Item 1.01 Entry into a Material Definitive Agreement.
Effective October 30,
2018, Charles Davidson, Andrew P. Hines, and Michael R. Zapata, each a director of Schmitt Industries, Inc. (the Registrant), entered into an Indemnification Agreement (the Indemnification Agreement). The Indemnification
Agreement supplements the indemnification rights provided under the Registrants Second Restated Articles of Incorporation, and Second Restated Bylaws, and Oregon law.
The Indemnification Agreement provides that the Registrant will indemnify the executive officer or director (each an Indemnitee) against all
expenses (as defined in the Indemnification Agreement) actually and reasonably incurred by the Indemnitee and arising out of his service as an executive officer or director in to the fullest extent permitted by the Registrants Second Restated
Articles of Incorporation and Second Restated Bylaws, and Oregon law or other applicable law and to any greater extent that applicable law may in the future permit. The Indemnification Agreement also provides procedures for the determination of an
Indemnitees right to receive indemnification and the advancement of expenses. To be eligible for indemnification, the Indemnitee must have acted in good faith and in a manner that Indemnitee reasonably believed to be in the best interests of
the Registrant (and, in the case of a criminal proceeding, the Indemnitee had no reasonable cause to believe that Indemnitees conduct was unlawful).
The foregoing description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to, and should be
read in conjunction with, the full text of the Indemnification Agreement (see Exhibit 10.1).
Board of Directors Policy on Confidentiality
On October 12, 2018, the Board of Directors of the Registrant adopted a Board of Directors Policy on Confidentiality (the Policy) which
provides that (i) no Director shall use Confidential Information for his or her own personal benefit or to benefit persons or entities outside the Company; and (ii) no Director shall disclose Confidential Information outside the Company,
either during or after his or her service as a Director of the Company, except with authorization of the Board of Directors or as may be otherwise required by law. Confidential Information is defined in the Policy as meaning all
information entrusted to or obtained by a Director by reason of his or her position as a Director of the Company.
The foregoing description of the Policy does not purport to be complete and is qualified in its entirety by reference to, and should be read in conjunction
with, the full text of the Policy which is filed as Exhibit 10.2.