SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
                                (Amendment No. )


Filed by the Registrant  [X]
Filed by a Party other than the Registrant [ ] Check the appropriate box:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by 
    Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12

                       Gentner Communications Corporation
--------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

                                                                                
--------------------------------------------------------------------------------
       (Name of Person(s) Filing Proxy Statement if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11.

        1)     Title of each class of securities to which transaction applies:

               -----------------------------------------------------------------

        2)     Aggregate number of securities to which transaction applies:

               -----------------------------------------------------------------

        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:
                                                                                
               -----------------------------------------------------------------


                                       1

<PAGE>

[ ] Fee paid previously with preliminary materials.
[ ] 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:

               -----------------------------------------------------------------






























                                       2

<PAGE>



                       GENTNER COMMUNICATIONS CORPORATION
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                                October 10, 2001


TO THE SHAREHOLDERS:

        NOTICE IS HEREBY  GIVEN  that the  Annual  Meeting  of  Shareholders  of
Gentner Communications Corporation (the "Company"), a Utah Corporation,  will be
held on November 14, 2001, at 3:00 P.M. MST, at the Company's  corporate offices
located  at 1825  Research  Way,  Salt Lake City,  Utah 84119 for the  following
purposes:

        1.      To elect six members of the Company's Board of Directors;

        2.      To amend the Articles of  Incorporation of the Company to change
                the   name  of  the   Company   from   "Gentner   Communications
                Corporation" to "ClearOne Communications Inc.;"

        3.      To approve an amendment to the Company's  1998 Stock Option Plan
                to increase  the number of shares of Common  Stock  reserved for
                issuance thereunder by 800,000;

        4.      To ratify the appointment of the Company's independent auditors;
                and

        5.      To transact such other  business as may properly come before the
                meeting or any adjournment thereof.

        The  foregoing  items of business are more fully  described in the Proxy
Statement  accompanying this Notice.  The Board of Directors  recommends that an
affirmative  vote be cast in favor of all nominees and for each of the proposals
listed in the proxy card.

        Only the  shareholders  of record at the close of business on October 1,
2001 are  entitled to notice of and to vote at the  meeting and any  adjournment
thereof.







                                       3

<PAGE>


        All shareholders are cordially  invited to attend the meeting in person.
However,  to ensure your  representation at the meeting,  you are urged to mark,
sign,  date and  return  the  enclosed  proxy as  promptly  as  possible  in the
postage-prepaid  envelope enclosed for that purpose.  Any shareholder  attending
the meeting may vote in person even if such shareholder has previously  returned
a proxy.

                               FOR THE BOARD OF DIRECTORS


                               /s/ Frances M. Flood                             
                               -------------------------------------------------
                               Frances M. Flood, President and
                               Chief Executive Officer















                                       4

<PAGE>


                       GENTNER COMMUNICATIONS CORPORATION
               PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS

        The  enclosed  Proxy is solicited on behalf of the Board of Directors of
Gentner  Communications  Corporation  (the  "Company")  for use at the Company's
Annual Meeting of Shareholders  ("Annual  Meeting") to be held November 14, 2001
at 3:00  P.M.  MST,  or at any  postponement  or  adjournment  thereof,  for the
purposes set forth herein and in the  accompanying  Notice of Annual  Meeting of
Shareholders.  The Annual Meeting will be held at the above date and time at the
Company's  offices located at 1825 Research Way, Salt Lake City, Utah 84119. The
telephone number at that address is (801) 975-7200.

        These proxy solicitation materials were first mailed on or about October
10, 2001 to all shareholders entitled to vote at the Annual Meeting.

                 INFORMATION CONCERNING SOLICITATION AND VOTING

Record Date and Shares Outstanding

        Shareholders  of record at the close of business on October 1, 2001 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting. On
the Record Date,  _,___,___  shares of Common Stock were issued and outstanding.
Each  shareholder  will be entitled  to one vote for each share of Common  Stock
held on the record date.

Voting of Proxies

        By completing  and returning the  accompanying  proxy,  the  shareholder
authorizes  Frances  M.  Flood,  President  and CEO,  and James A.  Valeo,  Vice
President and General  Counsel,  as designated on the face of the proxy, to vote
all shares for the  shareholder.  All proxies that are properly signed and dated
will be voted as the  shareholder  directs.  If no direction is given,  executed
proxies will be voted FOR each of the nominees and listed proposals.

Revocability of Proxies

        Any proxy  given  pursuant  to this  solicitation  may be revoked by the
person  giving it at any time  before its use by  delivering  to James A. Valeo,
Secretary of the Company, a written notice of revocation,  a duly executed proxy
bearing a later date or by attending the Annual Meeting and voting in person.

Solicitation

        The cost of this solicitation will be borne by the Company. In addition,
the  Company  may  reimburse  brokerage  firms  and other  persons  representing
beneficial  owners  of shares  for their  expenses  in  forwarding  solicitation
material to such beneficial owners.  Proxies may also be solicited by certain of
the Company's  directors,  officers,  and regular employees,  without additional
compensation, personally or by telephone, facsimile, or telegram.


                                       5

<PAGE>


Deadline for Receipt of Shareholder Proposals

        The Company  currently  anticipates  the Annual  Meeting in 2002 will be
held on or about  November  14,  2002.  Any  shareholder  desiring  to  submit a
proposal for  inclusion in the Company's  proxy  statement and form of proxy for
the Company's 2002 Annual Meeting of Shareholders  should transmit such proposal
to the  Secretary  of the  Company  on or before  June 10,  2002.  For any other
proposal that a  shareholder  wishes to have  considered  at the Company's  2002
Annual Meeting,  the  shareholder  must notify the Company of the proposal on or
before August 26, 2002.  Proposals for which the Company  receives  notice after
that time will be considered  untimely,  and the persons serving as proxies will
have discretionary authority to vote on such matter at the meeting.

Vote Required for Approval

        A quorum of the  shares of the  Company  must be  present  at the Annual
Meeting in order for the  shareholders to take official  action.  Under Utah law
and the Articles of Incorporation and Bylaws of the Company, a quorum will exist
if a majority  of the shares  issued by the  Company  and  entitled to vote on a
matter at the Annual Meeting are present, in person or by proxy. Abstentions and
broker  non-votes  will be considered  present at the Annual Meeting and will be
counted for purposes of determining whether a quorum exists, but abstentions and
broker non-votes will not be counted for purposes of determining the vote on any
matter  currently  proposed  for action at the Annual  Meeting.  The election of
directors  will  be  determined  by  plurality  vote.  The  Board  of  Directors
recommends  that an  affirmative  vote be cast in favor of all  nominees and for
each of the proposals listed in the proxy card.

                           STOCK OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain  information  regarding ownership
of the Common  Stock of the Company as of  September  1, 2001 by (i) each person
known  to  the  Company  to be the  beneficial  owner  of  more  than  5% of the
outstanding  Common  Stock of the  Company,  (ii) each  director of the Company,
(iii) the Chief  Executive  Officer  and each  other  executive  officer  of the
Company  whose  salary  and  bonus for the year  ended  June 30,  2001  exceeded
$100,000,  and (iv) all  executive  officers  and  directors of the Company as a
group.  Each person has sole  investment  and voting  power with  respect to the
shares indicated, subject to community property laws where applicable, except as
otherwise  indicated  below. The address for each beneficial owner is in care of
the Company, 1825 Research Way, Salt Lake City, Utah 84119.




                                       6

<PAGE>




                                            Amount of             Percentage
  Names of Beneficial Owners          Beneficial Ownership(1)     of Class(2)
  --------------------------          ---------------------        ---------

  Edward Dallin Bagley                     1,738,668(3)              20.2%
  Frances M. Flood                           296,913(4)              3.4%
  Susie Strohm                               169,729(5)              2.0%
  Brad R. Baldwin                            102,666(6)              1.2%
  Curtis Hewitson                             70,224(7)              0.8%
  Tracy Bathurst                              39,730(8)              0.5%
  David J. Wiener                             18,500(9)              0.2%
  Randall J. Wichinski                        18,200(10)             0.2%
  Eugene W. Kuntz, Jr.                        15,813(11)             0.2%
  Harry Spielberg                              5,000(12)             0.1%

  Directors and Executive Officers
  as a Group (11 people)                   2,500,513(3-13)           29.0%

1   For each shareholder,  the calculation of percentage of beneficial ownership
    is based on 8,612,978 shares of Common Stock  outstanding as of September 1,
    2001 and shares of Common Stock  subject to options held by the  shareholder
    that are currently exercisable or exercisable within 60 days of September 1,
    2001.

2   The percentage  ownership for any person is calculated assuming that all the
    stock  that  could be  acquired  by that  person  within  60 days by  option
    exercise or otherwise,  is in fact outstanding and that no other stockholder
    has exercised a similar right to acquire additional shares.



                                       7

<PAGE>

3   Director.  Includes:  1,321,285  shares owned directly;  options to purchase
    5,000 shares that are exercisable  within 60 days; 100,000 shares owned by a
    corporation  controlled by Mr. Bagley;  50 shares owned by Mr. Bagley's wife
    as custodian for one of Mr. Bagley's  daughters;  and 312,333 shares held in
    the  Bagley  Family  Revocable  Trust,  of which Mr.  Bagley is  co-trustee.
    Excludes:  50 shares owned by another of Mr. Bagley's daughters who is not a
    member of his household.  Mr. Bagley disclaims  beneficial ownership of such
    50  shares  and fifty  percent  of the  shares  owned by the  Bagley  Family
    Revocable Trust.

4   President, CEO and Director. Includes: 54,579 shares owned directly; options
    to purchase 242,334 shares that are exercisable within 60 days.

5   Vice President.  Includes: 31,265 shares owned directly; options to purchase
    138,464 shares that are exercisable within 60 days.

6   Director. Includes: 67,666 shares owned directly; options to purchase 30,000
    shares that are  exercisable  within 60 days;  and 5,000 shares owned by Mr.
    Baldwin's wife.

7   Vice President.  Includes: 6,724 shares owned directly;  options to purchase
    63,500 shares that are exercisable within 60 days.

8   Vice President.  Includes:  730 shares owned  directly;  options to purchase
    39,000 shares that are exercisable within 60 days.

9   Director.  Includes: 6,000 shares owned directly; options to purchase 12,500
    shares that are exercisable within 60 days.

10  CFO and Director. Includes: 5,700 shares owned directly; options to purchase
    12,500 shares that are exercisable within 60 days.

11  Vice President.  Includes:  813 shares owned  directly;  options to purchase
    15,000 shares that are exercisable within 60 days.

12  Director.  Includes:  0 shares  owned  directly;  options to purchase  5,000
    shares that are exercisable within 60 days.

13  Includes:  An additional 70 shares owned directly by one additional officer;
    and options to purchase 25,000 shares that are exercisable within 60 days by
    this officer.

                                       8

<PAGE>


                      PROPOSAL ONE -- ELECTION OF DIRECTORS

        The  Company  currently  has  six  directors.   Six  are  nominated  for
re-election  at the Annual  Meeting to serve  until the next  Annual  Meeting of
Shareholders  or  until  their  respective   successors  are  duly  elected  and
qualified.  Unless  otherwise  instructed,  the  proxies  will be voted  for the
election of the six nominees named below.  In the event any nominee is unable to
serve,  the  proxies  will be voted  for a  substitute  nominee,  if any,  to be
designated  by the Board of  Directors.  The Board of Directors has no reason to
believe any nominee will be unavailable.

THE  BOARD  OF  DIRECTORS  UNANIMOUSLY  RECOMMENDS  A VOTE FOR  ELECTION  OF THE
NOMINEES NAMED ABOVE TO THE BOARD OF DIRECTORS.

Nominees

The following individuals are currently directors of the Company:

             Name                Age    Principal Occupation         Since
             ----                ---    --------------------         -----

      Edward Dallin Bagley        63      Attorney                    1994

      Brad R. Baldwin             46      Attorney and Commercial     1988
                                          Real Estate Agent

      Frances M. Flood            45      Chairman of the Board of    1998
                                          Directors, Chief
                                          Executive Officer and
                                          President

      Harry Spielberg             50      Director of Cosentini       2001
                                          Information Technologies'
                                          Audiovisual Group

      Randall J. Wichinski        48      Vice President and Chief    1999
                                          Financial Officer

      David Wiener                43      President and CEO of        2000
                                          SoundTube Entertainment,
                                          Inc.

        Edward  Dallin  Bagley has been a Director  of the  Company  since April
1994. Previously, Mr. Bagley served as a Director of the Company from April 1987
to July 1991. Mr. Bagley began practicing law in 1965. Mr. Bagley is currently a
director of Tunex International,  NESCO, Inc., and Buyers Online.com. Mr. Bagley
received a Juris Doctorate in 1965 from the University of Utah College of Law.


                                       9

<PAGE>

        Brad R.  Baldwin  has been a Director of the  Company  since  1988.  Mr.
Baldwin  currently  is an  attorney  licensed  in  Utah  and is  engaged  in the
commercial  real estate  business with Colliers  Commerce CRG in Salt Lake City.
From October 1, 1994 to January 30, 2000,  Mr.  Baldwin  served as President and
Chief Executive  Officer of Bank One, Utah, a commercial bank  headquartered  in
Salt Lake City,  Utah. Mr. Baldwin  received a Juris  Doctorate in 1980 from the
University of Washington.

        Frances M. Flood has been a Director of the Company  since June of 1998.
Ms.  Flood  joined the Company in October  1996 as  Vice-President  of Sales and
Marketing.  She was named President in December 1997, Chief Executive Officer in
June 1998 and  Chairman  of the Board in  November  2000.  Prior to joining  the
Company,  Ms. Flood was Area  Director of Sales and Marketing for Ernst & Young,
LLP,  an  international  accounting  and  consulting  firm.  Ms.  Flood has over
twenty-five   years   experience  in  sales,   marketing,   change   management,
international  business and finance. Ms. Flood is currently a director of Mining
Services  International  and SoundTube  Entertainment,  Inc. Ms. Flood graduated
from Thomas Edison State College with a B.S./B.A. degree in Banking and Finance.

        Harry  Spielberg  has been a Director of the Company since January 2001.
Since January 1996, Mr. Spielberg has been the Director of Cosentini Information
Technologies'  Audiovisual Group, a division of the consulting engineering firm,
Cosentini  Associates.  Previously,  Mr.  Spielberg  served  as Vice  President,
Engineering for Media  Facilities  Corp. and Barsky & Associates.  Mr. Spielberg
received a Bachelor of Art degree in Psychology from the State University of New
York.

        Randall J. Wichinski has been a Director of the Company since June 1999.
Since August 2001,  Mr.  Wichinski has been Vice  President and Chief  Financial
Officer of the Company.  Prior to joining the  Company,  he served as the Senior
Tax Officer of Ohio National Financial Services.  From April 1983 to March 1999,
Mr. Wichinski was employed at Ernst & Young LLP, an international accounting and
consulting  firm,  serving  as a Tax  Partner  for  ten  years.  He  received  a
bachelor's  degree in 1977 and a Masters of  Business  Administration  degree in
1982 from the University of Wisconsin-Madison.

        David Wiener has been a Director of the Company since January 2000.  Mr.
Wiener has served as  President  and CEO of  SoundTube  Entertainment,  Inc.,  a
manufacturer of innovative commercial and consumer audio speakers, since January
1995. SoundTube Entertainment is a division of David Wiener Ventures, a product,
fashion and image development  company founded by Mr. Wiener in 1982. Mr. Wiener
received  his  bachelor's  degree  in  engineering,  aerodynamics  and art  from
Hampshire College in Amherst, Massachusetts.

Director Compensation

        All  directors  serve  until  their  successors  are  elected  and  have
qualified.  The Company pays each director $650 per month for services  provided



                                       10

<PAGE>

as a  director.  Directors  who are also  employees  of the  Company  receive no
additional compensation for serving on the Board of Directors.

Committees of the Board of Directors

        The Board of Directors has two  committees:  the Audit and  Compensation
Committees.  The Audit  Committee is  currently  composed of Mr.  Edward  Dallin
Bagley,  Mr. Brad R. Baldwin,  Mr. Harry  Spielberg  and Mr. David  Wiener.  The
Compensation  Committee is currently  composed of Mr. Edward Dallin Bagley,  Mr.
Brad R. Baldwin,  Mr. Harry Spielberg and Mr. David Wiener.  The Audit Committee
is authorized to review  proposals of the Company's  auditors  regarding  annual
audits and  quarterly  reviews,  recommend  the  engagement  or discharge of the
Company's   auditors,   review   recommendations  of  such  auditors  concerning
accounting  principles  and the  adequacy of internal  controls  and  accounting
procedures and practices,  to review the scope of the annual audit and quarterly
reviews,  to approve or disapprove each professional  service or type of service
other than standard  auditing  services to be provided by the  auditors,  and to
review and discuss the  audited  financial  statements  with the  auditors.  The
Compensation Committee makes recommendations to the Board of Directors regarding
remuneration  of  the  executive  officers  and  directors  of the  Company  and
administers the incentive plans for directors, officers and key employees.

Meetings of the Board of Directors and Committees

        The Board of Directors  held six  meetings  during the last fiscal year.
The Audit  Committee held four formal  meetings during the last fiscal year. The
Compensation  Committee held four formal  meetings  during the last fiscal year.
During the last fiscal year no incumbent director attended fewer than 75 percent
of all meetings.

                          Report of the Audit Committee

        The Audit Committee oversees the Company's  financial  reporting process
on behalf of the Board of Directors.  Management has the primary  responsibility
for the financial  statements and the reporting process including the systems of
internal controls. In fulfilling its oversight  responsibilities,  the Committee
reviewed the audited  financial  statements in the Annual Report with management
including  a  discussion  of the  quality,  not just the  acceptability,  of the
accounting  principles,  the  reasonableness of significant  judgments,  and the
clarity of disclosures in the financial statements.

        The  Committee   reviewed  with  the  independent   auditors,   who  are
responsible  for  expressing  an  opinion  on the  conformity  of those  audited
financial  statements  with  generally  accepted  accounting  principles,  their
judgments  as to the  quality,  not just  the  acceptability,  of the  Company's
accounting  principles  and such other  matters as are  required to be discussed
with the Committee under generally accepted auditing standards. In addition, the
Committee has discussed with the independent auditors the auditors' independence


                                       11

<PAGE>

from management and the Company including the matters in the written disclosures
required by the Independence Standards Board and considered the compatibility of
nonaudit services with the auditors' independence.

        The  Committee  discussed  with the Company's  independent  auditors the
overall  scope  and  plans  for  their  audits.  The  Committee  meets  with the
independent  auditors,  with and  without  management  present,  to discuss  the
results of their  examinations,  their  evaluations  of the  Company's  internal
controls, and the overall quality of the Company's financial reporting.

        In  reliance  on the reviews  and  discussions  referred  to above,  the
Committee  recommended  to the Board of Directors  (and the Board has  approved)
that the audited  financial  statements be included in the Annual Report on Form
10-K for the  year  ended  June 30,  2001 for  filing  with the  Securities  and
Exchange Commission. The Committee and the Board have also recommended,  subject
to shareholder approval, the selection of the Company's independent auditors.

        With one exception, each member of the Audit Committee is an independent
director  as  defined  in  Rule  4200(a)(14)  of  the  National  Association  of
Securities Dealers listing standards.  The Board determined that David Wiener is
not independent because Frances Flood, President,  CEO and Chairman of the Board
of the  Company  is  also a  member  of the  Board  of  Directors  of  SoundTube
Entertainment,  Inc. David Wiener is President,  CEO and a Director of SoundTube
Entertainment, Inc.

        Finally,  the Audit  Committee has previously  adopted a written Charter
that is included as Appendix A to this Proxy Statement.

Respectfully submitted by the members of the Audit Committee.

Edward Dallin Bagley
Brad R. Baldwin
Harry Spielberg
David Wiener

Filling  of  Vacancy  on  Board  

        The Board of Directors of the Company is considering enlarging the Board
of Directors to include one additional member and filling the vacancy created by
such action prior to the Annual Meeting.  The bylaws of the Company provide that
the Company  may have up to nine  directors  on the Board,  with the size of the
Board  determined  by  resolution  of the Board.  The Company  currently has six
directors as described  above in Proposal One. The bylaws of the Company require
that any director appointed by the Board to fill such a vacancy must be approved
by the  shareholders of the Company at its next annual meeting.  The bylaws also
provide  that  directors  are  elected and  approved by a plurality  vote of the
shareholders.

        Under the Securities and Exchange  Commission  rules  applicable to this
proxy  statement,  the Company cannot  solicit  proxies to vote for a director's
position  if a nominee for that  position  is not named in the proxy  statement.
Accordingly,  because the Board has not, as of the date of this proxy statement,
determined to enlarge the Board, the Company is not soliciting proxies for votes
regarding any such possible seventh Board member. In the event that prior to the
Annual Meeting the Board does enlarge the Board and appoints another director to
fill the  vacancy,  that  newly  appointed  director  will be  submitted  to the
shareholders present in person at the Annual Meeting for approval by a plurality
vote.



                                       12

<PAGE>



Executive Officers

        Officers are elected to serve, subject to the discretion of the Board of
Directors,  until their successors are appointed.  The executive officers of the
Company are as follows:

          Name            Age         Position
          ----            ---         --------

Frances M. Flood          45          President and Chief Executive Officer
Tracy Bathurst            37          Vice President of Technology - Research
Curtis Hewitson           37          Vice President of Human Resources
Eugene W. Kuntz, Jr.      38          Vice President of Technology - Development
Susie S. Strohm           41          Vice President of Finance and Controller
James A. Valeo            40          Vice President of Strategic Operations and
                                      General Counsel
Randall J. Wichinski      48          Vice President and Chief Financial Officer

        For the biography of Ms. Flood, see "Directors."

        Tracy  Bathurst  was named Vice  President  of  Technology - Research in
April 2000. He has been with Gentner since  September  1988,  serving in various
roles  in  engineering  and  engineering  management.   He  is  responsible  for
technology  development for the organization.  Prior to joining the Company, Mr.
Bathurst worked in the cable  television and  telecommunications  industries for
over five years.  Mr.  Bathurst holds a Bachelor of Science degree from Southern
Utah University.

        Curtis  Hewitson was named Vice President of Human Resources for Gentner
Communications  in November  1998. He has been with Gentner since  December 1994
serving in Human Resources. He is responsible for all aspects of Human Resources
and office administration.  Prior to joining the Company, Mr. Hewitson worked in
the telecommunications industry for nine years. In 1989, Mr. Hewitson received a
Bachelor of Science degree from the University of Utah.

        Eugene W. Kuntz, Jr. has been with Gentner Communications since November
1999.  Mr. Kuntz was named Vice President of Technology - Development in January
2001.  He  is  responsible   for  all  engineering   development   projects  and
manufacturing  activities for the organization.  From 1987 to November 1999, Mr.
Kuntz was a manager of research and development at Computer Sciences Corporation
in Clearfield,  Utah. Mr. Kuntz holds a Bachelor of Science degree in Electrical
Engineering   from  Montana   State   University   and  a  Masters  of  Business
Administration degree from Utah State University.

        Susie S. Strohm  became Vice  President of Finance in 1997 and was named
CFO during 1998, a post she held until August 2001.  In August 2001,  Ms. Strohm
became the Company's  controller and continues as its Vice President of Finance.
In  February  1996,  Ms.  Strohm  joined the Company as its  Controller.  She is
responsible  for all  the  Company's  accounting,  financial  and tax  planning,
financial and  management  reporting,  and  Securities  and Exchange  Commission


                                       13

<PAGE>

filings.  Prior to  joining  the  Company,  Ms.  Strohm was the  Controller  for
Newspaper  Agency  Corporation  in Salt Lake City,  Utah. She graduated from the
University of Utah with a Bachelor of Science degree in Accounting, and received
her Masters of Business Administration degree from Westminster College.

        James A. Valeo joined  Gentner  Communications  as its Vice President of
Strategic  Operations and General Counsel in October 2000.  Prior to joining the
Company,  from 1996 to 2000 he  practiced  law with the law firm of Jones  Waldo
Holbrook  &  McDonough  in  Salt  Lake  City,  Utah,  focusing  on  mergers  and
acquisitions,  corporate finance,  and general corporate law. Earlier, Mr. Valeo
worked for two law firms in  Washington,  D.C. Mr. Valeo  received a Bachelor of
Arts degree from New York University in 1982, and a Juris Doctorate  degree from
Boston University in 1986.

        For the biography of Mr. Wichinski, see "Directors."

Executive Compensation

        Summary Compensation

        The following  table sets forth,  for each of the  Company's  last three
fiscal years, the compensation of the Chief Executive Officer of the Company and
the other previously named executive  officers of the Company whose total salary
and bonus for the year ended  June 30,  2001  exceeded  $100,000,  for  services
rendered in all capacities to the Company during such fiscal years.


<TABLE>

                           SUMMARY COMPENSATION TABLE
<CAPTION>

                                           Annual Compensation           Long-Term 
                                  ------------------------------------  -----------
Compensation
                                                                          Awards         
                                                                 ------------------------
Payouts
                                                                       Securities
                                                    Other      Restric-  Under-           All
                                                   Annual         ted     lying          Other
                                                   Compen-       Stock   Options  LTIP  Compen-
Name and Position      Year    Salary      Bonus   sation       Awards    /SARS  Payoutssation(1)
-----------------      ----    ------      -----   ------       ------    -----  --------------

<S>                    <C>   <C>         <C>         <C>         <C>      <C>     <C>   <C>   
Frances M. Flood      Fiscal
CEO & President        2001  $160,000    $58,400     None        None     None    None  $2,056

                      Fiscal
                       2000  $160,333    $73,700     None        None    50,000   None  $1,802

                      Fiscal
                       1999  $104,912    $66,064     None        None     None    None  $2,022

Tracy Bathurst        Fiscal
Vice President(2)      2001  $100,000    $18,500     None        None     None    None  $1,850



                                       14

<PAGE>

                      Fiscal
                       2000   $93,073     $5,000     None        None    50,000   None  $1,765

Curtis Hewitson       Fiscal
Vice President         2001   $80,002    $13,600     None        None     None    None  $2,179

                      Fiscal
                       2000   $73,574    $31,400     None        None    50,000   None  $1,841

                      Fiscal
                       1999   $60,000    $10,278     None        None     None    None  $1,800

Eugene W. Kuntz, Jr.  Fiscal
Vice President(3)      2001   $92,502     $9,500     None        None    30,000   None  $1,850

Susie Strohm          Fiscal
Vice President         2001  $110,000    $37,000     None        None     None    None  $2,316

                      Fiscal
                       2000  $100,167    $55,538     None        None    50,000   None  $1,976

                      Fiscal
                       1999   $72,716    $44,414     None        None     None    None  $1,721

</TABLE>


1   This  amount   reflects  the   Company's   contributions   to  the  deferred
    compensation (401(k)) plan.
2   Mr. Bathurst was not an executive officer until fiscal year 2000.
3   Mr. Kuntz was not an executive officer until fiscal year 2001.

        Stock Options/SARS

        The  following  table sets forth the stock  option and SAR grants to the
named executive officers for the last fiscal year:

                     OPTION/SAR GRANTS IN FISCAL YEAR ENDED JUNE 30, 2001
                               (INDIVIDUAL GRANTS)

                         Number of       Percent of
                        Securities      Total Options
                        Underlying      /SARs Granted    Exercise
                       Options/SARs     to Employees      or Base    Expiration
Name and Position       Granted (#)    in Fiscal Year  Price ($/Sh)     Date
-----------------       -----------    --------------  ------------     ----

Eugene W. Kuntz, Jr.      30,000              6%          $12.50     12/01/2010

        These underlying options will vest in total ("cliff vest") at the end of
six years from the date of grant. However,  vesting of all or a portion of these
options may be accelerated if certain targeted earnings per share goals are met.



                                       15

<PAGE>

        Aggregated Stock Option/SAR Exercises

        The  following  table sets forth the  aggregated  stock options and SARs
exercised by the named executive  officers in fiscal 2001 and the year-end value
in-the-money of unexercised options and SARs:

<TABLE>

              AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR ENDED JUNE 30, 2001
                      AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>

                                                    Number of
                                                   Securities             Value of
                                                   Underlying            Unexercised
                                                   Unexercised          In-The-Money
                                                  Options/SARs          Options/SARs
                                                  at FY-End (#)         at FY-End ($)
                         Shares
                        Acquired         Value    Exercisable/          Exercisable/
Name and Position    on Exercise (#) Realized ($) Unexercisable        Unexercisable(1)
-----------------    --------------- ------------ -------------        --------------

<S>                         <C>           <C>    <C>                 <C>             
Frances M. Flood            0             $0     176,334/146,000     $1,655,344/$828,750

Tracy Bathurst              0             $0      19,750/80,250       $174,140/$182,085

Curtis Hewitson             0             $0      35,750/99,250       $294,619/$399,069

Eugene W. Kuntz, Jr.        0             $0      2,500/57,500              $0/$0

Susie Strohm                0             $0     99,464/119,000       $902,607/$564,724
</TABLE>


1 This value was  calculated  based on the closing stock price of $10.60 on June
30, 2001.

                          COMPENSATION COMMITTEE REPORT

        The Compensation Committee has provided the following report:

        Committee's   Responsibilities   -  The   Committee   sets  the  overall
compensation   principles  for  the  Company,   subject  to  annual  review.  In
consultation with the CEO, it establishes the individual compensation levels for
Company executives.  None of the members of the committee is a current or former
employee of the Company.

    Executive  Compensation  Policy  -  Gentner   Communications   Corporation's
compensation goals are as follows:

o       To attract and retain quality talent



                                       16

<PAGE>

o       To  use  incentive   compensation  to  reinforce  strategic  performance
        objectives
o       To align  the  interest  of the  executives  with the  interests  of the
        shareholders  such that risks and  rewards of  strategic  decisions  are
        shared

        All  compensation  is tax  deductible  for the  Company,  except for the
compensation that qualifies for incentive stock option tax treatment.

        Base Compensation - The Committee  believes that base compensation needs
to be competitive  with market rates, and makes salary decisions in coordination
with the CEO.  The  fiscal  2001 base pay rates of the four  executive  officers
increased  5.5% from  fiscal  2000 base pay  rates.  The CEO's  base pay did not
change from fiscal 2000 to fiscal 2001.

        Quarterly/Annual Bonus Plan - The fiscal year 2001 annual bonus plan was
developed to reward  executives  based on meeting or exceeding  certain internal
financial  objectives  that were created by the  executive  team.  The Committee
believed in fiscal 2001 that executive base pay was  compensation  for achieving
publicly  stated  targets.  The financial  objectives  were  established  in the
beginning  of the  fiscal  year and were based on the  Company's  profitability.
Objectives were  established  for each fiscal  quarter,  together with an annual
objective.  If a quarterly objective was met, a bonus was paid for that quarter.
If a quarterly  objective was not met, then no bonus was paid.  Executives  were
not allowed to make up a missed quarterly bonus based on subsequent performance.
A  significant  portion  of the bonus  pool was set aside for  annual  financial
objectives.  A single  quarterly  objective  was made and a bonus  paid for that
quarter.  The annual  internal  financial  objective  was not met, and no annual
bonus was paid to any executive, including the CEO.

        Long-Term  Incentive  Compensation  - The  Compensation  Committee  uses
employee  stock  options  for  long-term  executive  compensation  as a means of
achieving the compensation goals previously described. Options are granted under
the Company's 1998 Stock Option Plan (the "Plan").  The Compensation  Committee,
in  consultation  with the CEO determines the number of options  granted to each
executive.  Factors  bearing on the number of  options  granted to an  executive
include his or her position,  individual  performance,  and  contribution to the
Company's overall performance.

        Option  grants under the Plan permit a recipient  to purchase  shares of
Company  stock at a fixed  price  (the  market  price on the date the  option is
granted).  Options  typically vest over five (5) years, and the number of shares
vesting  in a given  year is  contingent  on the  Company  achieving  particular
earnings goals in each year. An executive's unvested options will cliff vest six
years after grant.  In order to exercise vested options an executive must remain
with the Company (including a 90 day period following termination).

        Employment  and Severance  Agreements - The Company has not entered into
Employment  Agreements with any of its  executives.  All officers of the Company
are employed at will and can be terminated  without cause.  All employees of the
Company  have signed  Confidentiality  Agreements  to keep  certain  information
confidential.



                                       17

<PAGE>


        The  preceding  Compensation  Committee  Report  and the  Company  Stock
Performance  Graph (set forth below) will not be  incorporated by reference into
any of the Company's filings,  past or future,  that may be made pursuant to the
U.S. Securities laws.

Respectfully submitted by the members of the Compensation Committee.

Edward Dallin Bagley
Brad Baldwin
Harry Spielberg
David Wiener

Compensation Committee Interlocks

        The  Compensation  Committee is made up of all external  board  members.
During fiscal 2001 Randy  Wichinski was an external board member.  On August 23,
2001, he joined the Company as its Vice President and Chief  Financial  Officer,
so as of the date of this report, he is no longer on the Compensation Committee.

        The Company's  Compensation  Committee is currently comprised of Messrs.
Bagley, Baldwin,  Spielberg,  and Wiener. Frances Flood is a member of the board
of directors  of Sound Tube  Entertainment,  Inc. Mr.  Wiener is a member of the
board of directors of Sound Tube  entertainment  and the Company's  Compensation
Committee.

                             STOCK PERFORMANCE GRAPH

        The following graph sets forth the cumulative total  shareholder  return
(assuming  reinvestment  of dividends) to Gentner  Communications  Corporation's
shareholders  during the  five-year  period ended June 30,  2001,  as well as an
overall stock market index (Nasdaq  Composite Index) and Gentner  Communications
Corporation's peer group index (Goldman Sachs Technology Index):

                                [graph omitted]


                                       18

<PAGE>

        The stock performance assumes $100 was invested on July 1, 1996.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Gentner Research Ltd. ("GRL"), is a related limited partnership,  formed
on August 1985,  in which the Company is the general  partner and Edward  Dallin
Bagley and, among other unrelated  parties,  certain members of his family,  are
the limited  partners.  In 1987 and 1988,  GRL sold to the  Company  proprietary
interests in the VRC-1000  (now  VRC-2000),  VRC-1000  Modem (now  VRC-2000) and
Digital Hybrid in exchange for royalty payments.  Royalty expense  recognized by
the  Company  for the years  ending June 30,  2001,  2000,  and 1999 was $3,600,
$16,000 and $39,900,  respectively. GRL was dissolved on February 20, 2001 after
consent to  dissolution  and  liquidation  was  received  by a  majority  of the
partners of GRL. The product line, which incorporated the proprietary  interest,
was deemed no longer integral to the product segment of the Company's  business.
The following directors and/or executive officers and members of their immediate
families have purchased the following interests in GRL:

               Edward Dallin Bagley (Director)...................  10.42%
               The Bagley Family Revocable Trust.................   5.21%
               Robert O. Baldwin (father of Brad Baldwin)........  10.42%

        The  Company  has  also  formed a second  related  limited  partnership,
Gentner Research II, Ltd. ("GR2L"), also in which it acts as general partner. In
fiscal year 1997, GR2L sold  proprietary  interest in the GSC3000 to the Company
in exchange for royalty payments.  Royalty expense related to product sales with
GR2L for the years ending June 30, 2001,  2000,  and 1999 was $90,793,  $106,084
and $82,989. GR2L was dissolved on May 21, 2001 after the completion of the sale
of the remote control portion of the RFM/Broadcast  division to Burk Technology.
The Company paid $178,516 to GR2L in 2001,  representing its royalty on the gain
on the sale of the remote control product line. The following  directors  and/or
executive  officers and members of their  immediate  families have purchased the
following interests in GR2L:

               Brad R. Baldwin (Director)........................   3.19%
               Robert O. Baldwin (father of Brad Baldwin)........   9.58%
               Edward D. Bagley (Director).......................   6.39%
               The Bagley Family Revocable Trust.................   6.39%


                 COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

        Section  16(a)  of the  Securities  Exchange  Act of 1934,  as  amended,
requires the Company's  directors and  executive  officers,  and persons who own
more than 10% of a registered class of the Company's  equity  securities to file
with the Securities  and Exchange  Commission  initial  reports of ownership and
reports of changes of ownership of equity  securities of the Company.  Officers,
directors and greater than 10%  shareholders are required to furnish the Company
with copies of all Section 16(a) forms they file.


                                       19

<PAGE>

        To the Company's  knowledge,  the persons described above have filed all
applicable Section 16(a)  requirements  during the preceding fiscal year, except
that the following Forms were filed late: Mr. Valeo's Form 4 relating to a grant
of stock  options in November  2000 and Mr.  Bagley's Form 4 relating to an open
market purchase of stock in October 2000.























                                       20

<PAGE>


              PROPOSAL TWO - AMEND THE ARTICLES OF INCORPORATION OF
                THE COMPANY TO CHANGE THE NAME OF THE COMPANY TO
                          CLEARONE COMMUNICATIONS INC.

The Board of Directors  proposes and  recommends to the  shareholders  that they
approve an amendment to the Company's  Articles of  Incorporation  to change the
Company's name from "Gentner Communications Corporation" to [                 ].
The Board  unanimously  approved both this  amendment and the  submission of the
amendment to the Company's shareholders for consideration. If the name change is
approved,  the Company intends to continue using the "Gentner" name including in
marketing certain of its products (provided that the Company may discontinue the
use of the  "Gentner"  name at any time).  The  shareholders'  approval  of this
proposal  to change the name of the Company  also grants to the  officers of the
Company the individual  authority to take actions that may be required implement
the name change.  These actions  include,  but are not limited to, the filing of
formal Articles of Amendment to the Articles of  Incorporation  on behalf of the
Company with the Division of  Corporations of the State of Utah. The affirmative
vote of the  holders of a majority  of the  Company's  Common  Stock  issued and
outstanding  as of the Record  Date will be  required to approve the name change
and the amendment of the Company's Articles of Incorporation. The change of name
to [              ] will become effective upon the filing of an amendment to the
Company's  Articles  of  Incorporation,  and will be implemented promptly by the
Company.

In the  event  that the  proposal  is  approved,  it will NOT be  necessary  for
shareholders  to request  new share  certificates  for their  stock in  Gentner;
current share  certificates  will continue to be honored the Company's  transfer
agent.  The Company has reserved a new trading symbol [    ] with NASDAQ for the
Company's shares.

THE  BOARD OF  DIRECTORS  UNAMIMOUSLY  RECOMMENDS  A VOTE FOR  AMENDMENT  OF THE
COMPANY'S ARTICLES OF INCORPORATION



                                       21

<PAGE>



              PROPOSAL THREE -- AMENDMENT OF 1998 STOCK OPTION PLAN
              TO INCREASE BY 800,000 THE NUMBER OF SHARES AVAILABLE
                             FOR ISSUANCE THEREUNDER
 
 
        Since 1998,  the Company has provided  stock options under the Company's
1998 Stock Option Plan (the "Plan"), which Plan was approved by the Shareholders
of the Company at the Company's annual meeting held on November 18, 1998. A copy
of the 1998 Plan is available to any  shareholder by making  written  request to
the Company's Secretary.  The Company believes that granting stock options as an
incentive to its employees is highly valuable in promoting increased stockholder
value.  Management  believes  that  stock  options  are one of the prime ways to
attract and retain key employees to the Company and to motivate  participants to
increase  shareholder  value.  In  addition,  stock  options  are  considered  a
competitive necessity in the industries in which the Company competes.

        The Company  currently grants options to employees upon initial hire, in
the discretion of management and the Compensation Committee, and periodically to
key employees or in recognition of achievement of certain performance  criteria.
From 1998 to the end of the 2001 fiscal  year,  the number of Company  employees
increased from 143 to 193.

        As a result of the  increase in number of  employees,  and the desire to
give further  incentive to and retain current  employees and officers in today's
highly  competitive  and tight labor  market,  only  [________]  options  remain
available for grant under the 1998 Plan as of September 28, 2001,  not including
the 800,000 shares subject to stockholder approval at this Annual Meeting.

Proposed Amendment

        At the Annual  Meeting,  the  stockholders  are  requested to approve an
amendment  to the 1998  Plan to  increase  the  number of  shares  reserved  for
issuance  thereunder by 800,000  shares,  resulting in an aggregate of 2,500,000
shares reserved for issuance thereunder. The amendment to increase the number of
shares  reserved  under the 1998 Plan is  proposed in order to give the Board of
Directors  and the  Compensation  Committee  of the Board of  Directors  greater
flexibility  to grant stock  options.  The Company  believes that granting stock
options  motivates high levels of performance and provides an effective means of
recognizing  employee  contributions to the success of the Company.  The Company
believes that this policy is of great value in recruiting  and retaining  highly
qualified technical and other key personnel, who are in great demand, as well as
rewarding and encouraging  current  employees.  The Board of Directors  believes
that the ability to grant options will be important to the future success of the
Company by allowing it to accomplish these objectives.

Summary of the Plan

        Effective June 10, 1998, the Board of Directors  approved the 1998 Stock
Option Plan (the "Plan") for the Company. The Plan was subsequently  approved by
the shareholders of the Company at the 1998 Annual Meeting of Shareholders, held


                                       22

<PAGE>

on  November  18,  2001.  The  purpose  of the Plan is to provide  stock  option
incentives to directors, officers, other employees,  consultants and advisors of
the  Company  (or any  future  subsidiary  or parent  company  of the  Company).
Described below are the material features of the Plan.

General

        The Plan provides for the grant of ISOs  qualified  under Section 422 of
the  Internal  Revenue Code of 1986,  as amended (the "Code") and  non-qualified
stock  options  ("NSOs").  The Plan can be  administered  either by the Board of
Directors  or  one  or  more   committees   of  the  Board  of  Directors   (the
"Administrator").  Option grants are made at the discretion of the Administrator
and may be made to Company officers, directors,  employees, and other persons as
determined  by the  Administrator.  Presently,  there are  eight  (8)  executive
officers,  four (4) non-employee  directors,  and 180 non-executive employees of
the  Company  employed  by the  Company,  all of whom  (as  well  as all  future
employees) are eligible to participate in the Plan. The Plan will terminate upon
the earlier of June 10, 2008,  or the date on which all shares  available  under
the Plan have been issued.

        The Plan currently provides that a maximum of 1,700,000 shares of Common
Stock may be issued under the Plan  (subject to adjustment in the event of stock
splits or other  changes in the Common  Stock as provided  in the Plan).  To the
extent  that  options  granted  under the Plan (i) expire or  terminate  for any
reason  prior  to  exercise,   or  (ii)  are   cancelled  and  replaced  by  the
Administrator,  the shares of Common Stock underlying such options will again be
available for award under the Plan.

        Current shares issued under the Plan were registered with the Securities
and Exchange Commission ("SEC") on Form S-8 on May 12, 1999, to allow the public
sale of the shares issued pursuant to the Plan. If the amendment to increase the
number of shares by 800,000 is approved by the  shareholders,  those shares will
be "restricted" as defined under Securities and Exchange Commission ("SEC") Rule
144,  until such time as the Company  registers such shares under the Securities
Act of  1933.  It is the  Company's  present  intention  to file a  registration
statement on Form S-8 to allow the public sale of the shares issued  pursuant to
the Plan.  Cash  proceeds  from the  exercise of option  grants will be used for
general corporate purposes.

        The  Company's  Board of  Directors  has  determined  that the Plan will
replace the Company's 1990 Stock Option Plan (the "1990 Plan") and no additional
option  grants will be made under the 1990 Plan.  All options  issued  under the
1990 Plan will remain  outstanding  subject to the terms and  conditions  of the
1990 Plan.


                                       23

<PAGE>

The Administrator

        As mentioned  above,  the  Administrator of the Plan can be the Board of
Directors or one or more  committees of the Board of Directors.  Such committee,
if it grants  options to officers and directors of the Company,  must be made up
of two or more  "non-employee  directors" (as defined under SEC Rule  16(b)(3)).
Currently, the Board of Directors has delegated authority to administer the Plan
to the Company's  Compensation  Committee.  The Administrator has full authority
and discretion in the  administration of the Plan,  including adopting rules for
administration  of the Plan and  determining  the  designation  of those persons
receiving option grants, the type of option granted,  the number of shares to be
covered  by  options,   the  exercise  price,   and  other  options  terms.  The
Administrator's  decisions  in the  administration  of the  Plan are  final  and
binding on all persons for all purposes.

Option Terms

        The  Company  may grant  ISOs  under the Plan only to  employees  of the
Company.  Such grants must be at an exercise  price per share not less than 100%
of the fair market  value of the Common Stock at the date of the grant (110% for
optionees  holding 10% or more of the Company's  Common Stock).  The Plan limits
grants of ISOs that may be exercised by the holder  during any calendar  year to
$100,000 in market value.  For optionees  holding more than 10% of the Company's
Common Stock,  ISOs must expire  within five years from the date of grant.  ISOs
are  exercisable  during a recipient's  lifetime only by such  recipient and are
transferable only upon death by will or the laws of descent and distribution.

        The  Company  may grant  NSOs  under the Plan to  directors,  employees,
consultants and advisors.  Such NSOs are not subject to the  requirements of the
Code and, therefore,  may not contain the same restrictions as ISOs issued under
the Plan.  NSOs must,  however,  have an exercise  price not lower than the fair
market value of the Common Stock on the date of grant. Additionally,  no option,
either ISO or NSO, may have a term of more than 10 years from the date of grant.

        The exercise price for options may be paid to the Company in cash, or at
the discretion of the  Administrator,  in shares of Common Stock,  payments over
time, or through a sale and remittance procedure implemented by the Company with
a brokerage firm. Generally, an option right may be exercised only by the holder
within three months after his or her termination of employment (twelve months if
termination is due to disability). An option generally may be exercised no later
than twelve months following an active employee's death. Also, an option usually
is  terminated   immediately  upon  termination  of  an  employee  for  material
misconduct.  These general rules regarding exercise following termination may be
varied by the  Administrator,  but in no event may an option be exercised  later
than the date of expiration of the option.

        NSOs  are  transferable,  in  whole or in  part,  only  (i)  during  the
recipient's  lifetime if a transfer is made in connection  with the  recipient's
estate plan to one or more members of the recipient's  immediate  family (spouse
and children) or to a trust  established  exclusively  for the benefit of one or


                                       24

<PAGE>

more such immediate  family members,  or (ii) by will or the laws of descent and
distribution following the recipient's death.

        Options  may or may not be subject to a vesting  schedule,  whereby  the
options  become  exercisable  by the recipient in portions.  Such vesting may be
based  on the  passing  of  time,  performance  goals,  or some  other  criteria
determined by the Administrator.  Generally,  such vesting may be accelerated by
the  Administrator  in  its  discretion  in the  event  of a  major  corporation
transaction  (such as a merger or sale of all  assets)  or  certain  changes  in
control of the Company.

Amendments

        The Board of  Directors  can  increase  the number of shares that may be
awarded  under the  Plan,  subject  in  certain  instances  to  approval  by the
shareholders.  The Administrator may otherwise amend the Plan at any time and in
any  manner,  subject to the rights of the  holders  of  outstanding  options as
specified in their option agreements.

Federal Income Tax Consequences of the 1998 Stock Option Plan

        The following  describes the general federal income tax  consequences of
the option grants for grant  recipients  and the Company.  A recipient  will not
realize  any income at the time an ISO is granted  nor upon  exercise of an ISO.
However, the difference between the option exercise price and the Common Stock's
fair  market  value  at the time of  exercise  will be taken  into  account  for
purposes of the recipient's alternative minimum income tax, if any.

        Upon the  subsequent  disposition  of shares of Common Stock acquired by
the exercise of an ISO more than (i) two years after the ISO is granted and (ii)
one year after the  transfer of shares of Common Stock upon the exercise of such
option,  the recipient will realize capital gain or loss upon such  disposition.
The option exercise price will be the recipient's basis for determining the gain
or loss.  If the  subsequent  disposition  of stock  occurs  before the  special
holding  requirements  describe  above are met,  the  recipient  generally  will
recognize  ordinary income upon such disposition equal to the excess of the fair
market  value of the  shares  at the  time the  option  was  exercised  over the
exercise price.

        A  recipient  will not realize any income at the time an NSO is granted.
Upon the recipient's  exercise of an NSO, the difference between the fair market
value of the Common  Stock at the time of exercise  and the option price will be
ordinary income to the employee.

        At the time the recipient  realizes ordinary income from the exercise of
an NSO,  the Company  will be entitled to a tax  deduction in the same amount as
the ordinary  income  realized by the recipient.  No such deduction or other tax
consequence is applicable to the Company upon grant or exercise of an ISO.

        The foregoing is only a summary of the effect of federal income taxation
upon a recipient  with  respect to the grant and  exercise of options  under the
Plan.  This  summary  does not purport to be  complete  and does not discuss the
income tax laws of any state or foreign country in which an employee may reside.

Awards Under the Stock Option Plan

        The  options  have a term of a minimum  of seven  years and an  exercise
price set on the date of a recipients  date of  employment or the date the grant
is  approved  by the  Administrator.  Each option  vests  (becomes  exercisable)
annually with respect to a percentage of one-fifth (1/5) of the total option


                                       25

<PAGE>

shares upon the  Company's  achieving  annual  increases  in earnings  per share
("EPS") in the five fiscal years 2001-2006,  as set forth on the schedule below.
The  schedule  set forth below will be adjusted  with new annual EPS targets for
successive years over time. The annual increase in EPS and the number of Options
to become exercisable will be determined by the Administrator  within forty-five
(45) days of the end of the  fiscal  year and shall be  determined  based on the
Company's  audited  financial  statements  for such fiscal year. For purposes of
determining EPS, the Administrator may, in its discretion,  exclude or otherwise
adjust  annual EPS due to the  occurrence of an  extraordinary  event during the
fiscal year.  Extraordinary  events shall include the merger of the Company, the
Company's  acquisition  of all or  substantially  all assets or stock of another
company,  the sale of all or substantially all assets or stock of the Company to
a third  party,  and  other  extraordinary  transactions  that are  outside  the
ordinary  course of  business.  As of  September  28,  2001,  stock  options for
__________ shares of Common Stock were outstanding under the Plan.


----------------------------------------------
                     Annual EPS
----------------------------------------------
  Fiscal Year       From       To          %
----------------   -------   -------    ------
           2001    $0.4200   $0.4399      50%
----------------------------------------------
                   $0.4400   $0.4599      60%
----------------------------------------------
                   $0.4600   $0.4799      70%
----------------------------------------------
                   $0.4800   $0.4999      80%
----------------------------------------------
                   $0.5000   $0.5199      90%
----------------------------------------------
                  >$0.5200               100%
----------------------------------------------
           2002    $0.6400   $0.6899      50%
----------------------------------------------
                   $0.6900   $0.7399      60%
----------------------------------------------
                   $0.7400   $0.7899      70%
----------------------------------------------
                   $0.7900   $0.8399      80%
----------------------------------------------
                   $0.8400   $0.8899      90%
----------------------------------------------
                  >$0.8900               100%
----------------------------------------------
           2003    $1.0500   $1.1299      50%
----------------------------------------------
                   $1.1300   $1.2099      60%
----------------------------------------------
                   $1.2100   $1.2899      70%
----------------------------------------------
                   $1.2900   $1.3699      80%
----------------------------------------------
                   $1.3700   $1.4499      90%
----------------------------------------------
                  >$1.4500               100%
----------------------------------------------
           2004    $1.5000   $1.5499      50%
----------------------------------------------
                   $1.5500   $1.5999      60%
----------------------------------------------
                   $1.6000   $1.6499      70%
----------------------------------------------
                   $1.6500   $1.6999      80%
----------------------------------------------
                   $1.7000   $1.7499      90%
----------------------------------------------
                  >$1.7500               100%
----------------------------------------------
           2005    $1.8000   $1.8399      50%
----------------------------------------------
                   $1.8400   $1.8799      60%
----------------------------------------------
                   $1.8800   $1.9199      70%
----------------------------------------------
                   $1.9200   $1.9599      80%
----------------------------------------------
                   $1.9600   $1.9999      90%
----------------------------------------------
                   $2.0000               100%
----------------------------------------------



                                       26

<PAGE>


        Based on the closing price of the Company's Common Stock on NASDAQ as of
September 28, 2001, the total market value of the __________  shares  underlying
outstanding grants under the Plan is $__________.

        A copy of the Plan is included in the  exhibits  to the  Company's  1998
Form 10-KSB filed with the  Securities  and Exchange  Commission  ("SEC").  Such
report can be inspected  and copies made at the public  reference  facilities of
the SEC at Room 1024, 450 Fifth Street, N.W., Washington,  D.C. 20549. Copies of
the Form 10-KSB can also be obtained by searching  the "EDGAR  Archives" for the
Company's name on the SEC's web page at http://www.sec.gov. or by request to the
Company.

Required Vote and Board of Directors' Recommendation

        The  affirmative  vote of a majority  of the  outstanding  shares of the
Company  present in person or  represented  by proxy and entitled to vote at the
Annual  Meeting is required for  approval of the proposed  amendment to the 1998
Plan. The effect of an abstention is the same as a vote against  approval of the
amendment.  Should such stockholder approval not be obtained, then the 1998 Plan
will  remain  unchanged,  and  option  grants and direct  stock  issuances  will
continue to be made pursuant to the  provisions of the 1998 Plan in effect prior
to the amendment summarized in this proposal.


THE  BOARD  OF  DIRECTORS  UNANIMOUSLY  RECOMMENDS  APPROVAL  OF THIS  PROPOSAL,
INCREASING THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE COMPANY'S STOCK
OPTION PLAN




                                       27

<PAGE>



                 PROPOSAL FOUR - RATIFICATION OF THE APPOINTMENT
                             OF INDEPENDENT AUDITORS

        The Board of Directors has appointed Ernst & Young,  LLP, as independent
auditors for the Company for the current fiscal year,  and  recommends  that the
shareholders vote for ratification of such appointment.  Ernst & Young, LLP, has
served as the  Company's  independent  auditors  since  1990.  Fees for the last
fiscal  year were  annual  audit fees of  $70,800,  audit  related  services  of
$34,800, and all other nonaudit services of $18,800.

        Neither Ernst & Young nor any of its members have ever had any direct or
indirect financial interest in the Company or been connected with the Company as
promoter,  underwriter,  voting trustee,  director,  officer, or employee. It is
anticipated  that a  representative  of Ernst & Young  will  attend  the  Annual
Meeting and will be available  to respond to  questions.  It is not  anticipated
that the  representative  will make any statement or presentation,  although the
representative will have an opportunity to do so if he desires.

THE BOARD OF DIRECTORS  UNANIMOUSLY  RECOMMENDS A VOTE FOR  RATIFICATION  OF THE
APPOINTMENT OF THE INDEPENDENT AUDITORS.


                                  OTHER MATTERS

        The Board of  Directors  knows of no other  matter to be  presented  for
action at the Annual  Meeting.  If any other  matters  properly  come before the
meeting,  it is the intention of the persons named in the enclosed proxy to vote
the shares they represent as the Board of Directors may recommend.

        It  is  important  that  your  stock  be  represented  at  the  meeting,
regardless of the number of shares which you hold. You are, therefore,  urged to
execute  and  return  the  accompanying  proxy in the  postage-prepaid  envelope
enclosed for that purpose at your earliest convenience.

                                    FOR THE BOARD OF DIRECTORS


                                    /s/ Frances M. Flood                        
                                    --------------------------------------------
                                    Frances M. Flood, President
                                    and Chief Executive Officer



Salt Lake City, Utah
October 10, 2001



                                       28

<PAGE>


                                   APPENDIX A

                       Gentner Communications Corporation
                             Audit Committee Charter

The following shall be the principal  recurring processes of the audit committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide  with  the  understanding  that  the  committee  may  supplement  them  as
appropriate.

o   The  committee  shall have a clear  understanding  with  management  and the
    independent   auditors  that  the   independent   auditors  are   ultimately
    accountable to the board and the audit committee,  as representatives of the
    Company's shareholders.  The committee shall have the ultimate authority and
    responsibility to evaluate and, where appropriate, recommend the replacement
    of the independent  auditors.  The committee shall discuss with the auditors
    their  independence from management and the Company and the matters included
    in the written  disclosures  required by the  Independence  Standards Board.
    Annually,  the  committee  shall  review  and  recommend  to the  board  the
    selection of the Company's  independent  auditors,  subject to shareholders'
    approval.

o   The committee shall discuss with the independent  auditors the overall scope
    and plans for their respective audits including the adequacy of staffing and
    compensation.  Also,  the committee  shall discuss with  management  and the
    independent  auditors the adequacy and  effectiveness  of the accounting and
    financial  controls,  including the  Company's  system to monitor and manage
    business  risk,  and legal and ethical  compliance  programs.  Further,  the
    committee  shall meet separately  with the  independent  auditors,  with and
    without management present, to discuss the results of their examinations.

o   The committee shall review the interim financial  statements with management
    and the independent  auditors prior to the filing of the Company's Quarterly
    Report on Form 10-Q.  Also,  the committee  shall discuss the results of the
    quarterly  review and any other matters  required to be  communicated to the
    committee by the  independent  auditors under  generally  accepted  auditing
    standards. The chair of the committee may represent the entire committee for
    the purposes of this review.

o   The committee shall review with management and the independent  auditors the
    financial  statements to be included in the Company's  Annual Report on Form
    10-K (or the  annual  report to  shareholders  if  distributed  prior to the
    filing of Form 10-K),  including their judgment about the quality,  not just
    acceptability,  of accounting principles,  the reasonableness of significant
    judgments,  and the clarity of the disclosures in the financial  statements.
    Also,  the  committee  shall discuss the results of the annual audit and any
    other  matters   required  to  be  communicated  to  the  committee  by  the
    independent auditors under generally accepted auditing standards.




                                       29

<PAGE>

        GENTNER COMMUNICATIONS CORPORATION

                             1998 STOCK OPTION PLAN



                                   ARTICLE 1.
                               GENERAL PROVISIONS
                               ------------------


        1.1.   PURPOSE OF THE PLAN

               This 1998 Stock  Option Plan (the  "Plan") is intended to promote
the interests of Gentner Communications  Corporation,  a Utah corporation,  (the
"Corporation") by providing  eligible persons with the opportunity to acquire or
increase their proprietary  interest in the Corporation as an incentive for them
to remain in the Service of the Corporation.

               Capitalized  terms shall have the meanings assigned to such terms
in the attached Appendix.

        1.2.   ADMINISTRATION OF THE PLAN

               a. The Plan shall be  administered by the Board or, to the extent
required  under  applicable  Stock  Exchange  requirements  or if desired by the
Board,  a committee of the Board.  If  administered  by  committee,  the Primary
Committee  shall have sole and exclusive  authority to administer  the Plan with
respect to Section 16 Insiders;  committee authority to administer the Plan with
respect to all other persons may be vested in either the Primary  Committee or a
Secondary Committee, as determined by the Board.

               b. Members of the Primary  Committee or any  Secondary  Committee
shall  serve  for such  period of time as the  Board  may  determine  and may be
removed by the Board at any time.  The Board may  terminate the functions of any
Secondary Committee at any time and delegate all powers and authority previously
delegated to such committee to the Primary  Committee.  To the extent  committee
administration  is no longer  required by  applicable  law,  regulation or Stock
Exchange  requirement,  the  Board  may  also  terminate  the  functions  of any
committee at any time and reassume all powers and authority previously delegated
to such committee.

               c.  Each  Plan  Administrator  shall,  within  the  scope  of its
administrative  functions  under the  Plan,  have full  power and  authority  to
establish  such  rules and  regulations  as it may deem  appropriate  for proper
administration of the Plan and to make such determinations under, and issue such
interpretations  of,  the  provisions  of the Plan and any  outstanding  options
thereunder  as it may  deem  necessary  or  advisable.  Decisions  of  the  Plan
Administrator  within the scope of its  administrative  functions under the Plan
shall be final and binding on all parties who have an interest in the Plan under
its jurisdiction or any option thereunder.


                                     

                                       30

<PAGE>


               d. Service on the Primary  Committee or the  Secondary  Committee
shall constitute  service as a Board member,  and members of each such committee
shall accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee.  No member of the Primary Committee
or the Secondary  Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants under the Plan.

               e.  Each  Plan  Administrator  shall,  within  the  scope  of its
administrative  jurisdiction under the Plan, have full authority (subject to the
provisions  of the Plan) to  determine  which  eligible  persons  are to receive
option  grants,  the time or times when such option  grants are to be made,  the
number of shares to be covered  by each such  grant,  the status of the  granted
option as either an  Incentive  Option or a  Non-Statutory  Option,  the time or
times at which each option is to become  exercisable,  the vesting  schedule (if
any) applicable to the option shares, the acceleration of such vesting schedule,
and all other terms and conditions of the option grants.

        1.3.   ELIGIBILITY

               The  following  persons shall be eligible to  participate  in the
Plan:

               a. Employees,

               b. non-employee members of the Board or the board of directors of
any Parent or Subsidiary, and

               c.  consultants  and  other  independent   advisors  who  provide
Services to the Corporation or any Parent or Subsidiary.

        1.4.   STOCK SUBJECT TO THE PLAN

               a.  The  stock  issuable  under  the  Plan  shall  be  shares  of
authorized  but unissued  Common  Stock,  including  shares  repurchased  by the
Corporation  on the open  market.  The maximum  number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed 1,700,000 shares,
which  number of shares  may be  changed  from time to time in  accordance  with
Article 3.4 below.

               b. Shares of Common Stock subject to outstanding options shall be
available for  subsequent  issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii) the options
are cancelled in accordance with the cancellation-regrant  provisions of Article
2.4.  However,  should the Exercise Price be paid with shares of Common Stock or
should shares of Common Stock  otherwise  issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding  taxes incurred in connection
with the  exercise  of an option  under the Plan,  then the  number of shares of
Common Stock available for issuance under the Plan shall be reduced by the gross
number of shares for which the option is exercised, and not by the net number of
shares of Common Stock issued to the holder of such option.

               c. Should any change be made to the Common Stock by reason of any
stock split, stock dividend,  recapitalization,  combination of shares, exchange



                                       31

<PAGE>


of shares or other  change  affecting  the  outstanding  Common Stock as a class
without the  Corporation's  receipt of  consideration,  appropriate  adjustments
shall be made to (i) the maximum  number  and/or  class of  securities  issuable
under the Plan,  (ii) the number  and/or class of  securities  for which any one
person may be granted  options per calendar  year,  and (iii) the number  and/or
class of  securities  and the Exercise  Price in effect  under each  outstanding
option in order to prevent the dilution or enlargement  of benefits  thereunder.
The adjustments determined by the Plan Administrator shall be final, binding and
conclusive.

                                   ARTICLE 2.
                              OPTION GRANT PROGRAM
                              --------------------

        2.1.   OPTION TERMS

               Each option shall be  evidenced  by one or more  documents in the
form  approved  by the Plan  Administrator;  provided,  however,  that each such
document shall comply with the terms specified below.  Each document  evidencing
an Incentive Option shall, in addition,  be subject to the provisions of Article
2.2 of the Plan, below.

               a.     Exercise Price
                      --------------
                                                                                
                    (1)  The   Exercise   Price  shall  be  fixed  by  the  Plan
Administrator  but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the Grant Date.

                    (2) The  Exercise  Price shall become  immediately  due upon
exercise of the option and shall,  subject to the provisions of Article 3.1, and
the  documents  evidencing  the  option,  be payable in one or more of the forms
specified below:

                          (a) cash or check made payable to the Corporation,

                          (b) a promissory note payable to the Corporation,  but
             only to the extent  authorized  by the  Administrator  pursuant  to
             Section 12 of the Plan,

                          (c)  shares of  Common  Stock  held for the  requisite
             period  necessary to avoid a charge to the  Corporation's  earnings
             for financial reporting purposes and valued at Fair Market Value on
             the Exercise Date, but only upon prior written approval of the Plan
             Administrator, or

                          (d)  upon  the  prior  written  approval  of the  Plan
             Administrator, and to the extent the option is exercised for vested
             shares, through a special sale and remittance procedure pursuant to
             which the Optionee shall concurrently  provide  irrevocable written
             instructions  to (a) a  Corporation-designated  brokerage  firm  to
             effect the immediate sale of the Purchased  Shares and remit to the
             Corporation,  out of the sale proceeds  available on the settlement
             date,  sufficient  funds  to cover  the  aggregate  Exercise  Price
             payable for the Purchased Shares plus all applicable federal, state
             and local income and  employment  taxes  required to be withheld by
             the  Corporation by reason of such exercise and (b) the Corporation
             to deliver the  certificates  for the Purchased  Shares directly to
             such brokerage firm in order to complete the sale.


                                       32

<PAGE>


               Except  to the  extent  such  sale and  remittance  procedure  is
utilized, payment of the Exercise Price for the Purchased Shares must be made on
the Exercise Date.

               b. Exercise and Term of Options. Each option shall be exercisable
at such time or times, during such period and for such number of shares as shall
be  determined  by the  Plan  Administrator  and  set  forth  in  the  documents
evidencing  the option.  However,  no option  shall have a term in excess of ten
(10) years measured from the Grant Date.

               c. Effect of Termination of Service

                    (1) The  following  provisions  shall govern the exercise of
any options held by the Optionee at the time of cessation of Service:

                          (a)  Any  option   outstanding  at  the  time  of  the
             Optionee's  cessation  of  Service  for any  reason  except  death,
             Permanent  Disability or Misconduct shall remain  exercisable for a
             three (3) month  period  thereafter,  provided  no option  shall be
             exercisable after the Expiration Date.

                          (b)  Any  option   outstanding  at  the  time  of  the
             Optionee's   cessation   of  Service  due  to  death  or  Permanent
             Disability shall remain  exercisable for a twelve (12) month period
             thereafter,  provided  no  option  shall be  exercisable  after the
             Expiration Date.  Subject to the foregoing,  any option exercisable
             in whole  or in part by the  Optionee  at the time of death  may be
             exercised  subsequently  by  the  personal  representative  of  the
             Optionee's estate or by the person or persons to whom the option is
             transferred  pursuant to the Optionee's  will or in accordance with
             the laws of descent and distribution.

                          (c) Should the  Optionee's  Service be terminated  for
             Misconduct, then all outstanding options held by the Optionee shall
             terminate immediately and cease to be outstanding.

                          (d)  During  the  applicable   post-Service   exercise
             period,  the option may not be exercised in the  aggregate for more
             than the number of shares for which the  option is  exercisable  on
             the date of the Optionee's  cessation of Service; the option shall,
             immediately upon the Optionee's cessation of Service, terminate and
             cease to be  outstanding  to the extent the option is not otherwise
             at that time  exercisable.  Upon the  expiration of the  applicable
             exercise  period or (if  earlier)  upon the  Expiration  Date,  the
             option shall  terminate and cease to be outstanding  for any shares
             for which the option has not been exercised.

                    (2)  The  Plan  Administrator  shall  have  the  discretion,
exercisable  either at the time an option is  granted  or at any time  while the
option remains outstanding, to:

                          (a)  extend the period of time for which the option is
             to remain exercisable following the Optionee's cessation of Service



                                       33

<PAGE>

             from the period otherwise in effect for that option to such greater
             period of time as the Plan  Administrator  shall deem  appropriate,
             but in no event beyond the Expiration Date, and/or

                          (b)  permit  the  option to be  exercised,  during the
             applicable  post-Service  exercise period, not only with respect to
             the  number  of shares of  Common  Stock for which  such  option is
             exercisable at the time of the Optionee's  cessation of Service but
             also with respect to one or more additional  shares that would have
             vested under the option had the Optionee continued in Service.

               d.  Stockholder  Rights.  The  holder of an option  shall have no
stockholder  rights with respect to the shares  subject to the option until such
person shall have exercised the option,  paid the Exercise  Price,  and become a
holder of record of the Purchased Shares.

               e. Limited Transferability of Options. During the lifetime of the
Optionee, Incentive Options may be exercised only by the Optionee, and shall not
be  assignable  or  transferable  except  by will or the  laws  of  descent  and
distribution  following  the  Optionee's  death.  Non-Statutory  Options  may be
assigned  or  transferred  in whole or in part only (i)  during  the  Optionee's
lifetime if in connection with the Optionee's estate plan to one or more members
of  the  Optionee's  immediate  family  (spouse  and  children)  or  to a  trust
established  exclusively  for the benefit of one or more such  immediate  family
members,  or (ii) by will or the laws of descent and distribution  following the
Optionee's  death.  The assigned  portion may only be exercised by the person or
persons  who  acquire a  proprietary  interest  in the  option  pursuant  to the
assignment.  The terms  applicable to the assigned  portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate.

        2.2.   INCENTIVE OPTIONS

               The terms specified  below shall apply to all Incentive  Options.
Except as modified by the  provisions of this Article 2.2, all the provisions of
this Plan shall apply to Incentive Options.  Options specifically  designated as
Non-Statutory  Options  when  issued  under the Plan shall not be subject to the
terms of this Article 2.2.

               a. Eligibility.   Incentive  Options  may  only   be  granted  to
Employees.

               b. Exercise Price.  The Exercise Price shall not be less than one
hundred percent (100%) of the Fair Market Value per share of Common Stock on the
Grant Date.

               c. Dollar  Limitation.  The  aggregate  Fair Market  Value of the
shares of Common Stock  (determined as of the respective date or dates of grant)
for which one or more  options  granted to any  Employee  under the Plan (or any
other option plan of the  Corporation or any Parent or  Subsidiary)  may for the
first time become  exercisable as Incentive  Options during any one (1) calendar
year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the
extent the Employee holds two (2) or more such options which become  exercisable
for the first time in the same calendar  year,  the foregoing  limitation on the
exercisability  of such  options as  Incentive  Options  shall be applied in the
order in which such options are granted.



                                       34

<PAGE>

               d. 10% Stockholder. If an Employee to whom an Incentive Option is
granted is a 10% Stockholder, then the Exercise Price shall not be less than one
hundred ten percent (110%) of the Fair Market Value per share of Common Stock on
the Grant Date,  and the option  term shall not exceed  five (5) years  measured
from the Grant Date.

               e. Holding Period.  Shares purchased  pursuant to an option shall
cease to qualify for favorable  tax treatment as Incentive  Option Shares if and
to the extent Optionee disposes of such shares within two (2) years of the Grant
Date or within one (1) year of Optionee's purchase of said shares.

        2.3.   CORPORATE TRANSACTION/CHANGE IN CONTROL

               a. In the event of any Corporate Transaction,  and subject to the
terms set forth in an  Optionee's  Stock  Option  Grant,  the Board of Directors
shall  have the sole  authority  to elect  that each  outstanding  option  shall
automatically  accelerate so that each such option shall,  immediately  prior to
the effective date of the Corporate Transaction,  shall become fully exercisable
for all of the shares of Common Stock at the time subject to such option and may
be  exercised  for any or all of those shares as  fully-vested  shares of Common
Stock.  The Board may  exercise  its  discretion  to  accelerate  the vesting of
options  whether or not (i) such  option is, in  connection  with the  Corporate
Transaction, either to be assumed by the successor corporation or parent thereof
or to be replaced  with a  comparable  option to purchase  shares of the capital
stock of the successor  corporation or parent thereof, (ii) such option is to be
replaced  with a cash  incentive  program  of the  successor  corporation  which
preserves the spread  existing on the unvested  option shares at the time of the
Corporate  Transaction and provides for subsequent payout in accordance with the
same vesting schedule  applicable to such option,  except to the extent that the
acceleration of such option is subject to other limitations  imposed by the Plan
Administrator at the time of the option grant.

               b. The Plan Administrator's discretion under Article 2.3.a. above
shall be  exercisable  either at the time the  option is  granted or at any time
while the option  remains  outstanding,  whether or not those  options are to be
assumed or replaced in the Corporate  Transaction.  The Plan Administrator shall
also have the discretion to grant options which do not accelerate whether or not
such options are assumed in connection with a Corporate Transaction.

               c. If the Board of Directors elects the automatic acceleration of
some or all of the  outstanding  options  upon  the  occurrence  of a  Corporate
Transaction,  all such  outstanding  options  shall  terminate  and  cease to be
outstanding,  except to the extent  assumed  by the  successor  corporation  (or
parent  thereof)  immediately   following  the  consummation  of  the  Corporate
Transaction.

               d. Each option  which is assumed in  connection  with a Corporate
Transaction  shall be appropriately  adjusted,  immediately after such Corporate
Transaction, to apply to the number and class of securities that would have been
issuable to the Optionee in consummation  of such Corporate  Transaction had the
option  been  exercised   immediately  prior  to  such  Corporate   Transaction.
Appropriate  adjustments  shall  also be made to (i) the  number  and  class  of
securities  available for issuance under the Plan following the  consummation of



                                       35

<PAGE>


such Corporate Transaction, (ii) the exercise price payable per share under each
outstanding  option,  provided the  aggregate  exercise  price  payable for such
securities  shall  remain the same and (iii) the  maximum  number of  securities
and/or  class of  securities  for  which any one  person  may be  granted  stock
options.

               e. The Plan Administrator shall have the discretion,  exercisable
at the time the  option  is  granted  or at any time  while the  option  remains
outstanding, to provide for the automatic acceleration of any options assumed or
replaced in a Corporate  Transaction  that do not  otherwise  accelerate at that
time in the event the Optionee's Service should subsequently terminate by reason
of  an  Involuntary  Termination  within  eighteen  (18)  months  following  the
effective date of such Corporate  Transaction.  Any options so accelerated shall
remain  exercisable  for shares until the earlier of (i) the  expiration  of the
option term or (ii) the expiration of the one (1)-year  period measured from the
effective date of the Involuntary Termination.

               f. The Plan Administrator shall have the discretion,  exercisable
either at the time the option is granted or at any time while the option remains
outstanding,  to (i)  provide  for  the  automatic  acceleration  of one or more
outstanding options upon the occurrence of a Change in Control or (ii) condition
any such option acceleration upon the subsequent Involuntary  Termination of the
Optionee's  Service  within a  specified  period  (not to exceed  eighteen  (18)
months)  following  the  effective  date of such Change in Control.  Any options
accelerated  in  connection   with  a  Change  in  Control  shall  remain  fully
exercisable until the Expiration Date or sooner termination of the option term.

               g. The portion of any Incentive Option  accelerated in connection
with a Corporate Transaction or Change in Control shall remain exercisable as an
Incentive  Option only to the extent the applicable One Hundred  Thousand Dollar
($100,000)  limitation is not exceeded.  To the extent such dollar limitation is
exceeded,  the  accelerated  portion of such option  shall be  exercisable  as a
Non-Statutory Option under the federal tax laws.

               h. The grant of options under the Plan shall in no way affect the
right of the Corporation to adjust,  reclassify,  reorganize or otherwise change
its capital or business structure or to merge, consolidate,  dissolve, liquidate
or sell or transfer all or any part of its business or assets.

                                   ARTICLE 3.
                                  MISCELLANEOUS
                                  -------------

        3.1.   FINANCING

               a. The Plan  Administrator  may  permit any  Optionee  to pay the
option  Exercise  Price by  delivering a promissory  note payable in one or more
installments. The terms of any such promissory note (including the interest rate
and the terms of repayment)  shall be established by the Plan  Administrator  in
its sole discretion. Promissory notes may be authorized with or without security
or collateral.  In all events,  the maximum credit available to the Optionee may
not exceed the sum of (i) the aggregate  option  Exercise  Price payable for the
Purchased Shares plus (ii) the amount of any federal, state and local income and
employment tax liability  incurred by the Optionee in connection with the option
exercise.




                                       36

<PAGE>

               b. The Plan Administrator may, in its discretion,  determine that
one or more  such  promissory  notes  shall be  subject  to  forgiveness  by the
Corporation  in whole or in part upon such terms as the Plan  Administrator  may
deem appropriate.

        3.2.   TAX WITHHOLDING

               a. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options under the Plan shall be subject to the satisfaction
of all applicable federal, state and local income and employment tax withholding
requirements.

               b. The Plan Administrator may, in its discretion,  provide any or
all holders of Non-Statutory Options under the Plan with the right to use shares
of Common  Stock in  satisfaction  of all or part of the Taxes  incurred by such
holders in  connection  with the  exercise of their  options.  Such right may be
provided to any such holder in either or both of the following formats:

                      (1)  Stock   Withholding:   The   election   to  have  the
        Corporation withhold, from the shares of Common Stock otherwise issuable
        upon the  exercise  of such  Non-Statutory  Option,  a portion  of those
        shares with an aggregate  Fair Market Value equal to the  percentage  of
        the Taxes (not to exceed one hundred percent  (100%))  designated by the
        holder.

                      (2)  Stock  Delivery:  The  election  to  deliver  to  the
        Corporation,  at the time the Non-Statutory Option is exercised,  one or
        more shares of Common Stock  previously  acquired by such holder  (other
        than in connection with the option  exercise  triggering the Taxes) with
        an aggregate Fair Market Value equal to the percentage of the Taxes (not
        to exceed one hundred percent (100%)) designated by the holder.

        3.3.   EFFECTIVE DATE AND TERM OF THE PLAN

               a. The Plan shall become  effective on the Plan  Effective  Date.
However,  no shares shall be issued under the Plan pursuant to Incentive Options
until  the  Plan  is  approved  by  the  Corporation's  stockholders.   If  such
stockholder  approval is not obtained  within  twelve (12) months after the Plan
Effective Date, then all Incentive  Options  previously  granted under this Plan
shall automatically convert into Non-Statutory Options.

               b. The Plan shall  terminate  upon the  earliest  of (i) June 10,
2008,  (ii) the date on which all shares  available for issuance  under the Plan
shall have been issued,  or (iii) the termination of all outstanding  options in
connection  with a  Corporate  Transaction.  Upon  such  Plan  termination,  all
outstanding  options shall continue to have force and effect in accordance  with
the provisions of the documents evidencing such options.


                                       37

<PAGE>


        3.4.   AMENDMENT OF THE PLAN

               a.  The  Board  shall  have  complete  and  exclusive  power  and
authority to amend or modify the Plan in any or all  respects,  or to cancel any
grants made thereunder; provided, however, that no such amendment, modification,
or cancellation  shall adversely  affect any rights and obligations with respect
to options at the time outstanding  under the Plan unless each affected Optionee
consents  to  such  amendment,   modification,  or  cancellation.  In  addition,
amendments  to the Plan  shall  be  subject  to  approval  of the  Corporation's
stockholders to the extent required by applicable laws,  regulations,  or Nasdaq
or Stock Exchange requirements.

               b.  Options  to  purchase  shares of Common  Stock may be granted
under the Plan that are in each  instance in excess of the number of shares then
available  for  issuance  under the Plan,  provided any excess  shares  actually
issued  are  held  in  escrow  until  there  is  obtained  Board  approval  (and
shareholder  approval if  required by  applicable  laws,  regulations,  or Stock
Exchange  requirements)  of an amendment  sufficiently  increasing the number of
shares of Common Stock available for issuance under the Plan.

        3.5.   USE OF PROCEEDS

               Any cash proceeds  received by the  Corporation  from the sale of
shares  of  Common  Stock  under the Plan  shall be used for  general  corporate
purposes.

        3.6.   REGULATORY APPROVALS

               a. The  implementation  of the Plan,  the  granting of any option
under the Plan, and the issuance of any shares of Common Stock upon the exercise
of any option shall be subject to the Corporation's  obtaining all approvals and
permits required by regulatory authorities having jurisdiction over the Plan and
the options  granted under it, and the shares of Common Stock issued pursuant to
the Plan.

               b. No shares of Common Stock shall be issued or  delivered  under
the Plan unless and until there shall have been  compliance  with all applicable
requirements  of federal and state  securities  laws and all applicable  listing
requirements  of any stock  exchange (or the Nasdaq  market,  if  applicable) on
which Common Stock is then listed for trading.

        3.7.   NO EMPLOYMENT/SERVICE RIGHTS

               Nothing in the Plan shall  confer upon the  Optionee any right to
continue  in Service for any period of specific  duration or  interfere  with or
otherwise  restrict in any way the rights of the  Corporation  (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee,  which rights
are hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.


CURRENT WITH ALL AMENDMENTS THROUGH AUGUST 7, 2000



                                       38

<PAGE>




                                    APPENDIX
                                    --------

               The following  definitions  shall be in effect under the Plan and
the Plan Documents:

        0.1. Board shall mean the Corporation's Board of Directors.

        2. Change in Control  shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:

                      (i) the acquisition, directly or indirectly, by any person
        or related group of persons (other than the Corporation or a person that
        directly or indirectly  controls,  is controlled  by, or is under common
        control with,  the  Corporation),  of beneficial  ownership  (within the
        meaning of Rule  13d-3 of the 1934 Act) of  securities  possessing  more
        than  fifty  percent  (50%) of the total  combined  voting  power of the
        Corporation's  outstanding  securities  pursuant to a tender or exchange
        offer made directly to the Corporation's  stockholders,  which the Board
        does not recommend such stockholders to accept, or

                      (ii) a  change  in the  composition  of the  Board  over a
        period  of  thirty-six  (36)  consecutive  months  or less  such  that a
        majority of the Board members ceases, by reason of one or more contested
        elections  for Board  membership,  to be  comprised of  individuals  who
        either (A) have been Board members  continuously  since the beginning of
        such period or (B) have been elected or nominated  for election as Board
        members  during such period by at least a majority of the Board  members
        described  in clause  (A) who were still in office at the time the Board
        approved such election or nomination.

        3. Code shall mean the Internal Revenue Code of 1986, as amended.

        4. Common Stock shall mean the Corporation's common stock.

        5.   Corporate   Transaction   shall  mean   either  of  the   following
stockholder-approved transactions to which the Corporation is a party:

                      (i)  a  merger  or   consolidation   in  which  securities
        possessing  more than fifty percent (50%) of the total  combined  voting
        power of the Corporation's  outstanding  securities are transferred to a
        person or persons  different from the persons  holding those  securities
        immediately prior to such transaction; or

                      (ii) the sale,  transfer  or other  disposition  of all or
        substantially all of the Corporation's assets in complete liquidation or
        dissolution of the Corporation.

        6. Eligible Director shall mean a non-employee  Board member eligible to
participate in the Plan.

        7.  Employee  shall  mean  an  individual  who is in the  employ  of the
Corporation (or any Parent or Subsidiary), subject to the control  and direction



                                       39

<PAGE>


of the employer  entity as to both the work to be  performed  and the manner and
method of performance.

        8. Exercise Date shall mean the date on which the Corporation shall have
received written notice of the option exercise.

        9. Exercise  Price shall mean the exercise  price per share as specified
in the Stock Option Grant.

        10.  Expiration  Date shall mean the date on which the option expires as
specified in the Stock Option Grant.

        11. Fair Market  Value per share of Common  Stock on any  relevant  date
shall be determined in accordance with the following provisions:

                      (i) If the  Common  Stock  is  traded  at the  time on the
        Nasdaq National Market,  then the Fair Market Value shall be the closing
        selling price per share of Common Stock on the date in question, as such
        price is reported by the National  Association of Securities  Dealers on
        the  Nasdaq  National  Market or any  successor  system.  If there is no
        closing selling price for the Common Stock on the date in question, then
        the Fair Market  Value shall be the  closing  selling  price on the last
        preceding date for which such quotation exists.

                      (ii) If the  Common  Stock  is at the time  listed  on any
        Stock Exchange,  then the Fair Market Value shall be the closing selling
        price  per share of Common  Stock on the date in  question  on the Stock
        Exchange  determined by the Plan  Administrator to be the primary market
        for the  Common  Stock,  as  such  price  is  officially  quoted  in the
        composite tape of transactions on such exchange.  If there is no closing
        selling  price for the Common  Stock on the date in  question,  then the
        Fair  Market  Value  shall  be the  closing  selling  price  on the last
        preceding date for which such quotation exists.

                      (iii) If the  Common  Stock  is not  listed  on any  Stock
        Exchange nor traded on the Nasdaq National Market,  then the Fair Market
        Value shall be  determined by the Plan  Administrator  after taking into
        account such factors as the Plan Administrator shall deem appropriate.

                      (iv)  For  purposes  of  any  option  grants  made  on the
        Underwriting  Date, the Fair Market Value shall be deemed to be equal to
        the price per share at which  the  Common  Stock is sold in the  initial
        public offering pursuant to the Underwriting Agreement.

        12.  Grant  Date  shall  mean the date on which the option is granted to
Optionee as specified in the Stock Option Grant.


        13.   Incentive   Option  shall  mean  an  option  which  satisfies  the
requirements of Code Section 422.


                                       40

<PAGE>


        14. Involuntary Termination shall mean the termination of the Service of
any individual which occurs by reason of:

                      (i)  such  individual's involuntary dismissal or discharge
        by the Corporation for reasons other than Misconduct, or

                      (ii) such individual's voluntary resignation following (A)
        a change in his or her position with the  Corporation  which  materially
        reduces his or her level of  responsibility,  (B) a reduction  in his or
        her level of compensation  (including  base salary,  fringe benefits and
        participation   in   corporate-performance   based  bonus  or  incentive
        programs) by more than fifteen percent (15%) or (C) a relocation of such
        individual's place of employment by more than fifty (50) miles, provided
        and only if such  change,  reduction  or  relocation  is effected by the
        Corporation without the individual's consent.

        15.  Market  Stand Off shall mean the market  stand off  restriction  on
disposition of the Purchased  Shares as identified under such title in the Stock
Option Exercise Notice and Purchase Agreement.

        16.   Misconduct  shall  mean  the  commission  of  any  act  of  fraud,
embezzlement or dishonesty by the Optionee,  any  unauthorized use or disclosure
by such person of  confidential  information or trade secrets of the Corporation
(or any  Parent or  Subsidiary),  or any other  intentional  misconduct  by such
person  adversely  affecting the business or affairs of the  Corporation (or any
Parent or Subsidiary) in a material manner.  The foregoing  definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee or other person in the Service of the Corporation (or any Parent
or Subsidiary).

        17. 1933 Act shall mean the Securities Act of 1933, as amended.

        18. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

        19.  Non-Statutory  Option  shall mean an option not intended to satisfy
the requirements of Code Section 422.

        20.  Optionee  shall mean any person to whom an option is granted  under
Plan.

        21.  Option  Shares  shall  mean the  number of  shares of Common  Stock
subject to the option as specified in the Stock Option Grant.

        22.  Owner  shall  mean  Optionee  and  all  subsequent  holders  of the
Purchased  Shares  who  derive  their  claim of  ownership  through a  Permitted
Transfer from Optionee.

        23. Parent shall mean any corporation (other than the Corporation) in an
unbroken  chain of  corporations  ending  with the  Corporation,  provided  each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination,  stock possessing fifty percent (50%) or more of the total
combined  voting power of all classes of stock in one or the other  corporations
in such chain.


                                       41

<PAGE>


        24.  Permanent   Disability  or  Permanently  Disabled  shall  mean  the
inability  of the  Optionee  to engage in any  substantial  gainful  activity by
reason of any medically  determinable  physical or mental impairment expected to
result in death or to be of continuous duration of twelve (12) months or more.

        25.  Permitted  Transfer  shall mean (i) a  gratuitous  transfer  of the
Purchased Shares,  provided and only if Optionee obtains the Corporation's prior
written  consent to such  transfer,  (ii) a transfer  of title to the  Purchased
Shares effected pursuant to Optionee's will or the laws of intestate  succession
following  Optionee's death, or (iii) a transfer to the Corporation in pledge as
security for any purchase-money  indebtedness incurred by Optionee in connection
with the acquisition of the Purchased Shares.

        26. Plan  Administrator  shall mean the particular  entity,  whether the
Board or a committee of the Board,  which is authorized  to administer  the Plan
with  respect to one or more  classes of  eligible  persons,  to the extent such
entity is carrying out its administrative  functions under the Plan with respect
to the persons under its jurisdiction.

        27. Plan  Documents  shall mean the Plan,  the Stock Option  Grant,  and
Stock Option Exercise Notice and Purchase Agreement, collectively.

        28.    Plan Effective Date shall mean                , the date on which
the Plan was adopted by the Board.

        29.  Primary  Committee  shall  mean  the  committee  of two (2) or more
non-employee  Board members (as defined in the  regulations to Section 16 of the
1934 Act)  appointed by the Board to administer the Plan with respect to Section
16 Insiders.

        30.  Purchased  Shares shall mean the shares  purchased upon exercise of
the Option.

        31.  Recapitalization  shall  mean  any  stock  split,  stock  dividend,
recapitalization,  combination  of shares,  exchange  of shares or other  charge
affecting  the  Corporation's  outstanding  Common Stock as a class  without the
Corporation's receipt of consideration.

        32. Reorganization shall mean any of the following transactions:

                      (i) a merger or  consolidation in which the Corporation is
           not the surviving entity;

                      (ii) a  sale,  transfer  or  other  disposition  of all or
           substantially all of the Corporation's assets;

                      (iii) a reverse  merger in which  the  Corporation  is the
           surviving entity but in which the  Corporation's  outstanding  voting
           securities are transferred in whole or in part to a person or persons
           different from the persons holding those securities immediately prior
           to the merger; or


                                       42

<PAGE>


                      (iv) any  transaction  effected  primarily  to change  the
           state in which the Corporation is incorporated or to create a holding
           company structure.

        33. SEC shall mean the Securities Exchange Commission.

        34. Secondary  Committee shall mean a committee of two (2) or more Board
members  appointed by the Board to administer  the Plan with respect to eligible
persons other than Section 16 Insiders.

        35.  Section  16  Insider  shall  mean an  officer  or  director  of the
Corporation  subject to the short-swing  profit liabilities of Section 16 of the
1934 Act.

        36. Service shall mean the  performance  of services to the  Corporation
(or any Parent or  Subsidiary)  by a person in the  capacity of an  Employee,  a
non-employee  member of the board of directors or a  consultant  or  independent
advisor,  except to the extent otherwise  specifically provided in the documents
evidencing the option grant.

        37. Stock Exchange shall mean either the American  Stock  Exchange,  the
New York Stock Exchange,  another regional stock exchange,  or the Nasdaq market
as established by the National Association of Securities Dealers.

        38. Stock Option Exercise  Notice and Purchase  Agreement shall mean the
agreement  of said  title in  substantially  the form of  Exhibit A to the Stock
Option Grant,  pursuant to which Optionee gives notice of his intent to exercise
the option and purchase Shares.

        39.  Stock  Option  Grant shall mean the Stock  Option  Grant  document,
pursuant to which  Optionee  has been  informed of the basic terms of the option
granted under the Plan.

        40.  Subsidiary shall mean any corporation  (other than the Corporation)
in an unbroken chain of corporations  beginning with the  Corporation,  provided
each corporation  (other than the last  corporation) in the unbroken chain owns,
at the time of the  determination,  stock possessing fifty percent (50%) or more
of the total  combined  voting power of all classes of stock in one of the other
corporations in such chain.

        41. Taxes shall mean the Federal,  state and local income and employment
tax liabilities  incurred by the holder of  Non-Statutory  Options in connection
with the exercise of those options.

        42. 10% Stockholder  shall mean the owner of stock (as determined  under
Code  Section  424(d))  possessing  more  than ten  percent  (10%) of the  total
combined  voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).



                                       43