIRECTED TO THE COMPANY.
THE SOLICITATION OF PROXIES TO WHICH THIS PROXY STATEMENT
RELATES IS BEING MADE ON BEHALF OF THE COMPANY BY ITS BOARD OF
DIRECTORS.
The matters to be considered and voted upon at the Annual
Meeting will be:
1. Election of six directors to serve until the next Annual
Meeting of Shareholders or until their successors are elected
and qualified;
2. Ratification of the selection of KPMG Peat Marwick as the
independent auditors of the Company; and
3. Transaction of such other business as may properly come
before the meeting.
It is important that proxies be returned promptly.
Stockholders are requested to vote, sign, date and return the
proxy in the enclosed self-addressed envelope.
The Board of Directors recommends that the stockholders
vote FOR the election of its nominees for directors, and FOR
the proposal to ratify the selection of KPMG Peat Marwick as
independent public accountants.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of the close of business on the record date (October 2,
1996), the date for determining shareholders entitled to
notice of and to vote at the meeting, Dynatronics had issued
and outstanding 8,424,747 shares of common stock, no par
value, all of which are entitled to vote and be voted at the
meeting. Each share is entitled to one vote and only
shareholders of record of the Company's common stock as of the
close of business on the record date shall be entitled to vote
their shares. Shareholders will not be allowed to cumulate
their shares. Holders of a majority of such shares must be
represented at the Annual Meeting to constitute a quorum for
purposes of conducting any business.
Each of the proposed actions to be considered requires the
affirmative approval of a majority of the votes cast at the
Annual Meeting where holders of a majority of the shares
issued and outstanding are present in person or by proxy.
The following tables set forth, as of October 2, 1996, the
number of shares of common stock, no par value, of the Company
owned beneficially by all the persons known to be holders of
more than five percent (5%) of the Company's voting
securities:
Amount and
Nature of
Name and Address of Title of Beneficial Percent of
Beneficial Owner Class Ownership Class (7)
- -------------------- -------- ----------- --------
Kelvyn H. Cullimore, Jr. Common 742,225 (1) 8.8%
7030 Park Centre Drive Stock
Salt Lake City, UT 84121
<PAGE>
The following tables set forth, as of October 2, 1996, the
number of shares of common stock, no par value, of the Company
owned beneficially by (a) directors and executive officers and
(b) all executive officers and directors of the Company as a
group:
<TABLE>
<CAPTION>
Amount and Nature
Title of of Beneficial Percent of
Name of Beneficial Owner Class Ownership Class (7)
- ------------------------ -------- ----------------- ----------
<S> <C> <C> <C>
Kelvyn H. Cullimore Common 178,256 (2) 2.1%
stock
Kelvyn H. Cullimore, Jr. " 742,225 (1) 8.8%
E. Keith Hansen, M.D. " 227,350 (3) 2.7%
Larry K. Beardall " 68,000 (4) *
V. LeRoy Hansen " 28,000 (5) *
John S. Ramey " 22,500 (6) *
All executive officers and " 1,236,331 (7)(8) 14.7%
directors as a group
(8 persons)
* Less than 1 percent
</TABLE>
(1) Includes 609,105 shares owned directly, 51,120 shares
owned by Mr. Cullimore's wife and minor children, 30,000
shares owned by a family corporation of which Mr. Cullimore,
Jr. is Vice President, and exercisable options for the
purchase of 52,000 shares.
(2) Includes 91,256 shares owned directly, 5,000 shares owned
by Mr. Cullimore's wife, 30,000 shares owned by a family
corporation of which Mr. Cullimore is President, and
exercisable options for the purchase of 52,000 shares.
(3) Includes 181,350 shares owned directly and exercisable
options for the purchase of 46,000 shares.
(4) Includes 37,000 shares owned directly and exercisable
options for the purchase of 31,000 shares.
(5) Includes exercisable options for the purchase of 28,000
shares.
(6) Includes 9,500 shares owned by a retirement plan as to
which Mr. Ramey is beneficiary and exercisable options for the
purchase of 13,000 shares.
<PAGE>
(7) The "Percent of Class" calculation is based on shares and
options beneficially owned divided by -- 8,424,747 the number
of shares outstanding as of October 2, 1996 plus non-issued
securities which are subject to exercisable options by the
particular beneficial owner identified in the table.
(8) The calculation of beneficially owned shares of all
executive officers and directors as a group eliminates the
duplicate entries of shares owned by a family corporation
which are reflected in the beneficial ownership of both Kelvyn
H. Cullimore and Kelvyn H. Cullimore, Jr.
PROPOSAL 1 - ELECTION OF DIRECTORS
At the Annual Meeting of Shareholders, six (6) directors
will be elected. The Board of Directors has no reason to
believe that any nominees named herein will be unable or
unwilling to serve. Each person identified as a nominee has
consented to be named as such.
Directors of the Company hold office until the next annual
meeting of the Company's shareholders and until their
successors have been elected or appointed and duly qualified.
Executive officers are elected by the Board of Directors of
the Company at the first meeting after each annual meeting of
shareholders and hold office until their successors are
elected or appointed and duly qualified. The Company has no
executive committees. Vacancies on the board which are
created by the retirement, resignation or removal of a
director may be filled by the vote of the remaining members of
the Board, with such new director serving the remainder of the
term or until his successor shall be elected and qualify.
The bylaws presently provide for a board comprised of
seven directors. There is presently no nominee for the
seventh position. Consequently, the Board of Directors may
determine whether it will fill the vacancy or leave it
unfilled until the next meeting of the shareholders, as
provided by the bylaws of the Company. Only six nominees will
be voted upon at the Annual Meeting.
There were six regular meetings of the Board of Directors
held during the fiscal year ending June 30, 1996. No director
attended fewer than 75% of the meetings. The Company had no
formal standing audit or nominating committee during the
fiscal year ending June 30, 1996. The Company has a
Compensation Committee composed of the outside directors of
the board which reviews and approves compensation matters for
executive officers of the Company. Members of this Committee
are: Dr. E. Keith Hansen, V. LeRoy Hansen, and Joseph H.
Barton. There were four meetings of the Compensation
Committee of the Board of Directors held during the fiscal
year ending June 30, 1996. All members of the Compensation
Committee were in attendance at each meeting.
<PAGE>
There are no material legal proceedings to which any
director or executive officer is a party adverse to the
Company.
The directors and executive officers of the Company at
October 2, 1996 were:
<TABLE>
<CAPTION>
Director
or Officer Position
Name Age Since with Company
- ---- --- ----- ------------
<S> <C> <C> <C>
Kelvyn H. Cullimore* 61 1983 Chairman of the Board
Kelvyn H. Cullimore, Jr.* 40 1983 President, CEO and Director
Larry K. Beardall* 40 1986 Executive Vice President
of Sales and Marketing and
Director
E. Keith Hansen, M.D.* 51 1983 Director
V. LeRoy Hansen* 58 1987 Director
Joseph H. Barton* 68 1995 Director
John S. Ramey 45 1992 Vice President of Operations
and Research & Development
Keith E. Turner 47 1992 Chief Financial Officer and
Treasurer
*Nominated for reelection to Board.
</TABLE>
Kelvyn H. Cullimore is the father of Kelvyn H. Cullimore,
Jr. V. LeRoy Hansen and E. Keith Hansen are cousins.
Kelvyn H. Cullimore has served as Chairman of the Board of
the Company since its incorporation in April, 1983. From 1983
until 1992, Mr. Cullimore served as President of the Company.
Mr. Cullimore received a B.S. in Marketing from Brigham Young
University in 1957, and following graduation, worked for a
number of years as a partner in a family-owned home
furnishings business in Oklahoma City, Oklahoma. Mr.
Cullimore has participated in the organization and management
of various enterprises, becoming the president or general
partner in several business entities, including real estate,
motion picture, and equipment partnerships. Since 1986, Mr.
Cullimore has served as Chairman and President of ITEC
Attractions, an affiliate of the Company. From 1979 until
1992, Mr. Cullimore served as Chairman of the Board of
American Consolidated Industries ("ACI"). ACI was merged with
and into the Company in November, 1992.
<PAGE>
Kelvyn H. Cullimore, Jr. was elected President and Chief
Executive Officer of the Company in December of 1992. He has
been a Director since the incorporation of the Company. He
served as Secretary/Treasurer of the Company from 1983 until
1992 and Administrative Vice President from 1988 until 1992.
Mr. Cullimore graduated from Brigham Young University with a
degree in Financial and Estate Planning in 1980. Since
graduation, Mr. Cullimore has served on the Board of Directors
of several businesses, including Dynatronics Marketing Company
and ACI, both of which were affiliates of the Company until
they were merged into the Company. In addition, he served as
Secretary/Treasurer of ACI and Dynatronics Marketing Company.
From 1983 until 1992 Mr. Cullimore served as Executive Vice
President and Chief Operating Officer of ACI. Since 1986, Mr.
Cullimore has served on the Board of Directors of ITEC
Attractions.
Larry K. Beardall was elected Executive Vice President of
the Company in December of 1992. He has served as a Director
and the Vice President of Sales and Marketing for the Company
since July of 1986. Mr. Beardall joined Dynatronics in
February of 1986 as Director of Marketing. He graduated from
Brigham Young University with a degree in Finance in 1979.
Prior to his employment with Dynatronics, Mr. Beardall worked
with GTE Corporation in Durham, North Carolina as the Manager
of Mergers and Acquisitions and subsequently with Donzis
Protective Equipment in Houston, Texas as National Sales
Manager. He also served on the Board of Directors of Nielsen
& Nielsen, Inc., the marketing arm for Donzis, a supplier of
protective sports equipment.
E. Keith Hansen, M.D. has been a Director of the Company
since 1983. Dr. Hansen obtained a Bachelor of Arts degree
from the University of Utah in 1966 and an M.D. from Temple
University in 1972. He has been in private practice in Sandy,
Utah since 1976. Dr. Hansen was also a Director of American
Consolidated Industries, an affiliate of the Company until
1992, and he is Vice President and Director of Mountain
Resources Corporation and a Director of Accent Publishers,
each of which is based in Salt Lake City, Utah.
Joseph H. Barton was elected a Director of the Company in
November, 1995, and began serving in January, 1996. Mr.
Barton received a Civil Engineering degree from the University
of California at Berkeley and has held various executive
positions including President of J. H. Barton Construction
Company, Senior Vice President of Beverly Enterprises, and
President of KB Industries, a building and land development
company. Most recently, Mr. Barton served as Senior Vice
President of GranCare, Inc. from 1989 to 1994 and currently is
a consultant for Covenant Care, Inc. and GranCare, Inc.
<PAGE>
V. LeRoy Hansen has been a Director of the Company since
1987. Mr. Hansen received a Bachelor of Science degree in
Economics from the University of Utah in 1965. From 1960-
1980, Mr. Hansen was employed by AT&T in numerous management
positions. From 1976-1978, he served AT&T headquarters in
Market Management Concept Development and Implementation as
well as Long Range Financial Planning. In 1980 he co-founded
Mountain Resources Corporation, an energy development company
and served as Vice President until 1988. In 1988 Mr. Hansen
founded Associated Enterprises, Inc., a corporation providing
management and business development consulting services, and
served as President until 1996. In May of 1992, Mr. Hansen
founded Silver Summit, L.C., a real estate development
company.
John S. Ramey joined the Company in December, 1992 as Vice
President of Research and Development and currently serves as
Senior Vice President of Operations. Prior to joining the
Company, Mr. Ramey worked for 16 years with Phillips Semi-
conductors--Signetics, an integrated circuit manufacturing
company as Manager of Product Engineering. From 1983 to 1989
Mr. Ramey also served as President of Enertronix, a small
public corporation. Since 1989 Mr. Ramey has served as Vice
President of JRH Technology, a private engineering firm. Mr.
Ramey earned his MBA degree in 1991 from the University of
Phoenix (in Salt Lake City, Utah) and a BS degree in
electronics in 1977 from Brigham Young University.
Keith E. Turner served as Controller of the Company from
February 1989 to March 1994, and Chief Financial Officer and
Treasurer since December 1992. Mr. Turner also serves as
Chief Financial Officer of ITEC Attractions, a position he has
held since June 1991. From 1986 to 1989, Mr. Turner was self-
employed, providing services in accounting, sales and customer
relations and pursued various personal business interests and
opportunities. From 1983 to 1986 he was business
administrator of a law firm in Salt Lake City, Utah. Mr.
Turner also has experience in real estate appraisal and
manufacturing management. He received a B.S. in Accounting
from Brigham Young University in 1974 and an M.B.A. from the
University of Utah in 1975.
Certain Relationships and Related Transactions
- ----------------------------------------------
The Company provides ITEC, an affiliate, with office space
and administrative services at the Company's headquarters in
Salt Lake City, Utah. Office space consists of offices and
allocated use of common and conference areas. Administrative
services include secretarial, administrative and accounting
functions. During fiscal 1996, the Company charged ITEC
$84,000 for the space and services provided by the Company.
ITEC filed for protection under Chapter 11 of the U.S.
Bankruptcy Laws in January, 1996. During the year, the
<PAGE>
Company recorded charges of $720,103 related to the ITEC
bankruptcy. ITEC is current in its obligations to the Company
in the period since the bankruptcy filing. For more
information, see the Company's Annual Report on Form 10-K for
the year ended June 30, 1996.
Compliance with Section 16(a) of the Securities Exchange Act
- ------------------------------------------------------------
of 1934
- -------
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the
Company's equity securities, to file reports of ownership and
changes in ownership on Forms 3, 4 and 5 with the Securities
and Exchange Commission ("SEC"). Officers, directors and
greater than ten-percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section
16(a) forms which they file.
Based solely on the Company's review of the copies of such
forms furnished to the Company, the Company believes that
during its 1996 fiscal year all Section 16(a) filings
applicable to its officers, directors and greater than ten-
percent beneficial owners were filed.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee applies a consistent philosophy
to compensation for all executives. This philosophy is based
on the premise that the achievements of the Company result
from the coordinated efforts of all individuals working toward
common objectives. The executive management team is
responsible for achieving those objectives through teamwork
that is focused on meeting the expectations of customers and
shareholders.
Compensation Philosophy
The goals of the compensation program are to align
compensation with business objectives and performance, and to
enable the Company to attract, retain and reward executive
officers who contribute to the long-term success of the
Company. The Company's compensation program for executive
officers is based on the same four principles applicable to
compensation decisions for all employees of the Company:
<PAGE>
The Company pays competitively. The Company is
committed to providing a program that helps attract
and retain the best people in the industry. To ensure
that pay is competitive, the Committee regularly
compares its pay practices with those of other leading
companies and sets its pay parameters based on this
review.
The Company pays for relative sustained performance.
Executive officers are rewarded based upon corporate
performance, department performance and individual
performance. Corporate performance and department
performance are evaluated by reviewing the extent to
which strategic and business plan goals are met,
including such factors as operating profit,
performance relative to competitors and timely new
product introductions. Individual performance is
evaluated by reviewing organizational and management
development progress and the degree to which teamwork
and Company values are fostered.
The Company strives for fairness in the administration
of pay.
The Company believes that executives should understand
the performance evaluation and pay administration
process.
The process of assessing performance includes setting
objectives and key goals, ongoing feedback on performance, and
evaluating the accomplishments of objectives/key goals.
The Company has had a long and successful history of
using a simple total compensation program that consists of
salary, bonus and equity-based compensation. Having a
compensation program that allows the Company to successfully
attract and retain key employees permits it to provide useful
products and services to customers, enhance shareholder value,
motivate technological innovation, foster teamwork, and
adequately reward employees. Compensation is both cash-based
and equity-based as described below.
Cash-Based Compensation
Salary
The Compensation Committee sets base salaries for
executives by reviewing the base salaries for competitive
positions in the industry and by a review of each
executive's performance. There is no component that
provides for automatic increases in base salary.
Salaries are adjusted on an "as needed" basis, however,
not more frequently than once a year.
<PAGE>
Bonus
The Company has a bonus plan under which it distributes
to certain executive officers, a percentage of its
profits before income taxes and other adjustments. The
Committee believes that the executive management team
shares the responsibility for the Company achieving
profits. Therefore, base salaries are targeted at the
lower end of the competitive scale, with the intent that
the bonus program provides monetary rewards as
profitability is improved.
Equity-Based Compensation
Stock Option Program
The purpose of this program is to provide additional
incentives to employees to work to maximize shareholder
value. The option program also utilizes vesting periods
to encourage employees to continue in the employ of the
Company.
COMPENSATION COMMITTEE
----------------------
V. LeRoy Hansen, Chairman
E. Keith Hansen, M.D.
Joseph H. Barton
Cash Compensation of Officers
- -----------------------------
The following table sets forth the compensation of the
Company's chief executive officer and all executive officers
whose total annual salary and bonus exceeded $100,000 during
the fiscal year ended June 30, 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
-------------------------------- -------------------- -------
Name Other Restricted
and Annual Stock LTIP All Other
Principal Compen- Award(s) Options/ Payouts Compen-
Position Year Salary($) Bonus($) sation(1) ($ ) SAR(#) ($) sation($)
- ------------ ---- --------- -------- --------- ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kelvyn H. Cullimore, Jr. 1996 $95,400 $15,277 $8,279 $ -0- 25,000 $ -0- $ -0-
President/CEO 1995 $90,000 $12,973 $7,195 $ -0- -0- $ -0- $ -0-
1994 $85,000 $ -0- $9,539 $ -0- 52,000 $ -0- $ -0-
Larry K. Beardall* 1996 $86,920 $20,369 $9,237 $ -0- 20,000 $ -0- $ -0-
Executive Vice President
*During Fiscal 1994 and 1995, Mr. Beardall's salary and bonus did not exceed $100,000.
</TABLE>
<PAGE>
(1) The Company provides automobiles for certain
executive officers and pays all vehicle operating expenses.
The Company also provides life insurance for its officers.
The amount of this column includes the approximate value of
these benefits to the named officer.
During the last completed fiscal year, the Company made
no awards under any long term incentive plan and no stock
appreciation rights were granted.
The following chart sets forth a five year comparison of
the yearly percentage change in the cumulative total
shareholder return on the Company's common stock in relation
to the cumulative total return of the NASDAQ market and to a
peer group index of companies in similar industries.
<PAGE>
[Insert Graph]
<PAGE>
Bonus Plan
- ----------
The Company maintains a discretionary incentive bonus
plan administered by the Compensation Committee. Pursuant
to the plan, the Compensation Committee granted incentive
bonuses to certain officers and employees of the Company
during the year. The total amount of bonuses paid for
fiscal 1996 was $79,710 of which $63,654 was for officers
and is included under the annual bonus category in the
compensation table above.
Salary Continuation Plan
- ------------------------
During fiscal 1988, the Company's Board of Directors
adopted a Salary Continuation Agreement (Agreement) for
certain Officers of the Company. The Agreement provides for
a pre-retirement benefit to the employee's designated
beneficiary in the event that the employee dies before
reaching age 65 and a retirement benefit upon reaching age
65. The pre-retirement benefit provides for payment of 50
percent of the employee's compensation at the time of death
up to $75,000 annually for a period of 15 years or until the
employee would have reached age 65, whichever is longer.
The retirement benefit provides the employee $75,000
annually for a period of 15 years. Presently, Kelvyn H.
Cullimore, Kelvyn H. Cullimore, Jr. and Larry K. Beardall
are covered under this plan.
Funding for obligations arising in connection with the
Agreement is provided by life insurance policies on
participating employees, of which the Company is the owner
and beneficiary. The face amounts of the policies have been
determined so that sufficient cash values and death benefits
will be provided to meet the obligations as they occur. In
fiscal 1996, the Company expensed $37,107 relating to salary
continuation obligations. No benefits have been paid under
this salary continuation plan.
Profit-Sharing and 401(k) Plan
- ------------------------------
The Company has adopted a Profit-Sharing and 401(k) Plan
(the "Plan") which consists of a profit-sharing plan and a
salary reduction arrangement. Employees who are age 20 and
have completed at least six months of service with the
Company are eligible to participate in the Plan.
<PAGE>
Eligible employees may make contributions to the Plan in
the form of salary deferrals up to 15% of total
compensation, not to exceed $9,500, the maximum allowable
amount of salary deferrals for calendar 1995. The Company
matches annual employee contributions at 25% of employee
contributions, up to a maximum of $500 per employee per
year.
Participants under the Plan are 100% vested in their
salary deferral contributions and vest 20% a year after 2
years of participation in Company matching contributions.
Amounts deferred by employees under the Plan are included
under "Salary" in the compensation table for applicable
executives above. Amounts contributed by the Company for
each applicable individual are included in the "Other
Compensation" column in the table above.
Stock Options Outstanding
- -------------------------
On August 12, 1993, options to purchase 456,300 shares
were granted under the 1992 Stock Option Plan as follows:
Kelvyn H. Cullimore, Jr., 52,000 shares; executive officers
as a group, 175,000 shares (exclusive of Cullimore, Jr.);
others, 229,300 shares. Options are to purchase shares of
the common stock, no par value, of the Company and are
exercisable one year (minimum) from the date of grant. The
per share exercise price of these options is $.875.
During fiscal 1996, options to purchase 166,026 shares
were granted under the 1992 Stock Option Plan as follows:
Kelvyn H. Cullimore, Jr., 25,000 shares; to all executive
officers as a group, 65,000 shares (exclusive of Kelvyn H.
Cullimore, Jr.); and to others, 76,026. Options are to
purchase the common stock, no par value, of the Company and
are exercisable one year (minimum) from the date of grant.
The per share exercise price of these options ranges from
$1.08 to $1.28.
The following table sets forth options granted to named
executive officers whose total compensation exceeded
$100,000 during fiscal 1996. The Company has not granted
any SAR's to employees or directors.
<PAGE>
<TABLE>
<CAPTION>
Options/SAR Grants in Last Fiscal Year
Potential
Realized Value at
Assumed Annual Alternative
Rate of Stock Price to (f) and (g):
Individual Appreciation Grant Date
Grants for Option Term Value
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
% of
Number of Total
Securities Options/
Underlying SARs
Options/ Granted to Exercise Grant
SARs Employees or Base Date
Granted in Fiscal Price Expiration Present
Name (#) Year ($/Sh) Date 5% ($) 10% ($) Value $
- -----------------------------------------------------------------------------------------------------------
Kelvyn H. Cullimore, Jr. 25,000/0 17%/0% $1.08 2/2/2001 $7,460 $16,484 0
President and CEO
Larry K. Beardall 20,000/0 14%/0% $1.08 2/2/2001 $5,968 $13,187 0
</TABLE>
The following table sets forth the stock options granted
to the Company's chief executive officer and all other
executive officers whose total compensation exceeded
$100,000 during fiscal 1996.
Aggregated Option/SAR Exercises In Last Fiscal Year
and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
June 30, 1996 June 30, 1996
Shares
Acquired on Exercisable/ Exercisable/
Name Exercise Value Realized ($) Unexercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kelvyn H. Cullimore, Jr. 0 0 52,000/25,000 $0/$0
President/CEO
Larry K. Beardall 0 0 31,000/20,000 $0/$0
Executive Vice President
</TABLE>
<PAGE>
Remuneration of Directors
- -------------------------
Directors who receive remuneration as officers of the
Company are paid $100 per meeting for attendance at regular
and special director's meetings. Outside directors are paid
an annual retainer of $3,600. In addition, the Company pays
all expenses incurred by directors in connection with
attendance at board meetings.
Each outside director also participates in an annual
bonus program. The full annual bonus per director is one
percent of the Company's pre-tax profits. A total of
$15,948 was paid to the outside directors under this plan
for the fiscal year 1996.
PROPOSAL 2 - RATIFICATION OF SELECTION OF AUDITORS
The firm of KPMG Peat Marwick served as independent
public accountants for the Company for the fiscal year ended
June 30, 1996. The Board of Directors desires the firm to
continue in this capacity for the current fiscal year.
Accordingly, a resolution will be presented at the meeting
to ratify the selection of KPMG Peat Marwick by the Board of
Directors as independent accountants to audit the accounts
and records of the Company for the fiscal year ending June
30, 1997, and to perform other appropriate services. The
Board recommends that the shareholders vote FOR Proposal 2,
ratifying the selection of KPMG Peat Marwick as auditors for
the Company for fiscal 1997. If the stockholders fail to
ratify the selection, the Board of Directors will reconsider
its decision.
Representatives of KPMG Peat Marwick are expected to be
present at the Annual Meeting of Shareholders of the
Company, will have the opportunity to make a statement if
they desire and may be available to respond to appropriate
questions. During the two most recent fiscal years, there
has been no resignation or dismissal of the independent
accountants engaged by the Company.
GENERAL
Expenses which are incurred in connection with the
solicitation of proxies for use at the Annual Meeting will
be borne by the Company. While there is no formal agreement
to do so, the Company will reimburse banks, brokerage houses
and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding annual meeting materials
to their principals.
<PAGE>
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the
1997 Annual Meeting of the Company's Shareholders must be
received by the Company at its corporate headquarters on or
before July 31, 1997, in order to be included in the Proxy
Statement and Form of Proxy relating to that meeting.
OTHER MATTERS
The Board of Directors of the Company knows of no other
matters to be presented at the Annual Meeting of
Shareholders to which this Proxy Statement relates.
<PAGE>
AVAILABILITY OF INFORMATION
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH
SHAREHOLDER TO WHOM THIS PROXY STATEMENT IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30, 1996,
INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH
DOCUMENT SHALL BE SENT BY FIRST CLASS MAIL OR OTHER EQUALLY
PROMPT MEANS. WRITTEN OR ORAL REQUEST FOR SUCH INFORMATION
SHOULD BE DIRECTED TO MR. BOB CARDON, CORPORATE SECRETARY,
DYNATRONICS CORPORATION, 7030 PARK CENTRE DRIVE, SALT LAKE
CITY, UTAH 84121.
DYNATRONICS CORPORATION
By order of the Board of Directors
/s/ Bob Cardon
----------------------------------
Bob Cardon, Corporate Secretary
