This side project was the origins of Halo: Combat Evolved, originating as an RTS due to thinking Myth would be better if it were science-fiction and Starcraft would be better without resource management. This project was at least in progress by the time the 'Armor' trademark was filed on September 24, 1997.
During this time, Bungie only had 12-15 employees in a small office in South Halsted, Chicago, when Marcus Lehto was brought on board to work with Jason Jones on a small 'side project' then-known as 'Armor'.
In 1997, Bungie had just finished Myth: The Fallen Lords and was beginning the development of Myth II.