<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[_]Confidential, For Use of the
[_]Preliminary Proxy Statement Commission Only (as permitted by
Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Stoneridge, Inc.
---------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
---------------------------------------------------------------
(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-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_]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:
Not Applicable
(2)Form, Schedule or Registration Statement No.:
Not Applicable
(3)Filing Party:
Not Applicable
(4)Date Filed:
Not Applicable
<PAGE>
STONERIDGE, INC.
Notice of Annual Meeting of Shareholders
----------------
To our Shareholders:
The 1999 annual meeting of shareholders of Stoneridge, Inc. will be held at
600 Golf Drive, Warren, Ohio 44483, on Monday, May 3, 1999, at 10:00 a.m.,
local time, for the following purposes:
1. To elect eight directors, each for a term of one year;
2. To receive reports at the meeting. No action constituting approval
or disapproval of the matters referred to in the reports is
contemplated; and
3. Any other matters that properly come before the meeting.
Only shareholders of record at the close of business on March 22, 1999, will
be entitled to notice of and to vote at the meeting or any adjournment
thereof. Shareholders are urged to complete, date and sign the enclosed proxy
and return it in the enclosed envelope. The principal address of Stoneridge,
Inc. is 9400 East Market Street, Warren, Ohio 44484.
By order of the Board of Directors,
AVERY S. COHEN,
Secretary
Dated: March 31, 1999
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY
<PAGE>
STONERIDGE, INC.
PROXY STATEMENT
----------------
Our Board of Directors is sending you this proxy statement to ask for your
vote as a Stoneridge shareholder on certain matters to be voted on at the
upcoming annual meeting of shareholders. The annual meeting of shareholders
will be held at 600 Golf Drive, Warren, Ohio 44483, on Monday, May 3, 1999, at
10:00 a.m., local time. We are mailing this proxy statement and the
accompanying notice and proxy to you on or about March 31, 1999.
Annual Report. A copy of our Annual Report to Shareholders for the fiscal
year ended December 31, 1998, is enclosed with this proxy statement.
Solicitation of Proxies. Our Board of Directors is making this solicitation
of proxies and we will pay the cost of the solicitation. We have retained
Corporate Investor Communications, Inc., at an estimated cost of $3,200, to
assist us in the solicitation of proxies from brokers, nominees, institutions
and individuals. In addition to solicitation of proxies by mail and by
Corporate Investor Communications, Inc., our employees may solicit proxies by
telephone or facsimile.
Proxies; Revocation of Proxies. The shares represented by your proxy will be
voted in accordance with the instructions as indicated on your proxy. In the
absence of any such instructions, they will be voted to elect the director
nominees set forth under "Election of Directors" below. Your presence at the
annual meeting of shareholders, without more, will not revoke your proxy.
However, you may revoke your proxy at any time before it has been exercised by
signing and delivering a later-dated proxy or by giving notice to us in
writing at our address indicated on the attached Notice of Annual Meeting of
Shareholders, or in open meeting.
Voting Eligibility. Only shareholders of record at the close of business on
the record date, March 22, 1999, are entitled to receive notice of the annual
meeting of shareholders and to vote the common shares that they held on the
record date at the meeting. On the record date, our voting securities
outstanding consisted of 22,397,311 common shares, without par value, each of
which is entitled to one vote at the meeting.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table describes certain information regarding the beneficial
ownership of our common shares as of December 31, 1998, by: (a) our directors
(all of whom are also nominees for director); (b) each other person who is
known by us to own beneficially more than 5% of our outstanding common shares;
(c) our chief executive officer and the four other most highly compensated
executive officers named in the Summary Compensation Table; and (d) our
executive officers and directors as a group.
<TABLE>
<CAPTION>
Number of Shares Percent
Name of Beneficial Owner(1) Beneficially Owned of Class
- --------------------------- ------------------ --------
<S> <C> <C>
D.M. Draime(2)..................................... 5,616,172 25.1%
Scott N. Draime(3)................................. 3,521,050 15.7
Jeffrey P. Draime(4)............................... 1,431,326 6.4
Cloyd J. Abruzzo(5)................................ 1,849,659 8.3
Avery S. Cohen(6)(7)............................... 547,002 2.4
Sheldon J. Epstein(7).............................. 420,522 1.9
Richard E. Cheney(8)............................... 51,579 *
C.J. Hire.......................................... 0 0
Richard G. LeFauve................................. 0 0
Earl L. Linehan.................................... 100,079 *
Gerald V. Pisani(9)................................ 431,719 2.1
David L. Thomas.................................... 94,158 *
Kevin P. Bagby..................................... 47,079 *
Sten Forseke....................................... 352,031 1.6
All Executive Officers and Directors as a Group (12
persons).......................................... 9,510,000 42.5%
</TABLE>
- --------
* Less than 1%.
(1) Unless otherwise indicated, the beneficial owner has sole voting and
investment power over such shares.
(2) 5,616,172 common shares held in trust for the benefit of Mr. Draime, of
which Mr. Draime is trustee. The address of Mr. Draime is 9400 East
Market Street, Warren, Ohio 44484.
(3) Includes 818,240 common shares held in trust for the benefit of Scott N.
Draime, of which Scott N. Draime is trustee; 1,022,554 common shares held
in trusts for the benefit of Jeffrey P. Draime's and Rebecca M. Gang's
children, of which Scott N. Draime is trustee; and 1,363,456 common shares
held by trusts of which Scott N. Draime is a trust advisor. The address of
Scott N. Draime is 1209 Cerrito Grande, El Paso, Texas 79912.
(4) Includes 886,114 Common Shares held in trust for the benefit of Jeffrey P.
Draime of which Jeffrey P. Draime is trustee, and 545,212 Common Shares
held in trusts for the benefit of Scott N. Draime's children, of which
Jeffrey P. Draime is trustee. The address of Jeffrey P. Draime is 9400
East Market Street, Warren, Ohio 44484.
(5) Includes 299,590 common shares held in trust for the benefit of Cloyd J.
Abruzzo of which Mr. Abruzzo is trustee, and an aggregate of 1,390,856
common shares held in trust for the benefit of D.M. Draime's children and
grandchildren of which Mr. Abruzzo is trustee. The address of Cloyd J.
Abruzzo is 9400 East Market Street, Warren, Ohio 44484.
(6) Includes 124,481 common shares held under the Ohio Transfer to Minors Act
for the benefit of William M. Draime and John A. Draime, of which Mr.
Cohen is custodian.
(7) Includes 373,443 common shares held in separate trusts for the benefit of
Scott N. Draime, Jeffrey P. Draime and Rebecca M. Gang, of which Mr. Cohen
and Mr. Epstein are co-trustees.
(8) Includes 4,000 common shares held in Mr. Cheney's Individual Retirement
Account and 500 common shares owned by Mr. Cheney's wife.
(9) Includes 169,545 common shares held in trust for the benefit of Gerald V.
Pisani of which Mr. Pisani is trustee and 185,120 common shares held in
separate trusts for the benefit of Gerald V. Pisani's children, of which
Gerald V. Pisani's wife is the trustee.
2
<PAGE>
ELECTION OF DIRECTORS
Effective February 16, 1999, by action of our Board of Directors, we
increased the number of directors from six to seven and appointed C.J. Hire,
the former President, Chief Executive Officer and principal shareholder of Hi-
Stat Manufacturing Co., Inc., a Florida corporation, to fill the vacancy in
the Board of Directors created by the increase. We acquired Hi-Stat on
December 31, 1998. On March 15, 1999, by action of our Board of Directors, we
increased the number of directors from seven to eight and appointed Richard
LeFauve, a retired Senior Vice President of General Motors, to fill the
vacancy in the Board of Directors created by the increase.
At the annual meeting of shareholders, you will elect eight directors to
hold office until our next annual meeting of shareholders and until their
successors are elected and qualified. The Board of Directors proposes that the
nominees described below, all of whom are currently serving as directors, be
re-elected to the Board of Directors. At the annual meeting of shareholders
the shares represented by proxies, unless otherwise specified, will be voted
for the election of the eight nominees hereinafter named.
The director nominees are identified in the following table. If for any
reason any of the nominees is not a candidate when the election occurs (which
is not expected), the Board of Directors expects that proxies will be voted
for the election of a substitute nominee designated by management. The
following information is furnished with respect to each person nominated for
election as a director.
The Board recommends that you vote "FOR" the following nominees.
Nominees for Election at the Annual Meeting
<TABLE>
<CAPTION>
Expiration
Period of of Term
Principal Occupation Service as a for Which
Name and Age and Business Experience Director Proposed
------------ ------------------------------------ ------------ ----------
<S> <C> <C> <C>
Cloyd J. Abruzzo........ President, Chief Executive Officer, 1990 to date 2000
48 Assistant Treasurer of the Company
Richard E. Cheney....... Retired Chairman of Hill & Knowlton, 1988 to date 2000
77 Inc., a public relations firm
Avery S. Cohen.......... Partner, Baker & Hostetler LLP, a 1988 to date 2000
62 law firm
D.M. Draime............. Chairman of the Board of Directors, 1988 to date 2000
65 Assistant Secretary of the Company
Sheldon J. Epstein...... Managing Member, Epstein, Woods & 1988 to date 2000
60 Dwyer, P.L.C., an independent public
accounting firm
C. J. Hire.............. Retired President and Chief 1999 to date 2000
69 Executive Officer of Hi-Stat
Manufacturing Co., Inc., an
automobile parts manufacturer. Mr.
Hire is currently serving as
Executive Vice President of Hi-Stat.
Richard G. LeFauve...... Retired President of GM University 1999 to date 2000
64 and retired Senior Vice President of
GM.
Earl L. Linehan......... President, Woodbrook Capital Inc., a 1988 to date 2000
57 venture capital and investment firm
</TABLE>
Each of the nominees for election as a director has engaged in the principal
occupation or activity indicated for at least five years, except (i) Mr.
Epstein was the managing partner of Epstein, Rehbock & Applebaum, an
independent public accounting firm, from 1992 to 1994, (ii) Mr. Hire was the
president and chief executive officer of Hi-Stat Manufacturing Co., Inc. from
1969 until our acquisition of Hi-Stat on December 31, 1998 and (iii) Mr.
LeFauve was the President of GM University and the Senior Vice President of GM
from April 1997
3
<PAGE>
until his retirement in January 1999 and was the chief executive officer and
president of the Saturn subsidiary of GM and the Group Executive of Small Car
Production of GM's North American Operations from 1994 until April 1997.
Mr. Abruzzo is a director of Second National Bank of Warren. Mr. Cheney is a
director of Rowe Furniture, Inc. and Chattem, Inc. Mr. Linehan is a director
of Strescon Industries, Inc. Mr. LeFauve is a director of Harley-Davidson,
Inc.
Our Board of Directors has appointed an audit committee, a compensation
committee and a stock option committee. The Board of Directors does not have a
finance or nominating committee. Each of the committees is comprised of
Messrs. Cheney, Epstein and Linehan.
The audit committee makes recommendations to the Board of Directors
concerning the engagement of independent public accountants for our company,
reviews with the independent public accountants the plans and results of audit
engagements, approves professional services provided by the independent public
accountants, reviews the independence of the independent public accountants,
considers the range of audit and nonaudit fees, reviews the independent public
accountants' management letters and our responses, reviews the adequacy of our
internal accounting controls, and reviews major accounting or reporting
changes.
The compensation committee reviews employment, development, reassignment and
compensation matters involving corporate officers and other executive level
employees, including issues relating to salary, bonus and incentive
arrangements. The stock option committee administers our Long-Term Incentive
Plan.
In 1998 our Board of Directors held six meetings. The audit committee held
two meetings, the compensation committee held three meetings and the stock
option committee held one meeting. In 1998, each member of the Board of
Directors attended at least 75% of the meetings of the Board of Directors and
of the committees on which he serves.
Directors' Compensation. Each director, who is not employee of ours, or of a
subsidiary of ours, receives $16,000 per year for being a director and $1,000
for attending each meeting of the Board of Directors. There is no additional
fee received for attending committee meetings. Directors who are also
employees of ours are not paid any director's fee. We reimburse out-of-pocket
expenses incurred by all directors in connection with attending Board of
Director and committee meetings. Starting in 1999 each director, who is not
employee of ours, or of a subsidiary of ours, will receive $20,000 per year
for being a director, $1,000 for attending each meeting of the Board of
Directors and $500 for each telephonic meeting of the Board of Directors.
Joint Report by the Compensation Committee and the Stock Option Committee
Introduction. The compensation committee is responsible for determining the
compensation to be paid to our executive officers. The compensation committee
is referred to as "the Committee." The stock option committee administers our
Long-Term Incentive Plan.
The Committee's philosophy with respect to the compensation of our executive
officers is (i) to provide a competitive total compensation package that
enables us to attract and retain qualified executives and align their
compensation with our overall business strategies, and (ii) through the stock
option committee, to provide each executive officer with a significant
economic stake in our success.
To this end, the Committee determines executive compensation with a focus on
compensating executive officers based on their responsibilities and our
performance. The primary components of our executive compensation program are
(i) base salaries and certain other annual compensation, (ii) bonuses, and
(iii) share options. The overall objectives of this strategy are to attract
and retain the best possible executive talent, to motivate our executives to
achieve the goals inherent in our business strategy, to link executive and
shareholder interests through equity-based plans and, finally, to provide a
compensation package that recognizes individual contributions and overall
business results.
4
<PAGE>
Each year the Committee conducts a review of our executive compensation
program. In connection with the review of compensation for 1998, the Committee
commissioned two comprehensive reports from Arthur Andersen LLP. The first
report was prepared in December 1997 (the "December 1997 Executive Pay
Benchmarking Analysis") and the second report was prepared in October 1998
(the "October 1998 Executive Pay Benchmarking Analysis"). Both reports assess
our compensation program and compare our executive compensation, corporate
performance, and total return to shareholders to a peer group of public
corporations that represent our most direct competitors for executive talent.
In setting our executive officers' overall 1998 compensation, the Committee
reviewed and considered the December 1997 Executive Pay Benchmarking Analysis
in determining the base salary amounts and the October 1998 Executive Pay
Benchmarking Analysis in determining bonus awards.
The Committee reviews the selection of peer companies used for compensation
analysis. The peer groups used for compensation analysis are generally not the
same as the peer group index in the Performance Graph included in this proxy
statement. The Committee believes that our most direct competitors for
executive talent are not necessarily all of the companies that would be
included in a peer group established for comparing shareholder returns. This
year's compensation reviews permitted an evaluation of the link between our
performance and our executive compensation in the context of the compensation
programs of other companies.
The Committee determines the compensation of the most highly compensated
corporate executives, including the individuals whose compensation is detailed
in this proxy statement, and sets policies for and reviews the compensation
awarded to other highly compensated corporate executives. This is designed to
ensure consistency throughout the executive compensation program. In reviewing
the individual performance of the executives whose compensation is detailed in
this proxy statement (other than Mr. Abruzzo), the Committee takes into
account the views of Mr. Abruzzo and Mr. D.M. Draime.
Base Salaries and Other Annual Compensation. After the review and
consideration of the 1997 Executive Pay Benchmarking Analysis, the Committee
set salary levels for our executive officers on the basis of the executives'
responsibilities. However, in each case, due consideration is given to
personal factors, such as the individual's experience and record and the
responsibility associated with his position, and external factors, such as
salaries paid to similarly situated executive officers by peer companies and
prevailing conditions in the geographic area where the executive's principal
services will be performed. In the case of executive officers with
responsibility for a particular business unit, that unit's financial results
are also considered.
Annual adjustments to each executive officer's salary are determined based
on the following factors but with due consideration also being given to
prevailing economic conditions, to the relationship of such adjustments to
those being given to other employees, to the performance of the executive's
duties and responsibilities and to other individual performance-related
criteria that may be relevant with respect to such executive officer at the
time. Finally, the Committee, where appropriate, also considers non-financial
performance measures. These include increase in market share, manufacturing
efficiency gains, improvements in product quality and improvements in
relations with customers, suppliers and employees.
In determining the appropriate levels for Mr. Abruzzo's 1998 base salary and
bonus, the Committee considered the same factors that it considers when fixing
compensation levels for our other executive employees and sought to achieve
the same corporate goal. The Committee also considered the major initiative
and programs which, in 1998, were commenced, completed or furthered under Mr.
Abruzzo's leadership, such as, (i) the successful completion of our first full
year as a public company, (ii) the acquisition of Hi-Stat Manufacturing Co.,
Inc., (iii) our success in meeting our financial goals in 1998, and (iv) the
management of the impact to our business resulting from the strike against
General Motors in the summer of 1998. The Committee also took into account the
longevity of Mr. Abruzzo's service to Stoneridge and its belief that Mr.
Abruzzo is an excellent representative Stoneridge to the public by virtue of
his stature in the industry and the community. Mr. Abruzzo was granted a base
salary of $300,000 for 1998.
5
<PAGE>
Bonuses. Our executive officers are eligible for an annual cash bonus.
Bonuses are viewed as a reward for individual contributions to our
performance, based not only on our short-term results but also on the
investments for the future growth of our profits. In addition, consideration
is given to the achievement of selected financial goals (i.e., operating
performance, asset management and business growth development) and progress in
meeting other long-term objectives and the executive's leadership role in
these activities. The Committee usually makes bonus awards toward the end of
the year. In addition to the consideration described above, the Committee also
considered the October 1998 Executive Pay Benchmarking Analysis in determining
bonus awards for 1998. Based on the above-described methodology, the Committee
awarded Mr. Abruzzo a bonus of $500,000 in 1998, the same level as the bonus
received in 1997.
Share Options. All of our executive officers are eligible to receive options
to purchase our common shares under the Long-Term Incentive Plan. We believe
that share option grants are a valuable motivating tool and provide a long-
term incentive to management. Share option grants reinforce long-term goals by
providing the proper nexus between the interests of management and the
interests of our shareholders. However, the stock option committee, in
consultation with the Committee, determined not to grant any share options to
Mr. Abruzzo or any of the other four most highly compensated executive
officers in 1998. The ongoing negotiations with, and the completion of the
transaction to acquire, Hi-Stat Manufacturing Co., Inc. are primary reasons
share options were not granted to our executive officers in 1998. The stock
option committee expects that it will resume its practice of granting share
options to our executive officers in the future.
Conclusion. Through the programs described above, a very significant portion
of our executive compensation is linked directly to individual and company
performance and share price appreciation. The Committee and the stock option
committee intend to continue the policy of linking executive compensation to
performance and returns to shareholders, recognizing that the ups and downs of
the business cycle from time to time may result in an imbalance for a
particular period.
<TABLE>
<S> <C>
Compensation Committee Stock Option Committee
---------------------- ----------------------
Richard E. Cheney Richard E. Cheney
Sheldon J. Epstein Sheldon J. Epstein
Earl L. Linehan Earl L. Linehan
</TABLE>
6
<PAGE>
EXECUTIVE COMPENSATION
The table below describes the compensation paid for the last three fiscal
years to our Chief Executive Officer and the four other most highly
compensated executive officers. We sometimes refer to the people listed in the
table below as our "named executive officers."
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation Awards
----------------- ---------------------
Number of
Other Annual Restricted Securities All Other
Name and Principal Fiscal Salary Bonus Compensation Shares Underlying Compensation
Position Year ($) ($) ($) ($) Option (#) ($)
------------------ ------ -------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cloyd J. Abruzzo........ 1998 $300,000 $500,000 -- -- -- 1,199(1)
President and 1997 204,000 500,000 -- -- 200,000 --
Chief Executive Officer 1996 204,000 250,000 -- -- -- --
D.M. Draime............. 1998 200,000 200,000 -- -- -- 4,405(1)
Chairman of the 1997 189,600 250,000 -- -- -- --
Board of Directors 1996 189,600 250,000 -- -- -- 174,570(2)
Gerald V. Pisani........ 1998 204,000 200,000 -- -- -- 2,689(1)
Vice President and 1997 170,400 180,000 -- -- 100,000 --
President, Stoneridge 1996 159,000 140,000 -- -- -- --
Engineered Products
Group
David L. Thomas......... 1998 180,000 160,000 -- -- -- 1,297(1)
Vice President and 1997 144,000 130,000 -- -- 50,000 --
President, Alphabet
Group 1996 144,000 110,000 -- -- -- --
Kevin P. Bagby.......... 1998 162,000 150,000 -- -- -- 1,113(1)
Vice President and 1997 129,500 125,000 -- -- 50,000 --
Chief Financial Officer 1996 120,000 65,000 -- -- 34,771 --
</TABLE>
- --------
(1) Represents the aggregate amount of term life insurance premiums paid by
us.
(2) Represents the aggregate amount of life insurance premiums paid by us on a
split-dollar life insurance policy.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money Options
Shares Options at at Fiscal Year-
Acquired on Value Fiscal Year-End (#) End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisableet
---- ----------- -------- -------------------- --------------------
<S> <C> <C> <C> <C>
Cloyd J. Abruzzo........ -- -- -- /200,000 -- /$925,000
D.M. Draime............. -- -- -- / -- -- / --
Gerald V. Pisani........ -- -- -- /100,000 -- / 462,500
David L. Thomas......... -- -- -- / 50,000 -- / 231,250
Kevin P. Bagby.......... -- -- -- / 50,000 -- / 231,250
</TABLE>
7
<PAGE>
Change of Control Agreements
Messrs. Abruzzo, Bagby, Forseke, Pisani and Thomas have each entered into an
agreement with us that guarantees we will pay to each of them two years of
continued compensation (including bonuses) and benefits upon a change of
control regardless of whether they remain employed by us. A change of control
shall be deemed to have occurred if any shareholder or group of shareholders
acquires more of our common shares than owned by D.M. Draime and his direct
descendants and trusts for the benefit of D.M. Draime and his direct
descendants.
Compensation Committee Interlocks and Insider Participation
Messrs. Cheney, Epstein, Linehan are the members of our compensation
committee. There are no compensation committee interlocks.
Certain Relationships and Related Transactions
Acquisition of Hi-Stat Manufacturing Co., Inc. On December 31, 1998 we
acquired Hi-Stat, a privately held Florida corporation and a manufacturer of
engineered sensors, solenoids and switches for the automotive industry. The
purchase price for Hi-Stat was approximately $362 million. C.J. Hire, who was
appointed to our Board of Directors on February 16, 1999, was the principal
shareholder of Hi-Stat prior to our acquisition and was a member of Hi-Stat's
board of directors and served as Hi-Stat's president and chief executive
officer. Prior to our acquisition of Hi-Stat, Mr. Hire, through a trust, owned
170 out of 300 Hi-Stat outstanding shares of common stock. Mr. Hire's wife
owned, through a trust, 60 shares of Hi-Stat and various family members,
through trusts, owned another 30 shares of Hi-Stat. Mr. Hire's and his
family's trusts received approximately $313 million in cash in connection with
our acquisition of Hi-Stat.
Greenwood Facility. D.M. Draime is the sole owner of a manufacturing
facility located in Greenwood, South Carolina. We lease the facility from Mr.
Draime pursuant to a lease expiring on September 15, 2004. In February 1997,
we restructured our operations and terminated our use of the Greenwood
facility. However, we continue to make lease payments to Mr. Draime, and the
Greenwood property is for sale. In 1998, we made lease payments to Mr. Draime
in the aggregate amount of $157,200.
Hunters Square. D.M. Draime is a 25% owner of Hunters Square, Inc., an Ohio
corporation ("HSI"), which owns Hunters Square, an office complex and shopping
mall located in Warren, Ohio. We lease office space in Hunters Square for use
as the headquarters of our Alphabet Group. We pay all maintenance, tax and
insurance costs related to the operation of the office. Lease payments made by
us to HSI in 1998 were $214,189. We will continue to make lease payments as
required under the lease agreement, which terminates in June 2002.
Industrial Development Associates LP. Earl Linehan and D.M. Draime, as
limited partners, own 11.81% and 10.00%, respectively, of Industrial
Development Associates ("IDA"), a Maryland limited partnership real estate
development company in which we are a 30% general partner. We have entered
into a lease agreement with IDA pursuant to which we lease a facility located
in Mebane, North Carolina, until March 31, 2004. We are responsible for all
maintenance, taxes and insurance. We made lease payments to IDA of $117,038 in
1998. In addition, we sublease warehouse space in the same industrial park as
the Mebane facility from Baumgartner, Inc. Baumgartner, Inc. leased the space
from IDA. We made sublease payments to Baumgartner, Inc. of $90,566 in 1998.
Relationship with Counsel. Avery S. Cohen, one of our directors, is a
partner in Baker & Hostetler LLP, a law firm which has served as general
outside counsel for us since 1993 and is expected to continue to do so in the
future.
8
<PAGE>
Performance Graph
Set forth below is a line graph comparing the cumulative total return of a
hypothetical investment in our common shares with the cumulative total return
of a hypothetical investment in each of the New York Stock Exchange Market
Index and the Media General Financial Services, Inc. Industry Group 333
(Automotive Parts) Index based on the respective market price of each such
investment at October 10, 1997 (the date of our initial public offering),
December 31, 1997, March 31, 1998, June 30, 1998, September 30, 1998 and
December 31, 1998, assuming in each case an initial investment of $100 on
October 10, 1997, and reinvestment of dividends.
[GRAPH]
- --------------------------------------------------------------------------------
Stoneridge, Inc. Auto Parts NYSE Market Index
- --------------------------------------------------------------------------------
10/10/97 100.00 100.00 100.00
- --------------------------------------------------------------------------------
12/31/97 80.00 94.35 103.07
- --------------------------------------------------------------------------------
3/31/98 100.00 107.23 115.82
- --------------------------------------------------------------------------------
6/30/98 92.19 99.93 117.41
- --------------------------------------------------------------------------------
9/30/98 80.94 79.38 102.29
- --------------------------------------------------------------------------------
12/31/98 113.75 95.35 121.04
- --------------------------------------------------------------------------------
9
<PAGE>
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of shareholders intended to be presented pursuant to Rule 14a-8
under the Securities Exchange Act of 1934 (the "Exchange Act") at our 2000
Annual Meeting of Shareholders must be received by us at 9400 East Market
Street, Warren, Ohio 44484, on or before December 2, 1999, for inclusion in
our proxy statement and form of proxy relating to the 2000 Annual Meeting of
Shareholders. In order for a shareholder's proposal outside of Rule 14a-8
under the Exchange Act to be considered timely within the meaning of Rule 14a-
4(c) of the Exchange Act, such proposal must be received by us at the address
listed in the immediately preceding sentence not later than February 15, 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive
officers, and owners of more than 10% of the our common shares, to file with
the Securities and Exchange Commission (the "SEC") and the New York Stock
Exchange initial reports of ownership and reports of changes in ownership of
our common shares and other equity securities. Executive officers, directors
and owners of more than 10% of the Common Shares are required by SEC
regulations to furnish the Company with copies of all forms they file pursuant
to Section 16(a).
To our knowledge, based solely on our review of the copies of such reports
furnished to us and written representations that no other reports were
required, during the fiscal year ended December 31, 1998, all Section 16(a)
filing requirements applicable to its executive officers, directors and
greater-than-10% beneficial owners were complied with, except that Scott N.
Draime, a 10% shareholder, failed to report four transactions in September
1998 on a timely basis.
OTHER MATTERS
Representatives of Arthur Andersen LLP, which served as our independent
public accountants during the fiscal year ended December 31, 1998, are
expected to be present at the annual meeting and will have the opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.
If the enclosed proxy is executed and returned to us, the persons named in
it will vote the shares represented by that proxy at the meeting. The form of
proxy permits specification of a vote for the election of directors as set
forth under "Election of Directors" above, the withholding of authority to
vote in the election of directors, or the withholding of authority to vote for
one or more specified nominees. When a choice has been specified in the proxy,
the shares represented will be voted in accordance with that specification. If
no specification is made, those shares will be voted at the meeting to elect
directors as set forth under "Election of Directors" above. Under Ohio law and
the Company's Amended and Restated Articles of Incorporation, as amended,
broker non-votes and abstaining votes will not be counted in favor of or
against any nominee. Director nominees who receive the greatest number of
affirmative votes will be elected directors. If any other matter properly
comes before the meeting, the persons named in the proxy will vote thereon in
accordance with their judgment. We do not know of any other matter that will
be presented for action at the meeting and we have not received any timely
notice that any of our shareholders intend to present a proposal at the
meeting.
By order of the Board of Directors,
Avery S. Cohen,
Secretary
Dated: March 31, 1999
10
<PAGE>
STONERIDGE, INC.
P R O X Y
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The undersigned hereby appoints Cloyd J. Abruzzo, Kevin P. Bagby and Avery
S. Cohen, and each of them, attorneys and proxies of the undersigned, with full
power of substitution, to attend the annual meeting of shareholders of
Stoneridge, Inc. to be held at 600 Golf Drive, Warren, Ohio 44483, on Monday,
May 3, 1999, at 10:00 a.m., local time, or any adjournment thereof, and to vote
the number of shares of Stoneridge, Inc. which the undersigned would be entitled
to vote, and with all the power the undersigned would possess if personally
present, as follows:
1. ________ FOR (except as noted below), or ________ WITHHOLD AUTHORITY to
vote for, the following nominees for election as directors, each to
serve until the next annual meeting of the shareholders and until his
successor has been duly elected and qualified: Cloyd J. Abruzzo,
Richard E. Cheney, Avery S. Cohen, D.M. Draime, Sheldon J. Epstein,
C.J. Hire, Richard G. LeFauve and Earl L. Linehan.
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(INSTRUCTION: To withhold authority to vote for any particular nominee,
write that nominee's name on the line provided below.)
2. On such other business as may properly come before the meeting.
<PAGE>
The Proxies will vote as specified above, or if a choice is not specified,
they will vote FOR the nominees listed in Item 1.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
Receipt of the Notice of Annual Meeting
of Shareholders and Proxy Statement
dated March 31, 1999, is hereby
acknowledged.
Dated ___________________________, 1999
_______________________________________
_______________________________________
_______________________________________
Signature(s)
(Please sign exactly as your name or
names appear hereon, indicating, where
proper, official position or
representative capacity.)
