<PAGE>
DYNATRONICS CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
November 18, 1997
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 18, 1997, at 4:00 p.m., Mountain Standard Time,
for the following purposes:
1. To elect a Board of seven 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 1998 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
Friday, October 10, 1997 will be entitled to vote at this
meeting. A list of shareholders entitled to vote will be
available for inspection at the office 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 28, 1997
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 18, 1997
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 18, 1997, 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 10, 1997 and will be mailed on or about October 28,
1997. 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 seven 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.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of the close of business on the record date (October
10, 1997), the date for determining shareholders entitled to
notice of and to vote at the meeting, Dynatronics had issued
and outstanding 8,427,847 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.
<PAGE>
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 10, 1997,
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 767,225 (1) 9.0%
7030 Park Centre Drive Stock
Salt Lake City, UT 84121
The following tables set forth, as of October 10, 1997,
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:
Amount and
Nature of
Title of Beneficial Percent of
Name of Beneficial Owner Class Ownership Class (7)
- -----------------------------------------------------------------------
Kelvyn H. Cullimore Common 188,256 (2) 2.2%
stock
Kelvyn H. Cullimore, Jr. " 767,225 (1) 9.0%
E. Keith Hansen, M.D. " 230,350 (3) 2.7%
Larry K. Beardall " 88,000 (4) 1.0%
V. LeRoy Hansen " 31,000 (5) *
Howard L. Edwards " 27,000 *
John S. Ramey " 37,500 (6) *
All executive officers and 1,339,331 (7)(8) 15.3%
directors as a group
(9 persons)
* Less than 1 percent
(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
77,000 shares.
<PAGE>
(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 62,000 shares.
(3) Includes 181,350 shares owned directly and exercisable
options for the purchase of 49,000 shares.
(4) Includes 37,000 shares owned directly and exercisable
options for the purchase of 51,000 shares.
(5) Includes exercisable options for the purchase of 31,000
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 28,000 shares.
(7) The "Percent of Class" calculation is based on shares and
options beneficially owned divided by - 8,427,847 the number
of shares outstanding as of October 10, 1996 plus non-issued
securities which are subject to exercisable options by the
particular beneficial owners 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, seven (7) directors
will be elected. The Board of Directors has no reason to
believe that any nominee 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.
There were six regular meetings of the Board of Directors
held during the fiscal year ended June 30, 1997. No director
attended fewer than 75% of the meetings. The Company had no
formal standing audit or nominating committee during the fiscal
year ended June 30, 1997. 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, Joseph H. Barton and Howard
L. Edwards. There were five meetings of the Compensation
Committee of the Board of Directors held during the year ended
June 30, 1997.
There are no material legal proceedings to which any
director or executive officer is a party adverse to the
Company.
<PAGE>
The directors and executive officers of the Company at
October 10, 1997 were:
Director
or Officer Position
Name Age Since with Company
- -----------------------------------------------------------------------
Kelvyn H. Cullimore* 62 1983 Chairman of the Board
Kelvyn H. Cullimore, Jr.* 41 1983 President, CEO and Director
Larry K. Beardall* 41 1986 Executive Vice President of
Sales and Marketing and
Director
E. Keith Hansen, M.D.* 52 1983 Director
V. LeRoy Hansen* 59 1987 Director
Joseph H. Barton* 69 1995 Director
Howard L. Edwards* 66 1997 Director
John S. Ramey 46 1992 Sr. Vice President
of Operations and
Research and Development
John L. Hales 53 1997 Chief Financial
Officer and Treasurer
* Nominated for re-election to Board.
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. From 1979 until 1992, Mr.
Cullimore served as Chairman of the Board of American
Consolidated Industries (ACI), the former parent company of
Dynatronics. Since 1986, Mr. Cullimore has served as President
of ITEC Attractions and from 1986 to 1997, he served as ITEC's
Chairman, President and CEO. Presently, Mr. Cullimore serves
as President/CEO of ITEC.
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. Mr. Cullimore
has served on the Board of Directors of several businesses,
including Dynatronics Marketing Company, ACI and currently
serves on the Board of ITEC Attractions. In addition, he has
<PAGE>
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.
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 then 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 ACI until
1992 and a Director of Mountain Resources Corporation from 1980
to 1988. Currently, Dr. Hansen serves as a Director of Accent
Publishers based in Salt Lake City, Utah.
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 AT&T headquarters in
Market Management Concept Development and Implementation as
well as Long Range Financial Planning. From 1980 to 1988, he
co-founded Mountain Resources Corporation, an energy
development company and served as vice president. From 1988 to
1993, Mr. Hansen founded and served as president of Associated
Enterprises, Inc., a corporation providing management and
business development consulting services. In May of 1992, Mr.
Hansen founded Silver Summit, L.C., a real estate development
company.
Joseph H. Barton was elected a Director 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, a company which owns and manages long-term
care facilities throughout the United States.
Howard L. Edwards was elected a Director in January, 1997.
From 1968 to 1995 Mr. Edwards served in various capacities at
Atlantic Richfield Company (ARCO) and its predecessor, the
Anaconda Company, including corporate secretary, vice
president, treasurer and general attorney. In addition, Mr.
Edwards served for a number of years as a partner in the law
firm of VanCott, Bagley, Cornwall and McCarthy, based in Salt
Lake City, Utah. He graduated from the George Washington
University School of Law in 1959 and received a bachelor's
degree in Finance and Banking from Brigham Young University in
1955.
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
<PAGE>
Phoenix (in Salt Lake City, Utah) and a BS degree in
electronics in 1977 from Brigham Young University.
John L. Hales joined the Company and was elected Chief
Financial Officer and Treasurer in November, 1996. Prior to
joining the Company, Mr. Hales worked as an independent
management consultant from 1994 until 1996. From 1993 to 1994,
he served as Chief Financial Officer of the Covey Leadership
Center. From 1980 to 1992, he was employed by the Hill-Rom
Company, a subsidiary of Hillenbrand Industries, and served as
Vice President of Finance and Administration for nine years.
Mr. Hales received his B.S. degree in Finance from Brigham
Young University in 1968 and his MBA from Utah State University
in 1970.
Certain Relationships and Related Transactions
- ----------------------------------------------
The Company provides ITEC Attractions with contracted
administrative services from the Company's headquarters in Salt
Lake City, Utah. Administrative services include secretarial,
administrative and accounting functions. During fiscal year
1997 the Company charged ITEC $72,000 for services provided by
the Company. In fiscal year 1996 the Company wrote-off
$720,103 related to a bank loan to ITEC which was guaranteed by
Dynatronics and a note receivable. In fiscal year 1997, the
Company received approximately $89,000 pursuant to ITEC's Plan
of Reorganization payout to creditors. The Company retains a
nominal (approximately 3%) ownership in ITEC. The Company's
Chairman, Kelvyn H. Cullimore, is also the President and CEO of
ITEC. The Company's President and CEO, Kelvyn H. Cullimore,
Jr., is also a director of ITEC. For more information, see the
Company's Annual Report on Form 10-KSB for the year ended June
30, 1997.
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 1997 fiscal year all Section 16(a) filings
applicable to its officers, directors and greater than ten-
percent beneficial owners were filed.
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 $100,000 during
the fiscal year ended June 30, 1997.
<PAGE>
Summary Compensation Table
[CAPTION]
<TABLE>
Long Term Compensation
-------------------------------------------
Annual Compensation Awards Payouts
----------------------------------------------------------------------------
Name Other Restricted
and Annual Stock LTIP All Other
Principal Compen- Award(s) Options/ Payouts Compen-
Position Year Salary($) Bonus($) sation(1) ($) SAR(#) ($) sation($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kelvyn H. Cullimore, Jr. 1997 $101,124 $12,837 $9,590 $-0- 25,000 $-0- $-0-
President/CEO 1996 $95,400 $15,277 $8,279 $-0- -0- $-0- $-0-
1995 $90,000 $12,973 $7,195 $-0- -0- $-0- $-0-
Larry K. Beardall* 1997 $93,135 $17,117 $9,461 $-0- 20,000 $-0- $-0-
Executive Vice President 1996 $86,920 $20,369 $9,237 $-0- -0- $-0- $-0-
</TABLE>
*During fiscal year 1995, Mr. Beardall's salary and bonus did not
exceed $100,000.
(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 year, the Company made no awards
under any long-term incentive plan and no stock appreciation
rights were granted.
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 1997 was $81,636 of
which $52,706 was for officers, a portion of which is included
under the annual bonus category in the compensation table
above.
Salary Continuation Plan
- ------------------------
During fiscal year 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 year 1997, the Company expensed $39,078 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 1996. 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% per 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 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 ranges
from $1.08 to $1.28.
During fiscal 1997, options to purchase 246,426 shares
were canceled and options to purchase 256,206 were granted
under the 1992 Stock Option Plan as follows: Kelvyn H.
Cullimore, Jr., 25,000 shares; to all executive officers as a
group, 97,300 shares (exclusive of Kelvyn H. Cullimore, Jr.,);
and to others, 133,906. Options are to purchase common stock
of the Company and are exercisable one year (minimum) from the
date of grant. The per share exercise price of these options
ranges from $.72 to $1.02.
The following table sets forth options granted to named
executive officers whose total compensation exceeded $100,000
during fiscal 1997. The Company has not granted any SAR's to
employees or directors.
<PAGE>
Options/SAR Grants in Last Fiscal Year
[CAPTION]
<TABLE>
Potential
Realized Value at
Assumed Annual Alternative
Rates of Stock Price to (f) and (g):
Individual Appreciation Grant Date
Grants for Option Term Value
- ---------------------------------------------------------------------------------------------------------------
% of
Number of Total
Securities Options/
Underlying SARs
Options/ Granted to Exercise Grant
SARs Employees or Base Date
Granted in Fiscal Price Expiration Present
Name (#) Year ($/Sh) Date 5% ($) 10% ($) Value $
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kelvyn H. Cullimore, Jr. 25,000/0 10%/0% $.72 8/22/01 $900 $1,800 0
President and CEO
Larry K. Beardall 20,000/0 8%/0% $.72 8/22/01 $720 $1,440 0
Executive Vice President
</TABLE>
The following table sets forth the information, including
the fiscal year-end value of unexercised stock options held by
to the Company's chief executive officer and all other
executive officers whose total compensation exceeded $100,000
during fiscal 1997.
Aggregated Option/SAR Exercises In Last Fiscal Year
and Fiscal Year-End Option/SAR Values
[CAPTION]
<TABLE>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
June 30, 1997 June 30, 1997
Shares
Acquired on Exercisable/ Exercisable/
Name Exercise Value Realized ($) Unexercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kelvyn H. Cullimore, Jr. 0 0 52,000/25,000 $2,313
President/CEO
Larry K. Beardall 0 0 31,000/20,000 $1,850
</TABLE>
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 $26,778 was paid to
the outside directors under this plan for the fiscal year 1997.
<PAGE>
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,
1997. 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, 1998, 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
year 1998. 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.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1998
Annual Meeting of the Company's Shareholders must be received
by the Company at its corporate headquarters on or before July
31, 1998, 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-KSB FOR THE YEAR ENDED JUNE 30, 1997, 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 REQUESTS FOR SUCH INFORMATION SHOULD BE
DIRECTED TO MR. BOB CARDON, CORPORATE SECRETARY, DYNATRONICS
CORPORATION, 7030 PARK CENTRE DRIVE, SALT LAKE CITY, UT 84121.
DYNATRONICS CORPORATION
By order of the Board of Directors
/S/ Bob Cardon
-----------------------------------
Bob Cardon, Corporate Secretary
