UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant [X]
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Filed
by a Party other than the Registrant [ ]
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Check
the appropriate box:
[X]
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Preliminary
Proxy Statement
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[ ]
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[ ]
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Definitive
Proxy Statement
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[ ]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material Pursuant to Section 240.14a-12
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SINTX
TECHNOLOGIES, INC.
(Name
of Registrant as Specified in Its Charter)
Commission
File Number: 001-33624
Not
Applicable
(Name
of Persons Filing Proxy Statement If Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
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No
fee required.
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[ ]
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Title
of each class of securities to which transaction applies:
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Aggregate
number of securities to which transaction applies:
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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):
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maximum aggregate value of transaction:
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Total
fee paid:
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[ ]
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Fee
paid previously with preliminary materials.
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[ ]
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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1)
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Amount
Previously Paid:
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Form,
Schedule or Registration Statement No.:
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Filing
Party:
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SINTX
Technologies, Inc.
1885
West 2100 South
Salt
Lake City, UT 84119
ANNUAL
MEETING OF STOCKHOLDERS
August
13, 2020
NOTICE
OF MEETING
The
annual meeting of the stockholders of SINTX Technologies, Inc., a Delaware corporation, will be held at 10:00 a.m., local time,
on August 13, 2020, at 1885 West 2100 South, Salt Lake City, UT 84119.
We
are carefully monitoring the public health impact of the coronavirus (COVID-19) on a daily basis, and may decide to forego the
physical, in person Annual Meeting in favor of a virtual-only Annual Meeting or some other alternative depending on the situation.
While we understand this could disrupt the travel plans of those who plan to attend, our first priority is the health and safety
of our communities, shareholders, employees and other stakeholders. In the event we decide to hold a virtual-only Annual Meeting
or some other alternative, shareholders will be notified and provided with additional details in a press release and pursuant
to filings we make with the SEC. At any virtual-only Annual Meeting, we will ensure that all shareholders or their proxyholder
have the ability to participate, ask questions and vote their shares. As always, we encourage you to vote your shares prior to
the Annual Meeting.
The
Annual Meeting will be held for the following purposes, as more fully described in the Proxy Statement accompanying this notice:
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1.
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to
elect two Class III directors to hold office for a term expiring at the annual meeting of stockholders to be held in 2023
or until their respective successors are elected and qualified;
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2.
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to
approve the form, terms and provisions of the SINTX Technologies, Inc. 2020 Equity Incentive Plan;
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3.
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to
ratify the Audit Committee’s appointment of Tanner LLC as SINTX’s independent registered public accounting firm
for the year ending December 31, 2020;
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4.
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to
adopt, on an advisory basis, a non-binding resolution approving the compensation of the Company’s named executive officers,
as described in the Proxy Statement under “Executive Compensation”;
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5.
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to
approve the change of domicile of the Company from the State of Delaware to the State of Nevada;
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6.
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to
approve one or more adjournments of the annual meeting, if necessary or appropriate, to solicit additional proxies if there are
insufficient votes at the time of the meeting to adopt one or more of the foregoing Proposals; and
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to
act upon such other matters as may properly come before the meeting or any adjournment or postponement of the meeting.
Stockholders
at the close of business on June 26, 2020 are entitled to vote in person or by proxy at the annual meeting. The annual meeting
will be open to the public.
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B.
Sonny Bal
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Chief
Executive Officer
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July
__, 2020
Important
Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to be held August 13, 2020:
The
proxy statement, notice of annual meeting, and annual report to shareholders are available at [ ]
or from our Investor Relations website at https://ir.sintx.com/annual-shareholder-materials.
SINTX
Technologies, Inc.
1885
West 2100 South
Salt
Lake City, UT 84119
PROXY
STATEMENT
FOR
ANNUAL
MEETING OF STOCKHOLDERS
To
be Held on August 13, 2020
This
proxy statement is provided to stockholders of SINTX Technologies, Inc. (the “Company”) in connection with the annual
meeting of stockholders and any adjournments or postponements of the annual meeting. The annual meeting will be held at 10:00
a.m. local time, on August 13, 2020, at 1885 West 2100 South, Salt Lake City, UT 84119. Directions to the annual meeting can be
obtained by calling the Company at (801) 839-3500.
We
are carefully monitoring the public health impact of the coronavirus (COVID-19) on a daily basis, and may decide to forego the
physical, in person Annual Meeting in favor of a virtual-only Annual Meeting or some other alternative depending on the situation.
While we understand this could disrupt the travel plans of those who plan to attend, our first priority is the health and safety
of our communities, shareholders, employees and other stakeholders. In the event we decide to hold a virtual-only Annual Meeting
or some other alternative, shareholders will be notified and provided with additional details in a press release and pursuant
to filings we make with the SEC. At any virtual-only Annual Meeting, we will ensure that all shareholders or their proxyholder
have the ability to participate, ask questions and vote their shares. As always, we encourage you to vote your shares prior to
the Annual Meeting.
This
proxy statement and form of proxy are first being sent or given to our stockholders on or about July [ ], 2020, along
with our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the Securities and Exchange Commission
(the “SEC”) on March 26, 2020.
ABOUT
THE MEETING, VOTING, STOCKHOLDER PROPOSALS
AND
COMPANY INFORMATION
Q:
Why did I receive this proxy statement?
A:
The Board of Directors is soliciting your proxy to vote at the annual meeting because you were a holder of the Company’s
shares of common stock, par value $0.01 per share (“Common Stock”), at the close of business on June 26, 2020, the
record date, and are entitled to vote at the annual meeting. The annual meeting is being held for the purposes of obtaining stockholder
approval for the following proposals (the “Proposals”):
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1.
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to
elect two Class III directors to hold office for a term expiring at the annual meeting of stockholders to be held in 2023
or until their respective successors are elected and qualified;
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2.
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to
approve the form, terms and provisions of the SINTX Technologies, Inc. 2020 Equity Incentive Plan;
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3.
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to
ratify the Audit Committee’s appointment of Tanner LLC as SINTX’s independent registered public accounting firm
for the year ending December 31, 2020;
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4.
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to
adopt, on an advisory basis, a non-binding resolution approving the compensation of the Company’s named executive officers,
as described in the Proxy Statement under “Executive Compensation”;
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5.
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to
approve the change of domicile of the Company from the State of Delaware to the State of Nevada;
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6.
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to
approve one or more adjournments of the annual meeting, if necessary or appropriate, to solicit additional proxies if there
are insufficient votes at the time of the meeting to adopt one or more of the foregoing Proposals; and
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to
act upon such other matters as may properly come before the meeting or any adjournment or postponement of the meeting.
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Q:
What information is contained in this proxy statement?
A:
The information in this proxy statement relates to the Proposals to be voted on at the annual meeting, the voting process and
certain other required information.
Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards
or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate
voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares
of Common Stock are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and
return each proxy card and voting instruction card that you receive.
Q:
How may I obtain an additional set of proxy materials?
A:
All stockholders may write to us at the following address to request an additional copy of these materials:
SINTX
Technologies, Inc.
1885
West 2100 South
Salt
Lake City, UT 84119
Attention:
Corporate Secretary
Additionally,
this proxy statement and notice of annual meeting are all available free of charge on our website at http://investors.sintx.com/annual-meetings-proxies
Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
A:
If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you
are considered, with respect to those shares, the “stockholder of record.” If you are a stockholder of record, this
proxy statement and a proxy card have been sent directly to you by the Company.
If
your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner”
of shares held in street name. If you own shares held in street name, this proxy statement has been forwarded to you by your broker,
bank or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have
the right to direct your broker, bank or nominee how to vote your shares by using the voting instruction card included in the
mailing or by following their instructions for voting by telephone or the Internet, if the broker, bank or nominee offers these
alternatives. Since a beneficial owner is not the stockholder of record, you may not vote these shares in person at the annual
meeting unless you obtain a “legal proxy” from the broker, bank or nominee that holds your shares, giving you the
right to vote the shares at the annual meeting.
Q:
How do I vote?
A:
You may vote using any of the following methods:
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●
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Proxy
card or voting instruction card. Be sure to complete, sign and date the card and return it in the prepaid envelope.
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●
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By
Internet. If you are a stockholder of record, you may vote on the Internet using the instructions in the enclosed proxy card.
If you own shares held in street name, you will receive voting instructions from your bank, broker or other nominee and may
vote by telephone or on the Internet if they offer that alternative.
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●
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In
person at the annual meeting. All stockholders may vote in person at the annual meeting. You may also be represented by another
person at the annual meeting by executing a proper proxy designating that person. If you own shares held in street name, you
must obtain a legal proxy from your bank, broker or other nominee and present it to the inspector of election with your ballot
when you vote at the annual meeting.
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Q:
What can I do if I change my mind after I vote my shares?
A:
If you are a stockholder of record, you may revoke your proxy at any time before it is voted at the annual meeting by:
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sending
written notice of revocation to our Corporate Secretary;
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●
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submitting
a new, proper proxy dated later than the date of the revoked proxy; or
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attending
the annual meeting and voting in person.
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If
you own shares held in street name, you may submit new voting instructions by contacting your broker, bank or nominee. You may
also vote in person at the annual meeting if you obtain a legal proxy as described in the answer to the previous question. Attendance
at the annual meeting will not, by itself, revoke a proxy.
Q:
What if I return a signed proxy card, but do not vote for some of the matters listed on the proxy card?
A:
If you return a signed proxy card without indicating your vote, your shares will be voted in accordance with the Board of Director’s
recommendations, “FOR” the approval of Proposal No. 1, “FOR” Proposal No. 2, “FOR” Proposal
No. 3 and “FOR” Proposal No. 4.
Q:
Can my broker vote my shares for me without my instructions?
A:
Your broker or nominee will have discretionary authority to vote your shares with respect to “routine” proposals such
as Proposal No. 3. Proposals Nos. 1, 2 and 4 are not considered routine and your broker or nominee will not have discretionary
authority to vote your shares on those proposals without your direction. Please provide voting instructions on the proposals described
herein so your vote can be counted.
Q:
Can my shares be voted if I do not return my proxy card or voting instruction card and do not attend the annual meeting?
A:
If you do not vote your shares held of record (registered directly in your name, not in the name of a bank or broker), your shares
will not be voted.
If
you do not vote your shares held in street name with a broker, your broker will not be authorized to vote on Proposal No. 1, Proposal
No. 2. and Proposal No. 4 but will be authorized to vote on Proposal 3 and Proposal 5.
Q:
What are the voting requirements with respect to each of the Proposals?
A:
Proposal No. 1. The two nominees for Class III director receiving the highest number of votes will be elected Class III
directors. The proxy card enables a stockholder to vote “FOR” or “WITHHOLD” from voting as to each person
nominated by the Board. “Withhold” votes and broker non-votes are not considered votes cast for the foregoing purpose
and will have no effect on the election of the nominees.
Proposal
No. 2. The affirmative (“FOR”) vote of the holders of a majority of the votes present in person or represented
by proxy and entitled to vote on this Proposal and cast at the annual meeting is necessary to approve Proposal No. 2. Abstentions
will have the same effect as votes against Proposal No. 2. We believe brokerage firms have authority to vote customers’
unvoted shares held by the firms in street name on this Proposal.
Proposal
No. 3. This proposal requires the affirmative vote of a majority of the votes cast. Any shares not voted (whether by abstention
or otherwise) have no impact on the vote. We believe brokerage firms have authority to vote customers’ unvoted shares held
by the firms in street name on this Proposal.
Proposal
No. 4. The affirmative (“FOR”) vote of the holders of a majority of the votes present in person or represented
by proxy and entitled to vote on this Proposal and cast at the annual meeting is necessary to approve Proposal No. 4. Because
abstentions and broker non- votes are not considered votes cast, they will have no effect on the vote.
Proposal
No. 5. The affirmative (“FOR”) vote of the holders of a majority of the votes outstanding and entitled to vote
at the Annual Meeting is necessary to approve Proposal No. 4. Abstentions will have the same effect as votes against Proposal
No. 4. We believe brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name
on this Proposal.
Proposal
No. 6. The affirmative (“FOR”) vote of the holders of a majority of the votes present in person or represented
by proxy and entitled to vote on this Proposal and cast at the annual meeting is necessary to approve Proposal No. 6. Abstentions
will have the same effect as votes against Proposal No. 6. We believe brokerage firms have authority to vote customers’
unvoted shares held by the firms in street name on this Proposal.
Q:
How many votes do I have?
A:
As of June 26, 2020, the record date, there were [●] shares of our Common Stock outstanding and entitled to vote. Each share
of our Common Stock that you own entitles you to one vote.
Q:
What happens if additional matters are presented at the annual meeting?
A:
Other than the items of business described in this proxy statement, we are not aware of any other business to be acted upon at
the annual meeting. If you grant a proxy, the persons named as proxy holders, B. Sonny Bal and David O’Brien, will have
the discretion to vote your shares on any additional matters properly presented for a vote at the annual meeting.
Q:
How many shares must be present or represented to conduct business at the annual meeting?
A:
A quorum will be present if at least a majority of the outstanding shares of our Common Stock entitled to vote is represented
at the annual meeting, either in person or by proxy.
Both
abstentions and broker non-votes (described below) are counted for the purpose of determining the presence of a quorum.
Q:
How can I attend the annual meeting?
A:
You are entitled to attend the annual meeting only if you were a stockholder of SINTX as of the close of business on June 26,
2020, the record date, or if you hold a valid proxy for the annual meeting. You should be prepared to present photo identification
for admittance. If you are a stockholder of record, your name will be verified against the list of stockholders of record on the
record date prior to your admission to the annual meeting. If you are not a stockholder of record, but hold shares through a broker,
bank or nominee (i.e., in street name), you should provide proof of beneficial ownership on the record date, such as your most
recent account statement prior to the record date, a copy of the voting instruction card provided by your broker, bank or nominee,
or other similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined
above, you will not be admitted to the annual meeting.
The
annual meeting will begin promptly at 10:00 a.m., local time on August 13, 2020. You should allow adequate time for check-in procedures.
We
are carefully monitoring the public health impact of the coronavirus (COVID-19) on a daily basis, and may decide to forego the
physical, in person Annual Meeting in favor of a virtual-only Annual Meeting or some other alternative depending on the situation.
While we understand this could disrupt the travel plans of those who plan to attend, our first priority is the health and safety
of our communities, shareholders, employees and other stakeholders. In the event we decide to hold a virtual-only Annual Meeting
or some other alternative, shareholders will be notified and provided with additional details in a press release and pursuant
to filings we make with the SEC. At any virtual-only Annual Meeting, we will ensure that all shareholders or their proxyholder
have the ability to participate, ask questions and vote their shares. As always, we encourage you to vote your shares prior to
the Annual Meeting.
Q:
How can I vote my shares in person at the annual meeting?
A:
Shares held in your name as the stockholder of record may be voted in person at the annual meeting. Shares held beneficially in
street name may be voted in person at the annual meeting only if you obtain a legal proxy from the broker, bank or nominee that
holds the shares giving you the right to vote the shares. Even if you plan to attend the annual meeting, we recommend that you
also submit your proxy card or voting instruction card as described herein so your vote will be counted if you later decide not
to attend the annual meeting.
Q:
What is the deadline for voting my shares?
A:
If you hold shares as the stockholder of record, your vote by proxy must be received before the polls close at the annual meeting,
except that proxies submitted by the Internet must be received by 11:59 p.m., Eastern Time, on August 12, 2020.
If
you hold shares beneficially in street name, please follow the voting instructions provided by your broker, bank or nominee. You
may vote these shares in person at the annual meeting only if at the annual meeting you provide a legal proxy obtained from your
broker, bank or nominee.
Q:
Is my vote confidential?
A:
Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects
your voting privacy. Your vote will not be disclosed either within SINTX or to third parties, except: (1) as necessary to meet
applicable legal requirements; (2) to allow for the tabulation of votes and certification of the vote; and (3) to facilitate a
successful proxy solicitation. Occasionally, stockholders provide written comments on their proxy card, which are then forwarded
to our management.
Q:
What is a broker non-vote?
A:
A broker non-vote occurs when a broker does not vote on a particular proposal with respect to shares of Common Stock held in a
fiduciary capacity (typically referred to as being held in “street name”) because the broker has not received voting
instructions from the beneficial owner. Under the rules that govern brokers who are voting with respect to shares held in street
name, brokers have the discretion to vote such shares on routine matters, but not on non-routine matters. Routine matters include
the ratification of auditors. Non-routine matters include matters such as the election of directors, the approval of, and amendments
to, stock plans, the approval of, and amendments to by-laws and corporate charter documents and change in corporate domicile.
Therefore, if you do not give your broker or nominee specific instructions, your shares will not be voted on non-routine matters
and may not be voted on routine matters. However, shares represented by such “broker non-votes” will be counted in
determining whether there is a quorum present at the annual meeting for the purpose of transacting business.
Q:
Where can I find the voting results of the annual meeting?
A:
We intend to announce preliminary voting results at the annual meeting and publish final voting results in a Current Report on
Form 8-K to be filed with the United States Securities and Exchange Commission (“SEC”) within four business days after
the annual meeting.
Q:
Who will bear the cost of soliciting votes for the annual meeting?
A:
The cost of this solicitation is being borne by SINTX. These costs will include the expense of preparing, assembling, printing
and mailing the notice, this proxy statement and any other material used in the Company’s solicitation of proxies to stockholders
of record and beneficial owners, and reimbursements paid to banks, brokerage firms, custodians and others for their reasonable
out-of-pocket expenses for forwarding proxy materials to stockholders and obtaining beneficial owners’ voting instructions.
Proxies may be solicited on our behalf by our directors, officers and regular employees by telephone or other means. There will
be no special or additional compensation for these services. Stockholders voting via the telephone or Internet should understand
that there may be costs associated with telephonic or electronic access, such as usage charges from telephone companies and internet
access providers, which must be borne by the stockholder. We have retained the services of D.F. King & Co., Inc., a professional
solicitation firm, as proxy solicitor for this annual meeting. We expect to pay D.F. King & Co., Inc. approximately $12,500
for the services it will perform as proxy solicitor in connection with this annual meeting. Further, we will reimburse D.F. King
& Co., Inc. for its reasonable out-of-pocket expenses in connection therewith. We have also agreed to indemnify D.F. King
& Co., Inc. against certain liabilities relating to or arising out of the engagement.
Q:
What if I have questions for the Company’s transfer agent?
A:
Please contact our transfer agent at the telephone number or address listed below with any questions concerning stock certificates,
transfer of ownership or other matters pertaining to your stock account.
American
Stock Transfer & Trust Company LLC
6201
15th Ave
Brooklyn
NY 11219
1-800-937-5449
help@astfinancial.com
Q:
Who can help answer my questions?
A:
If you have any questions about the annual meeting or how to vote or revoke your proxy, please contact:
SINTX
Technologies, Inc.
188
West 2100 South
Salt
Lake City, UT 84119
Attention:
Corporate Secretary
Q:
How does the Board recommend I vote my shares?
A:
The Board recommends a vote FOR each nominee for election to the Board, FOR approval of Proposals numbered 2, 3 and 4.
Q:
How can I bring business to be presented from the floor of the annual meeting?
A:
Stockholders may present proposals for action at a future meeting if they comply with SEC rules, state law and our Bylaws. For
nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to our Bylaws, the stockholder
must have given timely notice thereof in writing to the Secretary of the Corporation.
Q:
How can Stockholders recommend a candidate for election to the Board?
A:
Stockholders who wish to recommend a candidate for election to our Board should write to: Corporate Secretary, SINTX Technologies,
Inc., 1885 West 2100 South, Salt Lake City, UT 84119, stating in detail the qualifications of a candidate for consideration by
the Board. Additionally, our corporate Bylaws contain a detailed description of the process that must be followed by a stockholder
in order to properly nominate a candidate for election to our Board. Information on how to obtain a copy of our Bylaws is provided
below. In considering Board candidates, the Board seeks individuals of proven judgment and competence who have strong reputations
in their respective fields. The Board considers such factors as experience, education, employment history, special talents or
personal attributes, anticipated participation in Board activities, and geographic and diversity factors. The process for identifying
and evaluating nominees would include detailed consideration of the recommendations and opinions of members of our Board, our
executive officers, and our stockholders. There would be no difference in the process of evaluation of candidates recommended
by a stockholder and those recommended by other sources.
Q:
How can I communicate with the Board?
A:
Stockholders interested in communicating directly with our Board may do so by writing to: Board of Directors, SINTX Technologies,
Inc., 1885 West 2100 South, Salt Lake City, UT 84119. All such written correspondence is delivered to the director or directors
to whom it is addressed or, if addressed generally to the Board, to all directors. Concerns relating to accounting, internal controls,
or auditing matters are immediately forwarded to the Chief Executive Officer, Chief Financial Officer and Principal Accounting
Officer, and Chairman of the Audit Committee.
Q:
Will the Board attend the Annual Meeting?
A:
We encourage attendance by members of the board and senior executives, but attendance is not required.
Q:
How can a stockholder submit a Stockholder Proposal for inclusion in the 2021 Proxy Statement; Discretionary Voting
A:
Stockholders interested in submitting a proposal for inclusion in our proxy statement for next year’s annual meeting must
do so in compliance with our Bylaws and applicable SEC rules and regulations. Under Rule 14a-8 adopted by the SEC, to be considered
for inclusion in our proxy materials for our 2021 annual meeting, a stockholder proposal, including nominations for directors,
must be received in writing by our Corporate Secretary no later than 5:00 p.m. MST on March 5, 2021. If the date of our 2021 annual
meeting is moved more than 30 days before or after the anniversary date of this year’s meeting, the deadline for inclusion
of proposals in our proxy statement will instead be a reasonable time before we begin to print and mail our proxy materials next
year. Any such proposals will also need to comply with the various provisions of Rule 14a-8, which governs the basis on which
such stockholder proposals can be included or excluded from Company-sponsored proxy materials.
If
a stockholder desires to submit a proposal, including nominations for directors, for consideration at the 2021 annual meeting,
but not have the proposal included with our proxy solicitation materials relating to the 2021 annual meeting, the stockholder
must comply with the procedures set forth in our governing documents. Our Bylaws require that, for business to be properly brought
before an annual meeting by a stockholder, such stockholder must have given timely notice thereof, along with other specified
material, in proper written form to the Company. To be timely, a stockholder’s notice pertaining to an annual meeting shall
be delivered to the Corporate Secretary at the principal executive offices of the Company not less than ninety (90) or more than
one-hundred and twenty (120) days prior to the first anniversary of the date of the preceding year’s annual meeting; provided,
however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than thirty (30) days
after the previous year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the
close of business on the one-hundred and twentieth (120th) day prior to such annual meeting and not later than the close of business
on the later of the ninetieth (90th) day prior to such annual meeting or the close of business on the tenth (10th) day following
the day on which public announcement of the date of such meeting is first made by the Corporation.
Any
stockholder who wishes to make such a proposal should obtain a copy of the Bylaws, which contain these and other requirements
with respect to stockholder proposals and director nominations, including certain information that must be included concerning
the stockholder and each proposal and nominee. Our Bylaws were filed with the SEC as an exhibit to our Current Report on Form
8-K, filed on February 20, 2014. You may also obtain a copy by writing to our Corporate Secretary, at SINTX Technologies, Inc.,
1885 W 2100 S, Salt Lake City, UT 84119.
Q:
Where can I find More Information on SINTX
Our
corporate website is http://www.sintx.com. We make available on this website, free of charge, access to our Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statement on Schedule 14A and amendments to those materials
filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable
after we electronically submit such material to the SEC. The SEC makes available on its website, free of charge, reports, proxy
and information statements, and other information regarding issuers, such as us, that file electronically with the SEC. The SEC’s
website is http://www.sec.gov.
Directors
and Officers
Directors
The
following table sets forth the names, ages, and positions with SINTX for each of our directors.
Name
|
|
Age
|
|
Positions
|
B.
Sonny Bal, M.D.
|
|
57
|
|
Chairman
of the Board of Directors, President and Chief Executive Officer
|
David
W. Truetzel
|
|
63
|
|
Director
|
Jeffrey
S. White
|
|
66
|
|
Director
|
Eric
A. Stookey
|
|
49
|
|
Director
|
Mark
Froimson, M.D.
|
|
59
|
|
Director
|
Our
Board is divided into three classes (Class I, Class II and Class III) with staggered three-year terms. Directors in each class
are elected to serve for three-year staggered terms that expire in successive years. Officers serve at the discretion of our Board.
The following is information on the business experience of each director now serving and a discussion of the qualifications, attributes
and skills that led to the Board of Directors’ conclusion that each one is qualified to serve as a director.
The
following is a brief summary of the background of each of our directors.
Class
III Directors— up for election at the 2020 Annual Meeting of Stockholders with a term expiring at the 2023 annual meeting
of stockholder if re-elected.
B.
Sonny Bal, M.D. has served on our Board of Directors since February 2012, as Chairman of our Board of Directors since August
2014 and as our President and Chief Executive Officer since October 2014. Dr. Bal was a tenured Professor in Orthopaedic Surgery
at the University of Missouri, Columbia, and has an extensive history of research into silicon nitride ceramics. He is Adjunct
Professor of Material Sciences at Missouri Science and Technology University at Rolla. Dr. Bal is a member of the American Academy
of Orthopaedic Surgeons, the American Association of Hip and Knee Surgeons, and the International Society of Technology in Arthroplasty.
Dr. Bal received his M.D. degree from Cornell University and an M.B.A. from Northwestern University, a J.D. from the University
of Missouri, and a Ph.D. in Engineering from the Kyoto Institute of Technology in Japan. We believe that Dr. Bal’s breadth
of experience and scientific expertise in silicon nitride qualifies him to serve as our Chairman, President and Chief Executive
Officer.
Jeffrey
S. White has served on our Board of Directors since January 2014. From January 2013 to 2018, Mr. White served as Principal
at Medtech Advisory Group LLC, a firm he founded that advises early and mid-stage medical technology firms. In that capacity Mr.
White has consulted MiMedx Group Inc., the leading amniotic tissue and allograft regenerative biomaterials firm since mid-2015
and served as Vice President, Product Management Strategies at MiMedix. Mr. White previously served as a director of Residency
Select LLC, a company which offers psychometric assessment, training and compliance products to medical and surgical residency
programs. Mr. White also served in 2014 and 2015 as President and director of Liventa Bioscience LLC, a provider of specialty
amniotic tissue allografts for use in surgical and wound care applications. From May 2006 to December 2012 he served as Global
Director of Business Development for Synthes Inc., a global orthopedic firm that was acquired by Johnson and Johnson in 2012.
Mr. White has served as Chief Executive Officer and/or co-founder of several start-up surgical device firms and has previously
held executive level positions at United States Surgical Corporation, now part of Medtronic. Mr. White holds a B.S. in Biology
from Union College in Schenectady NY. We believe that Mr. White’s experience as an executive and founder of medical device
companies qualifies him to serve on our Board of Directors.
Class
II Directors - continuing directors with a term expiring at the 2022 annual meeting of stockholders.
David
W. Truetzel has served on our Board of Directors since our acquisition of US Spine, Inc. in September 2010. Mr. Truetzel has
been the general partner of Augury Capital Partners, a private equity fund that invests in life sciences and information technology
companies, which he co-founded in 2006. Mr. Truetzel is a director of Enterprise Bank, Inc., Bonfyre, LLC, a provider of enterprise
technology management solutions, and Paranet, LLC, an IT services provider. Mr. Truetzel holds a B.S. in Business Administration
from Saint Louis University and an M.B.A. from The Wharton School. We believe that Mr. Truetzel’s financial and managerial
expertise qualify him to serve on our Board of Directors.
Eric
A. Stookey has served on our Board of Directors since October 2014. Mr. Stookey has served as Chief Operating Officer of Osteoremedies,
LLC since March of 2015. From October 2011 until August 2014, Mr. Stookey served as the President of the Extremities-Biologics
division at Wright Medical Group Inc. Mr. Stookey also served in various other marketing and sales positions at Wright Medical
Group Inc. since 1995, including as the Senior Vice President and Chief Commercial Officer from January 2010 to November 2011,
as the Vice President North American Sales from 2007 to January 2010, as the Vice President US Sales from 2005 to 2007, as the
Senior Director of Sales, Central Region, from 2003 to 2005 and as the Director of Marketing for Large Joint Reconstruction Products
from 2001 to 2003. Mr. Stookey earned his M.B.A. from Christian Brothers University and his B.S. in Business from the Indiana
University School of Business. We believe that Mr. Stookey’s industry and executive leadership experience qualifies him
to serve on our Board of Directors.
Class
I Directors - continuing directors with a term expiring at the 2021 annual meeting of stockholders.
Mark
Froimson, M.D. has served on our Board of Directors since February 2020. Dr. Froimson is currently a Principal at Riverside
Health Advisors, a consulting company that provides strategic advice and services to health care executive leaders. Dr. Froimson
served as the President of the American Association of Hip and Knee Surgeons from March 2017 to March 2018. Previously, he was
the Executive Vice President and Chief Clinical Officer of Trinity Health, a major national non-profit Catholic healthcare system
comprising 93 hospitals in 22 states. Prior to his executive leadership position at Trinity Health, Dr. Froimson was President
and Chief Executive Officer of Euclid Hospital, a Cleveland Clinic Hospital. Dr. Froimson served as a staff surgeon in the Department
of Orthopedic Surgery at the Cleveland Clinic for over 16 years, during which time he held a variety of leadership positions,
including President of the professional staff, Vice Chair of the Orthopedic and Rheumatologic Institute, and member of the board
of governors and board of trustees. Dr. Froimson also serves on the board of directors of Pacira Biosciences, Inc., a publicly
traded company on the NASDAQ Stock Market. Dr. Froimson received a B.S. in philosophy from Princeton University, an M.D. from
Tulane University School of Medicine and an MBA from the Weatherhead School of Business at Case Western Reserve University.
We
believe Dr. Froimson’s qualifications to sit on our Board include his clinical expertise and executive experience in the
medical field.
Executive
Officers
Our
current executive officers and their respective ages and positions are as follows:
Name
|
|
Age
|
|
Position
|
B.
Sonny Bal, M.D.
|
|
57
|
|
Chairman
of the Board of Directors, President and Chief Executive Officer, Principal Financial Officer
|
Bryan
J. McEntire
|
|
67
|
|
Chief
Scientific Officer
|
David
O’Brien
|
|
55
|
|
Chief
Operating Officer
|
The
following is a brief summary of the background of each of our executive officers.
B.
Sonny Bal, M.D. has served on our Board of Directors since February 2012, as Chairman of our Board of Directors since August
2014 and as our President and Chief Executive Officer since October 2014. Dr. Bal was a tenured Professor in Orthopaedic Surgery
at the University of Missouri, Columbia, and has an extensive history of research into silicon nitride ceramics. He is Adjunct
Professor of Material Sciences at Missouri Science and Technology University at Rolla. Dr. Bal is a member of the American Academy
of Orthopaedic Surgeons, the American Association of Hip and Knee Surgeons, and the International Society of Technology in Arthroplasty.
Dr. Bal received his M.D. degree from Cornell University and an M.B.A. from Northwestern University, a J.D. from the University
of Missouri, and a Ph.D. in Engineering from the Kyoto Institute of Technology in Japan. We believe that Dr. Bal’s breadth
of experience and scientific expertise in silicon nitride qualifies him to serve as our Chairman, President and Chief Executive
Officer.
Bryan
J. McEntire has served as our Chief Scientific Officer since May 2012. From June 2004 to May 2012 he served as our Vice President
of Manufacturing and as our Vice President of Research from December 2006 to May 2012. Dr. McEntire has worked in various advanced
ceramic product development, quality engineering and manufacturing roles at Applied Materials, Inc., (Santa Clara, CA), Norton
Advanced Ceramics, a division of Saint-Gobain Industrial Ceramics Corporation (E. Granby, CT), Norton/TRW Ceramics (Northboro,
MA) and Ceramatec, Inc., (Salt Lake City, UT). Dr. McEntire has a BS degree in Materials Science and Engineering and an MBA both
from the University of Utah (Salt Lake City, UT), and a Ph.D. from the Kyoto Institute of Technology (Kyoto, Japan).
David
O’Brien has served as our Chief Operating Officer since July 2019. Mr. O’Brien previously served as the Company’s
Vice President and General Manager from October 2016 to July 2019 and from March 2014 through September 2016, he held prior roles
as our Vice President of Operations and Vice President of Manufacturing. Mr. O’Brien has over 30 years of experience in
engineering, manufacturing, and operations leadership in advanced materials and medical device organizations. From 2005 to 2014,
he fulfilled several engineering leadership roles for Covidien including Manufacturing Engineering Manager for the Norfolk, Nebraska
facility. From 1991 to 2005, he worked for Arnold Magnetic Technologies in the production of ceramic, powder metal and molded
magnets in multiple facilities across the U.S. and in England. He has extensive experience with Lean and other Continuous Improvement
initiatives. Mr. O’Brien holds an M.S. in Ceramic Engineering from the Georgia Institute of Technology, and a B.S. in Physics
from the University of Texas at San Antonio.
Arrangements
between Officers and Directors
To
our knowledge, there is no arrangement or understanding between any of our directors, officers and any other person, pursuant
to which the director or officer was selected to serve in such capacity.
Family
Relationships
None
of our directors are related by blood, marriage, or adoption to any other director, executive officer, or other key employees.
Other
Directorships
Except
for Dr. Froimson who also serves on the board of directors of Pacira Biosciences, Inc., a publicly traded company on the NASDAQ
Stock Market, none of the directors of the Company are also directors of issuers with a class of securities registered under Section
12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act).
Other
Involvement in Certain Legal Proceedings
None
of our directors or executive officers has been involved in any bankruptcy or criminal proceedings (other than traffic and other
minor offenses) or been subject to any of the items set forth under Item 401(f) of Regulation S-K, nor have there been any judgments
or injunctions brought against any of our directors or executive officers during the last ten years that we consider material
to the evaluation of the ability and integrity of any director or executive officer.
The
Board and Committees
Our
Board of Directors has five members. The Chairman of the Board and our Chief Executive Officer, B. Sonny Bal, MD, PhD, is a member
of the Board and is a full-time employee of SINTX. David W. Truetzel, Eric A. Stookey, Jeffrey S. White, and Mark Froimson are
non-employee directors, and the Board has determined that these persons (who constitute a majority of the Board) are “independent
directors” under the criteria set forth in Rule 5605(a)(2) of the Nasdaq Listing Rules. The Board met four (4) times during
the year ended December 31, 2019. All directors, except for Dr. Froimson who was not a member of the board of directors during
2019, attended all of the meetings of the Board and committee meetings of which such director was a member held during 2019.
In
accordance with our restated Certificate of Incorporation, our Board of Directors is divided into three classes with staggered
three-year terms. At each annual meeting of stockholders, the successors to the directors whose terms then expire will be elected
to serve until the third annual meeting following such election. Our directors are divided among the three classes as follows:
|
●
|
The
Class I director is Mark Froimson and his term will expire at the annual meeting of stockholders to be held in 2021.
|
|
|
|
|
●
|
The
Class II directors are David W. Truetzel and Eric A. Stookey, and their terms expire at the 2022 annual meeting of stockholders.
|
|
|
|
|
●
|
The
Class III directors are B. Sonny Bal, M.D. and Jeffrey S. White, and their terms will expire at the annual meeting of stockholders
to be held in 2020
|
Any
additional directorships resulting from an increase in the number of directors will be distributed among the three classes so
that, as nearly as possible, each class will consist of one-third of the directors.
Our
Board of Directors has three permanent committees: the Audit Committee, the Compensation Committee, and the Corporate Governance
and Nominating Committee. The written charters for these committees are on our website at https://ir.sintx.com/corporate-governance.
Our Board of Directors may from time to time establish other standing committees. In addition, from time to time, special committees
may be established under the direction of our Board of Directors when necessary to address specific issues.
The
following table sets forth a description of the three permanent Board committees and the chairpersons and members of those committees,
all of whom are independent directors:
Committee
|
|
Independent
Chairman
|
|
Independent
Members
|
|
|
|
|
|
|
|
Audit
Committee
|
|
David
W. Truetzel
|
|
Eric
A. Stookey
|
|
Jeffrey
S. White
|
|
|
|
|
|
|
|
Compensation
Committee
|
|
Jeffrey
S. White
|
|
David
W. Truetzel
|
|
Eric
A. Stookey
|
|
|
|
|
|
|
|
Governance
and Nominating Committee
|
|
Eric
A. Stookey
|
|
Jeffrey
S. White
|
|
David
W. Truetzel
|
Corporate
Governance and Nominating Committee
The
Corporate Governance and Nominating Committee is currently comprised of the following members: Eric A. Stookey (Chairman), David
W. Truetzel and Jeffrey S White. Among other items, the Corporate Governance and Nominating Committee is tasked by the Board to:
(1) identify individuals qualified to serve as members of the Board and, recommend individuals to be nominated by the Board for
election by the stockholders or to be appointed by the Board to fill vacancies consistent with the criteria approved by the Board;
(2) develop and periodically evaluate and recommend changes to SINTX’s Corporate Governance Guidelines and Code of Ethics,
and to review the Company’s policies and programs that relate to matters of corporate responsibility, including public issues
of significance to the Company and its stakeholders; and (3) oversee an annual evaluation of the performance of the Board. The
Board has determined that each of the members of the Corporate Governance and Nominating Committee is “independent”
under the standard set forth in Rule 5605(a)(2) of the Nasdaq Listing Rules. The Corporate Governance and Nominating Committee
did not meet as a separate committee in 2019, but rather, because the committee is comprised of all three independent directors
of the board, governance matters were addressed as necessary in meetings of the Board. The Corporate Governance and Nominating
Committee operates under a written charter adopted by the Board of Directors, which sets forth the responsibilities and powers
delegated by the Board to the Corporate Governance and Nominating Committee.
Board
Nominations
In
considering Board candidates, the Board seeks individuals of proven judgment and competence who have strong reputations in their
respective fields. Although we do not have a formal diversity policy, the Board considers such factors as experience, education,
employment history, special talents or personal attributes, anticipated participation in Board activities, and geographic and
diversity factors. The process for identifying and evaluating nominees would include detailed consideration of the recommendations
and opinions of members of our Board, our executive officers, and our stockholders. There would be no difference in the process
of evaluation of candidates recommended by a stockholder and those recommended by other sources.
The
Nominating and Governance Committee has adopted a policy and procedures for shareholders to recommend nominees to the Company’s
Board. The Committee will only consider qualified proposed nominees that meet the qualification standards set forth on Appendix
A to the Committee’s charter available on the Company’s website at www.SINTX.com. Pursuant to the policy, only shareholders
who meet minimum percentage ownership requirements as established by the Board may make recommendations for consideration by the
Committee. At this time, the Board has set a minimum percentage ownership of 5% of the Company’s issued and outstanding
shares of common stock for a period of at least one year. To make recommendations, a shareholder must submit the recommendation
in writing by mail, courier or personal delivery to: Corporate Secretary, SINTX Technologies, Inc., 1885 West 2100 South, Salt
Lake City, UT 84119. For each annual meeting the Committee will consider only one proposed nominee from each shareholder or shareholder
group (within the meaning of Regulation 13D under the Exchange Act).
The
recommendation must set forth (1) the name, address, including telephone number, of the recommending shareholder or shareholder
group; (2) the number of the Company’s shares of common stock held by such shareholder and proof of ownership if the shareholder
is not a holder of record; and (3) a statement that the shareholder has a good faith intention of holding the shares through the
record date of the Company’s next annual meeting. For shareholder groups this information must be submitted for each shareholder
in the group.
The
recommendation must set forth in relation to the proposed nominee being recommended by the shareholder: (1) the information required
by Items 401, 403 and 404 of Regulation S-K under the Exchange Act, (2) any material relationships or agreements between the proposed
nominee and the recommending shareholder or the Company’s competitors, customers, labor unions or other persons with special
interests in the Company; (3) a statement regarding the qualifications of the proposed nominee to serve on the Board; (4) a statement
that the proposed nominee can fairly represent the interests of all shareholders of the Company; and (5) a signed consent by the
proposed nominee to being interviewed by the Nominating and Governance Committee.
Recommendations
must be made not later than 120 calendar days prior to the first anniversary of the date of the proxy statement for the prior
annual meeting of shareholders. In the event that the date of the annual meeting of shareholders for the current year is more
than 30 days following the first anniversary date of the annual meeting of shareholders for the prior year, the submission of
a recommendation will be considered timely if it is submitted not earlier than the close of business on the 120 days prior to
such annual meeting and not later than the close of business on the later of 90 days prior to such annual meeting or the close
of business 10 days following the day on which public announcement of the date of such meeting is first made by the Company.
Audit
Committee
We
have a standing Audit Committee and audit committee charter, which complies with Rule 10A-3 of the Exchange Act, and the requirements
of the Nasdaq Listing Rules. Our Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. The
Audit Committee is currently comprised of the following members: David W. Truetzel (Chairman), Eric A. Stookey and Jeffrey S White.
The Audit Committee provides oversight for financial reporting matters, internal controls, and compliance with the Company’s
financial policies, and meets with its auditors when appropriate. The Audit Committee did not meet as a separate committee in
2019, but rather, because the committee is comprised of all three independent directors of the board, committee matters were addressed
as necessary in meetings of the Board. The Board has determined that David W. Truetzel is an “audit committee financial
expert” within the meaning of Item 407(d)(5) of Regulation S-K. Further, the Board has determined that each of David W.
Truetzel, Jeffrey S. White and Eric A. Stookey are “independent” under the standard set forth in Rule 5605(a)(2) of
the Nasdaq Listing Rules. The Audit Committee operates under a written charter adopted by the Board of Directors, which sets forth
the responsibilities and powers delegated by the Board to the Audit Committee.
Compensation
Committee
The
Compensation Committee of the Board is comprised of the following members: Jeffrey S. White, (Chairman), David W. Truetzel and
Eric A. Stookey. The Board has determined that each of David W. Truetzel, Jeffrey S. White and Eric A. Stookey are “independent”
under the standard set forth in Rule 5605(a)(2) of the Nasdaq Listing Rules. The Compensation Committee recommends to the Board
for determination compensation of our executive officers, including the chief executive officer, and addresses salary and benefit
matters for other key personnel and employees of the Company. The Compensation Committee did not meet as a separate committee
in 2019, but rather, because the committee is comprised of all three independent directors of the board, committee matters were
addressed as necessary in meetings of the Board. The Compensation Committee operates under a written charter adopted by the Board
of Directors, which sets forth the responsibilities and powers delegated by the Board to the Compensation Committee.
Code
of Business Conduct
The
Board has adopted a Code of Business Conduct that applies to all of our employees, officers and directors, including those officers
responsible for financial reporting. The code of business conduct is available on our website at https://ir.sintx.com/corporate-governance.
We intend to disclose any amendments to the code or any waivers of its requirements on our website.
The
Bylaws of the Company provide that no contract or transaction between SINTX and one or more of its directors or officers, or between
SINTX and any other corporation, firm, association, or other organization in which one or more of its directors or officers are
financially interested, shall be void or voidable solely for this reason, or solely because the director or officer is present
at or participates in the meeting of the Board of Directors or committee that authorizes or approves the contract or transaction,
or because their votes are counted for such purpose, provided that:
|
●
|
the
material facts as to his, her, or their relationship or interest as to the contract or transaction are disclosed or are known
to the Board of Directors or the committee and noted in the minutes, and the Board of Directors or committee authorizes the
contract or transaction in good faith by the affirmative vote of a majority of disinterested directors, even though the disinterested
directors are less than a quorum;
|
|
|
|
|
●
|
the
material facts as to his, her, or their relationship or interest as to the contract or transaction are disclosed or are known
to the stockholders entitled to vote thereon and the contract or transaction is specifically approved in good faith by vote
of the stockholders; or
|
|
|
|
|
●
|
the
contract or transaction is fair as to SINTX as of the time it is authorized, approved or ratified by the Board of Directors,
a committee thereof, or the stockholders.
|
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our officers, directors, and persons who beneficially own more
than 10% of our common stock (“10% Stockholders”), to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (“SEC”). Such officers, directors and 10% Stockholders are also required by SEC
rules to furnish us with copies of all Section 16(a) forms that they file.
Based
solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, the
Company believes that during fiscal year ended December 31, 2019, the filing requirements applicable to its officers, directors
and greater than 10% percent beneficial owners were complied with.
STOCK
OWNERSHIP
The
following table sets forth certain information regarding the beneficial ownership of our common stock as of June 9, 2020 by:
|
●
|
each
of our current directors;
|
|
|
|
|
●
|
each
of our executive officers; and
|
|
|
|
|
●
|
all
of our directors and executive officers as a group;
|
|
|
|
|
●
|
each
stockholder known by us to own beneficially more than 5% of our Common Stock.
|
Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities.
Shares of common stock that may be acquired by an individual or group within 60 days of June 9, 2020, pursuant to the exercise
or vesting of options or warrants or conversion of convertible promissory notes, are deemed to be outstanding for the purpose
of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person shown in the table. Percentage of shares beneficially owned is based on 11,801,310
shares issued and outstanding on June 9, 2020.
Except
as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment
power with respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by
such stockholders. The address for each director and executive officer listed is: c/o SINTX Technologies, Inc., 1885 West 2100
South, Salt Lake City, Utah 84119.
|
|
Shares Beneficially Owned
|
|
Name and Address of Beneficial Owner
|
|
Number
|
|
|
Percentage
|
|
Five Percent Stockholders:
|
|
|
-
|
|
|
|
|
|
None.
|
|
|
|
|
|
|
|
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
B. Sonny Bal, M.D. (1)
|
|
|
1,899
|
|
|
|
*
|
|
David W. Truetzel (2)
|
|
|
119
|
|
|
|
*
|
|
Jeffrey S. White (3)
|
|
|
15
|
|
|
|
*
|
|
Eric A. Stookey (4)
|
|
|
13
|
|
|
|
*
|
|
Bryan McEntire (5)
|
|
|
54
|
|
|
|
*
|
|
David O’Brien (6)
|
|
|
24
|
|
|
|
*
|
|
Mark Froimson, M.D.
|
|
|
-
|
|
|
|
*
|
|
All executive officers and directors as a group (7 persons)
|
|
|
2,124
|
|
|
|
*
|
|
|
*
|
Indicates
ownership of less than 1% of the outstanding shares of the Company’s common stock.
|
(1)
|
Represents
12 shares of Common Stock and options and warrants to purchase 1,887 shares of Common Stock that are currently exercisable
within 60 days of July [ ], 2020.
|
|
|
(2)
|
Represents
71 shares of Common Stock and options to purchase 48 shares of Common Stock that are currently exercisable within 60 days
of July [ ], 2020.
|
|
|
(3)
|
Represents
2 shares of Common Stock and options to purchase 13 shares of Common Stock that are currently exercisable within 60 days of
July [ ], 2020.
|
|
|
(4)
|
Represents
options to purchase 13 shares of Common Stock that are currently exercisable within 60 days of July [ ], 2020.
|
|
|
(5)
|
Represents
13 shares of Common Stock and options to purchase 41 shares of Common Stock that are currently exercisable within 60 days
of July [ ], 2020.
|
|
|
(6)
|
Represents
options to purchase 24 shares of Common Stock that are currently exercisable within 60 days of July [ ], 2020.
|
EXECUTIVE
AND BOARD COMPENSATION
The
following discussion relates to the compensation of our “named executive officers.”
Summary
Compensation Table
The
following table sets forth information about certain compensation awarded or paid to our named executive officers for the 2019
and 2018 fiscal years.
Name and
Principal
Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Non-Equity
Incentive
Plan
Compensation
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
All
Other Comp (1)
|
|
|
Total
Compensation
|
|
B. Sonny Bal
|
|
|
2019
|
|
|
$
|
400,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,231
|
|
|
$
|
401,231
|
|
Chief Executive Officer
|
|
|
2018
|
|
|
|
400,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,693
|
|
|
|
411,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bryan McEntire
|
|
|
2019
|
|
|
|
238,702
|
|
|
|
4,001
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,610
|
|
|
|
249,313
|
|
Chief Scientific Officer
|
|
|
2018
|
|
|
|
234,959
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9,398
|
|
|
|
244,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David O’Brien
|
|
|
2019
|
|
|
|
231,750
|
|
|
|
3,984
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,418
|
|
|
|
242,152
|
|
Chief Operating Officer
|
|
|
2018
|
|
|
|
219,202
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,386
|
|
|
|
226,588
|
|
(1)
|
Amount
reflects matching of 401(k) contributions paid by us, unless otherwise noted.
|
Narrative
Disclosure to Summary Compensation Table. We do not have written employment agreements with any of our executive officers.
All of our executive officers serve on an at-will basis. The base salaries for our named executive officers were determined by
our independent members of our board of directors and compensation committee after reviewing a number of factors, including: the
responsibilities associated with the position, the seniority of the executive’s position, the base salary level in prior
years, and our financial position; and for executive officers other than our Chief Executive Officer, recommendations made by
our Chief Executive Officer.
Outstanding
Equity Awards at Fiscal Year-End
The
following table shows information regarding equity awards held by our named executive officers as of December 31, 2019:
|
|
Number of Securities
Underlying Unexercised
Options (#)
|
|
Option
Exercise
|
|
|
Option
Expiration
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
|
Price
|
|
|
Date
|
Sonny Bal
|
|
1
|
|
|
-
|
|
|
$
|
139,158
|
|
|
3/15/2022
|
|
|
16
|
|
|
-
|
|
|
|
5,221
|
|
|
1/7/2025
|
|
|
9
|
|
|
-
|
|
|
|
2,321
|
|
|
9/16/2025
|
|
|
28
|
|
|
-
|
|
|
|
367
|
|
|
9/14/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bryan McEntire
|
|
19
|
|
|
-
|
|
|
|
5,130
|
|
|
8/13/2024
|
|
|
13
|
|
|
-
|
|
|
|
5,221
|
|
|
1/7/2025
|
|
|
9
|
|
|
-
|
|
|
|
608
|
|
|
1/4/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David O’Brien
|
|
9
|
|
|
-
|
|
|
|
5,129
|
|
|
7/17/2024
|
|
|
6
|
|
|
-
|
|
|
|
5,222
|
|
|
1/7/2025
|
|
|
9
|
|
|
-
|
|
|
|
608
|
|
|
1/4/2026
|
401(k)
Plan
We
offer our executive officers, including our named executive officers, retirement benefits, including participation in our tax-qualified
profit sharing plan that includes a “cash-or-deferred” (or 401(k)) feature in the same manner as other employees.
The plan is intended to satisfy the requirements of Section 401 of the Internal Revenue Code. Our employees may elect to reduce
their current compensation by up to the statutorily prescribed annual limit and have a like amount contributed to the plan. In
addition, we may make discretionary and/or matching contributions to the plan in amounts determined annually by our Board. We
currently elect to match the contributions of our employees who participate in our 401(k) plan as follows: a match of 100% on
the first 3% of compensation contributed by a plan participant and a match of 50% on amounts above 3%, up to 5%, of compensation
contributed by a plan participant.
Potential
Payments upon Termination or Change in Control
We
had entered into certain agreements and maintained certain plans that may have required us to make certain payments and/or provide
certain benefits to the executive officers named in the Summary Compensation Table in the event of a termination of employment
or change in control.
Pursuant
to severance agreements that we have entered into with each of our named executive officers, upon the consummation of a change
in control, all outstanding options, restricted stock and other such rights held by the executives will fully vest. Additionally,
if a change in control occurs and at any time during the one-year period following the change in control (i) we or our successor
terminate the executive’s employment other than for cause (but not including termination due to the executive’s death
or disability) or (ii) the executive terminates his employment for good reason, then such executive has the right to receive payment
consisting of a lump sum payment equal to two times his highest annual salary with us during the preceding three-year period,
including the year of such termination and including bonus payments (measured on a fiscal year basis), but not including any reimbursements
and amounts attributable to stock options and other non-cash compensation. “Change in control” is defined in the severance
agreements as occurring upon: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becoming the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
representing 50% or more of the total voting power represented by our then outstanding voting securities (excluding securities
held by us or our affiliates or any of our employee benefit plans) pursuant to a transaction or a series of related transactions
which our Board did not approve; (ii) a merger or consolidation of our company, other than a merger or consolidation which would
result in our voting securities outstanding immediately prior thereto continuing to represent at least 50% of the total voting
securities or such surviving entity or parent of such corporation outstanding immediately after such merger or consolidation;
or (iii) the approval by our stockholders of an agreement for the sale or disposition of all or substantially all of our assets.
As defined in the severance agreements, “cause” means: (i) the executive’s commission of a felony (other than
through vicarious liability or through a motor vehicle offense); (ii) the executive’s material disloyalty or dishonesty
to us; (iii) the commission by the executive of an act of fraud, embezzlement or misappropriation of funds; (iv) a material breach
by the executive of any material provision of any agreement to which the executive and we are party, which breach is not cured
within 30 days after our delivery to the executive of written notice of such breach; or (v) the executive’s refusal to carry
out a lawful written directive from our Board. “Good reason” as defined in the severance agreements means, without
the executive’s consent: (i) a change in the principal location at which the executive performs his duties to a new work
location that is at least 50 miles from the prior location; or (ii) a material change in the executive’s compensation, authority,
functions, duties or responsibilities, which would cause his position with us to become of less responsibility, importance or
scope than his prior position, provided, however, that such material change is not in connection with the termination of the executive’s
employment with us for any reason.
In the event that an officer entitled to receive
or receives payment or benefit under the severance agreements described above, or under any other plan, agreement or arrangement
with us, or any person whose action results in a change in control or any other person affiliated with us and it is determined
that the total amount of payments will be subject to excise tax under Section 4999 of the Internal Revenue Code, or any similar
successor provisions, we will be obligated to pay such officer a “gross up” payment to cover all taxes, including any
excise tax and any interest or penalties imposed with respect to such taxes due to such payment.
Code of Business Conduct Violations
It is our policy under our Code of Business
Conduct to take appropriate action against any executive officer whose actions are found to violate the Code or any other policy
of SINTX. Disciplinary actions may include immediate termination of employment and, where SINTX has suffered a loss, pursuing its
remedies against the executive officer responsible. SINTX will cooperate fully with the appropriate authorities where laws have
been violated.
Role of the Board in Risk Oversight
Risk is inherent with every business, and how
well a business manages risk can ultimately determine its success. Management is responsible for the day-to-day management of the
risks that we face, while our Board of Directors, as a whole and through its committees, has responsibility for the oversight of
risk management. In its risk oversight role, our Board of Directors is responsible for satisfying itself that the risk management
processes designed and implemented by management are adequate and functioning as designed.
Our Board of Directors does not have a standing
risk management committee, but rather administers this oversight function directly through our Board of Directors as a whole, as
well as through various standing committees of the Board of Directors that address risks inherent in their respective areas of
oversight. In particular, our Board of Directors is responsible for monitoring and assessing strategic risk exposure, including
a determination of the nature and level of risk appropriate for us. Our Audit Committee has the responsibility to consider and
discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including
guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors
oversight of the performance of our internal audit function. Our Corporate Governance and Nominating Committee monitors the effectiveness
of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating
conduct. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs have the potential
to encourage excessive risk-taking or promote behaviors contra to our Code of Business Conduct.
Board Compensation
The following table shows the total compensation
paid or accrued during the fiscal year ended December 31, 2019 to each of our non-employee directors.
Name
|
|
Fees Earned or Paid in Cash ($)
|
|
|
Stock Awards ($)
|
|
|
Option Awards ($)
|
|
|
Total ($)
|
|
David W. Truetzel
|
|
$
|
122,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
122,000
|
|
Jeffrey S. White
|
|
|
41,997
|
|
|
|
-
|
|
|
|
-
|
|
|
|
41,997
|
|
Eric A. Stookey
|
|
|
41,997
|
|
|
|
-
|
|
|
|
-
|
|
|
|
41,997
|
|
Mark Froimson(1)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
(1)
|
Dr. Froimson did not serve on the board of directors during the fiscal year ended December 31, 2019.
|
The following compensation schedule sets forth
compensation for non-employee directors (paid on a quarterly basis) as approved by the Board:
|
●
|
Annual Retainer of $40,000 paid in four equal installments of $10,000 each at the beginning of each calendar quarter;
|
|
|
|
|
●
|
$1,000 for each board and committee meeting attended in person;
|
|
|
|
|
●
|
$500 for each board and committee meeting attended via telephone or other remote medium; and
|
|
|
|
|
●
|
Reimbursement of reasonable expenses as supported by documentation and receipts.
|
A new Board appointee receives an award of
40,000 stock options upon appointment. Further, historically, each member of the Board is awarded an option grant for 15,000 stock
options on an annual basis. No awards were made for 2019.
The chair of the Audit Committee is paid an
annual retainer of $120,000 payable in monthly increments of $10,000 each.
Equity Compensation Plan Information
The following table sets forth information
as of December 31, 2019 relating to all of our equity compensation plans:
Plan
Category
|
|
(a)
Number of Securities to be Issued upon Exercise of Outstanding Options
|
|
|
(b)
Weighted- average Exercise Price of Outstanding Options
|
|
|
(c)
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Referenced
in Column (a))
|
|
Equity compensation plans
approved by stockholders
|
|
|
377
|
(1)
|
|
|
$
7,447
|
(2)
|
|
|
2,520
|
|
Equity compensation plans not approved
by Stockholders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
377
|
(1)
|
|
|
$
7,447
|
(2)
|
|
|
2,520
|
|
(1)
|
Includes options outstanding under our 2012 Equity Incentive Plan
|
|
|
(2)
|
Represents weighted-average exercise price per share of common stock acquirable upon exercise of outstanding stock options.
|
|
|
(3)
|
See description below under the 2012 Equity Incentive Plan describing the plan’s evergreen formula.
|
2012 Equity Incentive Plan
The 2012 Plan is intended to encourage ownership
of common stock by our employees and directors and certain of our consultants in order to attract and retain such people, to induce
them to work for the benefit of us and to provide additional incentive for them to promote our success. The number of shares of
our common stock reserved for issuance under the 2012 Plan is 3,173, which number is automatically increased on January 1 of each
of year by the lesser of (i) 601 shares of our common stock on such date, (ii) 5% of the number of outstanding shares of our common
stock on such date, and (iii) such other amount determined by the Board through the termination of the 2012 Plan.
Types of Awards. The 2012 Plan provides
for the granting of incentive stock options, NQSOs, stock grants and other stock-based awards, including RSUs.
● Incentive and Nonqualified
Stock Options. The plan administrator determines the exercise price of each stock option. The exercise price of an NQSO may
not be less than the fair market value of our common stock on the date of grant. The exercise price of an incentive stock option
may not be less than the fair market value of our common stock on the date of grant if the recipient holds 10% or less of the combined
voting power of our securities, or 110% of the fair market value of a share of our common stock on the date of grant otherwise.
● Stock Grants. The
plan administrator may grant or sell stock, including restricted stock, to any participant, which purchase price, if any, may not
be less than the par value of shares of our common stock. The stock grant will be subject to the conditions and restrictions determined
by the administrator. The recipient of a stock grant shall have the rights of a stockholder with respect to the shares of stock
issued to the holder under the 2012 Plan.
● Stock-Based Awards.
The administrator of the 2012 Plan may grant other stock-based awards, including stock appreciation rights, phantom stock awards
and RSUs, with terms approved by the administrator, including restrictions related to the awards. The holder of a stock-based award
shall not have the rights of a stockholder until shares of our common stock are issued pursuant to such award.
Plan Administration. Our Board is the
administrator of the 2012 Plan, except to the extent it delegates its authority to a committee, in which case the committee shall
be the administrator. Our Board has delegated this authority to our compensation committee. The administrator has the authority
to determine the terms of awards, including exercise and purchase price, the number of shares subject to awards, the value of our
common stock, the vesting schedule applicable to awards, the form of consideration, if any, payable upon exercise or settlement
of an award and the terms of award agreements for use under the 2012 Plan.
Eligibility. Our Board will determine
the participants in the 2012 Plan from among our employees, directors and consultants. A grant may be approved in advance with
the effectiveness of the grant contingent and effective upon such person’s commencement of service within a specified period.
Termination of Service. Unless otherwise
provided by our Board or in an award agreement, upon a termination of a participant’s service, all unvested options then
held by the participant will terminate and all other unvested awards will be forfeited.
Transferability. Awards under the 2012
Plan may not be transferred except by will or by the laws of descent and distribution, unless otherwise provided by our Board in
its discretion and set forth in the applicable agreement, provided that no award may be transferred for value.
Adjustment. In the event of a stock
dividend, stock split, recapitalization or reorganization or other change in change in capital structure, our Board will make appropriate
adjustments to the number and kind of shares of stock or securities subject to awards.
Corporate Transaction. If we are acquired,
our Board of Directors (or Compensation Committee) will: (i) arrange for the surviving entity or acquiring entity (or the surviving
or acquiring entity’s parent company) to assume or continue the award or to substitute a similar award for the award; (ii)
cancel or arrange for cancellation of the award, to the extent not vested or not exercised prior to the effective time of the transaction,
in exchange for such cash consideration, if any, as our Board of Directors in its sole discretion, may consider appropriate; or
(iii) make a payment, in such form as may be determined by our Board of Directors equal to the excess, if any, of (A) the value
of the property the holder would have received upon the exercise of the award immediately prior to the effective time of the transaction,
over (B) any exercise price payable by such holder in connection with such exercise. In addition, in connection with such transaction,
our Board of Directors may accelerate the vesting, in whole or in part, of the award (and, if applicable, the time at which the
award may be exercised) to a date prior to the effective time of such transaction and may arrange for the lapse, in whole or in
part, of any reacquisition or repurchase rights held by us with respect to an award.
Amendment and Termination. The 2012
Plan will terminate on September 6, 2022 or at an earlier date by vote of the stockholders or our Board; provided, however, that
any such earlier termination shall not affect any awards granted under the 2012 Plan prior to the date of such termination. The
2012 Plan may be amended by our Board, except that our Board may not alter the terms of the 2012 Plan if it would adversely affect
a participant’s rights under an outstanding stock right without the participant’s consent. Stockholder approval will
be required for any amendment to the 2012 Plan to the extent such approval is required by law, include the Internal Revenue Code
or applicable stock exchange requirements.
Amendment of Outstanding Awards. The
administrator may amend any term or condition of any outstanding award including, without limitation, to reduce or increase the
exercise price or purchase price, accelerate the vesting schedule or extend the expiration date, provided that no such amendment
shall impair the rights of a participant without such participant’s consent.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
We have a classified Board currently consisting
of five members, all but one of whom are non-employee directors, divided into three classes (Class I, Class II and Class II). Directors
in each class are elected to serve for three-year staggered terms that expire in successive years. Our Class III directors are
up for election this year. Accordingly, we are holding an election for our Class III directors at the Annual Meeting, with each
Class III director elected to serve a three-year term.
The Board has nominated B. Sonny Bal, MD and
Jeffrey W. White for election as Class III directors, for three-year terms expiring at the annual meeting of stockholders to be
held in 2023 or until their successors are elected and qualified, or their earlier death, resignation or removal. If the nominees
decline to serve or become unavailable for any reason, or if any additional vacancy occurs before the election (although we know
of no reason to anticipate that this will occur), the proxies may be voted for such substitute nominees as the Board may designate.
Each nominee has consented to being named in the Proxy Statement and has agreed to serve if elected.
If a quorum is present, the two nominees for
Class III director receiving the highest number of votes will be elected Class III directors. Abstentions and broker non-votes
will be counted as shares present for the purpose of determining the presence of a quorum but will have no effect on the results
of the vote. Biographical information, including the principal occupation of and other directorships held by each director for
at least the past five years as well as the specific experience, qualifications, attributes and skills that led to the conclusion
that each director should serve as a member of the Board is provided elsewhere in this proxy statement in the preceding section
entitled “DIRECTORS AND OFFICERS” with respect to Class III nominees, as well as the Class I and Class II directors
whose terms of office will continue after the Annual Meeting.
RECOMMENDATION OF THE BOARD OF DIRECTORS
FOR PROPOSAL NO. 1:
The Board of Directors recommends that
you vote FOR the Director Nominees listed above.
PROPOSAL NO. 2:
APPROVAL OF THE 2020 EQUITY INCENTIVE PLAN
Background and Purpose
We are asking shareholders to approve the SINTX
Technologies, Inc. 2020 Equity Incentive Plan, which we refer to as the 2020 Plan. Our Board of Directors believes that our success
depends, in large part, on our ability to maintain a competitive position by attracting, retaining and motivating key employees
with experience and ability. We believe that stock-based compensation programs are central to this objective. On April 21, 2020,
subject to shareholder approval, the Board of Directors adopted the 2020 Plan. The 2020 Plan is intended to replace our Amended
and Restated 2012 Equity Incentive Plan, which will expire by its terms on September 6, 2022 (the “2012 Plan”). If
our shareholders approve the 2020 Plan at the Annual Meeting, then we will not grant any new awards under the 2012 Plan after the
Annual Meeting; however, awards outstanding under the 2012 Plan will remain in effect.
If shareholders approve the 2020 Plan, subject
to adjustment in the event of stock splits and other similar events, awards may be made under the 2020 Plan for up to the sum of
1,902,520 shares of our common stock, consisting of the 1,900,000 shares of common stock to be approved for issuance under the
2020 Plan and 2,520 shares of common stock reserved for issuance under the 2012 Plan that remain available for grant under the
2012 Plan immediately prior to the date that the 2020 Plan is approved by our shareholders. An additional 377 shares of common
stock may also be issued under the 2020 Plan for shares of common stock currently subject to outstanding awards granted under the
2012 Plan, which awards may expire, terminate or be otherwise surrendered, cancelled, or forfeited without being exercised by their
holder. As of December 31, 2019, options to purchase 377 shares of common stock were outstanding under the 2012 Plan with a weighted-average
remaining term of 5.3 years and a weighted-average exercise price of $$7,447 per share. The 2020 Plan provides that each share
of common stock subject to an award under the 2012 Plan that becomes available for grant under the 2020 Plan will increase the
2020 Plan’s share reserve by one share. We expect that the proposed share pool under the 2020 Plan will allow us to continue
to grant equity awards at our historic rates for approximately five years.
We believe that our stock-based compensation
programs have been integral to our success in the past and will be important to our ability to succeed in the future. If the 2020
Plan is not approved by our shareholders, we will not be able to make meaningful long-term equity incentive awards under a shareholder-approved
equity incentive plan due to the lack of common shares available for award under the 2012 Plan. Therefore, we consider approval
of the 2020 Plan vital to our future success.
RECOMMENDATION OF THE BOARD OF DIRECTORS
FOR PROPOSAL NO. 2:
The affirmative (“FOR”) vote
of the holders of a majority of the votes present in person or represented by proxy and entitled to vote on this Proposal and cast
at the annual meeting is necessary to approve Proposal No. 2. Abstentions will have the same effect as votes against Proposal No.
2. We believe brokerage firms have authority to vote customers’ unvoted shares held by the firms in street name on this Proposal.
The Board of Directors recommends that
you vote FOR this Proposal.
Summary of the 2020 Equity Incentive Plan
Certain provisions of the 2020 Plan are summarized
below. A copy of the Plan is attached to this proxy statement as Appendix I and is incorporated herein by reference. The following
summary of the material terms of the 2020 Plan does not purport to be a complete description of the 2020 Plan and is qualified
in its entirety by reference to the complete copy of the 2020 Plan in Appendix I. Because this summary may not contain all of the
information that is important to you, you should review the Proxy Statement, including Appendix I, before deciding how to vote.
The 2020 Plan provides for the grant of nonqualified
stock options, incentive stock options, restricted stock, restricted stock units, stock appreciation rights (SARs), and performance
share awards to employees, officers, consultants, advisors, non-employee directors and independent contractors designated by either
the board of directors of the Company or if so authorized by the board of directors, the Compensation Committee (the “Committee”)
of the Board of Directors. Under the 2020 Plan, the maximum number of shares of common stock which may be issued, subject to adjustment
as described below, is 1,902,520 shares of common stock, which includes 2,520 shares that have been rolled over from our 2012 Plan,
as amended. In addition, there are 377 shares subject to outstanding awards under our 2012 Plan that, if, after April 21, 2020,
are forfeited or reacquired by the Company due to termination or cancellation of such awards shall also be permitted to be granted
under the 2020 Plan. For stock options and SARs, the aggregate number of shares with respect to which such awards are exercisable,
rather than the number of shares actually issued upon exercise, will be counted against the number of shares available for awards
under the 2020 Plan. If awards under the 2020 Plan expire or otherwise terminate without being exercised, the shares not acquired
pursuant to such awards again become available for issuance under the 2020 Plan in accordance with its terms. However, under the
following circumstances, shares will not again be available for issuance under the 2020 Plan: (i) shares unissued due to a “net
exercise” of a stock option, (ii) any shares withheld or shares tendered to satisfy tax withholding obligations with respect
to a stock option or SAR, (iii) shares covered by a SAR that is not settled in shares upon exercise and (iv) shares repurchased
using stock option exercise proceeds.
Administration
The 2020 Plan will be administered by the Committee,
or in the board of director’s sole discretion, by the board of directors. The Board of Directors will fill vacancies on and
from time to time may remove or add members to the Committee, and the Committee will be so constituted to permit awards granted
under the 2020 Plan to be exempt from Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and
to permit grants of awards under the plan to comply with or any other statutory rule or regulatory requirements, unless otherwise
determined by the Board of Directors.
Subject to the express provisions of the 2020
Plan, the Committee has authority to administer and interpret the 2020 Plan, including the authority to determine who is eligible
to participate in the 2020 Plan and to whom and when awards are granted under the 2020 Plan, to grant awards, to determine the
number of shares of common stock subject to awards and the exercise or purchase price of such shares under an award, to establish
and verify the extent of satisfaction of any performance criteria applicable to awards, to prescribe and amend the terms of the
agreements evidencing awards made under the 2020 Plan, and to make other determinations deemed necessary or advisable for the administration
of the 2020 Plan. Also, subject to the requirements of Delaware General Corporation Law and any limitations under applicable stock
exchange rules, the Committee also has the power to delegate to officers the authority to grant and determine the terms and conditions
of awards granted under the 2020 Plan. These delegated officers shall not be permitted to grant awards to any person subject to
Rule 16b-3 under the Exchange Act or Code.
Eligibility
Participants under the 2020 Plan are limited
to employees, officers, non-employee directors, and consultants providing services to the Company, or any person to whom an offer
of employment or engagement with the Company is extended. In determining to whom awards will be granted and the nature of such
each award, the Committee may take into account the nature of the services rendered by the respective participant, their present
and potential contributions to the success of the Company or such other factors as the Committee, in its discretion, deems relevant.
We estimate that approximately 32 persons are currently eligible to participate in the 2020 Plan, which includes 25 employees,
3 named-executive officers and 4 non-employee directors.
General Terms and Conditions of Awards
Nonqualified Stock Options
The Committee may grant nonqualified stock
options under the 2020 Plan which do not meet the requirements of Section 422 of the Code and which will be subject to the following
terms and conditions. The option exercise price per share will be determined by the Committee but will not be less than 100% of
the “fair market value” of the common stock on the date of grant of such option. The term “fair market value”
means either (a) if the common stock is listed on any established stock exchange, the closing price for the common stock on the
date of grant or (b) in the absence of an established market for the common stock, the fair market value shall be determined in
good faith by the Committee and such determination shall be conclusive and binding on all persons. The exercise price of an option
may be paid through various means specified by the Committee, including in cash or check, by delivering to the Company shares of
common stock or by a reduction in the number of shares issuable pursuant to such option. Except in limited circumstances, every
option which has not been exercised within ten years of its date of grant will lapse upon the expiration of the ten-year period,
unless it has lapsed at an earlier date as determined by the Committee.
During the lifetime of a participant, except
as otherwise may be provided by the Committee in its discretion, options granted to that participant under the 2020 Plan generally
will be nontransferable and exercisable only by the participant. A participant will have the right to transfer any options granted
to such participant upon such participant’s death either by the terms of such participant’s will or under the laws
of descent and distribution.
Incentive Stock Options
The Committee may grant incentive stock options
under the 2020 Plan which meet the requirements of section 422 of the Code. Under the 2020 Plan, the aggregate fair market value,
determined at the time the option is granted, of the common stock with respect to which incentive stock options are exercisable
for the first time by any participant during any calendar year (under the 2020 Plan and any other incentive stock option plans
of the Company) may not exceed $100,000, or any other limit as may be prescribed by the Code from time to time. The option exercise
price per share will be determined by the Committee but will not be less than 100% of the “fair market value” of the
common stock on the date of grant of such option. In the case of a grant of an incentive stock option to a participant who, at
the time such option is granted, owns stock possessing more than 10% of the combined voting power of all classes of stock of the
Company, the option exercise price per share under such option will not be less than 110% of the “fair market value”
of the common stock on the date of grant of such option and such option will expire and no longer be exercisable no later than
five years from the date of grant of such option.
SARs
The committee may grant SARs under the 2020
Plan. Subject to the express provisions of the 2020 Plan and as discussed in this paragraph, the Committee has discretion to determine
the grant value, term, methods of exercise, dates of exercise, methods of settlement and any other terms and conditions of any
SAR. The grant value of each SAR granted under the 2020 Plan will be determined by the Committee. Every SAR which has not been
exercised within ten years of its date of grant will lapse upon the expiration of such ten-year period, unless it has lapsed at
an earlier date as determined by the Committee.
Restricted Stock and Restricted Stock Units
The Committee may grant restricted stock or
restricted stock units under the 2020 Plan. Restricted stock and restricted stock units will be subject to such restrictions as
the Committee may impose (including, without limitation, any limitation on the right to vote a share of restricted stock or the
right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination
at such time or times, in such installments or otherwise as the Committee may deem appropriate. For example, awards may, at the
Committee’s discretion, be conditioned upon a participant’s completion of a specified period of service, or upon the
achievement of one or more performance goals established by the Committee, or upon any combination of service-based and performance-based
conditions. A restricted stock or restricted stock unit award that is conditioned in whole or in part upon the achievement of one
or more financial or other company-related performance goals (including goals specific to the participant’s individual performance,
other than performance of service alone) is generally referred to as a performance share or performance share unit award.
Any restricted stock granted under the 2020
Plan shall be issued at the time such awards are granted and may be evidenced in such manner as the Committee may deem appropriate.
In the case of restricted stock units, no common stock shall be issued at the time such awards are granted. Upon the lapse or waiver
of restrictions and the restricted period relating to restricted stock units evidencing the right to receive common stock, such
common stock shall be issued and delivered to the holder of the restricted stock units.
Except as otherwise determined by the Committee,
if a director resigns or is removed or if the employment of an employee holding restricted stock or restricted stock units terminates
during the applicable restricted period, the restricted stock and/or restricted stock units held by such director or employee will
be forfeited and reacquired by the Company.
Transferability
Generally, no award (other than fully vested
and unrestricted shares) and no right under any such award shall be transferable by a participant other than by will or by the
laws of descent and distribution, and no award (other than fully vested and unrestricted shares) or right under any such award
may be pledged, alienated, attached or otherwise encumbered. If a transfer is allowed by the Compensation Committee (other than
for fully vested and unrestricted shares), the transfer will be for no value and shall comply with the Form S-8 rules. The Committee
may establish procedures to allow a participant to designate a beneficiary or beneficiaries, to exercise the rights of the participant
and receive any property distributable with respect to an award in the event of the participant’s death.
Corporate Transactions
In the event of any Change-in-Control Event
(as defined in the 2020 Plan), reorganization, merger, consolidation, split-up, spin-off, combination, plan of arrangement, take-over
bid or tender offer, repurchase or exchange of common stock or other securities of the Company or any other similar corporate transaction
or event involving the Company, all outstanding options and SARs shall become immediately exercisable with respect to 100% of the
shares subject to such options or SARs, and/or the restricted period shall expire immediately with respect to 100% of the outstanding
shares of restricted stock awards or restricted stock units. Further, with respect to performance share awards and cash awards,
in the event of a Change-in-Control, all performance goals or other vesting criteria will be deemed achieved at 100% of target
levels and all other terms and conditions will be deemed met.
In addition, in the event of a Change-in-Control,
the Committee may in its discretion and upon at least 10 days’ advance notice to the affected persons, cancel any outstanding
awards and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such awards based upon the price
per share of common stock received or to be received by other shareholders of the Company in the event. In the case of any option
or SAR with an exercise price (or SAR Exercise Price in the case of a SAR) that equals or exceeds the price paid for a share of
common stock in connection with the Change-in-Control, the Committee may cancel the option or SAR without the payment of consideration
therefor.
Amendment and Termination
No awards may be granted pursuant to the 2020
Plan after the ten-year anniversary of the effective date of the 2020 Plan which, if the shareholders approve the amendment and
restatement of the 2020 Plan, will be April 21, 2030. Except to the extent stockholder approval or participant consent is required
as provided by the 2020 Plan, the Board may amend, modify or terminate the 2020 Plan.
The Committee may amend, modify or terminate
an outstanding award, provided, however, that, except as expressly provided in the 2020 Plan, the Committee may not, without the
participant’s consent, amend, modify or terminate an outstanding award unless it determines that the action would not adversely
alter or impair the terms or conditions of such award. However, the Committee reserves the right to reprice any previously granted
“underwater” option or SAR by (i) lowering the exercise price, (ii) canceling the underwater option or SAR and granting
a substitute award, or (iii) repurchasing the underwater option or SAR.
Certain Federal Income Tax Consequences
The following is a summary of the principal
U.S. federal income tax consequences generally applicable to awards made under the 2020 Plan. The summary does not contain a complete
analysis of all the potential tax consequences relating to awards granted under the 2020 Plan, including state, local or foreign
tax consequences.
Nonqualified Stock Options
A participant will not be deemed to have received
taxable income upon the grant of a nonqualified stock option with an exercise price equal to the fair market value of the underlying
stock on the date of the grant. Upon the exercise of a nonqualified stock option, a participant generally will be deemed to have
received taxable ordinary income in an amount equal to the excess of the fair market value of the common stock received on the
date of exercise over the option price.
Upon the exercise of a nonqualified stock option,
we will ordinarily be entitled to a deduction for federal income tax purposes in an amount equal to the amount included in income
by the participant as a result of such exercise. This deduction will be available to us in the tax year in which the participant
recognizes the income.
The income arising from a participant who is
an employee exercising a nonqualified stock option will be treated as compensation income for income and payroll tax withholding
purposes, and the Committee may allow the participant to satisfy the tax withholding obligation by withholding a portion of the
shares that would otherwise be delivered upon exercise. The basis of shares received upon the exercise of a nonqualified stock
option will be the option exercise price paid plus the amount recognized by the participant as taxable income attributable to such
shares as a result of the exercise. Gain or loss recognized by the participant on a subsequent disposition of any such shares will
be capital gain or loss if such shares constitute a capital asset in the hands of the participant. A participant’s holding
period will commence on the date of exercise.
Incentive Stock Options
Participants will not be deemed to recognize
taxable income upon the grant or exercise of an incentive stock option with an exercise price equal to the fair market value of
the underlying stock on the date of the grant. If a participant makes no disqualifying disposition of the common stock received
upon exercise within the one year period beginning after the transfer of such common stock to the participant nor within two years
from the date of grant of the incentive stock option, and if the participant at all times from the date of the grant of the incentive
stock option to a date three months before the date of exercise has been an employee of ours, any gain recognized on the disposition
of the common stock acquired upon exercise will be long-term capital gain. The difference between the fair market value of the
common stock at the time of exercise and the exercise price will, however, be an item of tax preference, and may subject a participant
to the alternative minimum tax. We will not be entitled to any deduction with respect to the grant or exercise of the incentive
stock option or the transfer of common stock acquired upon exercise.
If the participant makes a disqualifying disposition
of the common stock before the expiration of the one or two year holding periods described above, the participant will be deemed
to have received taxable ordinary income at the time of such disposition to the extent that the fair market value of the common
stock at the time of exercise, or, if less, the amount realized on such disposition, exceeds the exercise price. To the extent
that the amount realized on such disposition exceeds the fair market value of the common stock at the time of exercise, such excess
will be taxed as capital gain if the common stock is otherwise a capital asset in the hands of the participant. To the extent the
participant recognizes ordinary income on a disqualifying disposition of the common stock, we may be entitled to a deduction for
federal income tax purposes in an amount equal to the ordinary income recognized by the participant.
SARs
A participant will not be deemed to have received
taxable income upon the grant or vesting of a SAR with an exercise price equal to the fair market value of the underlying stock
on the date of the grant. Upon the exercise of a SAR, a participant generally will be deemed to have received income, taxable for
federal income tax purposes at ordinary income rates, equal to the fair market value at the time of exercise of any common stock
received plus the amount of any cash received, and we will ordinarily be entitled to a deduction for federal income tax purposes
equal to the amount of ordinary income recognized by the participant as a result of such exercise.
The income arising from a participant who is
an employee exercising a SAR will be treated as compensation income for withholding tax purposes and the Committee may allow the
participant to satisfy the tax withholding obligation by withholding a portion of the shares that would otherwise be delivered
upon exercise. The basis of shares received upon the exercise of a SAR will equal the fair market value of the shares at the time
of exercise. Gain or loss recognized by the participant on a subsequent disposition of any such shares will be capital gain or
loss if such shares constitute a capital asset in the hands of the participant.
Restricted Stock
The federal income tax consequences of the
issuance of restricted stock will depend upon whether the participant elects to be taxed at the time of grant of the restricted
stock under Section 83(b) of the Code. If no election is made, the participant will not be deemed to have received taxable income
upon the grant of restricted stock, but rather recognition of income will be postponed until such time as the restrictions on the
shares of restricted stock lapse. At that time, the participant will be deemed to have received taxable ordinary income in an amount
equal to the fair market value of the restricted stock when the restrictions lapse. If a Section 83(b) election is made, the participant
will be deemed to have received taxable ordinary income at the time of the grant of the restricted stock equal to the fair market
value of the shares of restricted stock at that time determined without regard to any of the restrictions on the shares, and the
participant will not recognize ordinary income on the lapse of the restrictions.
We will ordinarily be entitled to a deduction
for federal income tax purposes in the taxable year in which the participant recognizes any ordinary income as a result of the
lapse of restrictions on the restricted stock or as a result of a Section 83(b) election. The amount of the deduction will equal
the amount of ordinary income recognized by the participant. In the case of employees, such income will be treated as compensation
income for income and payroll tax withholding purposes, and the Committee may allow the participant to satisfy the tax withholding
obligation by withholding a portion of the shares whose restrictions have lapsed. The basis of any shares received will equal the
amount recognized by the participant as taxable income attributable to such shares as a result of the lapse of restrictions on
the restricted stock or as a result of a Section 83(b) election. Gain or loss recognized by the participant on a subsequent disposition
of any such shares will be capital gain or loss if such shares constitute a capital asset in the hands of the participant. For
purposes of determining the holding period of any such shares, there will be included only the period beginning at the time the
restrictions lapse or, if a Section 83(b) election is made, at the time of grant.
Restricted Stock Units
A participant will not be deemed to have received
taxable income upon the grant of restricted stock units. The participant will be deemed to have received taxable ordinary income
at such time as shares are distributed to the participant. Upon the distribution of shares to a participant with respect to restricted
stock units, we will ordinarily be entitled to a deduction for federal income tax purposes in an amount equal to the taxable ordinary
income recognized by the participant. In the case of employees, such income will be treated as compensation income for income and
payroll tax withholding purposes, and the Committee may allow the participant to satisfy the tax withholding obligation by withholding
a portion of the shares that would otherwise be delivered. The basis of the shares of common stock received will equal the amount
of taxable ordinary income recognized by the participant upon receipt of such shares. Gain or loss recognized by the participant
on a subsequent disposition of any such shares will be capital gain or loss if such shares constitute a capital asset in the hands
of the participant. A participant’s holding period will commence on the date the shares are distributed to the participant.
Code Section 409A of the Internal Revenue
Code
The Committee intends to administer and interpret
the 2020 Plan and all award agreements in a manner designed to satisfy the requirements of Code Section 409A of the Internal Revenue
Code and to avoid any adverse tax results thereunder to a holder of an award. Section 409A of the Code, or Section 409A, provides
certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution
elections and permissible distribution events. If an award is subject to and fails to satisfy the requirements of Section 409A,
the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which
may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A
fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% tax on compensation recognized as
ordinary income, as well as interest on such deferred compensation.
Special Rules for Executive Officers Subject
to Section 16 of the Exchange Act.
Special rules may apply to individuals subject
to Section 16 of the Exchange Act. In particular, unless a special election is made pursuant to 83(b) of the Internal Revenue Code,
shares received through the exercise or settlement of an award may be treated as restricted as to transferability and subject to
a substantial risk of forfeiture for a period of up to six months after the date of exercise. Accordingly, the amount of any ordinary
income recognized, and the amount of our income tax deduction, will be determined as of the end of that period.
Forfeiture of Awards
The Committee may specify in an award agreement
that the participant’s rights, payments and benefits with respect to an award shall be subject to reduction, cancellation,
forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions of an award. Such
events may include, without limitation, breach of non-competition, non-solicitation, confidentiality, or other restrictive covenants
that are contained in the award agreement or otherwise applicable to the participant, a termination of the participant’s
continuous service for cause, or other conduct by the participant that is detrimental to the business or reputation of the Company.
PROPOSAL NO. 3
RATIFICATION OF THE APPOINTMENT OF TANNER
LLC
AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR 2020
The Audit Committee has selected and appointed
the firm of Tanner LLC as the independent registered public accounting firm to examine our financial statements for the year ended
December 31, 2020. Tanner LLC audited our 2019 and 2018 annual financial statements. We do not expect representatives of Tanner
LLC will attend the annual meeting.
Ratification of the selection of Tanner LLC
is not required by our Bylaws or otherwise. The Board is submitting the selection to our stockholders for ratification as a matter
of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select
another registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select
a different registered public accounting firm at any time after the annual meeting if it determines such a change would be in the
interests of SINTX and its stockholders.
Accountant Fees and Services
The aggregate fees and expenses incurred from
our principal accounting firm, Tanner LLC, for fiscal years ended December 31, 2019 and 2018, were as follows (in thousands):
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Year Ended
December 31, 2019
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Year Ended
December 31, 2018
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Audit fees
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$
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259,929
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$
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251,558
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Audit related fees
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64,971
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124,974
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Tax fees
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16,750
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17,482
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All other fees
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-
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-
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Total Fees
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$
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341,650
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$
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394,014
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Each of the permitted non-audit services has
been pre-approved by the Audit Committee or the Audit Committee’s Chairman pursuant to delegated authority by the Audit Committee,
other than de minimus non-audit services for which the pre-approval requirements are waived in accordance with the rules
and regulations of the Securities and Exchange Commission.
Audit Fees
Consist of fees billed for professional services
rendered for the audit of our financial statements and review of interim consolidated financial statements included in quarterly
reports and services that are normally provided by the principal accountants in connection with statutory and regulatory filings
or engagements.
Audit Related Fees
Consist of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are
not reported under “Audit Fees”.
Tax Fees
Consist of fees billed for professional services
for tax compliance, tax advice and tax planning. These services include preparation of federal and state income tax returns.
All Other Fees
Consist of fees for product and services other
than the services reported above.
Policy for Approval of Audit and Permitted
Non-Audit Services
The Audit Committee charter provides that the
Audit Committee will pre-approve audit services and non-audit services to be provided by our independent auditors before the accountant
is engaged to render these services. The Audit Committee may consult with management in the decision-making process, but may not
delegate this authority to management. The Audit Committee may delegate its authority to pre-approve services to one or more committee
members, provided that the designees present the pre-approvals to the full committee at the next committee meeting.
The affirmative vote of the holders of
a majority of the common shares voted on the proposal and represented at the annual meeting in person or by proxy is required to
ratify the selection of Tanner LLC. The Board of Directors recommends that you vote FOR this proposal.
PROPOSAL NO. 4
ADVISORY VOTE ON EXECUTIVE COMPENSATION (“SAY-ON-PAY”)
Background
The Dodd-Frank Wall Street Reform and Consumer
Protection Act (“Dodd-Frank Act”) requires that stockholders have the opportunity to cast an advisory (non-binding)
vote on executive compensation (a so-called “say-on-pay” vote), as well as an advisory vote with respect to whether
future “say-on-pay” votes will be held every one, two or three years (a so-called “say-on-frequency” vote).
Our executive compensation programs are designed
to attract, motivate and retain our named executive officers (“NEOs”), who are critical to our success. Under these
programs, our NEOs are rewarded for the achievement of both specific financial and strategic goals, which are expected to result
in increased stockholder value. Please read the tables and narrative disclosure that follow for additional details about our executive
compensation programs, including information about the year ended December 31, 2019 compensation of our NEOs.
The Compensation Committee regularly reviews
the compensation programs for our NEOs to ensure that they achieve the desired goals of aligning our executive compensation structure
with our stockholders’ interests and with current market practices. This includes establishing corporate target goals and
objectives based on our strategic and operating plans. We closely monitor the compensation programs and pay levels of executives
at other similarly situated companies with less than 50 employees, so that we may ensure that our compensation programs are within
the norm of market practices. This enables us to retain our executive officers in a competitive market for executive talent.
We believe that our executive compensation
programs have been effective at motivating the achievement of positive results, appropriately aligning pay and performance, and
enabling us to attract and retain talented executives within our industry.
Recommendation
We request stockholder approval of our compensation
of our NEOs for the year ended December 31, 2019 as disclosed in this Proxy Statement pursuant to the SEC’s compensation
disclosure rules (which disclosure includes the compensation tables, and the narrative disclosures that accompany the compensation
tables within the Executive Compensation section of this Proxy Statement). This vote is not intended to address any specific item
of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy
Statement.
Accordingly, we ask that you vote “FOR”
the following resolution at our Annual Meeting:
“RESOLVED, that the stockholders of SINTX
Technologies, (the ” Company “) approve, on an advisory basis, the compensation of the named executive officers, as
disclosed in the Company’s Proxy Statement for the Annual Meeting of Stockholders pursuant to the compensation disclosure
rules of the Securities and Exchange Commission, including the Summary Compensation Table and the other related tables and disclosure
within the Executive Compensation section of this Proxy Statement.”
The vote solicited for Proposal No. 4 is advisory,
and therefore is not binding on the Company, our Board of Directors or our Compensation Committee, nor will its outcome require
the Company, our Board of Directors or our Compensation Committee to take any action. Moreover, the outcome of the vote will not
be construed as overruling any decision by the Company, the Board of Directors or the Compensation Committee. However, our Compensation
Committee, which is responsible for designing and administering our executive compensation programs, values the opinions expressed
by our stockholders in their vote on this Proposal and will consider the outcome of this vote when making future compensation decisions
for our NEOs.
We currently intend to include a stockholder
advisory resolution on our executive compensation program at our annual meeting of stockholders each year.
PROPOSAL NO. 5:
REINCORPORATION OF THE COMPANY TO THE STATE
OF NEVADA FROM THE STATE OF DELAWARE
The Board has approved, subject to stockholder
approval, and is asking stockholders to approve the reincorporation of the Company from the State of Delaware to the State of Nevada.
To accomplish the reincorporation the board has unanimously adopted an Agreement and Plan of Merger pursuant to which the Company
(sometimes referred to as “SINTX-Delaware”) will merge with and into its newly formed, wholly owned subsidiary, SINTX
Technologies, Inc., a Nevada corporation (“SINTX-Nevada”), resulting in reincorporation from the State of Delaware
to the State of Nevada (the “Reincorporation”). The Agreement and Plan of Merger is attached hereto as Appendix B and
should be read in its entirety.
The Reincorporation will become effective upon
the filing of the requisite merger documents in Nevada and Delaware, which filings are expected to occur as promptly as practicable
after the requisite stockholder approval is obtained. A copy of the proposed Articles of Incorporation and bylaws for SINTX-Nevada
are attached hereto as Appendix C and Appendix D, respectively.
Purpose of the Reincorporation
The primary purpose of the Reincorporation
is to reduce the Company’s future tax burden, in particular franchise taxes. In Delaware, the amount of such tax payments
is determined based, in part, on the total number of shares of stock the Company is authorized to issue and the number of shares
of stock outstanding. The Company’s current capital structure requires it to maintain a large number of authorized but unissued
shares of Common Stock, which results in higher franchise taxes in Delaware. For example, we estimate that we will be required
to pay approximately $200,000 annually in Delaware franchise taxes. This amount is prohibitive and not in the interests of the
Company’s stockholders. Nevada does not have a franchise tax and the annual fees are not material. Thus, effecting the Reincorporation
should result in significant cash savings for the Company. Therefore, the Board believes that it is in the best interest for the
Company to reincorporate in the State of Nevada from our present domicile of Delaware. See “Significant Differences between
the Corporate Laws of Delaware and Nevada.”
Effects of the Reincorporation
Implementing the Reincorporation will have,
among other things, the following effects:
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each share of the Company’s Common Stock issued and outstanding immediately prior to the effective time of the Reincorporation will be converted into the right to receive one share of common stock of SINTX-Nevada, and each outstanding share of common stock of SINTX-Nevada held by the Company shall be retired and canceled and shall resume the status of authorized and unissued common stock;
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each share of the Company’s preferred stock issued and outstanding immediately prior to the effective time of the Reincorporation will be converted into the right to receive one share of the corresponding series of preferred stock of SINTX-Nevada;
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each outstanding option to purchase common stock will automatically be assumed by SINTX-Nevada and will represent an option or right to acquire shares of common stock of SINTX-Nevada on the basis of one share of the Company’s common stock for each one share of common stock of SINTX-Nevada and the exercise price will remain unchanged, in each case subject to customary adjustments. Each outstanding warrant to purchase common stock will similarly automatically be assumed and converted into a warrant to purchase shares of common stock of SINTX-Nevada;
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each certificate representing issued and outstanding shares of Company common stock will represent the same number of shares of common stock of SINTX-Nevada;
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the persons presently serving as our executive officers and directors will continue to serve in such respective capacity following the effective time of the Reincorporation;
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Articles of Incorporation will be adopted under the laws of the State of Nevada in the form attached hereto as Annex C; and
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new Bylaws will be adopted under the laws of the State of Nevada in the form attached hereto as Annex D.
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Our common stock is currently quoted on the
NASDAQ Capital Market under the trading symbol “SINT.” We believe that following the effective date of the Reincorporation,
our common stock will continue to be quoted on the NASDAQ Capital Market. However, there is no assurance that we will continue
to meet the continued listing requirements under the NASDAQ Capital Market standards.
The Reincorporation will not result in any
change in the corporate name, business, management, fiscal year, accounting, location of the principal executive offices, assets
or liabilities of our Company.
Stockholders should note that approval of the
Reincorporation described in this Proposal 5 would also constitute approval of the assumption by SINTX-Nevada of the Company’s
options and other rights to purchase capital stock. Stockholder approval would also constitute approval of the assumption by SINTX-Nevada
of the Company’s 2020 Equity Incentive Plan. The Company’s other employee benefit arrangements would also be continued
by SINTX-Nevada upon the terms and subject to the conditions in effect prior to the effective time of the Reincorporation.
The Board has the authority to abandon the
Reincorporation even after approval by the stockholders.
Comparison of Stockholders’ Rights
Before and After the Reincorporation
Because of differences between the Nevada business
corporation law (the “NRS”) and the Delaware General Corporation Law (the “DGCL”), as well as differences
between the Company’s governing documents before and after the Reincorporation, the Reincorporation will effect certain changes
in the rights of the Company’s stockholders. Summarized below are the most significant provisions of the NRS and DGCL, along
with the differences between the rights of the stockholders of the Company before and after the Reincorporation that will result
from the differences among the NRS and the DGCL and the differences between SINTX-Nevada’s articles of incorporation and
bylaws and SINTX-Delaware’s certificate of incorporation and bylaws. The summary below is not an exhaustive list of all differences
or a complete description of the differences described, and is qualified in its entirety by reference to the NRS, the DGCL, SINTX-Nevada’s
articles of incorporation, SINTX-Nevada’s bylaws and SINTX-Delaware’s certificate of incorporation and SINTX-Delaware’s
bylaws.
Provision
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Delaware
Law and
SINTX-Delaware’s
Certificate
of
Incorporation
and
Bylaws
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Nevada
Law and
SINTX-Nevada’s
Articles
of Incorporation and
Bylaws
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Notes
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Amendment
of Charter Documents
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Delaware
law requires a vote of a corporation’s board of directors followed by the affirmative vote of the majority of shares
present in person or represented by proxy and entitled to vote to approve any amendment to the certificate of incorporation,
unless a greater percentage vote is required by the certificate of incorporation. Where a separate vote by class or series
is required, the affirmative vote of a majority of the shares of such class or series is required unless the certificate of
incorporation requires a greater percentage vote. Further, Delaware law states that if an amendment would increase or decrease
the aggregate number of authorized shares of a class, increase or decrease the par value of shares of a class or alter or
change the powers, preferences or special rights of a particular class or series of stock so as to affect them adversely,
the class or series so affected shall be given the power to vote as a class notwithstanding the absence of any specifically
enumerated power in the certificate of incorporation. Delaware law also states that the power to adopt, amend or repeal the
bylaws of a corporation shall be vested in the stockholders entitled to vote, provided that the corporation in its certificate
of incorporation may confer such power on the board of directors in addition to the stockholders.
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Nevada
law requires a vote of the corporation’s board of directors followed by the affirmative vote of the majority of shares
present or in person and entitled to vote to approve any amendment to the articles of incorporation. If any proposed amendment
would adversely alter or change any preference or any relative or other right given to any class or series of outstanding
shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders
of shares representing a majority of the voting power of each class or series adversely affected by the amendment. Nevada
law provides that, unless otherwise prohibited by any bylaw adopted by the stockholders, the directors may adopt, amend or
repeal any bylaw, including any bylaw adopted by the stockholders. The articles of incorporation may grant the authority to
adopt, amend or repeal bylaws exclusively to the directors.
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Number
of Directors
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Delaware
law provides that a corporation must have at least one or more directors to be fixed as provided in the bylaws of the corporation,
unless the certificate of incorporation fixes the number of directors, in which case a change in the number of directors shall
be made only by amendment of the certificate of incorporation.
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Nevada
law provides that a corporation must have at least one director, and may provide in its articles of incorporation or in its
bylaws for a fixed number of directors or a variable number of directors, and for the manner in which the number of directors
may be increased or decreased.
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Nevada
and Delaware law are substantially similar in respect to setting the number of directors of the Company.
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The
Delaware Bylaws provide that subject to the rights of the holders of any series of preferred stock of the Company then outstanding
to elect additional directors under specified circumstances, the number of directors shall be fixed from time to time exclusively
by the Board of Directors pursuant to a resolution adopted by a majority of the board.
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The
Nevada Bylaws provide that subject to the rights of the holders of any series of preferred stock of the Company then outstanding
to elect additional directors under specified circumstances, the number of directors shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the board.
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The
Company’s existing Bylaws and the Delaware Bylaws are the same in this regard.
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Classified
Board of Directors
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Under
Delaware law, the certificate of incorporation or the bylaws may provide for the classification of directors into as many
as three classes with staggered terms of office. The certificate of incorporation may provide the holders of any class or
series of stock the right to elect 1 or more directors. In addition, the certificate of incorporation may confer upon 1 or
more directors voting powers greater than or less than those of other directors.
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Under
Nevada law, the articles of incorporation or the bylaws may provide for the classification of directors as to the duration
of their respective terms of office or as to their election by one or more authorized classes or series of shares. At least
one-fourth of the total number of the directors must be elected annually.
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Nevada
and Delaware law are substantially similar in respect to classification of the Board.
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We
have a classified Board currently consisting of five members, all but one of whom are non-employee directors, divided into
three classes (Class I, Class II and Class II). Directors in each class are elected to serve for three-year staggered terms
that expire in successive years.
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The
Nevada company will also have a classified Board consisting of five members, all but one of whom are non-employee directors,
divided into three classes (Class I, Class II and Class II). Directors in each class are elected to serve for three-year staggered
terms that expire in successive years.
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Term
of Board of Directors
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The
default rule in Delaware is that each director shall hold office until the next annual meeting of stockholders (and until
such director’s successor is elected and qualified) or until such director’s earlier resignation or removal.
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Nevada
law provides that, unless otherwise provided in the articles of incorporation or bylaws, each director holds office after
the expiration of his or her term until a successor is elected and qualified at an annual meeting of stockholders, or until
the director resigns or is removed.
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Nevada
and Delaware law are substantially similar in respect to the term of directors.
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We
have a classified Board currently consisting of five members, all but one of whom are non-employee directors, divided into
three classes (Class I, Class II and Class II). Directors in each class are elected to serve for three-year staggered terms
that expire in successive years.
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The
Nevada company will also have a classified Board consisting of five members, all but one of whom are non-employee directors,
divided into three classes (Class I, Class II and Class II). Directors in each class are elected to serve for three-year staggered
terms that expire in successive years.
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The
Delaware Bylaws provide that each director shall hold office until such director’s successor is elected and qualified.
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The
Company’s existing Bylaws provide that each director shall hold office until the next annual shareholder meeting or
until his or her successor is elected and qualified.
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The
SINTX-Nevada Bylaws and the Company’s existing Bylaws are identical in this regard.
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Removal
of Directors
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Delaware
law provides that a director may be removed with or without cause by the holders of a majority in voting power of the issued
and outstanding stock entitled to vote, except that (1) members of a classified board of directors may be removed only for
cause, unless the certificate of incorporation provides otherwise, and (2) in the case of a corporation having cumulative
voting, directors may not be removed in certain situations without satisfying certain stockholder approval requirements.
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Nevada
law provides that the any director may be removed, with or without cause, from office by the vote of stockholders representing
not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote. With respect to corporations
that elect directors with cumulative voting, any director or directors who constitute fewer than all of the directors may
not be removed except upon vote of the stockholders owning sufficient shares to prevent each director’s election at
the time of removal.
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Nevada
and Delaware law are substantially similar in respect to the removal of directors.
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The
Delaware Bylaws provide any director, or the entire Board of Directors, may be removed from office at any time only for cause
and only by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all of the then outstanding
shares of the Corporation then entitled to vote at an election of directors, voting together as a single class.
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The
Company’s existing Bylaws provide any director, or the entire Board of Directors, may be removed from office at any
time only for cause and only by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of
all of the then outstanding shares of the Corporation then entitled to vote at an election of directors, voting together as
a single class.
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The
SINTX-Nevada Bylaws and the Company’s existing Bylaws are identical in this regard.
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Filling
Vacancies on the Board of Directors
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Delaware
law provides that, unless otherwise provided in the certificate of incorporation or bylaws of a corporation, vacancies may
be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Further,
if, at the time of filling any vacancy, the directors then in office shall constitute less than a majority of the whole board,
the Delaware Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the total
number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in
office.
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Nevada
law provides that all vacancies, including those caused by an increase in the number of directors, may be filled by a majority
of the remaining directors, though less than a quorum, unless it is otherwise provided in the articles of incorporation. Unless
otherwise provided in the articles of incorporation, pursuant to a resignation by a director, the board may fill the vacancy
or vacancies with each director so appointed to hold office during the remainder of the term of office of the resigning director
or directors.
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Delaware
law provides greater protection to the Company’s stockholders by permitting stockholders representing at least 10% of
the issued and outstanding shares to apply to the Delaware Court of Chancery to have an election of directors in the situation
where the directors in office constitute less than a majority of the whole Board.
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The
Delaware Bylaws provide that any vacancy on the board of directors may be filled be filled only by a resolution of a majority
of the directors then in office even though less than a quorum, or by a sole remaining director and not by the stockholders,
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The
Company’s existing Bylaws provide that vacancies on the Board may be filled only by a resolution of a majority of the
directors then in office even though less than a quorum, or by a sole remaining director and not by the stockholders,
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The
SINTX-Nevada Bylaws provide the same appointment rights as the Company’s existing Bylaws.
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Cumulative
Voting
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Delaware
law permits corporations to provide for cumulative voting in the corporation’s certificate of incorporation.
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Nevada
law permits cumulative voting only if the articles of incorporation provide for cumulative voting and certain procedures regarding
notice are followed.
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Nevada
and Delaware law are substantially similar in respect to cumulative voting for directors.
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The
Delaware Certificate of Incorporation does not provide for cumulative voting.
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The
Company’s existing Articles of Incorporation do not provide for cumulative voting.
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The
SINTX-Delaware Certificate of Incorporation and SINTX-Nevada’s Articles of Incorporation are identical in respect to
not allowing cumulative voting.
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Board
Action by Written Consent
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Under
Delaware law, unless otherwise stated in the articles of incorporation or bylaws, any action required or permitted to be taken
at any meeting of the board of directors or committee of the board of directors may be taken without a meeting if all members
of the board consent thereto in writing, or by electronic transmission and the writing or writings or electronic transmission
or transmissions are filed with the minutes of proceedings of the board, or committee.
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Under
Nevada law, unless otherwise stated in the articles of incorporation or bylaws, any action required or permitted to be taken
at a meeting of the board of directors or committee of the board of directors may be taken without a meeting if, before or
after the action, a written consent thereto is signed by all the members of the board except any interested directors.
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Nevada
and Delaware law are substantially similar in respect to the action by written consent.
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The
Delaware Certificate of Incorporation and the Delaware Bylaws do not change this statutory provision.
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The
Company’s existing Articles of Incorporation and Bylaws do not change this statutory provision.
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Interested
Party Transactions
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Delaware
law provides that no contract or transaction between a corporation and one or more of its directors or officers, or between
a corporation and any other entity of which one or more of its directors or officers are directors or officers, or in which
one or more of its directors or officers have a financial interest, is void or voidable if (a) the material facts as to the
director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or known
to the board of directors or a committee thereof, which authorizes the contract or transaction in good faith by the affirmative
vote of a majority of the disinterested directors, even though the disinterested directors are less than a quorum, (b) the
material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction
are disclosed or known to the stockholders entitled to vote thereon and the contract or transaction is specifically approved
in good faith by the stockholders or (c) the contract or transaction is fair to the corporation as of the time it is authorized,
approved or ratified by the board of directors, a committee thereof, or the stockholders.
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Nevada
law provides that no contract or transaction between a corporation and one or more of its directors or officers, or between
a corporation and any other entity of which one or more of its directors or officers are directors or officers, or in which
one or more of its directors or officers have a financial interest, is void or voidable if (a) the director’s or officer’s
interest in the contract or transaction is known to the board, committee or stockholders and the transaction is approved or
ratified by the board, committee or stockholders in good faith by a vote sufficient for the purpose (without counting the
vote of the interested director or officer), (b) the fact of the common interest is not known to the director or officer at
the time the transaction is brought before the board, or (c) the contract or transaction is fair to the corporation at the
time it is authorized or approved.
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Nevada
and Delaware law are substantially similar, with Delaware law providing additional provisions for the approval of related
party transactions by stockholders.
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The
Delaware Certificate of Incorporation and Delaware Bylaws will not change this statutory rule.
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The
Company’s existing Articles of Incorporation and Bylaws do not change this statutory rule.
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Stockholder
Voting- Quorum
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Delaware
law provides that a majority of shares entitled to vote, present in person or by proxy, constitutes a quorum at a stockholder
meeting.
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Nevada
law provides that a majority of the voting power, present in person or by proxy at a meeting of stockholders (regardless of
whether the proxy has authority to vote on all matters), constitutes a quorum for the transaction of business.
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Nevada
and Delaware law are substantially similar in respect to quorum requirements.
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The
Delaware Bylaws provide that a majority of the voting power, present in person or by proxy at a meeting of stockholders constitutes
a quorum for the transaction of business.
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The
Company’s existing Bylaws provide that a majority of the voting power, present in person or by proxy at a meeting of
stockholders constitutes a quorum for the transaction of business.
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The
SINTX-Nevada Bylaws and the Company’s existing Bylaws are identical in respect to quorum requirements.
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Stockholder
Voting-Action
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In
all matters other than the election of directors, the affirmative vote of the majority shares present in person or by proxy
at the meeting and entitled to vote on the subject matter constitutes the act of the stockholders. Where are separate vote
by a class or series or classes or series is required, a majority of the outstanding shares of such class or series, present
in person or by proxy, generally constitutes a quorum and the affirmative vote of the majority of shares of such class or
series present in person or by proxy constitutes the act of such class or series.
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Action
by the stockholders on a matter other than the election of directors is approved if the number of votes cast in favor of the
action exceeds the number of votes cast in opposition to the action.
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Nevada
and Delaware law are substantially similar in respect to stockholder voting.
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The
Delaware Bylaws provide that action by the stockholders on a matter is approved by a majority of the stock present or represented
and voting on the matter, except when a different vote is required by law, the articles of incorporation or the bylaws (such
as the election of directors which is determined by a plurality of the votes cast).
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The
Company’s existing Bylaws provide that action by the stockholders on a matter is approved by a majority of the stock
present or represented and voting on the matter, except when a different vote is required by law, the articles of incorporation
or the bylaws (such as the election of directors which is determined by a plurality of the votes cast).
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The
SINTX-Nevada and the Company’s existing Bylaws are substantially similar.
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Director
Elections
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Delaware
law provides that, unless otherwise stated in the certificate or bylaws, the election of directors shall be by a plurality
of the vote.
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Nevada
law provides that, unless otherwise stated in the articles or bylaws, the election of directors shall be by a plurality of
the vote.
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Nevada
and Delaware law are substantially similar in respect to the election of directors.
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The
Delaware Bylaws provide that the election of directors shall be by a plurality of the vote.
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The
Company’s existing Bylaws provide that the election of directors shall be by a plurality of the vote
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The
SINTX-Nevada and the Company’s existing Bylaws are substantially similar.
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Stockholder
Action by Written Consent
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Delaware
law provides that, unless the certificate of incorporation provides otherwise, any action required to be taken at any annual
or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if the holders
of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted consent to the action in writing. In addition,
the corporation is required to give prompt notice of the taking of the corporate action without a meeting by less than unanimous
written consent to those stockholders who did not consent in writing.
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Nevada
law provides that, unless the articles of incorporation or the bylaws provide otherwise, any action required or permitted
to be taken at a meeting of the stockholders may be taken without a meeting if the holders of the outstanding stock having
at least the minimum number of votes that would be necessary to authorize or take such action at a meeting consent to the
action in writing.
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Nevada
and Delaware law are substantially similar in relation to action by written consent of the stockholders.
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The
Delaware Bylaws provide that any action required to be taken at any annual or special meeting of stockholders may be effected
only at a duly called annual or special meeting of the stockholders of the Corporation and may not be effected by written
consent.
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The
Company’s Nevada Bylaws provide that any action required to be taken at any annual or special meeting of stockholders
may be effected only at a duly called annual or special meeting of the stockholders of the Corporation and may not be effected
by written consent.
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The
SINTX-Nevada and the Company’s existing Bylaws are substantially similar.
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Stockholder
Vote for Mergers and Other Corporate Reorganizations
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Under
Delaware law, a majority of outstanding shares entitled to vote, as well as approval by the board of directors is required
for a merger or a sale of substantially all of the assets of the corporation. Generally, Delaware law does not require a stockholder
vote of the surviving corporation in a merger (unless the corporation provides otherwise in its certificate of incorporation)
if: (a) the plan of merger does not amend the existing certificate of incorporation; (b) each share of stock of the surviving
corporation outstanding immediately before the effective date of the merger is an identical outstanding share after the merger;
and (c) either no shares of common stock of the surviving corporation and no shares, securities or obligations convertible
into such stock are to be issued or delivered under the plan of merger, or the authorized unissued shares or shares of common
stock of the surviving corporation to be issued or delivered under the plan of merger plus those initially issuable upon conversion
of any other shares, securities or obligations to be issued or delivered under such plan do not exceed 20% of the shares of
common stock of such constituent corporation outstanding immediately prior to the effective date of the merger.
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Under
Nevada law, a majority of outstanding shares entitled to vote, as well as approval by the board of directors is required for
a merger or a sale of substantially all of the assets of the corporation. Generally, Nevada law does not require a stockholder
vote of the surviving corporation in a merger if: (a) the plan of merger does not amend the existing articles of incorporation;
(b) each share of stock of the surviving corporation outstanding immediately before the effective date of the merger is an
identical outstanding share after the merger; (c) the number of voting shares outstanding immediately after the merger, plus
the number of voting shares issued as a result of the merger, either by the conversion of securities issued pursuant to the
merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 20% the total number
of voting shares of the surviving domestic corporation outstanding immediately before the merger; and (d) the number of participating
shares outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger,
either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant
to the merger, will not exceed by more than 20% the total number of participating shares outstanding immediately before the
merger.
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Nevada
and Delaware law are substantially similar in relation to stockholder approval of mergers and other corporate reorganizations.
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The
Delaware Certificate of Incorporation and Delaware Bylaws do not change this statutory rule.
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The
Company’s existing Articles of Incorporation and Bylaws do not change this statutory rule.
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Special
Meetings of Stockholders
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Under
Delaware law, a special meeting of stockholders may be called by the board of directors or by such persons as may be authorized
by the certificate of incorporation or by the bylaws.
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Under
Nevada law, unless otherwise provided in the articles of incorporation or bylaws, the entire board of directors, any two directors
or the president may call annual and special meetings of the stockholders and directors.
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Nevada
law provides for explicit authority to call special meetings to any two directors and the president, whereas Delaware law
leaves discretion to the certificate of incorporation or the bylaws.
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The
Delaware Bylaws provide that a special meeting may be called at any time by the chairperson of the Board, the CEO, or by a
majority of the Board.
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The
Company’s existing Bylaws provide that special meetings of stockholders may be called by the chairman of the Board,
the CEO, or the majority of the board.
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The
SINTX-Nevada Bylaws and the Company’s existing Bylaws are substantially the same.
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Failure
to Hold an Annual Meeting of Stockholders
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Delaware
law provides that if an annual meeting for election of directors is not held on the date designated or an action by written
consent to elect directors in lieu of an annual meeting has not been taken within 30 days after the date designated for the
annual meeting, or if no date has been designated, for a period of 13 months after the latest to occur of the organization
of the corporation, its last annual meeting or the last action by written consent to elect directors in lieu of an annual
meeting, the Court of Chancery may summarily order a meeting to be held upon the application of any stockholder or director.
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Nevada
law provides that if a corporation fails to elect directors within 18 months after the last election of directors, a Nevada
district court will have jurisdiction in equity and may order an election upon petition of one or more stockholders holding
at least 15% of the voting power.
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Delaware
law provides for a shorter interval than Nevada law (13 months vs. 18 months) before a shareholder can apply to a court to
order meeting for the election of directors. Nevada law requires that application to be made by a stockholder holding at least
15% of the voting power, whereas Delaware law permits any stockholder or director to make the application.
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The
Certificate of Incorporation and Delaware Bylaws do not change this statutory rule.
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The
Company’s existing Articles of Incorporation and Bylaws do not change this statutory rule.
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Limitation
on Director Liability
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Under
Delaware law, if a corporation’s certificate of incorporation so provides, the personal liability of a director for
breach of fiduciary duty as a director may be eliminated or limited. A corporation’s certificate of incorporation, however,
may not limit or eliminate a director’s personal liability (a) for any breach of the director’s duty of loyalty
to the corporation or its stockholders, (b) for acts or omissions not in good faith or involving intentional misconduct or
a knowing violation of law, (c) for the payment of unlawful dividends, stock repurchases or redemptions, or (d) for any transaction
in which the director received an improper personal benefit.
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Under
Nevada law, unless the articles of incorporation or an amendment thereto (filed on or after October 1, 2003) provides for
greater individual liability, a director or officer is not individually liable to the corporation or its stockholders or creditors
for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven
that: (a) the director’s or officer’s act or failure to act constituted a breach of his or her fiduciary duties
as a director or officer; and (b) the breach of those duties involved intentional misconduct, fraud or a knowing violation
of law.
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Delaware
law is more extensive in the enumeration of actions under which the Company may not eliminate a director’s personal
liability.
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The
Delaware Certificate of Incorporation do not change this statutory provision.
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The
Company’s existing Articles of Incorporation do not change this statutory provision.
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Indemnification
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Under
Delaware law, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or
proceeding if: the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe
the person’s conduct was unlawful. With respect to actions by or in the right of the corporation, no indemnification
shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit is brought
shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. A director
or officer who is successful, on the merits or otherwise, in defense of any proceeding subject to the Delaware corporate statutes’
indemnification provisions shall be indemnified against expenses (including attorneys’ fees) actually and reasonably
incurred by such person in connection therewith.
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Under
Nevada law, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action
by or in the right of the corporation, by reason of the fact that the person is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or
proceeding if the person: (a) is not liable pursuant to NRS 78.138; or (b) acted in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the conduct was unlawful. However, indemnification may not be made
for any claim, issue or matter as to which such a person has been adjudged to be liable to the corporation or for amounts
paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought
determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled
to indemnity for such expenses as the court deems proper. To the extent that such person has been successful on the merits
or otherwise in defense of any proceeding subject to the Nevada indemnification laws, the corporation shall indemnify him
or her against expenses, including attorneys’ fees, actually and reasonably incurred by him or her in connection with
the defense.
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The
Delaware Certificate of Incorporation and the Delaware Bylaws do not change this statutory provision.
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The
Company’s existing Articles of Incorporation and Bylaws do not change this statutory provision.
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Advancement
of Expenses
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Delaware
law provides that expenses incurred by an officer or director of the corporation in defending any civil, criminal, administrative
or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it is
ultimately determined that such person is not entitled to be indemnified by the corporation as authorized under the indemnification
laws of Delaware. Such expenses may be so paid upon such terms and conditions as the corporation deems appropriate. Under
Delaware law, unless otherwise provided in its certificate of incorporation or bylaws, a corporation has the discretion whether
or not to advance expenses.
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Nevada
law provides that the articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses
of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation
as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction
that the director or officer is not entitled to be indemnified by the corporation.
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The
Delaware Bylaws provide for advanced payment of expenses in accordance with the statutory provision.
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The
Company’s existing Articles of Incorporation and Bylaws do not alter this statutory provision.
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Declaration
and Payment of Dividends
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Under
Delaware law, subject to any restriction contained in a corporation’s certificate of incorporation, the board of directors
may declare, and the corporation may pay, dividends or other distributions upon the shares of its capital stock either (a)
out of “surplus” or (b) in the event that there is no surplus, out of the net profits for the fiscal year in which
the dividend is declared and/or the preceding fiscal year, unless net assets (total assets in excess of total liabilities)
are less than the capital of all outstanding preferred stock. “Surplus” is defined as the excess of the net assets
of the corporation over the amount determined to be the capital of the corporation by the board of directors (which amount
cannot be less than the aggregate par value of all issued shares of capital stock).
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Under
Nevada law, except as otherwise provided in the articles of incorporation, a board of directors may authorize and the corporation
may make distributions to its stockholders, including distributions on shares that are partially paid. However, no distribution
may be made if, after giving effect to such distribution: (a) the corporation would not be able to pay its debts as they become
due in the usual course of business; or (b) except as otherwise specifically allowed by the articles of incorporation, the
corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed,
if the corporation were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of
stockholders whose preferential rights are superior to those receiving the distribution.
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Delaware
law is more restrictive than Nevada law with respect to when dividends may be declared and paid.
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The
Delaware Certificate of Incorporation does not change this statutory provision.
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The
Company’s existing Articles of Incorporation do not change this statutory provision.
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Business
Combinations
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Delaware
law prohibits, in certain circumstances, a “business combination” between the corporation and an “interested
stockholder” within three years of the stockholder becoming an “interested stockholder.” Generally, an “interested
stockholder” is a holder who, directly or indirectly, controls 15% or more of the outstanding voting stock or is an
affiliate of the corporation and was the owner of 15% or more of the outstanding voting stock at any time within the three-year
period prior to the date upon which the status of an “interested stockholder” is being determined. A “business
combination” includes a merger or consolidation, a sale or other disposition of assets having an aggregate market value
equal to 10% or more of the consolidated assets of the corporation or the aggregate market value of the outstanding stock
of the corporation and certain transactions that would increase the interested stockholder’s proportionate share ownership
in the corporation. This provision does not apply where, among other things, (i) the transaction which resulted in the individual
becoming an interested stockholder is approved by the corporation’s board of directors prior to the date the interested
stockholder acquired such 15% interest, (ii) upon consummation of the transaction which resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85% of the outstanding voting stock of the corporation
at the time the transaction commenced, or (iii) at or after the date the person becomes an interested stockholder, the business
combination is approved by a majority of the board of directors of the corporation and an affirmative vote of at least 66
2/3% of the outstanding voting stock at an annual or special meeting and not by written consent, excluding stock not owned
by the interested stockholder. This provision also does not apply if a stockholder acquires a 15% interest inadvertently and
divests itself of such ownership and would not have been a 15% stockholder in the preceding three years but for the inadvertent
acquisition of ownership.
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Nevada
law prohibits certain business combinations between a Nevada corporation and an interested stockholder for three years after
such person becomes an interested stockholder. Generally, an interested stockholder is a holder who is the beneficial owner
of 10% or more of the voting power of a corporation’s outstanding stock and at any time within three years immediately
before the date in question was the beneficial owner of 10% or more of the then outstanding stock of the corporation. After
the three year period, business combinations remain prohibited unless they are (a) approved by the board of directors prior
to the date that the person first became an interested stockholder or a majority of the outstanding voting power not beneficially
owned by the interested party, or (b) the interested stockholder satisfies certain fair-value requirements. An interested
stockholder is (i) a person that beneficially owns, directly or indirectly, 10% or more of the voting power of the outstanding
voting shares of a corporation, or (ii) an affiliate or associate of the corporation who, at any time within the past three
years, was an interested stockholder of the corporation.
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The
Delaware Certificate of Incorporation has not opted out of this statutory provision
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The
Company’s existing Articles of Incorporation has not opted out of this statutory provision.
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United
States Federal Income Tax Consequences
The
following discussion of the material U.S. federal income tax consequences to our stockholders of the Reincorporation is based
upon the Internal Revenue Code of 1986 (the “Code”), Treasury regulations promulgated thereunder, Internal Revenue
Service (“IRS”) rulings and pronouncements, and judicial decisions, all as in effect as of the date of this proxy
statement, and all of which are subject to change, possibly with retroactive effect. Any such change could alter the tax consequences
described herein. We have not sought and will not seek an opinion of counsel or a ruling from the IRS regarding the federal income
tax consequences of the Reincorporation.
This
discussion is for general information purposes only to stockholders who hold their shares as capital assets. This discussion does
not address every aspect of U.S. federal income taxation that may be relevant to a particular company stockholder in light of
the stockholder’s particular circumstances or to persons who are otherwise subject to special tax treatment, including,
without limitation: (i) a partnership, subchapter S corporation or other pass-through entity; (ii) dealers in securities; (iii)
banks or other financial institutions; (iv) insurance companies; (v) mutual funds; (vi) tax exempt organizations or pension funds;
(vii) a foreign person, foreign entity or U.S. expatriate; (viii) persons who may be subject to the alternative minimum tax provisions
of the Code; (ix) a stockholder whose functional currency is not the U.S. dollar; (x) persons who acquired their common stock
in connection with stock option or stock purchase plans or in other compensatory transactions; or (xi) persons who hold their
common stock as part of a hedging, straddle, conversion or other risk reduction transaction. This discussion does not address
the tax consequences to any holders of our options, warrants or convertible debt. The state and local tax consequences of the
Reincorporation may vary significantly as to each stockholder, depending upon the jurisdiction in which such stockholder resides.
You are urged to consult your own tax advisors to determine the particular consequences to you.
We
believe that the merger of the Company with and into SINTX Technologies, Inc. (Nevada), which will result in the Reincorporation,
will qualify as a reorganization, under section 368(a)(1)(F) of the Code. As a result, the material federal income tax consequences
of the Reincorporation, would be as follows: (i) we and SINTX Technologies, Inc. (Nevada) will not recognize any gain or loss
as a result of the Reincorporation; (ii) no gain or loss will be recognized by holders of common stock on the conversion of the
Common Stock into the common stock of SINTX Technologies, Inc. (Nevada); (iii) the aggregate adjusted tax basis of the common
stock and preferred stock of SINTX Technologies, Inc. (Nevada) received by a stockholder in connection with the Reincorporation
will be the same as the aggregate adjusted tax basis of the Common Stock or Preferred Stock converted in connection with the Reincorporation;
and (iv) the holding period, for U.S. federal income tax purposes, for the SINTX Technologies, Inc. (Nevada) common stock and
preferred stock received in connection with the Reincorporation by a stockholder will include the period during which the holder
held the converted Common Stock or Preferred Stock.
If
the Reincorporation fails to qualify for tax-free treatment, either under section 368(a)(1)(F) or any other provision of the Code,
then stockholders may recognize gain or loss for U.S. federal income tax purposes equal to the difference between the fair market
value of the shares of stock received in connection with the Reincorporation and the stockholders’ adjusted tax basis in
the shares stock converted in connection with the Reincorporation. Further, we would recognize taxable gain as if we sold all
of our assets, subject to our liabilities, at fair market value.
Reporting
Requirements. Each stockholder who qualifies as a “significant holder” that receives stock in connection
with the Reincorporation will be required to file a statement with his, her or its federal income tax return setting forth his,
her or its tax basis in the stock surrendered and the fair market value of the stock of SINTX Technologies, Inc. (Nevada), if
any, received in the Reincorporation, and to retain permanent records of these facts relating to the Reincorporation. A “significant
holder” is a company stockholder who, immediately before the merger owned at least five percent (by vote or value) of our
outstanding stock or owned our securities with an adjusted tax basis of $1,000,000 or more.
Our
stockholders are urged to consult their own tax advisors regarding the tax consequences to them of the reincorporation, including
the applicable federal, state, local and foreign tax consequences.
No
Material Accounting Implications
Effecting
the Reincorporation will not have any material accounting implications.
No
Appraisal Rights
Under
the Delaware General Corporation Law, our stockholders are not entitled to dissenter’s rights or appraisal rights with respect
to the Reincorporation described in this Proposal 4 and we will not independently provide our stockholders with any such rights.
Interest
of Certain Persons in Matters to be Acted Upon
Other
than as described in “Significant Differences between the Corporate Laws of Delaware and Nevada – Limitation on Personal
Liability of Directors and Officers,” no officer or director has any substantial interest, direct or indirect, by security
holdings or otherwise, in the Reincorporation that is not shared by all of our other stockholders.
Vote
Required
Approval
of the reincorporation from the state of Delaware to the state of Nevada requires the affirmative vote of a majority of the voting
power of the incorporation.
RECOMMENDATION
OF THE BOARD OF DIRECTORS FOR PROPOSAL NO. 5:
THE
BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE REINCORPORATION FROM THE STATE OF DELAWARE TO THE
STATE OF NEVADA.
PROPOSAL
NO. 6:
ADJOURNMENT
TO SOLICIT ADDITIONAL PROXIES
Stockholders
are being asked to grant authority to proxy holders to vote in favor of one or more adjournments of the meeting, if necessary
or appropriate, to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt one or more
of the foregoing Proposals. If this Proposal is approved, the meeting could be successively adjourned to any date. We do not intend
to call a vote on adjournments of the meeting to solicit additional proxies if the adoption of each of the foregoing Proposals
is approved at the meeting. If the meeting is adjourned to solicit additional proxies, stockholders who have already submitted
their proxies will be able to revoke them at any time prior to their use.
Vote
Required
The
approval of authority to adjourn the meeting requires the affirmative vote of stockholders who hold a majority of the shares of
Common Stock present in person or represented by proxy at the meeting and entitled to vote. Abstentions will have the effect of
a vote against this Proposal. Broker non-votes will not count as votes for or against this Proposal and will have no effect on
the outcome.
RECOMMENDATION
OF THE BOARD OF DIRECTORS FOR PROPOSAL NO. 6:
The
Board of Directors recommends that stockholders vote for adjournments of the meeting, if necessary or appropriate, to solicit
additional proxies if there are insufficient votes at the time of the meeting to adopt one or more of the foregoing Proposals.
OTHER
MATTERS
As
of the date of this proxy statement, the Board knows of no other matters that may come before the annual meeting. However, if
any matters other than those referred to herein should be presented properly for consideration and action at the annual meeting,
or any adjournment or postponement thereof, the proxies will be voted with respect thereto in accordance with the best judgment
and in the discretion of the proxy holders.
The
above notice and proxy statement are sent by order of the Board of Directors.
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B.
Sonny Bal, MD
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Chief
Executive Officer
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July
__, 2020
APPENDIX
A
2020
EQUITY INCENTIVE PLAN
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