Fonix Corp – ‘DEFA14A’ on 11/12/03

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Additional Definitive Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFA14A     Amended Proxy Statement                               24    130K 

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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
 Securities Exchange Act of 1934

Filed by the Registrant                     [X]                                 
Filed by a Party other than the Registrant  [   ]                               

Check the appropriate box:                                                      
[ ]    Preliminary Proxy Statement                                              
[ ]    Confidential, for Use of the Commission Only (as permitted by            
Rule 14a-6(e)(2))                                               
[X]    Definitive Proxy Statement                                               
[ ]    Definitive Additional Materials                                          
[ ]    Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12      

 Fonix Corporation
.................................................................................
(Name of Registrant as Specified in Charter)

.................................................................................
 (Name of Person(s) Filing Proxy Statement If Other Than The Registrant)

Payment of Filing Fee (Check the appropriate box):                              

[X]  No fee required                                                            

[ ]  $125 per Exchange Act Rules 0-11(c)(1)(ii),  14a-6(i)(1),  14a-6(i)(2) or  
Item 22(a)(2) of Schedule 14A.                                        

[ ]  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:                                        

[  ]     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 of Schedule and the date of its filing.
        1)       Amount Previously Paid:......................................
        2)       Form, Schedule or Registration Statement No..................
        3)       Filing Party:................................................
        4)       Date Filed:..................................................
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 Fonix Corporation
180 West Election Road
 Suite 200
Draper, Utah 84020

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 22, 2003

To the Shareholders:                                                            

       Notice is hereby given that the Annual Meeting of the Shareholders of
Fonix Corporation (the "Company") will be held at the Salt Lake City Center     
Marriott Hotel, located at 220 South State Street, Salt Lake City, Utah 84111,  
on Monday, December 22, 2003, at 10:00 a.m., M.S.T., for the following          
purposes, which are discussed in the following pages and which are made part    
of this Notice:                                                                 

        1.       To elect three directors, each to serve until the next annual
             meeting of shareholders and until his or her successor is
elected and shall qualify;                  

  2.       To approve the Board of Directors' selection of Hansen,
         Barnett & Maxwell as the Company's independent public
                 accountants for the fiscal year ending December 31, 2003; and

       3.       To consider and act upon any other matters that properly may
       come before the meeting or any adjournment thereof.

     The Company's Board of Directors has fixed the close of business on
Friday, October 31, 2003, as the record date for the determination of           
shareholders having the right to notice of, and to vote at, the Annual Meeting  
of Shareholders and any adjournment thereof. A list of such shareholders will be
available for examination by a shareholder for any purpose germane to the       
meeting during ordinary business hours at the offices of the Company at 180 West
Election Road, Suite 200, Draper, Utah 84020, during the ten business days prior
to the meeting.                                                                 

        You are requested to date, sign and return the enclosed proxy which is
solicited by the Board of Directors of the Company and will be voted as         
indicated in the accompanying proxy statement and proxy. Your vote is important.
Please sign and date the enclosed Proxy and return it promptly in the enclosed  
return envelope whether or not you expect to attend the meeting. The giving of  
your proxy as requested hereby will not affect your right to vote in person     
should you decide to attend the Annual Meeting. The return envelope requires no 
postage if mailed in the United States. If mailed elsewhere, foreign postage    
must be affixed. Your proxy is revocable at any time before the meeting.        

               By Order of the Board of Directors,

 /s/ Thomas A. Murdock
Salt Lake City, Utah                                                            
November 10, 2003             Thomas A. Murdock,                                
                             Chairman of the Board and Chief Executive Officer

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 Fonix Corporation
180 West Election Road
 Suite 200
Draper, Utah 84020
(801) 553-6600

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

 PROXY STATEMENT

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

ANNUAL MEETING OF SHAREHOLDERS

The enclosed proxy is solicited by the Board of Directors of Fonix Corporation  
("Fonix" or the "Company") for use in voting at the Annual Meeting of           
Shareholders (the "Annual Meeting") to be held at the Salt Lake City Center     
Marriott Hotel, located at 220 South State Street, Salt Lake City, Utah 84111,  
on Monday, December 22, 2003, at 10:00 a.m., M.S.T.,  and at any postponement   
or adjournment  thereof, for the purposes set forth in the attached notice. When
proxies are properly  dated,  executed and returned,  the shares they  represent
will be voted at the Annual Meeting in accordance  with the  instructions of the
shareholder  completing the proxy. If a signed proxy is returned but no specific
instructions  are  given,  the  shares  will be voted (i) FOR the  nominees  for
directors set forth herein;  and (ii) FOR approval of Hansen,  Barnett & Maxwell
as the  Company's  independent  public  accountants  for the fiscal  year ending
December  31,  2003;  and (iii) FOR  approval  of the  Company's  2002  Employee
Compensation  Plan. A  shareholder  giving a proxy has the power to revoke it at
any time prior to its  exercise  by voting in person at the Annual  Meeting,  by
giving written notice to the Company's  Secretary prior to the Annual Meeting or
by giving a later dated proxy.                                                  

The presence at the meeting, in person or by proxy, of shareholders holding in  
the aggregate a majority of the outstanding shares of the Company's Class A     
common stock entitled to vote shall constitute a quorum for the transaction of  
business. The Company does not have cumulative voting for directors; a plurality
of the votes properly cast for the election of directors by the shareholders    
attending the meeting, in person or by proxy, will elect directors to office. A 
majority of votes properly cast upon any question presented for consideration   
and shareholder action at the meeting, other than the election of directors,    
shall decide the question. Abstentions and broker non- votes will count for     
purposes of establishing a quorum, but will not count as votes cast for the     
election of directors or any other questions and accordingly will have no       
effect. Votes cast by shareholders who attend and vote in person or by proxy at 
the Annual Meeting will be counted by inspectors to be appointed by the Company.
(The Company anticipates that the inspectors will be employees, attorneys or    
agents of the Company.)                                                         

The close of business on Friday, October 31, 2003, has been fixed as the record 
date for determining the shareholders entitled to notice of, and to vote at, the
Annual Meeting. Each share shall be entitled to one vote on all matters. As of  
the record date there were 45,495,963 shares of the Company's Class A common    
stock outstanding and entitled to vote, held by 1,219 holders of record. For a  
description of the principal holders of such stock, see "SECURITY OWNERSHIP OF  
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" below.                                

This Proxy Statement and the enclosed Proxy are being furnished to shareholders 
on or about November 14, 2003.                                                  

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

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 PROPOSAL 1 -- ELECTION OF DIRECTORS

    The Company's Bylaws provide that the number of directors shall be
determined from time to time by the shareholders or the Board of Directors, but 
that there shall be no fewer than three. Presently, the Company's Board of      
Directors consists of five members, all of whom are nominees for reelection at  
the Annual Meeting. Each director elected at the Annual Meeting will hold office
until a successor is elected and qualified, or until the director resigns, is   
removed or becomes disqualified. Unless marked otherwise, proxies received will 
be voted FOR the election of each of the nominees named below. If any such      
person is unable or unwilling to serve as a nominee for the office of director  
at the date of the Annual Meeting or any postponement or adjournment thereof,   
the proxies may be voted for a substitute nominee, designated by the proxy      
holders or by the present Board of Directors to fill such vacancy, or for the   
balance of those nominees named without nomination of a substitute, or the Board
may be reduced accordingly. The Board of Directors has no reason to believe that
any of such nominees will be unwilling or unable to serve if elected as a       
director.                                                                       

      The following information is furnished with respect to the nominees.
Stock ownership information is shown under the heading "Security Ownership of   
Certain Beneficial Owners and Management" and is based upon information         
furnished by the respective individuals.                                        

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

     THOMAS A. MURDOCK,  59, is a co-founder of the Company and has served as an
     executive officer and member of the Company's board of directors since June
     1994. He has been the Company's chief  executive  officer since January 26,
     1999.  Mr.  Murdock also has served as  president  of SCC Asset  Management
     Inc.,  formerly Studdert  Companies  Corporation  ("SCC"), a related party,
     since 1992. For much of his career, Mr. Murdock was a commercial banker and
     a senior corporate  executive with significant  international  emphasis and
     experience.  Mr. Murdock also serves as a director of KLS Enviro Resources,
Inc.("KLS") and SCC.                                                  

     ROGER D. DUDLEY,  50, is a  co-founder  of the Company and has served as an
     executive officer and member of the Company's board of directors since June
     1994. Mr. Dudley currently serves as the Company's executive vice president
     and chief  financial  officer.  After several years at IBM in marketing and
     sales,  he began his  career in the  investment  banking  industry.  He has
     extensive  experience  in  corporate  finance,   equity  and  debt  private
     placements  and asset  management.  Mr. Dudley also serves as a director of
KLS, SCC, and Audium Corporation.                                     

     WILLIAM A. MAASBERG, JR., 62, became a director of the Company in September
     1999 and was named chief operating  officer February 1, 2000. From December
     1997 through  February  1999,  Mr.  Maasberg was vice president and general
     manager of the AMS Division of Eyring Corporation which manufactures multi-
     media  electronic work  instruction  software  applications.  He was also a
     co-founder  and  principal  in  Information  Enabling  Technologies,   Inc.
     ("IET"),  and  LIBRA  Corporation  ("LIBRA"),  two  companies  focusing  on
     software  application  development,  and  served in several  key  executive
     positions with both IET and LIBRA from May 1976 through  November 1997. Mr.
     Maasberg  worked for IBM  Corporation  from July 1965  through  May 1976 in
     various capacities. He received his B.S. Degree from Stanford University in
     Electrical  Engineering  and his M.S. in  Electrical  Engineering  from the
University of Southern California.                                    

        Messrs. Murdock, Dudley, and Maasberg are nominees for election to the
Company's Board of Directors. None of the executive officers, directors or      
nominees of the Company is related to any other officer, director or nominee of 
the Company.                                                                    

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE DIRECTOR
 -----------------------------------------------------

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PROPOSAL NO. 2

APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS

         The Board of Directors of the Company has selected the certified public
accounting firm of Hansen, Barnett & Maxwell ("HBM") as the independent public  
accountants for the Company for the fiscal year ending December 31, 2003. At the
Annual Meeting, shareholders will be asked to ratify the selection by the Board 
of Directors of HBM as the Company's independent public accountant for the 2003 
fiscal year.                                                                    

 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure

        On July 16, 2002, the Company engaged HBM as the Company's independent
public accountant to review the Company's interim financial statements and to   
audit the Company's financial statements beginning with the Company's fiscal    
year ending December 31, 2002. Subsequently, on November 18, 2002, the Company  
engaged HBM to reaudit the Company's financial statements for the fiscal year   
ending December 31, 2001. The Company terminated its relationship with and      
dismissed its former independent public accountant, Arthur Andersen LLP         
("Andersen"), effective with the appointment of HBM in July 2002. The dismissal 
of Andersen and the appointment of HBM as the Company's new independent public  
accountant were approved by the Company's Audit Committee and Board of Directors
on July 12, 2002.                                                               

   The Company's shareholders approved the appointment of HBM as the
Company's independent public accountants for the year ended December 31, 2002,  
at a Special Meeting of Shareholders, held March 24, 2003.                      

 During the period from the date of Andersen's engagement as the
Company's independent public accountant to July 16, 2002, the Company did not   
consult with HBM on any matter of accounting principles or practices, financial 
statement disclosure, or auditing scope or procedure.                           

       During the most recent fiscal years ended December 31, 2001 and 2000,
and the interim period subsequent to December 31, 2001, through the date of     
dismissal of Andersen, there were no disagreements with Andersen on any matter  
of accounting principles or practices, financial statement disclosure, or       
auditing scope or procedure that would have caused Andersen to make references  
in its audit report to such disagreements.                                      

       Andersen's report on the Company's financial statements for the years
ended December 31, 2000 and 1999, contained no adverse opinion or disclaimer of 
opinion and was not modified as to audit scope or accounting principles, except 
that Andersen's report dated March 29, 2001, contained an explanatory paragraph 
regarding the Company's ability to continue as a going concern.                 

       The Company filed with the Commission a current report on Form 8-K on
July 17, 2002, disclosing the termination of the Company's engagement with      
Andersen, the Company's engagement of HBM, and other required information. The  
Company provided Andersen with a copy of the current report and requested that  
Andersen furnish a letter addressed to the Securities and Exchange Commission   
(the "Commission") stating whether Andersen agreed with the above statements. A 
representative of Andersen responded by advising the Company that Andersen would
no longer provide letters relating to its termination as an audit client's      
independent public accountant, and that Andersen's inability to provide such    
letters had been discussed with the Staff at the Commission.                    

        On November 18, 2002, the Company engaged HBM to reaudit the Company's
financial statements for the year ended December 31, 2001, and in connection    
with the reaudit, the Company amended its annual report on Form 10-K for the    
year ended December 31, 2001. The Company filed the amended annual report on    
Form 10-K for the year ended December 31, 2001, on December 18, 2002.           

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   Other than the termination of Andersen and the engagement of HBM,
during the years ended December 31, 2001, 2000, and 1999, and through the date  
hereof, there were no reportable events (as defined in Item 304(a)(1)(v) of     
Regulation S-K).                                                                

Audit Fees                                                                      

       In 2002, the aggregate fees billed by HBM for its audit and quarterly
reviews completed were $132,813.                                                

Financial Information Systems Design and Implementation                         

     In 2002, there were no fees billed by HBM for financial information
systems design and implementation.                                              

All Other Fees                                                                  

   In 2002, the aggregate fees billed by HBM for all other non-audit
services were $0.                                                               

   Because there were no fees billed by or paid to HBM for financial
information systems design and implementation or other fees, neither the        
Company's audit committee nor the Company's Board of Directors were required to 
consider whether the provision of such services would be compatible with        
maintaining HBM's independence.                                                 

Attendance at Annual Meeting

      Representatives of HBM are expected to attend the Annual Meeting and
will have an opportunity to make a statement if they desire to do so, and they  
will be available to answer appropriate questions from shareholders.            

 THE BOARD RECOMMENDS SHAREHOLDER APPROVAL OF THE SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS

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

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 INFORMATION ABOUT FONIX CORPORATION

   The following table sets forth certain information concerning the
executive officers and directors of the Company as of October 16, 2003:         

                                                        [Enlarge/Download Table]

 Name                            Age  Position                                                    

                                                                                                  
Thomas A. Murdock (1)*           59   Director, President & Chief Executive Officer               
Roger D. Dudley   (2)*           50   Director, Executive Vice President & Chief Financial Officer
John A. Oberteuffer, Ph.D.       62   Director, Vice President & Chief Technology Officer         
William A. Maasberg, Jr (1) (2)  63   Director, Chief Operating Officer                           
Rolf-Juergen Bruess              54   President, Fonix International                              

(1)      Member, Compensation Committee                       
(2)      Member, Audit Committee                              
*        Committee Chairman                                   

   Biographical information on Messrs. Murdock, Dudley, and Maasberg
appears above at page 3.                                                        

     JOHN A. OBERTEUFFER, Ph.D. has been a director of the Company since
    March 1997, vice president since January 1998 and chief technology
     officer since March 2001. He is the founder and former president of
     Voice Information Associates, Inc. ("VIA"), a consulting group that
    publishes the monthly newsletter, ASRNews. Dr. Oberteuffer also is
        president of the American Voice Input/Output Society ("AVIOS"). He was
    formerly vice president of Voice Processing Corp. (now merged with
    Voice Control Systems, Inc.), and also was founder and CEO of Iris
       Graphics, which was acquired by Seitex Corp. Dr. Oberteuffer received
    his bachelor's and master's degrees from Williams College, and his
       Ph.D. in Physics from Northwestern University. He was a member of the
         research staff at Massachusetts Institute of Technology for five years.

         ROLF-JUERGEN BRUESS is president of Fonix International and advisor for
        strategic implementation and marketing. He has over 20 years of senior
       and management experience in semiconductors, communications, consumer
     and automotive electronics, strategic technical marketing and sales
 with Siemens AG and Mannesmann VDO. He managed 1,500 world-wide
         engineering and sales personnel achieving $750 million in annual sales.

 SIGNIFICANT EMPLOYEES AND CONSULTANTS

         In addition to the officers and directors identified above, the Company
expects the following individuals to make significant contributions to the      
Company's business during 2002.                                                 

    D. LYNN SHEPHERD is vice president and general manager of embedded
       automotive and wireless and mobile applications and has been employed
        by the Company since 1997. He was employed by Synergetics from 1992 to
         March 13, 1997. Before his employment with Synergetics, he was employed
       with Mentorgraphics where he acted as a software systems architect in
       automatic semiconductor design. Before Mentorgraphics, he worked on a
         contract basis with Signetics, Inc. Mr. Shepherd graduated from Brigham
  Young University with a Bachelor of Science Degree in Electrical
         Engineering. He also received a Masters of Business Administration from
Brigham Young University.                                     

         R. BRIAN MONCUR is director of core technologies Implementation and has
 been with the Company since 1997. He was previously employed by
  Synergetics, Inc., from 1992 to 1997. Before his employment with
     Synergetics, he was employed by Signetics, Inc. and Mentorgraphics,
where he was a senior process                                 

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          engineer and software development engineer.  Mr. Moncur graduated from
          Brigham Young University with a Bachelor of Science degree in chemical
engineering.                                                

      K.H. KIM is vice president and general manager of Fonix Asia and has
     been employed by Fonix since 1998. Previously, he was employed as a
      senior researcher at Fujitsu Laboratories in Akashi, Japan, where he
   was in charge of multimodal human-computer information processing
  research projects. He has over 20 years of related experience in
      telecommunications, including a four-year assignment at the Advanced
       Telecommunications Research Institute. Mr. Kim has a Bachelor of Arts
        in Metallurgical Engineering from Han Yang University in Seoul, Korea,
       a Master of Science in Industrial Engineering from North Carolina A&T
    State University, and a Ph.D. in Industrial Engineering from North
Carolina State University.                                    

      EDWARD A. BRUCKERT is an advisory scientist and has been employed by
 Fonix since December 2001. Previously, he was employed by Force
    Computers, Inc. and Digital Equipment Corporation as the technical
        leader for the DECtalk text-to-speech product. His experience includes
    31 years of work in speech synthesis and hardware engineering. Mr.
         Bruckert graduated from the University of Massachusetts with a Bachelor
   of Science in Electrical Engineering and a Bachelor of Science in
Computing Engineering.                                        

       C. HAL HANSEN is an independent consultant and is co-inventor of some
   of the Company's automated speech recognition technologies. He is
   chairman and CEO of Synergetics, IMC2, and Adiva Corporation. For
       approximately 14 years, he was employed by Signetics, Inc. in various
 capacities, including test equipment engineer, characterization
        engineer, product engineer, and electronic specialist. He was involved
       in the design, fabrication and release of layout design for PC boards
        and interfaces. In 1991, Mr. Hansen founded Synergetics, Inc., were he
 directs new product development and engineering. IMC2 currently
       provides consulting in research and development to the Company in the
     area of ASR. Mr. Hansen holds a degree in electronics from the Utah
Trade Technical Institute of Provo, Utah.                     

  TONY R. MARTINEZ, Ph.D. is a senior consulting scientist for the
       Company's neural network development. He is an associate professor of
         Computer Science at Brigham Young University and currently heads up the
     Neural Network and Machine Learning Laboratory in the Brigham Young
  University Ph.D./MS program. His principal research is in neural
     networks, machine learning, ASOCS, connectionist systems, massively
     parallel algorithms and architectures, and non-von Neuman computing
     methods. He is associate editor of the Journal of Artificial Neural
  Networks. Dr. Martinez received his Ph.D. in computer science at
University of California at Los Angeles.                      

       None of the executive officers or directors of the Company is related
to any other officer or director of the Company.                                

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

SCC Asset Management Inc. ("SCC") (formerly Studdert Companies Corp.)           

   SCC is a Utah corporation that provides investment and management
services. The officers, directors and owners of SCC are Stephen M. Studdert,    
former chairman and CEO of the Company, and Thomas A. Murdock and Roger D.      
Dudley, each of whom is a director and executive officer of the Company.        

      The Company subleased from SCC office space located at 60 East South
Temple Street, Salt Lake City, Utah. The subleases, which expired in December   
2002 and February 2003, required the Company to pay the actual monthly rental of
$10,368 and all common area charges payable under the lease with SCC's landlord.
During October 2002, the Company assumed SCC's lease obligation (see            
"Properties").                                                                  

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    On March 18, 2003, the Company executed a promissory note with the
landlord in the amount of $113,768 covering the outstanding lease obligations   
under the subleases. The note bears annual interest at 10% and is payable in    
monthly installments of $3,000.                                                 

John A. Oberteuffer                                                             

     In February 2000, the Company entered into an agreement to purchase
from John A. Oberteuffer, an executive officer and director of the Company, all 
of Dr. Oberteuffer's rights and interests in certain methods and apparatus for  
integrated voice and pen input for use in computer systems. In payment for Dr.  
Oberteuffer's technology, the Company granted Dr. Oberteuffer 15,000 warrants to
purchase the Company's Class A common stock at an exercise price of $1.00 per   
share. The warrants expire February 10, 2010. Also, the Company granted Dr.     
Oberteuffer the right to repurchase the technology from the Company at fair     
market value if the Company subsequently determines not to commercialize the    
pen/voice technologies or products.                                             

Loans from Senior Management to Company                                         

      Two executive officers of the Company (the "Lenders") sold shares of
Class A common stock owned by them and advanced the resulting proceeds amounting
to $333,308 to the Company under the terms of a revolving line of credit and    
related promissory note. The funds were advanced for use in Company operations. 
The advances bear interest at 10 percent per annum, payable on a semi-annual    
basis. The entire principal, along with unpaid accrued interest and any other   
unpaid charges or related fees, is due and payable on June 10, 2003. Any time   
after December 11, 2002, all or part of the outstanding balance and unpaid      
interest may be converted at the option of the Lenders into shares of Class A   
common stock. The conversion price is the average closing bid price of the      
shares at the time of the advances. If converted, the conversion amount is      
divided by the conversion price to determine the number of shares to be issued  
to the Lenders. To the extent the market price of the Company's Class A common  
stock is below the conversion price at the time of conversion, the Lenders are  
entitled to receive additional shares equal to the gross dollar value received  
from the original sale of the shares. A beneficial conversion feature of $14,917
was recorded as interest expense in connection with this transaction. The       
Lenders may also receive additional compensation as determined appropriate by   
the Board of Directors. The Lenders subsequently pledged 30,866 shares of Class 
A common stock to the Equity Line Investor in connection with an advance of     
$182,676 to the Company under the Third Equity Line (see Note 11 to the         
condensed consolidated financial statements for the year ended December 31,     
2002, included with this report). The Equity Line Investor subsequently sold the
pledged shares and applied the proceeds in reduction of the advance. The value  
of the pledged shares of $82,242 was treated as an additional advance from the  
Lenders.                                                                        

        The aggregate advances of $415,550 from the Lenders are secured by the
Company's intellectual property rights and other assets.                        

 Compliance With Section 16(a) of the Exchange Act

   Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who beneficially own more than 10%
of a registered class of the Company's equity securities, to file reports of    
ownership and changes in ownership with the Securities and Exchange Commission. 
Officers, directors and greater than 10% shareholders are required by regulation
of the Securities and Exchange Commission to furnish the Company with copies of 
all Section 16(a) forms which they file. Based solely on its review of the      
copies of such forms furnished to the Company during the fiscal year ended      
December 31, 2001, the Company is aware of the following untimely filings:      

   Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who beneficially own more than 10%
of a registered class of the Company's equity securities, to file reports       

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of ownership and changes in ownership with the Securities and Exchange          
Commission. Officers, directors and greater than 10% shareholders are required  
by regulation of the Securities and Exchange Commission to furnish the Company  
with copies of all Section 16(a) forms which they file. Based solely on its     
review of the copies of such forms furnished to the Company during the fiscal   
year ended December 31, 2002, the Company is aware of the following untimely    
filings:                                                                        

     Thomas A. Murdock received options to purchase 18,750 shares of the
Company's Class A common stock on January 17, 2002, and options to purchase     
5,000 shares of the Company's Class A common stock on March 5, 2002.            
Additionally, Mr. Murdock, as trustee of a voting trust (the "Voting Trust"),   
sold 128,750 shares held in the Voting Trust from June 7 to July 5, 2002. Mr.   
Murdock loaned the proceeds of the sales to the Company. In return, Mr. Murdock 
received from the Company a promissory note in the principal amount of $207,775,
which became convertible into shares of the Company's Class A common stock on   
December 12, 2002. The sales of the shares and the acquisition of the options   
and the convertible promissory note were reported on a Form 5 filed on February 
14, 2003.                                                                       

   Roger D. Dudley received options to purchase 18,750 shares of the
Company's Class A common stock on January 17, 2002, and options to purchase     
5,000 shares of the Company's Class A common stock on March 5, 2002.            
Additionally, 35,673 shares of the Company's Class A common stock owned by Mr.  
Dudley and held in the Voting Trust, were sold from the Voting Trust in June    
2002. Mr. Dudley loaned the proceeds of the sales to the Company. In return, Mr.
Dudley received from the Company a promissory note in the principal amount of   
$207,775, which became convertible into shares of the Company's Class A common  
stock on December 12, 2002. Further, Mr. Dudley pledged 30,866 shares of Class A
common stock to secure an advance to the Company by a third-party lender. The   
pledgee executed on the pledged shares and sold the shares in October and       
November 2002. The sales of the shares and the acquisition of the options and   
the convertible promissory note were reported on a Form 5 filed February 14,    
2003.                                                                           

        William A. Maasberg, Jr., received options to purchase 7,500 shares of
the Company's Class A common stock on January 17, 2002, and options to purchase 
5,000 shares of the Company's Class A common stock on March 5, 2002. The        
acquisition of the options was reported on a Form 5 filed February 14, 2003.    

      John O. Oberteuffer received options to purchase 7,500 shares of the
Company's Class A common stock on January 17, 2002, and options to purchase     
5,000 shares of the Company's Class A common stock on March 5, 2002. The        
acquisition of the options was reported on a Form 5 filed February 14, 2003.    

 Mark S. Tanner received options to purchase 5,000 shares of the
Company's Class A common stock on March 5, 2002. The transaction will be        
reported on a Form 5 to be filed. Mr. Tanner resigned as a member of the Board  
of Directors on July 27, 2002.                                                  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

       The following table sets forth, as of October 31, 2003, the number of
shares of Common Stock of the Company beneficially owned by all persons known to
be holders of more than five percent of the Company's Common Stock and by the   
executive officers and directors of the Company individually and as a group.    
Unless indicated otherwise, the address of the stockholder is the Company's     
principal executive offices, 180 West Election Road, Suite 200, Draper, Utah    
84020.                                                                          

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                                                                [Download Table]

Name and Address of 5%                                                     
Beneficial Owners, Executive        Number of Shares                       
Officers, and Directors            Beneficially Owned  Percent of Class (1)

                                                                           
Thomas A. Murdock                     1,549,061(2)            3.31%        
Chairman of the Board & Chief                                              
  Executive Officer                                                        

Roger D. Dudley                       1,300,048(3)            2.78%        
Executive Vice President & Chief                                           
 Financial Officer, Director                                               

John A. Oberteuffer, Ph.D.               54,417(4)               *         
Vice President & Chief Technology                                          
 Officer, Director                                                         

William A. Maasberg                      36,062(5)               *         
Chief Operating Officer, Director                                          

All Officers and Directors as a       2,939,587               6.10%        
Group (4 persons)                                                          

*        Less than 1 percent.                                              

(1)      Percentages rounded to nearest 1/100th of one percent. Except as       
        indicated in the footnotes below, each of the persons listed exercises
         sole voting and investment power over the shares of Common Stock listed
for each such person in the table.                            

(2)      Includes 40,000 shares of Common Stock deposited in a voting trust (the
 "Voting Trust") as to which Mr. Murdock is the sole trustee and
        2,380,771 shares of Common Stock issuable as of February 4, 2003, into
        the Voting Trust under a convertible promissory note (the "Convertible
       Note") held by Mr. Murdock and Mr. Dudley. Persons who have deposited
      their shares of Common Stock into the Voting Trust have dividend and
       liquidation rights ("Economic Rights") in proportion to the number of
     shares of Common Stock they have deposited in the Voting Trust, but
      have no voting rights with respect to such shares. All voting rights
associated with the shares deposited into the Voting Trust are
        exercisable solely and exclusively by the Trustee of the Voting Trust.
      The Voting Trust expires, unless extended according to its terms, on
        the earlier of September 30, 2004, or any of the following events: (i)
the Trustee terminates it; (ii) the participating shareholders
unanimously terminate it; or (iii) the Company is dissolved or
  liquidated. Although as the sole trustee of the Voting Trust Mr.
         Murdock exercises the voting rights of all of the shares deposited into
      the Voting Trust, and accordingly has listed all shares in the table
      above, he has no economic or pecuniary interest in any of the shares
         deposited into the Voting Trust except for 1,190,386 shares issuable as
     of February 4, 2003, under the Convertible Note as to which he will
         directly own Economic Rights when issued. Also includes 71 shares owned
         directly by Mr. Murdock, 703 shares (including shares issuable upon the
     exercise of options) beneficially owned by members of Mr. Murdock's
        immediate family residing in the same household, and 109,583 shares of
Common Stock underlying stock options owned by Mr. Murdock and
       exercisable presently or within 60 days of October 31, 2003. Does not
         include 16,667 options which are not exercisable presently or within 60
days of October 31, 2003.                                     

(3)      Includes (i) 1,190,386 shares of Common Stock issuable as of February  
       4, 2003, under the Convertible Note, which will be deposited into the
        Voting Trust when issued, (ii) 71 shares owned directly by Mr. Dudley;
       (iii) 8 shares owned by Mr. Dudley's minor children; and (iv) 109,583
shares underlying stock                                       

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      options exercisable presently or within 60 days of October 31, 2003.
        Does not include 16,667 options which are not exercisable presently or
within 60 days of October 31, 2003.                           

(4)      Consisting of options or warrants exercisable presently or within 60   
        days of October 31, 2003. Does not include 7,083 options which are not
exercisable presently or within 60 days of October 31, 2003.  

(5)      Consisting of 480 shares owned directly by Mr. Maasberg, 165 shares    
        owned by Mr. Maasberg's minor children, and 35,417 options exercisable
         presently or within 60 days of October 31, 2003. Does not include 7,083
  options which are not exercisable presently or within 60 days of
October 31, 2003.                                             

 Report of Audit Committee

  The Audit Committee conducted two meetings during the year ended
December 31, 2002. The Audit Committee reviewed and discussed the audited       
financial statements with management. The Audit Committee discussed with the    
independent auditors the matters required to be discussed by Statement of       
Auditing Standards No. 61, received the written disclosures and the letter from 
the independent accountants required by Independence Standards Board Standard   
No. 1 and discussed with the independent auditor the independent auditor's      
independence. Based upon its review and the discussions described, the Audit    
Committee recommended to the Board of Directors that the audited financial      
statements be included in the Company's Annual Report on Form 10-K for the year 
ended December 31, 2002. The Company's Audit Committee Charter of Fonix         
Corporation is included as Appendix A.                                          

 BOARD OF DIRECTORS MEETINGS, COMMITTEES AND DIRECTOR COMPENSATION

   The Company's board of directors took action at five duly noticed
meetings of the board during 2002. Each director attended (in person or         
telephonically) all of the meetings of the Company's board of directors. During 
2002, the Company's board of directors had the following committees: Audit      
Committee, comprised of Messrs. Dudley (chairman) and Maasberg; and Compensation
Committee, comprised of Messrs. Murdock (chairman) and Maasberg. These standing 
committees conducted meetings in conjunction with meetings of the full board of 
directors.                                                                      

 Compensation of Directors

       Prior to April 1996, the Company's directors received no compensation
for their service. The Company historically has reimbursed its directors for    
actual expenses incurred in traveling to and participating in directors'        
meetings, and the Company intends to continue that policy for the foreseeable   
future. On March 30, 1996, the Company's board of directors adopted, and the    
Company's shareholders subsequently approved, the Company's 1996 Directors'     
Stock Option Plan (the "Directors' Plan"). Under the Directors' Plan, members of
the Board as constituted on the date of adoption received options to purchase   
5,000 shares of the Company's Class A common stock for each year (or any portion
thereof consisting of at least six months) during which such persons had served 
on the board for each of fiscal years 1994 and 1995 and were granted 5,000      
shares for each of fiscal years 1996 through 2002, which options vested after   
completion of at least six months' service on the board during those fiscal     
years. These options have terms of ten years. Similar grants have been made to  
the Company's directors under the Company's 1998 Stock Option Plan, as set forth
elsewhere in this proxy statement.                                              

       Directors who are executive officers are also entitled to participate
under the 2002 Employee Compensation Plan, described elsewhere in this Proxy    
Statement.                                                                      

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 Option Grants in Fiscal Year 2002

                                                        [Enlarge/Download Table]

                                                                                 Potential Realizable Value at
                                                                                    Assumed Annual Rates of   
                                   Individual Grants                             Stock Price Appreciation for 
                                                                                          Option Term         
           (a)                 (b)               (c)         (d)         (e)          (f)            (g)      
                            Number of        % of Total                                                       
                           Securities        Options to   Exercise                                            
                           Underlying       Employees in    Price    Expiration                               
Name                     Options Granted     Fiscal Year  ($/share)     Date          5%             10%      
                               (#)                                                                            

                                                                                                              
Thomas A. Murdock            18,750            11.9%        $3.60      1/17/12     $109,950        $175,078   
                              5,000             3.2%        $2.00      3/4/12       $16,289         $25,937   

Roger D. Dudley              18,750            11.9%        $3.60      1/17/12     $109,950        $175,078   
                              5,000             3.2%        $2.00      3/4/12       $16,289         $25,937   

William A. Maasberg, Jr.      7,500             4.8%        $3.60      1/17/12      $43,980         $70,031   
                              5,000             3.2%        $2.00      3/4/12       $16,289         $25,937   

John A. Oberteuffer           7,500             4.8%        $3.60      1/17/12      $43,980         $70,031   
                              5,000             3.2%        $2.00      3/4/12       $16,289         $25,937   

 Aggregated Option/SAR Exercises in Last Fiscal Year
 and Related December 31, 2002 Option/SAR Values

                                                        [Enlarge/Download Table]

           (a)                 (b)               (c)                 (d)                           (e)            
                                                                Number of Securities                              
                                                               Underlying Unexercised      Value of In-the-Money  
                                                              Options/SARs at December    Options/SARs at December
                                                                      31, 2002                    31, 2002        
                         Shares Acquired                      Exercisable/Unexercisable  Exercisable/Unexercisable
Name                     on Exercise (#)  Value Realized ($)             (#)                        ($)           

                                                                                                                  
Thomas A. Murdock               0                 $ 0              103,925/28,750                  $0/$0          
Roger D. Dudley                 0                 $ 0               99,167/27,083                  $0/$0          
William A. Maasberg, Jr.        0                 $ 0               28,750/13,750                  $0/$0          
John A. Oberteuffer             0                 $ 0               34,833/11,667                  $0/$0          

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EXECUTIVE COMPENSATION

 Compensation Committee Report on Executive Compensation

         Preliminary Note: Notwithstanding anything to the contrary set forth in
any of the previous filings made by the Company under the 1933 Act or the       
Securities Exchange Act of 1934, as amended, that might incorporate future      
filings, including, but not limited to, this Proxy Statement, in whole or in    
part, the following Executive Compensation Report and the performance graph     
appearing herein shall not be deemed to be incorporated by reference into any   
such future filings.                                                            

      This Executive Compensation Report discusses the Company's executive
compensation policies and the basis for the compensation paid to the Company's  
Chief Executive Officer and the Company's four most highly compensated executive
officers other than its Chief Executive Officer who were serving as executive   
officers at December 31, 2002, and whose annual compensation exceeded $100,000  
during such year (collectively, the "Named Executive Officers"), during the year
ended December 31, 2002.                                                        

Compensation   Policy.   The  Committee's   policy  with  respect  to  executive
compensation has been designed to:                                              

         o    Adequately and fairly compensate executive officers in relation to
         their responsibilities, capabilities and contributions to the
          Company and in a manner that is commensurate with compensation
        paid by companies of comparable size or within the Company's
industry;                                           

  o    Reward executive officers for the achievement of short-term
             operating goals and for the enhancement of the long-term value of
the Company; and                                    

      o    Align the interests of the executive officers with those of the
             Company's shareholders with respect to short-term operating goals
        and long-term increases in the price of the Company's common
stock.                                              

       The components of compensation paid to executive officers consist of:
(a) base salary, (b) incentive compensation in the form of annual bonus payments
and stock options awarded by the Company under the Company's stock incentive    
plans and (c) certain other benefits provided to the Company's executive        
officers. The Company's Compensation Committee is responsible for reviewing and 
approving cash compensation paid by the Company to its executive officers and   
members of the Company's senior management team, including annual bonuses and   
stock options awarded under the Company's stock incentive plans, selecting the  
individuals who will be awarded bonuses and stock options under the stock       
incentive plans, and for determining the timing, pricing and amount of all stock
options granted thereunder, each within the terms of the Company's stock        
incentive plans.                                                                

The Company's executive compensation program historically has 
emphasized the use of incentive-based compensation to reward the Company's      
executive officers and members of senior management for the achievement of goals
established by the board of directors. The Company uses stock options to provide
an incentive for a substantial number of its officers and employees, including  
selected members of management. The Company believes its incentive compensation 
plan rewards management when the Company and its shareholders have benefitted   
from achieving the Company's goals and targeted research and development        
objectives, all of which the Compensation Committee feels will dictate, in large
part, the Company's future operating results. The Compensation Committee        
believes that its policy of compensating officers and employees with            
incentive-based compensation fairly and adequately compensates those individuals
in relation to their responsibilities, capabilities and contribution to the     
Company, and in a manner that is commensurate with compensation paid by         
companies of comparable size or within the Company's industry.                  

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         Components of Compensation. The primary components of compensation paid
by the Company to its executive officers and senior management personnel, and   
the relationship of such components of compensation to the Company's            
performance, are discussed below:                                               

          o    Base Salary.  Subject to the terms of employment  agreements with
               certain   executive   officers,    the   Compensation   Committee
               periodically  reviews  and  approves  the base salary paid by the
               Company  to its  executive  officers  and  members  of the senior
               management  team.  Adjustments  to base  salaries are  determined
               based  upon  a  number  of  factors,   including   the  Company's
               performance  (to  the  extent  such  performance  can  fairly  be
               attributed or related to each executive's  performance),  as well
               as the nature of each executive's responsibilities,  capabilities
               and  contributions.   In  addition,  the  Compensation  Committee
               periodically  reviews  the base  salaries  of  senior  management
               personnel  in an  attempt to  ascertain  whether  those  salaries
               fairly  reflect  job   responsibilities   and  prevailing  market
               conditions and rates of pay. The Compensation  Committee believes
               that base  salaries for the  Company's  executive  officers  have
               historically  been  reasonable in relation to the Company's  size
               and  performance  in  comparison  with the  compensation  paid by
               similarly  sized  companies  or  companies  within the  Company's
industry.                                         

          o    Incentive Compensation. As discussed above, a substantial portion
               of each executive officer's  compensation  package is in the form
               of incentive  compensation  designed to reward the achievement of
               short-term operating goals and long-term increases in shareholder
               value.  The Company's  stock  incentive  plans allow the Board of
               Directors or the Compensation Committee to grant stock options to
               executive  officers and  employees  for the purchase of shares of
               the Company's Class A common stock.  Under the terms of the stock
               incentive  plans,  the Board of  Directors  and the  Compensation
               Committee have authority, within the terms of the stock incentive
               plans, to select the executive officers and employees who will be
               granted stock  options and to determine  the timing,  pricing and
               number of stock options to be awarded. The Compensation Committee
               believes that the stock options granted under the stock incentive
               plans  reward   executive   officers  only  to  the  extent  that
               shareholders  have  benefitted from increases in the value of the
Company's common stock.                           

          o    Other  Benefits.  The Company  maintains  certain other plans and
               arrangements  for  the  benefit  of its  executive  officers  and
               members of senior management. The Company believes these benefits
               are   reasonable  in  relation  to  the  executive   compensation
               practices of other similarly sized companies or companies  within
the Company's industry.                           

        Compensation of the Chief Executive Officer. As described elsewhere in
this Report, the Company has entered into an executive employment agreement with
Mr. Murdock. The material terms of this executive employment agreement are      
described herein. The Compensation Committee believes that the monthly          
compensation under such contract adequately and fairly compensates this         
executive officer in relation to his respective responsibilities, capabilities, 
contributions and dedication to the Company and secures for the Company the     
benefit of his leadership, management and financial skills and capabilities.    
Moreover, the Compensation Committee believes that the salary and other benefits
are reasonable in relation to the responsibilities, capabilities, contributions 
and dedication of Mr. Murdock to the Company and are warranted to keep them in  
line with the compensation earned by chief executive officers employed by       
companies of comparable size or within the Company's industry.                  

   Conclusion. The Compensation Committee believes that the concepts
discussed above further the shareholders' interests because a significant part  
of executive compensation is based upon the Company achieving its marketing,    
sales and product development goals and other specific goals set by the board of
directors. At the same time, the Compensation Committee believes that the       
program encourages responsible management of the Company in the short-term. The 
Compensation Committee regularly considers plan design so that the total program
is as effective as possible in furthering shareholder interests.                

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      The Compensation Committee bases its review on the experience of its
own members, on information requested from management personnel, and on         
discussions with and information compiled by various independent consultants    
retained by the Company.                                                        

 Respectfully submitted,

 Compensation Committee:
Thomas A. Murdock     
  William A. Maasberg, Jr.

        The following table sets forth information concerning the compensation
paid or accrued to all persons serving as the Company's chief executive officer 
and the Company's most highly compensated executive officers other than its     
chief executive officer who were serving as executive officers at December 31,  
2002 and whose annual compensation exceeded $100,000 during such year           
(collectively the "Named Executive Officers"):                                  

Summary Compensation Table

                                                        [Enlarge/Download Table]

                                                       Annual Compensation          Long-Term Compensation
                                                                         Other       Securities Underlying
Name and Principal Position          Year         Salary              Annual Bonus     Options/SARs (8)   
---------------------------          ----  ---------------------      ------------     ----------------   
                                                                                                          
Thomas A. Murdock (1)                2000  $        320,804                --             46,250/0        
Chief Executive Officer & President  2001  $        315,057                --             17,500/0        
                                     2002  $        315,096 (2)            --             23,750/0        

Roger D. Dudley (1)                  2000  $        320,845                --             46,250/0        
Executive Vice President & Chief     2001  $        314,895                --             17,500/0        
Financial Officer                    2002  $        315,487 (3)            --             23,750/0        

William A. Maasberg (4)              2000  $        208,411                --             13,750/0        
Chief Operating Officer              2001  $        226,584                --             11,250/0        
                                     2002  $        226,584 (5)            --             12,500/0        

John A. Oberteuffer (6)              2000  $        227,348                --              8,750/0        
Vice President & Chief Technology    2001  $        234,716                --             11,250/0        
Officer                              2002  $        225,420 (7)            --             12,500/0        

  (1)         The Company has executive employment agreements with
                    Messrs. Murdock and Dudley that were initiated November 1,
                   1996 and amended effective January 31, 2000 to extend the
                     term of the agreement and reduce the base compensation. The
                    material terms of each executive employment agreement with
             Messrs. Murdock and Dudley are identical and are as
                    follows: the annual base salary for each executive officer
                   is $309,400 and may be adjusted upward in future years as
           deemed appropriate by the board of directors. The
                     expiration date is December 31, 2005. As bonus compensation
                    for extending the term of each agreement at a compensation
                  level less than provided in the original agreement, each
                     executive was granted options to purchase 35,000 options of
                    the Company's Class A common stock at an exercise price of
  $1.01. The options expire July 19, 2010.

                   Each such executive officer also is entitled to customary
                     insurance benefits, office and support staff and the use of
                    an automobile. In addition, if any executive is terminated
without cause                         

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           during the contract term then all salary then and
                 thereafter due and owing under the executive employment
                    agreement shall, at the executive's option, be immediately
                     paid in a lump sum payment to the executive officer and all
                     stock options, warrants and other similar rights granted by
                    the Company and then vested or earned shall be immediately
                 granted to the executive officer without restriction or
limitation of any kind.               

        Each executive employment agreement contains a
                non-disclosure, confidentiality, non- solicitation and
        non-competition clause. Under the terms of the
                    non-competition clause, each executive has agreed that for
           a period of one year after the termination of his
                   employment with the Company the executive will not engage
                  in any capacity in a business which competes with or may
compete with the Company.             

    (2)         Because of the Company's inability to access the Third
                  Equity Line during much of 2002, the Company did not pay
                Mr. Murdock $114,259 of his compensation due for 2002.

    (3)         Because of the Company's inability to access the Third
                  Equity Line during much of 2002, the Company did not pay
               Mr. Dudley $141,808 of his compensation due for 2002.

       (4)         The Company has an employment agreement with Mr. Maasberg
               that was effective February 1, 2000. The terms of the
                 agreement establish the annual base salary of $225,000,
                which may be adjusted upward in future years as deemed
                appropriate by the board of directors. Mr. Maasberg is
              entitled to customary insurance benefits, office and
                    support staff. In addition, if any executive is terminated
                     without cause during the contract term then all salary then
                     and thereafter due and owing under the employment agreement
                    shall, at the executive's option, be immediately paid in a
                 lump sum payment to the executive officer and all stock
                   options, warrants and other similar rights granted by the
                Company and then vested or earned shall be immediately
                 granted to the executive officer without restriction or
                 limitation of any kind. The employment contract expired
                   January 31, 2003. The Company has extended the employment
contract through December 31, 2003.   

             The employment agreement contains a non-disclosure,
                confidentiality, non-solicitation and non- competition
                    clause. Under the terms of the non-competition clause, Mr.
                  Maasberg has agreed that for a period of 18 months after
                the termination of his employment with the Company the
                 executive will not engage in any capacity in a business
              which competes with or may compete with the Company.

    (5)         Because of the Company's inability to access the Third
                  Equity Line during much of 2002, the Company did not pay
                 Mr. Maasberg $102,824 of his compensation due for 2002.

(6)         The Company has an employment agreement with Mr.  
             Oberteuffer that was effective February 1, 2000 and
                    subsequently amended effective April 1, 2001. The terms of
                     the agreement establish the annual base salary of $235,000,
                which may be adjusted upward in future years as deemed
                   appropriate by the board of directors. Mr. Oberteuffer is
              entitled to customary insurance benefits, office and
                   support staff, and the use of an automobile. In addition,
                 if any executive is terminated without cause during the
                   contract term then all salary then and thereafter due and
            owing under the employment agreement shall, at the
               executive's option, be immediately paid in a lump sum
                 payment to the executive officer and all stock options,
                  warrants and other similar rights granted by the Company
                   and then vested or earned shall be immediately granted to
                    the executive officer without restriction or limitation of
any kind. The employment              

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                     contract expired January 31, 2003. The Company has extended
            the employment contract through December 31, 2003.

             The employment agreement contains a non-disclosure,
                confidentiality, non-solicitation and non- competition
                    clause. Under the terms of the non-competition clause, Mr.
                     Oberteuffer has agreed that for a period of 18 months after
                the termination of his employment with the Company the
                 executive will not engage in any capacity in a business
              which competes with or may compete with the Company.

    (7)         Because of the Company's inability to access the Third
                  Equity Line during much of 2002, the Company did not pay
                   Dr. Oberteuffer $99,125 of his compensation due for 2002.

      (8)         All options granted in 2002, 2001, and 2000 were granted
           pursuant to the Company's 1998 Stock Option Plan.

EMPLOYMENT CONTRACTS

      The Company has executive employment agreements with Messrs. Murdock
and Dudley that were initiated November 1, 1996, and amended effective January  
31, 2000, to extend the term of the agreement and reduce the base compensation. 
The material terms of each executive employment agreement with Messrs. Murdock  
and Dudley are identical and are as follows: the annual base salary for each    
executive officer is $309,400 and may be adjusted upward in future years as     
deemed appropriate by the board of directors. The expiration date is December   
31, 2005. As bonus compensation for extending the term of each agreement at a   
compensation level less than provided in the original agreement, each executive 
was granted options to purchase 1,400,000 options of the Company's Class A      
common stock at an exercise price of $1.01. The options expire July 19, 2010.   

     Each such executive officer also is entitled to customary insurance
benefits, office and support staff and the use of an automobile. In addition, if
any executive is terminated without cause during the contract term then all     
salary then and thereafter due and owing under the executive employment         
agreement shall, at the executive's option, be immediately paid in a lump sum   
payment to the executive officer and all stock options, warrants and other      
similar rights granted by the Company and then vested or earned shall be        
immediately granted to the executive officer without restriction or limitation  
of any kind.                                                                    

Each executive employment agreement contains a non-disclosure,
confidentiality, non-solicitation and non- competition clause. Under the terms  
of the non-competition clause, each executive has agreed that for a period of   
one year after the termination of his employment with the Company the executive 
will not engage in any capacity in a business which competes with or may compete
with the Company.                                                               

    The Company has an employment agreement with Mr. Maasberg that was
effective February 1, 2000. The terms of the agreement establish the annual base
salary of $225,000, which may be adjusted upward in future years as deemed      
appropriate by the board of directors. Mr. Maasberg is entitled to customary    
insurance benefits, office and support staff. In addition, if any executive is  
terminated without cause during the contract term then all salary then and      
thereafter due and owing under the employment agreement shall, at the           
executive's option, be immediately paid in a lump sum payment to the executive  
officer and all stock options, warrants and other similar rights granted by the 
Company and then vested or earned shall be immediately granted to the executive 
officer without restriction or limitation of any kind.                          

      The employment agreement contains a non-disclosure, confidentiality,
non-solicitation and non-competition clause. Under the terms of the             
non-competition clause, Mr. Maasberg has agreed that for a period of 18 months  
after                                                                           

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the termination of his employment with the Company the executive will not engage
in any capacity in a business which competes with or may compete with the       
Company.                                                                        

       The Company has an employment agreement with Mr. Oberteuffer that was
effective February 1, 2000 and subsequently amended effective April 1, 2001. The
terms of the agreement establish the annual base salary of $235,000, which may  
be adjusted upward in future years as deemed appropriate by the board of        
directors. Mr. Oberteuffer is entitled to customary insurance benefits, office  
and support staff, and the use of an automobile. In addition, if any executive  
is terminated without cause during the contract term then all salary then and   
thereafter due and owing under the employment agreement shall, at the           
executive's option, be immediately paid in a lump sum payment to the executive  
officer and all stock options, warrants and other similar rights granted by the 
Company and then vested or earned shall be immediately granted to the executive 
officer without restriction or limitation of any kind.                          

      The employment agreement contains a non-disclosure, confidentiality,
non-solicitation and non-competition clause. Under the terms of the             
non-competition clause, Mr. Oberteuffer has agreed that for a period of 18      
months after the termination of his employment with the Company the executive   
will not engage in any capacity in a business which competes with or may compete
with the Company.                                                               

Other Information                                                               

       U.S. Department of Labor Settlement Agreement - On March 5, 2003, the
Company entered into a settlement agreement with the U.S. Department of Labor   
relating to back wages owed to former and current employees during 2002. Under  
the agreement the Company will pay an aggregate of $4,755,041 to certain former 
and current employees in twenty-four installment payments. The first installment
payment was due May 1, 2003. The remaining payments are due on the first day of 
each month, until paid in full, If any of the installment payments are more than
fifteen days late, the entire balance may become due and payable.               

       The Company did not have sufficient cash to pay the first installment
payment due May 1, 2003. The Company reached an agreement with the Department of
Labor to extend the commencement date for installment payments to August 1, 2003
and has made the required payments due under the agreement.                     

       Employees may elect to receive a portion of their wages in registered
shares of the Company's Class A common stock. However, the amount that          
represents minimum wage and overtime, if any, as defined in the Fair Labor      
Standards Act of 1938, may not be paid with the Company's Class A common stock. 

Stock Performance Graph                                                         

       The following graph compares the yearly cumulative total returns from
the Company's Class A common stock during the five fiscal year period ended     
December 31, 2002, with the cumulative total return on the Media General Index  
and the Standard Industrial Classification (SIC) Code Index for that same       
period. The comparison assumes $100 was invested on December 31, 1997, in the   
Company's Class A common stock and in the common stock of the companies in the  
referenced Indexes and further assumes reinvestment of dividends.               

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 [GRAPHIC OMITTED]

                                                                [Download Table]

                      1997      1998     1999     2000      2001       2002  
                     -------  -------  -------  --------  --------  ---------
                                                                             
 FONIX CORPORATION   100.00    42.88     9.60     9.76      3.33       1.28  
  SIC CODE INDEX     100.00    94.69   171.40   197.61     57.68      15.58  
NASDAQ MARKET INDEX  100.00   141.04   248.76   156.35    124.64      86.94  

 OTHER MATTERS

       As of the date of this Proxy Statement, the Board of Directors of the
Company does not intend to present and has not been informed that any other     
person intends to present a matter for action at the Annual Meeting other than  
as set forth herein and in the Notice of Annual Meeting. If any other matter    
properly comes before the meeting, it is intended that the holders of proxies   
will act in accordance with their best judgment.                                

     The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. In addition to the solicitation of proxies by mail,   
certain of the officers and employees of the Company, without extra             
compensation, may solicit proxies personally or by telephone, and, if deemed    
necessary, third party solicitation agents may be engaged by the Company to     
solicit proxies by means of telephone, facsimile or telegram, although no such  
third party has been engaged by the Company as of the date hereof. The Company  
will also request brokerage houses, nominees, custodians and fiduciaries to     
forward soliciting materials to the beneficial owners of Common Stock held of   
record and will reimburse such persons for forwarding such material. The cost of
this solicitation of proxies will be borne by the Company.                      

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

 ANNUAL REPORT

         Copies of the Company's Annual Report on Form 10-K (including financial
statements and financial statement schedules) filed with the Securities and     
Exchange Commission may be obtained without charge by writing to the Company -  
Attention: Roger D. Dudley, 180 West Election Road, Suite 200, Draper, Utah,    
84020. A request for a copy of the Company's Annual Report on Form 10-K must set
forth a good-faith representation that the requesting party was either a holder 
of record or a beneficial owner of common stock                                 

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of the Company on October 31, 2003. Exhibits to the Form 10-K, if any, will be  
mailed upon similar request and payment of specified fees to cover the costs of 
copying and mailing such materials.                                             

     A Copy of the Company's 2002 Annual Report to Shareholders is being
mailed with this Proxy Statement, but is not deemed a part of the proxy         
soliciting material.                                                            

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

 SHAREHOLDER PROPOSALS

         Any shareholder proposal intended to be considered for inclusion in the
proxy statement for presentation in connection with the 2001 Annual Meeting of  
Shareholders must have been received by the Company by December 31, 2002. No    
such proposals were received.                                                   

         Any shareholder proposal intended to be considered for inclusion in the
proxy statement for presentation in connection with the 2003 Annual Meeting of  
Shareholders must be received by the Company by December 31, 2003. The proposal 
must be in accordance with the provisions of Rule 14a-8 promulgated by the      
Securities and Exchange Commission under the Securities Exchange Act of 1934.   
The Company suggests that any such request be submitted by certified mail,      
return receipt requested. The Board of Directors will review any proposal which 
is received by December 31, 2003, and determine whether it is a proper proposal 
to present to the 2004 Annual Meeting.                                          

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

      The enclosed Proxy is furnished for you to specify your choices with
respect to the matters referred to in the accompanying notice and described in  
this Proxy Statement. If you wish to vote in accordance with the Board's        
recommendations, merely sign, date and return the Proxy in the enclosed envelope
which requires no postage if mailed in the United States. A prompt return of    
your Proxy will be appreciated.                                                 

  By Order of the Board of Directors

/s/ Thomas A. Murdock           
Thomas A. Murdock               
                 Chairman of the Board and Chief Executive Officer

Salt Lake City, Utah                                                            
November 10, 2003                                                               

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APPENDIX A

AUDIT COMMITTEE CHARTER OF FONIX CORPORATION

 AUDIT COMMITTEE CHARTER
of
 FONIX CORPORATION

Organization                                                                    

There shall be a committee of the board of directors to be known as the audit   
committee. The audit committee shall be composed of directors who are           
independent of the management of the corporation and are free of any            
relationship that, in the opinion of the board of directors, would interfere    
with their exercise of independent judgment as a committee member.              

Statement of Policy                                                             

The audit committee shall provide assistance to the corporate directors in      
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of   
the corporation, and the quality and integrity of the financial reports of the  
corporation. In so doing, it is the responsibility of the audit committee to    
maintain free and open means of communication between the directors, the        
independent auditors, and the financial management of the corporation.          

Responsibilities                                                                

In carrying out its responsibilities, the audit committee believes its policies 
and procedures should remain flexible, in order to best react to changing       
conditions and to ensure to the directors and shareholders that the corporate   
accounting and reporting practices of the corporation are in accordance with all
requirements and are of the highest quality.                                    

In carrying out these responsibilities, the audit committee will:               

   o           Review and recommend to the directors the independent
                   auditors to be selected to audit the financial statements
                of the corporation and its divisions and subsidiaries.

         o           Meet with the independent auditors and financial management
                of the corporation to review the scope of the proposed
                   audit for the current year and the audit procedures to be
                    utilized, and at the conclusion thereof review such audit,
          including any comments or recommendations of the
independent auditors.                 

    o           Review with the independent auditors and the company's
              financial and accounting personnel, the adequacy and
                   effectiveness of the accounting and financial controls of
                 the corporation, and elicit any recommendations for the

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            improvement of such internal control procedures or
                 particular areas where new or more detailed controls or
                 procedures are desirable. Particular emphasis should be
                   given to the adequacy of such internal controls to expose
                any payments, transactions or procedures that might be
            deemed illegal or otherwise improper. Further, the
             committee periodically should review company policy
                statements to determine their adherence to the code of
conduct.                              

   o           Review the internal audit function of the corporation
                   including the independence and authority of its reporting
                    obligations, the proposed audit plans for the coming year,
                 and the coordination of such plans with the independent
auditors.                             

       o           Receive prior to each meeting, a summary of findings from
                completed internal audits and a progress report on the
                 proposed internal audit plan, with explanations for any
deviations from the original plan.    

     o           Review with management and the independent auditors the
                    financial statements contained in the annual and quarterly
              reports to be filed with the Securities and Exchange
                   Commission to determine that the independent auditors are
                    satisfied with the disclosure and content of the financial
                    statements. Any changes in accounting principles should be
reviewed.                             

         o           Provide sufficient opportunity for the independent auditors
                 to meet with the members of the audit committee without
              members of management present. Among the items to be
                   discussed in these meetings are the independent auditors'
                  evaluation of the corporations' financial and accounting
             personnel, and the cooperation that the independent
           auditors received during the course of the audit.

 o           Review accounting and financial human resources and
     succession planning within the corporation.

       o           Submit the minutes of all meetings of the audit committee
                to, or discuss the matters discussed at each committee
meeting with, the board of directors. 

        o           Investigate any matter brought to its attention within the
               scope of its duties, with the power to retain outside
               counsel for this purpose if, in its judgment, that is
appropriate.                          

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EXHIBIT 1                                                                       
FORM OF PROXY                                                                   
 Fonix Corporation
 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Thomas A. Murdock and Roger D. Dudley and each  
of them as Proxies, with full power of substitution, and hereby authorizes them 
to represent and vote, as designated below, all shares of Common Stock of the   
Company held of record by the undersigned at the Annual Meeting of Shareholders 
to be held at the Salt Lake City Center Marriott Hotel, located at 220 South    
State Street, Salt Lake City, Utah 84111, on Monday, December 22, 2003, at      
10:00 a.m., M.S.T.,  or at any adjournment thereof.                             

1. Election of Directors.                                                       
FOR             WITHHOLD AS TO ALL         FOR ALL EXCEPT                       
/  /                   /  /                    /  /                             

(INSTRUCTIONS: IF YOU MARK THE "FOR ALL EXCEPT" CATEGORY ABOVE, INDICATE THE    
NOMINEE(S) AS TO WHICH YOU DESIRE TO WITHHOLD AUTHORITY BY STRIKING A LINE      
THROUGH SUCH NOMINEE(S) NAME IN THE LIST BELOW:)                                

Thomas A. Murdock   Roger D. Dudley   William A. Maasberg, Jr.                  

2.       To approve the Board of Directors' selection of Hansen, Barnett &      
       Maxwell as the Company's independent public accountant for the fiscal
year ending December 31, 2003.                                
       FOR                        AGAINST                            ABSTAIN
     / /                           / /                               / /

3.       In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.      

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED  
FOR PROPOSALS 1, 2, AND 3.                                                      

Please sign and date this proxy where shown below and return it promptly:       

Date:                                             , 2003                        
-----------------------------         
Signed:                                                                         
SIGNATURE(S)                                                                    
             -----------------------------------------------------------------

PLEASE  SIGN ABOVE  EXACTLY AS THE SHARES ARE  ISSUED.  WHEN  SHARES ARE HELD BY
JOINT  TENANTS,  BOTH  SHOULD  SIGN.  WHEN  SIGNING AS  ATTORNEY,  AS  EXECUTOR,
ADMINISTRATOR,  TRUSTEE  OR  GUARDIAN,  PLEASE  GIVE  FULL  TITLE AS SUCH.  IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEFA14A’ Filing		Date		First		Last			Other Filings
		7/19/10		16		18
		2/10/10		9
		12/31/05		16		18			10-K,  5
		9/30/04		11					10-Q,  NT 10-Q
		12/31/03		2		24			10-K,  10-K/A,  5,  NT 10-K
		12/22/03		2		24			424B3,  DEF 14A
		11/14/03		3
Filed on / Effective on:		11/12/03							DEF 14A
		11/10/03		2		21			DEF 14A
		10/31/03		2		21
		10/16/03		7
		8/1/03		19
		6/10/03		9
		5/1/03		19
		3/24/03		5					8-K,  DEF 14A,  PRE 14A
		3/18/03		9
		3/5/03		19
		2/14/03		10
		2/4/03		11
		1/31/03		17		18
		12/31/02		5		21			10-K
		12/18/02		5					10-K/A,  10-Q/A,  S-2/A
		12/12/02		10
		12/11/02		9
		11/18/02		5
		7/27/02		10
		7/17/02		5					8-K
		7/16/02		5					8-K
		7/12/02		5					DEF 14A
		7/5/02		10
		3/5/02		10
		1/17/02		10
		12/31/01		5		9			10-K,  10-K/A
		4/1/01		17		19
		3/29/01		5
		12/31/00		5		6			10-K
		2/1/00		4		19
		1/31/00		16		18
		12/31/99		5		6			10-K,  NT 10-K
		1/26/99		4
		12/31/97		19					10-K,  10-K/A,  NT 10-K
		3/13/97		7					8-K
		11/1/96		16		18
		3/30/96		12
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