<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
SCHMITT INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a[cad 220]6(i)(1)
and 0[cad 220]11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
SCHMITT INDUSTRIES, INC.
2765 N.W. NICOLAI STREET
PORTLAND, OREGON 97210
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 29, 2000
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TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of SCHMITT
INDUSTRIES, INC., an Oregon corporation (the "Company"), will be held on
Friday, September 29, 2000 at 3:00 p.m., local time, at 2765 N.W.
Nicolai Street, Portland, Oregon 97210 for the following purposes:
1. To elect two directors to serve three-year terms and until their
successors are elected.
2. To transact such other business as may properly come before the meeting
or any postponement or adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on August 21, 2000
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments thereof.
All shareholders are cordially invited to attend the Annual Meeting.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if he or she returned a proxy.
By Order of the Board of Directors
Wayne A. Case
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Portland, Oregon
August 31, 2000
IMPORTANT
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WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE
THE ADDED EXPENSE OF REISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE
MEETING, AND SO DESIRE, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
2
<PAGE>
SCHMITT INDUSTRIES, INC.
2765 N.W. NICOLAI STREET
PORTLAND, OREGON 97210
(503) 227-7908
PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Schmitt Industries, Inc. (the "Company") for use at the Annual Meeting of
Shareholders to be held Friday, September 29, 2000, at 3:00 p.m., local time, or
at any postponement or adjournment thereof (the "Meeting"), for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Shareholders.
The Meeting will be held at 2765 N.W. Nicolai Street, Portland, Oregon 97210
(telephone number (503) 227-7908).
These proxy solicitation materials are being mailed on or about August 31,
2000 to all shareholders entitled to vote at the Meeting.
RECORD DATE
Shareholders of record of the Company's Common Stock at the close of
business on August 21, 2000 are entitled to notice of, and to vote at, the
Meeting. On August 21, 2000, 8,255,389 shares of the Company's Common Stock were
issued and outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Meeting and voting in person.
VOTING
Holders of shares of Common Stock are entitled to one vote per share on all
matters. One-third of the shares issued and outstanding as of August 21, 2000
must be present in person or represented by proxy at the Meeting for the
transaction of business. Nominees for election of directors are elected by
plurality vote of all votes cast at the Meeting. Abstentions and broker
non-votes are counted for purposes of determining whether a quorum exists at the
Meeting. Abstentions and broker non-votes are not counted and have no effect on
the determination of whether a plurality exists with respect to a given nominee.
SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
use of the mails, proxies may be solicited personally or by telephone by
directors, officers and employees of the Company, who will not be specially
compensated for such activities. Such solicitations may be made personally, or
by mail, facsimile, telephone, telegraph or messenger. The Company will also
request persons, firms and companies holding shares in their names or in the
name of their nominees,
3
<PAGE>
which are beneficially owned by others, to send proxy materials to and obtain
proxies from such beneficial owners. The Company will reimburse such persons for
their reasonable expenses incurred in that connection.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of shareholders that are intended to be presented by such
shareholders at the Company's 2001 Annual Meeting must be received by the
Company no later than May 3, 2001 in order that such proposals may be included
in the proxy statement and form of proxy relating to that meeting.
ELECTION OF DIRECTORS
The Company's Restated Bylaws provide that the Company shall not have less
than two nor more than nine directors, with the exact number set by the Board of
Directors. The size of the Board of Directors is currently set at seven
directors.
The directors of the Company are divided into three classes. One class of
directors is elected each year and the members of such class will hold office
for a three-year term and until their successors are duly elected and qualified
or until their death, resignation or removal from office. Class 1 directors are
David M. Hudson, Ray E. Oeltjen and Dennis T. Pixton, whose terms expire at the
2001 Annual Meeting of Shareholders. Class 2 directors are Trevor Nelson and
John A. Rupp, whose terms expire at the 2002 Annual Meeting of Shareholders.
Class 3 directors are Maynard E. Brown and Wayne A. Case, whose terms expire at
the 2000 Annual Meeting of Shareholders.
At the Meeting, two Class 3 directors will be elected, each to serve a
three-year term until the 2003 Annual Meeting and until their successors are
elected and qualified. The nominees for Class 3 directors are Messrs. Brown and
Case (the "Nominees"), both of whom are currently members of the Board of
Directors of the Company. The persons named on the enclosed proxy (the proxy
holders) will vote for election of the Nominees unless you have withheld
authority for them to do so on your proxy card. If a Nominee is unable or
declines for good cause to serve as a director at the time of the Meeting, the
proxies will be voted for any nominee named by the current Board of Directors to
fill the vacancy. As of the date of this Proxy Statement, the Board of Directors
is not aware of any Nominee who is unable and/or will decline to serve as a
director. There is no cumulative voting for election of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
ITS NOMINEES AS DIRECTORS.
The Company's directors, including the two Nominees, and executive officers
are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C> <C>
Wayne A. Case(1) 60 Chairman/President/CEO, Director (Class 3)
David W. Case 37 Vice President of Operations
Robert C. Thompson 50 Chief Financial Officer
Linda M. Case 55 Secretary
Maynard E. Brown(1) 53 Director (Class 3)
David M. Hudson 48 Director (Class 1)
Trevor S. Nelson(1)(2)(3) 39 Director (Class 2)
Ray E. Oeltjen 52 Director (Class 1)
Dennis T. Pixton(2) 53 Director (Class 1)
John A. Rupp(3) 60 Director (Class 2)
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Option Committee.
4
<PAGE>
NOMINEES
MAYNARD E. BROWN, a director since 1992, resides in British Columbia,
Canada. Since 1993, Mr. Brown has been the senior partner of Brown McCue of
Vancouver, British Columbia, a firm specializing in advising publicly held
corporations in securities and related matters. Mr. Brown has a Bachelor of Law
degree from Dalhousie University in Halifax, Canada.
WAYNE A. CASE has been President of the Company since 1986, Chief Executive
Officer since 1996 and Chairman of the Board since 1997. In addition to
overseeing the day-to-day operations of the Company, he is responsible for
international marketing operations. Mr. Case is a director of Silent Witness
Enterprises, Ltd., a manufacturer of surveillance cameras, and Air Packaging
Technologies, Inc., a manufacturer of industrial packaging products. Mr. Case
holds a B.S. degree in Business and Economics from Linfield College and a Master
of Business Administration degree from the University of Portland. Mr. Case is
married to Linda M. Case and is the father of David W. Case.
CONTINUING DIRECTORS
DAVID M. HUDSON, a director since 1996, is founder and President of
Coldstream Holdings, Inc. and Coldstream Capital Management, Inc., a privately
held registered investment advisory firm which provides advisory services to
individuals, institutions, trusts and endowments and advises clients on a
variety of corporate finance matters. Mr. Hudson holds a B.S. degree in
Mathematics from the University of Oregon where he also pursued post-graduate
studies in Economics.
TREVOR S. NELSON, a director since 1989, resides in British Columbia,
Canada. Since 1988, Mr. Nelson has been a financial planner for the Stewart
Thomas Financial Group in Penticton, British Columbia. He holds a Bachelor of
Commerce degree with an emphasis on accounting management and information
systems and is a Chartered Accountant.
RAY E. OELTJEN, a director since August 2000, has been Vice President of
Sales and Marketing at Leupold & Stevens, a manufacturer of premium optics
for the shooting sports and outdoor markets, since 1991. He has over 25 years
experience in retail, wholesale, and worldwide sales and marketing management
in the shooting sports industry. He holds a B.A. degree from Wayne State
College in Wayne, Nebraska.
DENNIS T. PIXTON, a director since 1997, has been President of Michaels of
Oregon Co., a manufacturer of products for the shooting and law enforcement
markets, since 1996. Prior to that he was managing partner of the Portland,
Oregon office of Moss Adams LLP. Mr. Pixton holds a B.A. degree in business from
the University of Washington and is a Certified Public Accountant.
JOHN A. RUPP, a director since 1996, is Vice President of Beauty
Management, Inc., which owns and manages beauty salons, and manages his personal
investments. Mr. Rupp holds a B.A. in economics from Harvard University.
OTHER EXECUTIVE OFFICERS
DAVID W. CASE has been Vice President of Operations of the Company since
1996 and before then was Production Manager. Mr. Case holds a Bachelor of Arts
degree in Engineering and Business Administration from the University of Oregon.
He has been responsible for many of the design features of the SBS Dynamic
Balance System. His duties include manufacturing, engineering and quality
assurance. Mr. Case is the son of Wayne A. Case.
ROBERT C. THOMPSON has been Chief Financial Officer of the Company since
January 1999. From 1990 until he joined the Company, he was General Manager and
Senior Business Consultant for R.C. Thompson & Associates and then for
Meyer-Thompson & Associates. From 1983 to 1990, Mr. Thompson was Chief Financial
Officer for Burns Brothers, Inc., a manufacturer, wholesaler and retailer of
truck and automotive products and services. Mr. Thompson is a Certified Public
Accountant and graduated from Washington State University with B.A. degrees in
Business and Accounting.
LINDA M. CASE has been secretary of the Company since 1993 and before then
was Office Manager. Her duties include investor relations, office management,
purchasing and inventory management. Ms. Case holds a B.A. degree in Sociology
and Psychology from Linfield College in McMinnville, Oregon. Ms. Case is married
to Wayne A. Case.
5
<PAGE>
BOARD MEETINGS, NOMINATIONS BY SHAREHOLDERS AND COMMITTEES
The Board of Directors of the Company held two meetings during the fiscal
year ended May 31, 2000.
The Board of Directors acts as a nominating committee for selecting
nominees for election as directors. The Company's Restated Bylaws also permit
shareholders to make nominations for the election of directors, if such
nominations are made pursuant to timely notice in writing to the Company's
Secretary. To be timely, notice must be delivered to, or mailed to and received
at, the principal executive offices of the Company not less than 60 days nor
more than 90 days prior to the date of the meeting, provided that at least 60
days' notice or prior public disclosure of the date of the meeting is given or
made to shareholders. If less than 60 days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be received by the Company not later than the
close of business on the tenth day following the date on which such notice of
the meeting was mailed or such public disclosure was made. Public disclosure of
the date of the Meeting was made by the issuance of a press release on August
16, 2000. A shareholder's notice of nomination must also set forth certain
information specified in Section 2.3.2 of the Company's Restated Bylaws
concerning each person the shareholder proposes to nominate for election and the
nominating shareholder.
The Company's Board of Directors currently has an Audit Committee, a
Compensation Committee, and an Option Committee. The Audit Committee recommends
engagement of the Company's independent certified public accountants, reviews
the scope of the audit, considers comments made by the independent certified
public accountants with respect to accounting procedures and internal controls
and the consideration given thereto by management, and reviews internal
accounting procedures and controls with the Company's financial and accounting
staff; the Audit Committee, which currently consists of Trevor Nelson and Dennis
T. Pixton, held one meeting in Fiscal 2000. The Compensation Committee reviews
executive compensation and establishes executive compensation levels; the
Compensation Committee, which currently consists of Messrs. Brown, Case and
Nelson, met once in Fiscal 2000. The Option Committee administers the Company's
Stock Option Plan and currently consists of Messrs. Nelson and Rupp; during
Fiscal 2000, the Option Committee held four meetings.
During Fiscal 2000, no director attended fewer than 75% of the aggregate of
(i) the total number of meetings of the Board of Directors and (ii) the total
number of meetings of all committees of the Board of Directors on which such
director served (during the period he served).
DIRECTOR COMPENSATION
For serving as directors of the Company, each director who is not an
employee of the Company ("Outside Director") is paid a $1,000 fee for each Board
meeting attended in person ($500 if attended by telephone) and a $500 fee for
each Board committee meeting attended in person ($250 if attended by telephone).
The Company also reimburses travel and lodging expenses incurred in connection
with attending meetings of the Board and its committees. Each newly appointed
Outside Director is entitled to receive 5,000 non-qualified stock options
pursuant to the terms of the Company's Stock Option Plan. Each Outside Director
is entitled to receive 2,500 non-qualified options for each full year of service
(or a prorated number of options for service for less than a full year), which
options are to be granted immediately after each Annual Meeting of Shareholders.
EXECUTIVE COMPENSATION
The following table sets forth, for each of the three years in the period
ended May 31, 2000, amounts of cash and certain other compensation paid by the
Company to Wayne A. Case, President and Chief Executive Officer, and David W.
Case, Vice President of Operations (the "Named Executives"). No other executive
officer was paid salary and bonus in excess of $100,000 in Fiscal 2000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
6
<PAGE>
<TABLE>
<CAPTION>
OTHER ANNUAL ALL OTHER
NAME/TITLE YEAR SALARY BONUS COMPENSATION COMPENSATION(1)
<S> <C> <C> <C> <C>
Wayne A. Case 2000 $168,023 -- $ -- $8,318
President/CEO 1999 167,916 -- 293,250(2) 5,413
1998 159,872 -- -- 8,525
David W. Case 2000 $100,696 -- $ -- $13,646
Vice President of 1999 100,698 -- 475,090(3) 6,450
Operations 1998 101,430 -- -- 8,945
</TABLE>
(1) During each period, "All Other Compensation" included an allocation for
automobile use benefits and 401(k) and group insurance benefits, which are
standardized and equal for all salaried officers.
(2) Includes earnings from the exercise of 293,250 options at $2.00 per share.
(3) Includes earnings from the exercise of 192,500 options at $1.47 per share.
On December 31, 1999, these shares were returned to the Company and
cancelled. See "Certain Transactions."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION*
EXECUTIVE COMPENSATION PHILOSOPHY
The Compensation Committee of the Board of Directors, composed of Maynard
E. Brown, Wayne A. Case and Trevor Nelson, is responsible for setting and
administering the policies and programs that govern compensation for the
executive officers of the Company. The Board of Directors' Option Committee
("Option Committee"), composed of Trevor Nelson and John A. Rupp, administers
the Company's Stock Option Plan (the "Option Plan"). The goal of the Company's
executive compensation policy is to ensure that an appropriate relationship
exists between compensation and corporate performance, while at the same time
attracting, motivating and retaining executive officers and other key employees.
The key components of the Company's compensation program are base salary,
bonuses and potential long-term compensation through stock options. These
components are administered with the goal of providing total compensation that
is competitive in the marketplace, rewards successful financial performance and
aligns executive officers' interests with those of shareholders. The
Compensation Committee reviews executive compensation on an annual basis, or
more often if necessary, and determines, subject to the Board's approval, base
salary for executive officers. The Option Committee makes all decisions with
respect to stock option grants.
EQUITY PARTICIPATION
The Company uses stock options granted under its Option Plan both to reward
past performance and to motivate future performance, especially long-term
performance. The Compensation Committee believes that through the use of stock
options, executive interests are directly tied to enhancing shareholder value.
Stock options under the Option Plan have a term of 10 years. Under the Option
Plan a maximum of 800,000 shares of the Company's Common Stock may be issued.
The stock options provide value to the recipients only when the market
price of the Company's Common Stock increases above the option grant price and
only as the shares vest and become exercisable. While option grants under the
Option Plan are made by the Option Committee, the Compensation Committee
considers these grants in making its cash compensation decisions.
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* The report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under either the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended (together, the "Acts"),
except to the extent that the Company specifically incorporates such report by
reference; and further, such report shall not otherwise be deemed filed under
the Acts.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
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The Chief Executive Officer's compensation is set using the Compensation
Committee's general philosophy as described above. In Fiscal 2000, Wayne A. Case
received a base salary of $ 168,023, no performance bonus, and no stock option
grants.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Compensation Committee has considered the impact of Section 162(m) of
the Internal Revenue Code adopted under the Omnibus Budget Reconciliation Act of
1993, which section disallows a deduction for any publicly held corporation for
individual compensation exceeding $1 million in any taxable year for the CEO and
the four other most highly compensated executive officers, unless such
compensation meets certain exceptions to the general rule. Compensation paid by
the Company to each of its executive officers in 1999 was well below $1 million,
and therefore Section 162(m) did not affect the tax deductions available to the
Company. The Committee will continue to monitor the applicability of the section
to the Company's compensation programs and will determine at a later date what
actions, if any, the Company should take to qualify for available tax
deductions.
COMPENSATION COMMITTEE
Maynard E. Brown
Wayne A. Case
Trevor Nelson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Maynard E. Brown, Wayne A. Case and
Trevor Nelson. Mr. Case is President and Chief Executive Officer of the Company.
No member of the Compensation Committee or executive officer of the Company has
a relationship that would constitute an interlocking relationship with executive
officers or directors of another entity.
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<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of July 15, 2000 by (i) each person
who is known to the Company to own beneficially more than 5% of the Company's
outstanding Common Stock, (ii) each of the Company's directors, (iii) the Named
Executives and (iv) all current directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(1)
DIRECTORS, NAMED EXECUTIVES
AND 5% SHAREHOLDERS NUMBER PERCENT
<S> <C> <C>
Wayne A. Case(2) 2,125,357(3)(4) 25.7%
Linda M. Case(2) 2,125,357(3)(4) 25.7%
Wayne A. Case Familty Trust(2) 2,124,357(3)(5) 25.7%
David W. Case 189,276(5) 2.2%
Maynard E. Brown 6,000(6) *
David M. Hudson 79,250(7) *
Trevor S. Nelson 2,500(8) *
Ray E. Oeltjen 0 *
Dennis T. Pixton 2,500(8) *
John A. Rupp 213,700(6) 2.6%
All directors and executive officers
as a group (ten persons) 2,631,683(9) 31.7%
</TABLE>
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*Less than 1%.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of options. Each beneficial owner's percentage ownership is
determined by assuming that options that are held by such person (but not
those held by any other person) and that are exercisable within 60 days from
the date hereof have been exercised. Unless otherwise noted, the Company
believes that all persons named in the table have sole voting and investment
power with respect to all shares of Common Stock beneficially owned by them.
(2) The address of the shareholder is care of Schmitt Industries, Inc., 2765
N.W. Nicolai Street, Portland, Oregon 97210.
(3) Includes 2,118,107 shares held as co-trustee of the Wayne A. Case Family
Trust with respect to which Wayne A. Case and his wife, Linda M. Case, have
sole voting and investment power, and 1,000 shares held by Linda M. Case, as
trustee for the Linda M. Case Family Trust with respect to which Ms. Case
has sole voting and investment power.
(4) Includes 6,250 shares subject to options held by Ms. Case that are currently
exercisable.
(5) Wayne A. Case and Linda M. Case are co-trustees of the Wayne A. Case Family
Trust and have sole voting and investment power with respect to the shares
they hold as co-trustees.
(6) Includes 2,500 shares subject to options that are currently exercisable.
(7) Includes 76,750 shares held by a partnership, the general partner of which
is Coldstream Capital Management, Inc. of which Mr. Hudson is president and
a shareholder. Also includes 2,500 shares subject to options that are
currently exercisable.
(8) Consists of shares subject to options that are currently exercisable.
(9) Includes 31,250 shares subject to options that are currently exercisable.
9
<PAGE>
CERTAIN TRANSACTIONS
On January 5, 1999, David W. Case, Vice President of Operations of the
Company, as trustee of the David W. Case Family Trust (the "Trust"), exercised
the Trust's option to purchase 192,500 shares of Common Stock for a total
purchase price of $282,975. The purchase price was paid pursuant to a promissory
note bearing interest at the rate of 6% per annum and due on January 5, 2001.
The note was secured by a pledge of the 192,500 shares of Common Stock. On
December 31, 1999, the Company cancelled the note at the Trust's request and the
Trust returned the 192,500 shares of Common Stock it held, which shares were
cancelled by the Company.
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return on its common stock with the cumulative
total return for the period from May 31, 1995 through May 31, 2000 of (i) the
Total Return Index of Nasdaq Stock Market - U.S. and (ii) the Pacific Stock
Exchange ("PSE") Technology Index. The PSE Technology Index represents 100
listed and over-the-counter technology stocks from 15 industries. The graph
assumes that on May 31, 1995, $100 was invested in the Common Stock of the
Company and in each of the comparative indices. The stock price performance on
the following graph is not necessarily indicative of future stock price
performance.
<TABLE>
<CAPTION>
05/31/95 05/31/96 05/31/97 05/31/98 05/31/99 05/31/00
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SCHMITT INDUSTRIES, INC. $100.00 $563.16 $373.68 $252.63 $126.32 $111.83
NASDAQ - US 100.00 145.34 163,76 209.68 293.58 402.12
PSE TECHNOLOGY INDEX 100.00 136.91 171.73 202.66 324.51 616.08
</TABLE>
10
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's directors,
its officers and any persons holding more than 10% of the Company's Common Stock
are required to report their initial ownership to the Securities and Exchange
Commission ("SEC"). Specific filing deadlines of these reports have been
established, and the Company is required to disclose in this Proxy Statement any
failure to file by these dates during the fiscal year ended May 31, 2000. To the
best of the Company's knowledge, all of these filing requirements have been
satisfied. In making this statement, the Company has relied solely on written
representations of its directors, officers and 10% holders and copies of the
reports that they filed with the SEC.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters to be
submitted at the Meeting. If any other matters properly come before the meeting,
the persons named in the enclosed form of proxy intend to vote the shares they
represent as the Board of Directors may recommend.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K for the fiscal year ended May 31, 2000 is available
without charge upon written request to: Corporate Secretary, Schmitt Industries,
Inc., 2765 N.W. Nicolai Street, Portland, Oregon 97210..
By Order of the Board of Directors
Wayne A. Case
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Portland, Oregon
August 31, 2000
11
<PAGE>
SCHMITT INDUSTRIES, INC.
2765 N.W. NICOLAI STREET
PORTLAND, OREGON 97210
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF THE SHAREHOLDERS, SEPTEMBER 29, 2000
The undersigned hereby appoints Wayne A. Case and Robert C. Thompson, or each of
them, as proxies, each with power of substitution, to vote for and on behalf of
the undersigned at the Annual Meeting of the Shareholders of the Company to be
held on September 29, 2000, and at any adjournment thereof, upon matters
properly coming before the Meeting, as set forth in the related Notice of Annual
Meeting and Proxy Statement, both of which have been received by the
undersigned. Without otherwise limiting the general authorization given hereby,
said proxies are instructed to vote as follows:
1. Election of the following nominees for directors: MAYNARD E. BROWN AND
WAYNE A. CASE
(THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR")
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY to vote for all
nominees listed above
INSTRUCTION: To withhold authority to vote for any individual nominee
listed above, write that nominee's name in the space provided
below.
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In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned holder. If no direction is made, this proxy will be
voted "FOR" Proposal 1.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
-----------------------------------------
Signature
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Signature if held jointly
Dated:_______________________________, 2000
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
