fonixs8102908ex4-m.htm


    
      

      

    

    
      FONIX
CORPORATION

       

      EMPLOYEE
STOCK GRANT AGREEMENT

       

      October
29, 2008

       

      


      WHEREAS,
the Board of Directors of Fonix Corporation, a Delaware corporation (the “
Company ”), has determined that the grant of shares of the Company’s Series A
Common Stock to John W. Shepherd (the “Employee”) in recognition and
appreciation of services previously performed by the Employee on behalf of the
Company is an effective means to align management interest with stockholder
interests;

       

      WHEREAS,
the continued participation of the Employee is considered by the Company to be
valuable to the Company’s growth; and

       

      WHEREAS,
the Company is willing to grant, and the Employee named below is willing to
accept, shares of the Company’s authorized Common Stock, par value $0.0001 per
share, according to the terms and conditions contained herein.

       

      1.           NOTICE
OF GRANTS OF STOCK

       

      Name:
John W. Shepherd

       

      You have
been granted shares of Class A Common Stock of the Company, on the following
dates and in the following amounts, subject to the terms and conditions of this
Agreement:

       

      
        
          	
                  Dates
      of Grant

                	
                  Total
      Number of Shares of Stock

                
	
                  October
      29, 2008

                	
                  66,666,667

                
	
                  November
      19, 2008

                	
                  66,666,667

                
	
                  TOTAL

                	
                  133,333,334

                


        

      

       

      2.           AGREEMENT

       

      (a)           Issuance of
Shares.  By signing below, the Employee hereby accepts from the
Company, and in recognition and appreciation of but not as compensation for past
services to the Company, the Company hereby issues to the Employee an aggregate
of 133,333,334 shares of Common Stock (the “Shares”), on the
schedule set forth above.  The Company will, promptly after execution
of this Agreement, issue a certificate representing the Shares registered in the
name of the Employee or as directed by the Employee.  Alternatively,
upon request by the Employee, the Company will work with its transfer agent to
have the Shares delivered electronically to a brokerage account of the
Employee.  In return, the Employee will deliver to the Company an
executed counterpart of this Agreement.

       

      (b)           Vesting .  All of
the Shares shall be fully vested upon issuance to the Employee.

       


      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      


      3.           Definitions .  As
used herein, the following definitions will apply:

       

      (a)           “Board” means the
Board of Directors of the Company or any committee of an individual or
individuals that has been designated by the Board to administer this
Agreement.

       

      (b)           “Common Stock ” means
the Class A Common Stock of the Company, par value $0.0001 per
share.

       

      (c)           “Securities Act” means
the Securities Act of 1933, as amended.

       

      4.           Withholding of
Taxes.  By signing below, the Employee acknowledges that the
issuance of the Shares on the schedule set forth above may constitute
compensation or have other taxable consequences to the Employee, and that grants
will be treated as supplemental wages and be added to the Employee’s W-2
Form.  The Company will be responsible for payment of its portion of
any applicable Social Security and Medicare taxes relating to the Shares, and
the Employee will be responsible for payment of his or her
portion.  The Employee acknowledges and agrees that the Shares are
subject to appropriate income tax withholding, and that the Employee shall be
responsible for any liability for any federal, state or local income taxes
required by law to be withheld with respect to such Shares (the “Withholding
Taxes”).

       

      5.           Tax
Consequences.   In addition to the acknowledgement above
in Section 4, the Employee represents and warrants that he or she has reviewed
with his or her own tax and financial advisors the federal, state, local, and
foreign tax consequences of this investment and the transactions contemplated by
this Agreement (including, without limitation, the withholding provisions of
Section 4 of this Agreement).   The Employee is relying
solely on such tax and financial advisors and not any statements or
representations of the Company or any agent of or legal, tax, or financial
advisor to the Company.   The Employee understands that he or she
(and not the Company) shall be responsible for the Employee’s own tax liability
that may arise as a result of this investment or the transactions contemplated
by this Agreement.

       

      6.           Additional
Actions.  The parties shall execute such further instruments
and take such further action as may reasonably be necessary to carry out the
intent of this Agreement.

       

      7.           Rights as
Shareholder.  The Employee shall be the record owner of the
Shares until or unless such Shares are sold or transferred, and as record owner
shall be entitled to all rights of a common stockholder of the Company,
including, without limitation, voting rights with respect to the Shares, and the
Employee shall receive, if and when paid, any dividends on all of the Shares
granted hereunder as to which the Employee is the record holder on the
applicable record date.

       


      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      


      8.           General
Provisions.

       

      (a)           This
Agreement will be governed by the internal substantive laws, but not the choice
of law rules of Utah.  This Agreement represents the entire agreement
between the parties with respect to the issuance of the Shares to the
Employee.

       

      (b)           Any
notice, demand or request required or permitted to be given by either the
Company or the Employee pursuant to the terms of this Agreement will be in
writing and will be deemed given when delivered personally or deposited in the
U.S.  mail, First Class with postage prepaid, and addressed to the
parties at the addresses of the parties set forth at the end of this Agreement
or such other address as a party may request by notifying the other in
writing.

       

      (c)           The
rights of the Company under this Agreement will be transferable to any one or
more persons or entities, and all covenants and agreements hereunder will inure
to the benefit of, and be enforceable by the Company’s successors and
assigns.

       

      (d)           Either
party’s failure to enforce any provision of this Agreement will not in any way
be construed as a waiver of any such provision, nor prevent that party from
thereafter enforcing any other provision of this Agreement.  The
rights granted both parties hereunder are cumulative and will not constitute a
waiver of either party’s right to assert any other legal remedy available to
it.

       

      (e)           The
Employee agrees upon request to execute any further documents or instruments
necessary or desirable to carry out the purposes or intent of this
Agreement.

       

      (f)           THE
EMPLOYEE ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREUNDER DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS AN EMPLOYEE FOR ANY PERIOD OR AT ALL, AND SHALL NOT
INTERFERE WITH EMPLOYEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE EMPLOYEE’S
EMPLOYMENT WITH THE COMPANY AT ANY TIME, WITH OR WITHOUT CAUSE.

       

      9.           Entire
Agreement.  By the Employee’s signature below, the Employee
represents that he or she is familiar with the terms and provisions of this
Agreement and hereby accepts it subject to all of the terms and provisions
hereof.   The Employee has reviewed this Agreement in its
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement, and fully understands all provisions of this
Agreement.  The Employee agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board upon any questions arising
under this Agreement.  The Employee further agrees to notify the
Company upon any change in the residence indicated below.

       

      



      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, this Stock Grant Agreement is deemed made as of the date first
set forth above.

       

      
        	 
      	
                FONIX
      CORPORATION

              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                By:______________________________

              
	 
      	
                Name:
      Roger D. Dudley

              
	 
      	
                Title:
      President

              
	 
      	 
      


      

      


      EMPLOYEE

      


      


      


      ________________________________

      


      



      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      


      APPENDIX
A

                                                                                                      


    
    

     

    
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