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EXHIBIT C
 
RESTRICTED STOCK AWARD
 
DYNATRONICS CORPORATION
2005 EQUITY INCENTIVE AWARD PLAN
RESTRICTED STOCK AWARD CERTIFICATE
 
 
THIS RESTRICTED STOCK AWARD CERTIFICATE (THIS “Certificate”), is to certify that
Dynatronics Corporation, a Utah corporation (the “Company”), has offered you
(“Grantee”) the right to receive Common Stock (the “Stock” or “Shares”) of the
Company under its 2005 Equity Incentive Award Plan (the “Plan”), as follows:
 
Name of Grantee: Kelvyn H. Cullimore, Jr.
Number of Shares: 400,000 shares
Grant Date: March 26, 2012
Vesting Commencement Date: March 26, 2013
Vesting Schedule: 40,000 shares per year for ten (10) years, commencing on the
Grant Date.
 
By your signature and the signature of the Company’s representative below, you
and the Company agree to be bound by all of the terms and conditions of the
Restricted Stock Award Agreement, which is attached hereto as Annex I, and the
Plan (both incorporated herein by this reference as if set forth in full in this
document). By executing this Certificate, you hereby irrevocably elect to accept
the Restricted Stock Award rights granted pursuant to this Certificate and the
related Restricted Stock Award Agreement and to receive the shares of Restricted
Stock of Dynatronics Corporation designated above subject to the terms of the
Plan, this Certificate and the Award Agreement.
 

     
GRANTEE:
 
DYNATRONICS CORPORATION
     
  /s/ Kelvyn H. Cullimore, Jr.  
Kelvyn H. Cullimore, Jr.
 
    /s/ Terry M. Atkinson            
Authorized Officer Signature

 
 
 
 
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ANNEX I
 
 
DYNATRONICS CORPORATION
2005 EQUITY INCENTIVE AWARD PLAN
RESTRICTED STOCK AWARD AGREEMENT
 
 
This Restricted Stock Award Agreement (this “Agreement”), is made and entered
into on the Grant Date of the Restricted Stock Award Certificate to which it is
attached (the “Certificate”), by and between Dynatronics Corporation, a Utah
corporation (the “Company”), and the employee (“Grantee”) named in the
Certificate.
 
Pursuant to the Dynatronics Corporation 2005 Equity Incentive Award Plan (the
“Plan”), the Committee (as that term is defined in the Plan) has authorized the
grant to Grantee of the right to receive shares of the Company’s Common Stock
(the “Award”), upon the terms and subject to the conditions set forth in this
Agreement and in the Plan. Except as otherwise provided herein, or unless the
context clearly indicates otherwise, capitalized terms not otherwise defined
herein shall have the same definitions as provided in the Plan.
 
NOW, THEREFORE, in consideration of the premises and the benefits to be derived
from the mutual observance of the covenants and promises contained herein and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
 
1.           Basis for Award. This Award is made pursuant to the Plan for valid
consideration provided to the Company by Grantee. By your execution of the
Certificate, you agree to accept the Restricted Stock Award rights granted
pursuant to the Certificate and this Agreement and to receive the shares of
Restricted Stock of Dynatronics Corporation designated in the Certificate
subject to the terms of the Plan, the Certificate and this Agreement.
 
2.           Restricted Stock Award. The Company hereby awards and grants to
Grantee, for valid consideration with a value in excess of the aggregate par
value of the Common Stock awarded to Grantee, the number of shares of Common
Stock of the Company set forth in the Certificate, which shall be subject to the
restrictions and conditions set forth in the Plan, the Certificate and in this
Agreement (the “Restricted Stock”). One or more stock certificates representing
the number of Shares specified in the Certificate shall hereby be registered in
Grantee’s name (the “Stock Certificate”), but shall be deposited and held in the
custody of the Company for Grantee’s account as provided in Section 8 hereof
until such Restricted Stock becomes vested.
 
3.           Vesting and Termination of Continuous Service. The Restricted Stock
shall vest and restrictions on transfer shall lapse subject to the Vesting
Schedule set forth in the Certificate; provided, that, Grantee is in Continuous
Service on the applicable vesting date. Upon the occurrence of a Change in
Control as defined in Grantee’s employment agreement with the Company dated
effective March 1, 2012 (“Executive Employment Agreement”), the Restricted Stock
shall become 100% vested on such event and the restrictions on transfer shall
lapse. The shares of Restricted Stock which have not vested in accordance with
the Certificate (the “Unvested Shares”) shall become vested and the restrictions
on transfer shall lapse upon termination of Continuous Service pursuant to
Section 6(b) of the Executive Employment Agreement. Upon termination of
Grantee’s Continuous Service for any other reason prior to the date that Grantee
becomes 100% vested in the Award, the Unvested Shares shall be forfeited
immediately and Grantee shall have no right with respect to the Unvested Shares,
except as otherwise provided in Section 6(a)(2) of the Executive Employment
Agreement. Prior to vesting, all Unvested Shares shall be subject to the
restrictions set forth in this Agreement. For purposes of this Agreement and
notwithstanding any other provision of the Plan to the contrary, “Cause” as used
herein shall have the meaning in Section 1 of the Executive Employment
Agreement.
 

 
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4.           Compliance with Laws and Regulations. The issuance, transfer,
vesting, and ownership of Common Stock shall be subject to compliance by the
Company and Grantee with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company’s Common Stock may be listed at the time of such issuance or
transfer. Grantee agrees to cooperate with the Company to ensure compliance with
such laws and requirements. Prior to issuance or transfer of Common Stock, the
Company may require Grantee to execute and deliver a letter of investment intent
in such form and containing such provisions as requested by the Committee.
 
5.           Tax Withholding.
 
(a)           Grantee agrees that, no later than the first to occur of (i) the
date as of which the restrictions on the Restricted Stock shall lapse with
respect to all or any of the Restricted Stock covered by this Agreement or
(ii) the date required by Section 5(b) below, Grantee shall pay to the Company
(in cash or by bank check) any federal, state, or local taxes of any kind
required by law to be withheld, if any, with respect to the Restricted Stock for
which restrictions shall lapse. The Company shall, to the extent permitted by
law, also have the right to deduct from any payment of any kind otherwise due to
Grantee any federal, state or local taxes of any kind required by law to be
withheld with respect to the Restricted Stock. Any gross-up payment made by the
Company under Section 4(j) of the Executive Employment Agreement shall be, at
the sole discretion of the Company, applied by the Company against any
withholding obligation of the Company in connection with the Restricted Stock or
payments made in relation to the Restricted Stock.
 
(b)           Grantee may elect, within thirty (30) days of the Grant Date, to
include in gross income for federal income tax purposes an amount equal to the
Fair Market Value of the Restricted Stock less the amount, if any, paid by
Grantee (other than by prior services) for the Restricted Stock granted
hereunder pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended. In connection with any such Section 83(b) election, Grantee shall pay
to the Company, or make such other arrangements satisfactory to the Committee to
pay to the Company based on the Fair Market Value of the Restricted Stock on the
Grant Date, any federal, state or local taxes required by law to be withheld
with respect to such Shares at the time of such election. If Grantee fails to
make such payments, the Company shall, to the extent permitted by law, have the
right to deduct from any payment of any kind otherwise due to Grantee any
federal, state or local taxes required by law to be withheld with respect to
such Shares.
 
6.           No Right to Continued Service. Nothing in this Agreement shall be
deemed by implication or otherwise to impose any limitation on any right of the
Company to terminate Grantee’s service at any time and for any reason.
 

 
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7.           Representations and Warranties of Grantee. Grantee represents and
warrants to the Company that:
 
(a)           Agrees to Terms of the Plan and the Agreement. Grantee has
received a copy of the Plan, the Certificate, and the Agreement and has read and
understands the terms thereof. Grantee acknowledges that there may be adverse
tax consequences upon the vesting of Restricted Stock or disposition of the
shares of Common Stock once vested, and that Grantee should consult a tax
advisor prior to such time.
 
(b)           Stock Ownership. Grantee is the record and beneficial owner of the
shares of Restricted Stock with full right and power to vote and receive
dividends on such shares; provided, that, Grantee understands that the stock
certificates evidencing the Restricted Stock will bear a legend referencing this
Agreement. Any dividends which are paid in cash shall be distributed to Grantee
as soon as practicable. If any dividends are paid in Common Stock during an
applicable period of restriction, Grantee shall receive such shares subject to
the same restrictions as the Restricted Stock with respect to which they were
issued.
 
8.           Restrictions on Unvested Shares.
 
(a)           Deposit of the Unvested Shares. Grantee shall deposit all of the
Unvested Shares with the Company to hold until the Unvested Shares become
vested, at which time such vested shares shall no longer constitute Unvested
Shares. Grantee shall execute and deliver to the Company, concurrently with the
execution of this Agreement, blank stock powers for use in connection with the
transfer to the Company or its designee of Unvested Shares. The Company will
deliver to Grantee the Stock certificate for the shares of Common Stock that
become vested upon vesting of such shares.
 
(b)           Restriction on Transfer of Unvested Shares. Grantee shall not
sell, transfer, assign, grant a lien or security interest in, pledge,
hypothecate as collateral for a loan or as security for the performance of any
obligation or for any other purpose, encumber or otherwise dispose of any of the
Unvested Shares, except as permitted by this Agreement.
 
9.           Adjustments. This Award is subject to the adjustment provisions set
forth in the Plan.
 
10.           Restrictive Legends and Stop-Transfer Orders.
 
(a)           Legends. Grantee understands and agrees that the Company will
place the legends set forth below or similar legends on any stock certificate(s)
evidencing the Common Stock, together with any other legends that may be
required by state or U.S. Federal securities laws, the Company’s Certificate of
Incorporation or Bylaws, any other agreement between Grantee and the Company or
any agreement between Grantee and any third party:
 
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON PUBLIC RESALE AND TRANSFER, AS SET FORTH IN A RESTRICTED STOCK AWARD
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES. SUCH
PUBLIC SALE AND TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE
SHARES.
 

 
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(b)           Stop-Transfer Instructions. Grantee agrees that, to ensure
compliance with the restrictions imposed by this Agreement, the Company may
issue appropriate “stop-transfer” instructions to its transfer agent, if any,
and if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
 
(c)           Refusal to Transfer. The Company will not be required (i) to
transfer on its books any shares of Common Stock that have been sold or
otherwise transferred in violation of any of the provisions of this Agreement or
(ii) to treat as owner of such shares, or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such shares have been so
transferred.
 
11.           Modification. Except as specifically provided in the Plan, the
Agreement may not be modified except in writing signed by both parties.
 
12.           Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Grantee or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Grantee.
 
13.           Entire Agreement. The terms and provisions of the Plan are
incorporated herein by reference. In the event of a conflict or inconsistency
between the terms and provisions of the Plan, the Certificate, and this
Agreement, the Plan shall govern and control. This Agreement, the Certificate
and the Plan constitute the entire agreement of the parties and supersede all
prior undertakings and agreements with respect to the subject matter hereof.
 
14.           Notices. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Grantee shall be in writing and
addressed to Grantee at the address indicated on the signature page hereof or to
such other address as such party may designate in writing from time to time to
the Company. All notices shall be deemed to have been given or delivered upon:
(a) personal delivery; (b) five (5) days after deposit in the United States mail
by certified or registered mail (return receipt requested); (c) two (2) business
days after deposit with any return receipt express courier (prepaid); or (d) one
(1) business day after transmission by facsimile.
 
15.           Successors and Assigns. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Grantee and Grantee’s heirs, executors, administrators, legal representatives,
successors and assigns.
 
16.           Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah without giving effect to its
conflict of law principles. If any provision of this Agreement is determined by
a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.
 

 
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EXHIBIT A
 
DYNATRONICS CORPORATION 2005 EQUITY INCENTIVE AWARD PLAN
 
[Copy of Plan Attached]
 

 
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EXHIBIT B
 
STOCK POWER
 
(To be left blank except for signature)
 
For value received, the undersigned does hereby sell, assign and transfer unto
Dynatronics Corporation      shares of Common Stock of Dynatronics Corporation
represented by certificate number        standing in the name of the
undersigned.
 
The undersigned does hereby irrevocably constitute and appoint             
attorney to transfer the foregoing on the books of the within named company,
with full power of substitution in the premises.
 
This stock power may only be used in accordance with the Restricted Stock Award
Agreement by and between Dynatronics Corporation and the undersigned dated as of
[      ], and any amendments thereto.
 
Dated:
     
Signature:
 

 
Signature must correspond EXACTLY to the name shown in the certificate.
 
 
 

 
 
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EXHIBIT C
 
Section 83(b) Election Form
 
Attached is an Internal Revenue Code Section 83(b) Election Form. IF YOU WISH TO
MAKE A SECTION 83(B) ELECTION, YOU MUST DO SO WITHIN 30 DAYS AFTER THE GRANT
DATE. In order to make the election, you must completely fill out the attached
form and file one copy with the Internal Revenue Service office where you file
your tax return. In addition, one copy of the statement also must be submitted
with your income tax return for the taxable year in which you make this
election. Finally, you also must submit a copy of the election form to the
Company within ten (10) days after filing that election with the Internal
Revenue Service. A Section 83(b) election normally cannot be revoked.
 
DYNATRONICS CORPORATION 2005 EQUITY INCENTIVE AWARD PLAN
 
_______________________________________
 
 
Election to Include Value of Restricted Stock in Gross Income
in Year of Transfer Under Internal Revenue Code Section 83(b)
 
_______________________________________
 
 
Pursuant to Section 83(b) of the Internal Revenue Code, I hereby elect within
30 days after receiving the property described herein to be taxed immediately on
its value specified in item 5 below.
 
1. My General Information:

  
Name:
 
Address:
     
S.S.N.  or T.I.N.:
 

2. Description of the property with respect to which I am making this election:
 
       shares of Restricted Stock of Dynatronics Corporation
 
3. The shares of Restricted Stock were transferred to me effective March 26,
2012. This election relates to the 20       calendar taxable year.

4. The shares of Restricted Stock are subject to the following restrictions:
 
The shares of Restricted Stock are forfeitable until they are vested in
accordance with Section 6 of the Dynatronics Corporation 2005 Equity Incentive
Award Plan (the “Plan”) and the Restricted Stock Award Agreement (the “Award
Agreement”) entered into between me and Dynatronics Corporation on March 26,
2012. The shares of Restricted Stock are not transferable until my interest
becomes vested and nonforfeitable, pursuant to the Award Agreement and the Plan.
 
 
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5. Fair market value:
 
The fair market value at the time of transfer (determined without regard to any
restrictions other than restrictions which by their terms will never lapse) of
the             shares of Restricted Stock with respect to which I am making
this election is $      per share.
 
6. Amount paid for Restricted Stock:
 
The amount I paid for the Restricted Stock is $    per share.
 
7. Furnishing statement to employer:
 
A copy of this statement has been furnished to my employer, Dynatronics
Corporation If the transferor of the Restricted Stock is not my employer, that
entity also has been furnished with a copy of this statement.
 
8. Award Agreement or Plan not affected:
 
Nothing contained herein shall be held to change any of the terms or conditions
of the Award Agreement or the Plan.
 
Dated:              , 2012.
 
 
 
 
 
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