<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999. Commission file number 001-13337
STONERIDGE, INC.
--------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Ohio 34-1598949
------------------------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
9400 East Market Street, Warren, Ohio 44484
------------------------------------- ---------------------
(Address of Principal Executive Offices) (Zip Code)
(330) 856-2443
--------------------------------------------------
Registrant's Telephone Number, Including Area Code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No .
---- ----
The number of Common Shares, without par value, outstanding as of May 11, 1999:
22,397,311
<PAGE>
STONERIDGE, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
Part I Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 1999 2
and December 31, 1998
Condensed Consolidated Statements of Income for the three 3
months ended March 31, 1999 and 1998
Condensed Consolidated Statements of Cash Flows for the 4
three months ended March 31, 1999 and 1998
Notes to Condensed Consolidated Financial Statements 5-7
Item 2. Management's Discussion and Analysis of 8-11
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosure About Market 11
Risk
Part II Other Information 12
Signatures 13
Exhibit Index 14
</TABLE>
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------------ -----------------
(unaudited) (audited)
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 1,764 $ 1,876
Accounts receivable, net 102,398 84,655
Inventories 57,323 53,273
Prepaid expenses and other 8,010 5,983
Deferred income taxes 12,447 11,679
------------------ -----------------
Total current assets 181,942 157,466
------------------ -----------------
PROPERTY, PLANT AND EQUIPMENT, net 99,970 94,770
OTHER ASSETS:
Goodwill, net 349,116 351,501
Other intangible assets, net 3,908 3,928
Investments and other 28,463 30,451
------------------ -----------------
TOTAL ASSETS $663,399 $638,116
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 21,885 $ 21,213
Accounts payable 43,517 45,835
Accrued expenses and other 53,052 48,234
------------------ -----------------
Total current liabilities 118,454 115,282
------------------ -----------------
LONG-TERM DEBT, net of current portion 332,449 322,724
DEFERRED INCOME TAXES 9,544 8,088
OTHER LIABILITIES 1,552 1,480
------------------ -----------------
Total long-term liabilities 343,545 332,292
------------------ -----------------
SHAREHOLDERS' EQUITY:
Preferred shares, without par value, 5,000 authorized, none issued -- --
Common shares, without par value, 60,000 authorized, 22,397 issued and -- --
outstanding at March 31, 1999 and December 31, 1998, stated at
Additional paid-in capital 141,506 141,506
Retained earnings 60,103 49,330
Accumulated other comprehensive income (209) (294)
------------------ -----------------
Total shareholders' equity 201,400 190,542
------------------ -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $663,399 $638,116
================== =================
</TABLE>
The accompanying notes to condensed consolidated financial statements are
an integral part of these condensed consolidated balance sheets.
2
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands except for per share data)
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------------
1999 1998
------------ ------------
<S> <C> <C>
NET SALES $177,654 $131,216
COST AND EXPENSES:
Cost of goods sold 128,214 99,513
Selling, general and administrative expenses 23,183 15,665
------------ ------------
Operating income 26,257 16,038
Interest expense, net 8,250 274
------------ ------------
INCOME BEFORE INCOME TAXES 18,007 15,764
Provision for income taxes 7,234 6,382
------------ ------------
NET INCOME $ 10,773 $ 9,382
============ ============
BASIC AND DILUTED NET INCOME PER SHARE $0.48 $0.42
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 22,397 22,397
============ ============
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated statements.
3
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
For the three months
ended March 31,
------------------------------
1999 1998
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 10,773 $ 9,382
Adjustments to reconcile net income to net cash
from operating activities-
Depreciation and amortization 7,106 3,559
Deferred income taxes 696 (997)
Changes in operating assets and liabilities-
Accounts receivable, net (13,385) (13,815)
Inventories 945 (161)
Prepaid expenses and other (1,531) (1,064)
Other assets, net 796 (995)
Accounts payable (4,656) 4,325
Accrued expenses and other 64 (1,027)
------------- -------------
Net cash from operating activities 808 (793)
------------- -------------
INVESTING ACTIVITIES:
Capital expenditures (1,639) (1,734)
Proceeds from sale of fixed assets -- 12
Business acquisitions (12,452) --
------------- -------------
Net cash from investing activities (14,091) (1,722)
------------- -------------
FINANCING ACTIVITIES:
Shareholder distributions paid -- (2,600)
Net proceeds (repayments) of long-term debt and 2,722 (140)
other
Net borrowings under credit facility 10,391 4,871
------------- -------------
Net cash from financing activities 13,113 2,131
------------- -------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH 58 --
EQUIVALENTS
NET CHANGE IN CASH AND CASH EQUIVALENTS (112) (384)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,876 1,338
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,764 $ 954
============= =============
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated statements.
4
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except for share and per share data)
1. The accompanying condensed consolidated financial statements have been
prepared by Stoneridge, Inc. (the Company), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission (the
Commission). The information furnished in the condensed consolidated
financial statements includes normal recurring adjustments and reflects all
adjustments which are, in the opinion of management, necessary for a fair
presentation of such financial statements. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the Commission's rules and regulations.
Although the Company believes that the disclosures are adequate to make the
information presented not misleading, it is suggested that these condensed
consolidated financial statements be read in conjunction with the audited
financial statements and the notes thereto included in the Company's 1998
Annual Report to Shareholders.
The results of operations for the three months ended March 31, 1999 are not
necessarily indicative of the results to be expected for the full year.
2. Inventories are valued at the lower of cost or market. Cost is determined
by the last-in, first-out (LIFO) method for approximately 69% and 76% of
the Company's inventories at March 31, 1999 and December 31, 1998,
respectively, and by the first-in, first-out (FIFO) method for all other
inventories. Inventory cost includes material, labor and overhead.
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
-------------- -----------------
<S> <C> <C>
Raw materials $ 37,739 $32,453
Work in progress 8,340 10,673
Finished goods 13,426 12,379
Less-LIFO reserve (2,182) (2,232)
------------ ------------
Total $57,323 $53,273
============ ============
</TABLE>
3. On March 6, 1999, the Company purchased certain assets and assumed certain
liabilities of Delta Schoeller, Ltd. (Delta), a United Kingdom manufacturer
of switches for the automotive industry. The transaction was accounted for
as a purchase. The preliminary purchase price approximates $12.0 million.
On December 31, 1998, the Company purchased all the outstanding common
shares of Hi-Stat Manufacturing Company, Inc. (Hi-Stat) for approximately
$362,000. Hi-Stat manufactures engineered sensors, switches and soleniods
for the automotive industry. The transaction was accounted for as a
purchase. Accordingly, the assets acquired and liabilities assumed of Hi-
Stat are included in the consolidated balance sheet as of March 31, 1999
and December 31, 1998. The purchase price was funded with the Company's
cash on hand and with proceeds from the Company's senior secured credit
facility. The components of intangible assets included in the allocation
of purchase price at December 31, 1998 and the related straight-line
amortization periods is summarized as follows:
5
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
(in thousands, except for share and per share data)
<TABLE>
<CAPTION>
Amortization
Amount Period (years)
------------ --------------
<S> <C> <C>
Non-compete covenants $ 590 2
Patents 2,580 6-13
Goodwill 306,613 40
--------
Total $309,783
========
</TABLE>
The results of operations of Hi-Stat will be included in the
accompanying financial statements from the date of acquisition. As such,
Hi-Stat has no effect on fiscal year 1998 net income.
The unaudited proforma consolidated results of operations as though
Hi-Stat had been acquired as of the beginning of fiscal 1998 is as follows:
<TABLE>
<CAPTION>
Three months ended
March 31, 1998
------------------
<S> <C>
Net sales $172,869
Operating income $ 22,741
Net income $ 7,330
Basic and diluted earnings per share $ 0.33
</TABLE>
The pro forma data does not purport to be indicative of the results
that would have been obtained had these events actually occurred at the
beginning of the periods presented and is not intended to be a projection of
future results. The pro forma amounts reflect the results of operations for the
Company, Hi-Stat and the following assumed purchase accounting adjustments for
the periods presented:
. Elimination of historical management costs and interest expense of
Hi-Stat.
. Interest expense on borrowings used to fund the acquisition
. Amortization of intangible assets based on the purchase price allocation
. Estimated income tax effect on the results of operations and the pro forma
adjustments assuming both companies were subject to tax as C corporations
4. Other comprehensive income includes foreign currency translation
adjustments, net of related tax. Comprehensive income consists of the
following:
<TABLE>
<CAPTION>
March 31, 1999 March 31, 1998
------------------- -------------------
<S> <C> <C>
Net income $10,773 $9,382
Other comprehensive income 85 90
------------------- -------------------
Comprehensive income $10,858 $9,472
=================== ===================
</TABLE>
6
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
(in thousands, except for share and per share data)
5. The Company has a $425,000 credit agreement with a bank group. The credit
agreement has three components: a $100,000 revolving credit facility, a
$150,000 term facility and a $175,000 term facility. The $100,000 revolving
facility and the $150,000 term facility expire on December 31, 2003, and
require a commitment fee of 0.37% to 0.50% on the unused balance. Interest
is payable quarterly at either (i) the prime rate plus a margin of .25% to
1.50% or (ii) LIBOR plus a margin of 1.75% to 3.00%, depending upon the
Company's ratio of consolidated total debt to consolidated earnings before
interest, taxes, depreciation and amortization, as defined. The $175,000
term facility expires on December 31, 2005. Interest is payable quarterly
at either (i) the prime rate plus a margin of 2.00% or (ii) LIBOR plus a
margin of 3.50%.
Long-term debt consists of the following:
<TABLE>
<CAPTION>
March 31, 1999 December 31,1998
------------------------- -------------------------
<S> <C> <C>
Borrowings under credit facility $352,541 $342,150
Other 1,793 1,787
------------------------- -------------------------
354,334 343,937
Less: Current maturities 21,885 21,213
------------------------- -------------------------
$332,449 $322,724
========================= =========================
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Three Months Ended March 31, 1999 Compared To Three Months Ended March 31, 1998
- -------------------------------------------------------------------------------
Net Sales. Net sales for the first quarter of 1999 increased by $46.5 million,
or 35.4%, to $177.7 million from $131.2 million for the same period in 1998.
Sales of core products increased by $54.1 million, or 49.9%, to $162.5 million
during the first quarter of 1999 compared to $108.4 million for the same period
of 1998. Sales of core products from the recent acquisitions of Hi-Stat and
Delta accounted for $47.1 million of the change, while sales of existing core
products increased by $7.0 million, or 6.5%, compared to same period in 1998.
Sales revenues for the quarter were favorably impacted by higher OEM production
volumes in both the passenger car/light truck and the commercial vehicle markets
which was offset by lower production volumes in the agricultural vehicle market.
Sales for the first quarter of 1999 for North America increased $40.6 million to
$161.2 million from $120.6 million for the same period in 1998. North American
sales accounted for 90.7% of total sales for the first quarter of 1999 compared
with 91.9% for the same period in 1998. Sales for the first quarter of 1999
outside North America increased $5.9 million to $16.5 million from $10.6 million
for the same period in 1998. Sales outside North America accounted for 9.3% of
total sales for the first quarter of 1999 compared with 8.1% for the same period
in 1998.
As expected, contract manufacturing sales for the first quarter of 1999 declined
by $7.6 million to $15.2 million, or 8.6%, of the Company's total sales revenue
compared with $22.8 million, or 17.4%, of total sales revenue for the same
period in 1998.
Cost of Goods Sold. Cost of goods sold for the first quarter of 1999 increased
by $28.7 million, or 28.8%, to $128.2 million from $99.5 million in the first
quarter of 1998. As a percentage of sales, cost of goods sold decreased to
72.2% in 1999 from 75.8% in 1998. The decrease as a percent of sales was due
primarily to a shift in product mix to higher value added electrical and
electronic core products and lower contract manufacturing sales.
Selling, General and Administrative Expenses. Selling, general and
administrative (SG&A) expenses increased by $7.5 million to $23.2 million in the
first quarter of 1999 from $15.7 million for the same period in 1998. As a
percentage of sales, SG&A expenses increased to 13.1% for the first quarter of
1999 from 12.0% for the same period in 1998. The increase is primarily
attributable to costs from the recent acquisitions.
Interest Expense. Interest expense for the first quarter of 1999 was $8.2
million compared with $0.3 million in 1998. Average outstanding indebtedness
was $349.1 million and $12.2 million for the first three months of 1999 and
1998, respectively. The increase in average outstanding indebtedness was
primarily due to borrowings to finance recent acquisitions.
Income Before Income Taxes. As a result of the foregoing, income before taxes
increased by $2.2 million for the first quarter of 1999 to $18.0 million from
$15.8 million in 1998.
Provision for Income Taxes. The Company recognized provisions for income taxes
of $7.2 million and $6.4 million for federal, state and foreign income taxes for
the first quarters of 1999 and 1998, respectively.
Net Income. As a result of the foregoing, net income increased by $1.4 million,
or 14.9%, to $10.8 million for the first quarter of 1999 from $9.4 million in
1998.
8
<PAGE>
Liquidity and Capital Resources
Net cash provided from operating activities was $0.8 million for the
quarter ended March 31, 1999 as compared to net cash used in operating
activities of $0.8 million for the quarter ended March 31, 1998. The increase in
net cash from operating activities of $1.6 million was due to the increase in
net income of $1.4 million and the increase in depreciation and amortization of
$3.5 million which was offset by the increase in working capital and other
operating assets of $3.3 million.
Net cash used for investing activities was $14.1 million and $1.7 million
for the quarters ended March 31, 1999 and 1998, respectively. The increase in
cash used for investing activities of $12.4 million was primarily the result of
the acquisition of Delta. The acquisition of Delta was financed with funds from
the Company's $425.0 million credit agreement.
Net cash provided by financing activities was $13.1 million and $2.1
million for the quarters ended March 31, 1999 and 1998, respectively. Primarily
as a result of the Delta acquisition, long-term debt increased $13.1 million for
the quarter ended March 31, 1999.
The Company has a $425.0 million credit agreement (of which $352.5 million
was outstanding at March 31, 1999) with a bank group. The credit agreement has
three components: a $100.0 million revolving facility, a $150.0 million term
facility, and a $175.0 million term facility. The $100.0 million revolving
facility and the $150.0 million term facility expire on December 31, 2003, and
require a commitment fee of 0.37% to 0.50% on the unused balance. Interest is
payable quarterly at either (i) the prime rate plus a margin of .25% to 1.50% or
(ii) LIBOR plus a margin of 1.75% to 3.00%, depending upon the Company's ratio
of consolidated total debt to consolidated earnings before interest, taxes,
depreciation and amortization, as defined. The $175.0 million term facility
expires on December 31, 2005. Interest is payable quarterly at either (i) the
prime rate plus a margin of 2.00% or (ii) LIBOR plus a margin of 3.50%.
The Company has entered into five interest rate swap agreements with a
total notional amount of $345.0 million. The interest rate swap agreements
exchange variable interest rates on the senior secured credit facility for fixed
interest rates. The Company does not use derivatives for speculative or profit-
motivated purposes. To the extent that the notional amount of the swap
agreements exceed the carrying value of the underlying debt, a mark to market
adjustment is reflected in the financial statements.
Management believes that cash flows from operations and the availability of
funds from the Company's credit facilities will provide sufficient liquidity to
meet the Company's growth and operating needs.
Inflation and International Presence
Management believes that the Company's operations have not been adversely
affected by inflation. By operating internationally, the Company is affected by
the economic conditions of certain countries. Based on the current economic
conditions in these countries, management believes they are not significantly
exposed to adverse economic conditions.
9
<PAGE>
Recently Issued Accounting Standards
Effective January 1, 1998 the Company adopted Statement of Financial
Accounting Standards No. 131 (SFAS 131), "Disclosures about Segments of an
Enterprise and Related Information." SFAS 131 requires the financial statement
disclosures for operating segments, products and services, and geographic areas.
The Company operates in one business segment based on the criteria set forth in
SFAS 131. Therefore, SFAS 131 will not affect the Company's financial position,
results of operations or financial statement disclosures.
The Company is required to adopt Statement of Financial Accounting
Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities" for its fiscal year ending 2000. SFAS 133 establishes new accounting
and reporting standards for derivatives and hedging activities. The Company has
not yet evaluated the financial accounting and reporting impact of SFAS 133.
Year 2000 Initiative
The Company has conducted an evaluation of the actions necessary in order
to gain assurance that its information and non-information technology systems
will be able to function without disruption with respect to the application of
dating systems in the Year 2000. As a result of this evaluation, the Company is
engaged in the process of upgrading, replacing and testing information systems,
computer applications and other systems to be able to operate without
disruption due to Year 2000 issues. The Company's remedial actions are scheduled
to be completed by the end of the third quarter of 1999.
There can be no assurance that the remedial actions being implemented by
the Company will be able to be completed by the time necessary to avoid Year
2000 dating systems problems or that the cost of doing so will not be in excess
of the amounts discussed below. If the Company is unable to complete its
remedial actions in the planned timeframe, contingency plans will be developed
to address systems that may not be Year 2000 compliant. These contingency plans
could include accelerating the implementation of third party Year 2000 compliant
software.
The Company estimates total historical Year 2000 expenditures to be
approximately $2.0 million. Year 2000 expenditures relate to modifying software,
purchasing new software and hardware, and replacing non-compliant software and
hardware. Year 2000 expenditures to be incurred through December 31, 1999 are
estimated to be an additional $1.6 million. These costs include both internal
and external personnel costs related to the assessment process, as well as the
cost of purchasing certain hardware and software. There can be no guarantee that
these estimates will be achieved, and actual results may differ from those
planned. The cost of remedial actions to rectify non-information technology
systems is not anticipated to be material to the Company's financial position or
results of operations. The Company intends to use cash provided from operations
to fund expenditures related to Year 2000 issues.
The Company currently believes the most likely worst case scenario with
respect to the Year 2000 issue is a disruption in the supply of products and
services from the Company's vendors, including utility providers. Such a supply
disruption could result in the Company not being able to produce certain
products for a period of time, which could have a material adverse effect on the
financial condition and results of operations of the Company.
10
<PAGE>
The Company intends to develop contingency plans to address potential third
party system failures resulting from a Year 2000 problem. The Company has an
ongoing assessment process to gain assurances and certifications of customers'
and suppliers' Year 2000 readiness programs. Based on the results of the
assessment process, the Company will develop contingency plans for those
suppliers who are unable or unwilling to develop remediation plans to become
Year 2000 compliant. Although these plans are not yet complete, the Company
expects that these plans will include a combination of the resourcing of
materials to Year 2000 compliant vendors and the stockpiling of components. The
Company expects the implementation of these plans to occur by the end of the
third quarter of 1999.
Portions of this Year 2000 section contain statements that constitute
forward-looking statements. The forward-looking statements include statements
regarding the Company's intent, belief and expectations with respect to, among
other things, the timing of the Company's Year 2000 remedial actions and the
development of the Company's contingency plans, and the future expenses related
to the Company's Year 2000 compliance programs. Investors are cautioned that any
such forward-looking statement is not a guarantee and involves risks and
uncertainties, and that actual events may differ materially from those in the
forward-looking statement as a result of various factors, including, among
others, the discovery of a currently unknown material Year 2000 issue, the
failure of third parties to address Year 2000 issues, the failure to implement
the Company's Year 2000 plan as scheduled, and a material increase in the costs
of external consultants.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company is exposed to certain market risks, primarily resulting from
the effects of changes in interest rates. To reduce exposures to market risks
resulting from fluctuations in interest rates, the Company uses derivative
financial instruments. Specifically, the Company uses interest rate swap
agreements to mitigate the effects of interest rate fluctuations on net income
by changing the floating interest rates on certain portions of the Company's
debt to fixed interest rates. The effect of changes in interest rates on the
Company's net income generally has been small relative to other factors that
also affect net income, such as sales and operating margins. Management believes
that its use of these financial instruments to reduce risk is in the Company's
best interest. The Company does not enter into financial instruments for trading
purposes.
The Company's risks related to commodity price and foreign currency
exchange risks have historically not been material. The Company does not expect
the effects of these risks to be material based on current operating and
economic conditions in the countries and markets in which it operates.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
In the ordinary course of business, the Company is involved in various legal
proceedings, workers' compensation and product liability disputes. The Company
is of the opinion that the ultimate resolution of these matters will not have a
material adverse effect on the results of operations or the financial position
of the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
- --------------------------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ----------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None.
ITEM 5. OTHER INFORMATION
- --------------------------
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits
3.1 Second Amended and Restated Articles of Incorporation of the Company
3.2 Amended and Restated Code of Regulations of the Company
27.1 Financial Data Schedule for the three months ended March 31, 1999
(b) Reports on Forms 8-K
1. The Registrant's Current Report on Form 8-K, dated January 15, 1999 that
described the acquisition of Hi-Stat Manufacturing Co., Inc.
2. The Company's Amendment No. 1 to Current Report on Form 8-K/A, dated
January 26, 1999 that described the acquisition of Hi-Stat Manufacturing
Co., Inc.
3. The Company's Amendment No. 2 to Current Report on Form 8-K/A, dated
March 16, 1999 that described the acquisition of Hi-Stat Manufacturing
Co., Inc. including financial statements of the business acquired and
pro forma financial information.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STONERIDGE, INC.
Date: May 17, 1999 /s/ Cloyd J. Abruzzo
--------------------
Cloyd J. Abruzzo
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 17, 1999 /s/ Kevin P. Bagby
------------------
Kevin P. Bagby
Treasurer and Chief Financial Officer
(Principal Financial and Chief
Accounting Officer)
13
<PAGE>
STONERIDGE, INC.
EXHIBIT INDEX
Exhibit
Number Exhibit
- -------- -------
3.1 Second Amended and Restated Articles of Incorporation of the Company,
filed herewith.
3.2 Amended and Restated Code of Regulations of the Company, filed
herewith.
27.1 Financial Data Schedule for the three months ended March 31, 1999,
filed herewith.
14
<PAGE>
Exhibit 3.1
SECOND AMENDED AND RESTATED
---------------------------
ARTICLES OF INCORPORATION
-------------------------
OF
--
STONERIDGE, INC.
----------------
FIRST: The name of the Corporation shall be "Stoneridge, Inc."
SECOND: The place in the State of Ohio where the principal office of the
Corporation is to be located is in Howland Township, Trumbull County.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be formed under Sections 1701.01 to 1701.98,
inclusive, of the Ohio Revised Code and any amendments heretofore or hereafter
made thereto.
FOURTH: The authorized number of shares of the Corporation is 65,000,000,
consisting of 60,000,000 Common Shares, without par value (hereinafter referred
to as "Common Shares"), and 5,000,000 Serial Preferred Shares, without par value
(hereinafter referred to as "Serial Preferred Shares").
DIVISION A
The Serial Preferred Shares shall have the following express terms:
Section 1. Series. The Serial Preferred Shares may be issued
from time to time in one or more series. All Serial Preferred Shares shall
be of equal rank and shall be identical, except in respect of the matters
that may be fixed by the Board of Directors as hereinafter provided, and
each share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. Subject to the provisions of Sections 2 through 6, both
inclusive, of this Division, which provisions shall apply to all Serial
Preferred Shares, the Board of Directors hereby is authorized to cause such
shares to be issued in one or more series and with respect to each such
series to determine and fix prior to the issuance thereof (and thereafter,
to the extent provided in clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series, which
number the Board of Directors may (except when otherwise provided
in the creation of
<PAGE>
the series) increase or decrease from time to time before or after
the issuance thereof (but not below the number of shares thereof
then outstanding);
(c) The dividend rate or rates of the series, including
the means by which any such rate may be established;
(d) The date or dates from which dividends shall accrue and
be cumulative and the dates on which and the period or periods for
which dividends, if declared, shall be payable, including the means
by which any such date or period may be established;
(e) The redemption rights and redemption price or prices,
if any, for shares of the series;
(f) The terms and amount of the sinking fund, if any, for
the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be convertible
into Common Shares or shares of any other class and, if so, the
conversion rate or rates or price or prices, any adjustments
thereof and all other terms and conditions upon which such
conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(b) of this Division) on the issuance of shares of the
same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time amendments
to the Second Amended and Restated Articles of Incorporation fixing, with
respect to each such series, the matters described in clauses (a) through (i),
both inclusive, of this Section and is authorized to take such actions with
respect thereto as may be required by law in order to effect such amendments.
Section 2. Dividends.
(a) The holders of Serial Preferred Shares of each series,
in preference to the holders of Common Shares and of any other
class of shares ranking junior to the Serial Preferred Shares,
shall be entitled to receive out of any funds legally available
for the payment of dividends on Serial Preferred Shares, when and
as declared by the Board of Directors, dividends in cash at the
rate or rates for such series fixed in accordance with the
provisions of Section 1 of this Division A and no more, payable on
the dates fixed for such series. Such dividends shall accrue and
be cumulative, in the case of shares of each particular series,
from and after the date or dates fixed with respect to
<PAGE>
such series. No dividends shall be paid upon or declared or set
apart for any series of Serial Preferred Shares for any dividend
period unless at the same time a like proportionate dividend
payable for the dividend periods terminating on the same or any
earlier date, ratably in proportion to the respective annual
dividend rates fixed therefor, shall have been paid upon or
declared or set apart for all Serial Preferred Shares of all series
then issued and outstanding and entitled to receive such dividend.
(b) So long as any Serial Preferred Shares shall be
outstanding no dividend, except a dividend payable in Common Shares
or other shares ranking junior to Serial Preferred Shares, shall be
paid or declared or any distribution be made, except as aforesaid,
in respect of the Common Shares or any other shares ranking junior
to Serial Preferred Shares, nor shall any Common Shares or any
other shares ranking junior to Serial Preferred Shares be
purchased, retired or otherwise acquired by the Corporation, except
out of the proceeds of the sale of Common Shares or other shares of
the Corporation ranking junior to Serial Preferred Shares received
by the Corporation subsequent to the date of first issuance of
Serial Preferred Shares of any series, unless:
(1) All accrued and unpaid dividends on Serial
Preferred Shares, including the full dividends for all
current dividend periods, shall have been declared and paid
or a sum sufficient for payment thereof set apart; and
(2) There shall be no arrearage with respect to the
redemption of Serial Preferred Shares of any series from any
sinking fund provided for shares of such series in accordance
with Section 1 of this Division A.
Section 3. Redemption.
(a) Subject to the express terms of each series and the
provisions of Subsection 5(c)(3) of this Division A, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series of
Serial Preferred Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with Section 1
of this Division A; and
(2) Shall, from time to time, make such redemptions of
each series of Serial Preferred Shares as may be required to
fulfill the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption prices fixed
in accordance with Section 1 of this Division A;
<PAGE>
and shall in the case of any such redemption pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall
be mailed, postage prepaid, to the holders of record of
Serial Preferred Shares to be redeemed at their
respective addresses then appearing on the books of the
Corporation, not less than 30 days nor more than 60 days
prior to the date fixed for such redemption, or such
other time prior thereto as the Board of Directors shall
fix for any series pursuant to Section 1 of this
Division A prior to the issuance thereof. At any time
after notice as provided above has been deposited in the
mail, the Corporation may deposit the aggregate
redemption price of Serial Preferred Shares to be
redeemed, together with accrued and unpaid dividends
thereon to the redemption date, with any bank or trust
company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $50,000,000,
named in such notice and direct that there be paid to
the respective holders of Serial Preferred Shares so to
be redeemed amounts equal to the redemption price of
Serial Preferred Shares so to be redeemed, together with
such accrued and unpaid dividends thereon, on surrender
of the share certificate or certificates held by such
holders; and upon the deposit of such notice in the mail
and the making of such deposit of money with such bank
or trust company, such holders shall cease to be
shareholders with respect to such shares; and from and
after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the
Corporation with respect to such shares, except only the
right to receive such money from such bank or trust
company without interest or to exercise before the
redemption date any unexpired privileges of conversion.
If less than all of the outstanding Serial Preferred
Shares are to be redeemed, the Corporation shall select
by lot the shares so to be redeemed in such manner as
shall be prescribed by the Board of Directors .
(2) If the holders of Serial Preferred Shares
which have been called for redemption shall not within
five years after such deposit claim the amount deposited
for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the Corporation
such unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Serial Preferred Shares which are (1) redeemed by
the Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted in
accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of authorized
but unissued Serial Preferred Shares without serial designation.
<PAGE>
Section 4. Liquidation.
(a) (1) In any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of
the Corporation, the holders of Serial Preferred Shares
of any series shall be entitled to receive in full out
of the assets of the Corporation, including its capital,
before any amount shall be paid or distributed among the
holders of Common Shares or any other shares ranking
junior to Serial Preferred Shares, the amounts fixed
with respect to shares of such series in accordance with
Section 1 of this Division, plus an amount equal to all
dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the
Corporation. If the net assets of the Corporation
legally available therefor are insufficient to permit
the payment upon all outstanding Serial Preferred Shares
of the full preferential amount to which they are
entitled pursuant to this subsection 4(a)(1), then such
net assets shall be distributed ratably upon all
outstanding Serial Preferred Shares in proportion to the
full preferential amount to which each such share is
entitled.
(2) After payment to the holders of Serial
Preferred Shares of the full preferential amounts as
aforesaid, the holders of Serial Preferred Shares, as
such, shall have no right or claim to any of the
remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation
into or with any other corporation or entity, the merger of
any other corporation or entity into the Corporation, or the
sale, lease or conveyance of all or substantially all the
assets of the Corporation, shall not be deemed to be a
dissolution, liquidation or winding up for the purposes of
this Section 4 .
Section 5. Voting.
(a) The holders of Serial Preferred Shares shall have no voting
rights, except as provided in this Section or as required by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of the equivalent of the full
dividends on any series of Serial Preferred Shares at the
time outstanding, whether or not earned or declared, for a
number of dividend payment periods (whether or not
consecutive) which in the aggregate contain at least 540
days, the holders of Serial Preferred Shares of all series,
voting together as one separate class, shall be entitled to
elect, as herein provided, two members of the Board of
Directors of the Corporation; provided, however, that the
holders of Serial Preferred Shares shall not have or exercise
such special class voting rights except at meetings of such
shareholders for the election of directors at which the
holders of not
<PAGE>
less than 50% of the outstanding Serial Preferred Shares of
all series then outstanding are present in person or by
proxy; and provided further that the special class voting
rights provided for in this subsection 5(b)(1) when the same
shall have become vested shall remain so vested until all
accrued and unpaid dividends on Serial Preferred Shares of
all series then outstanding shall have been paid, whereupon
the holders of Serial Preferred Shares shall be divested of
their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights on another default of the type
specified in this subsection 5(b)(1).
(2) In the event of default entitling the holders of
Serial Preferred Shares to elect two directors as specified
in paragraph (1) of this Subsection, a special meeting of
such holders for the purpose of electing such directors shall
be called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of Serial Preferred Shares of all series at the
time outstanding, and notice thereof shall be given in the
same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 120
days after the date of receipt of the foregoing written
request from the holders of Serial Preferred Shares; provided
further, however, that if that annual meeting is not so held
within such 120-day period, a special meeting shall be called
as soon as is practicable after the Corporation becomes aware
that such annual meeting will not be so held. At any meeting
at which the holders of Serial Preferred Shares shall be
entitled to elect directors, the holders of 50% of Serial
Preferred Shares of all series at the time outstanding,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a
majority of such shares so present at any such meeting at
which there shall be such a quorum shall be sufficient to
elect the members of the Board of Directors which the holders
of Serial Preferred Shares are entitled to elect as herein
provided. Notwithstanding any provision of these Second
Amended and Restated Articles of Incorporation or the Amended
and Restated Code of Regulations of the Corporation or any
action taken by the holders of any class of shares fixing the
number of directors of the Corporation, the two directors who
may be elected by the holders of Serial Preferred Shares
pursuant to this Subsection shall serve in addition to any
other directors then in office or proposed to be elected
otherwise than pursuant to this Subsection. Nothing in this
Subsection shall prevent any change otherwise permitted in
the total number of or classifications of directors of the
Corporation nor require the resignation of any director
elected otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other directors of
the Corporation, the two directors elected by the holders of
Serial
<PAGE>
Preferred Shares shall be elected annually for terms expiring
at the next succeeding annual meeting of shareholders.
(3) The terms of office of all directors then in office
elected by holders of Serial Preferred Shares as provided in
this Subsection shall terminate immediately upon the
expiration of the term of office during which there occurs
any divesting of the special class voting rights of these
holders. If the office of any director elected by such
holders becomes vacant by reason of death, resignation,
removal from office or otherwise, the holders of a majority
of Serial Preferred Shares of all series at the time
outstanding, present in person or by proxy at a special
meeting of shareholders called and held in accordance with
Subsection (2) above, shall elect a successor who shall hold
office for the unexpired term in respect of which such
vacancy occurred.
(c) The affirmative vote of the holders of at least
two-thirds of Serial Preferred Shares at the time outstanding, voting together
as one separate class, shall be necessary to effect any one or more of the
following (but so far as the holders of Serial Preferred Shares are concerned,
such action may be effected with such vote):
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Second Amended and Restated Articles of Incorporation
or of the Code of Regulations of the Corporation which
affects adversely the preferences or voting or other rights
of the holders of Serial Preferred Shares; provided, however,
neither the amendment of the Second Amended and Restated
Articles of Incorporation so as to authorize, create or
change the authorized or outstanding number of Serial
Preferred Shares or of any shares ranking on a parity with or
junior to Serial Preferred Shares nor the amendment of the
provisions of the Code of Regulations so as to change the
number or classification of directors of the Corporation
shall be deemed to affect adversely the preferences or voting
or other rights of the holders of Serial Preferred Shares;
and provided further, that if any amendment, alteration or
repeal affects adversely the preferences or voting or other
rights of one or more but not all series of Serial Preferred
Shares at the time outstanding, only the affirmative vote of
the holders of at least two-thirds of the number of shares at
the time outstanding of the series so affected shall be
required;
(2) The authorization, creation or increase in the
authorized number of shares, or of any security convertible
into shares, in either case ranking prior to the Serial
Preferred Shares; or
(3) The purchase or redemption (for sinking fund
purposes or otherwise) of less than all Serial Preferred
Shares then outstanding
<PAGE>
except in accordance with a share purchase offer made to all
holders of record of Serial Preferred Shares, unless all
dividends on all Serial Preferred Shares then outstanding for
all previous dividend periods shall have been declared and
paid or funds therefor set apart and all accrued sinking fund
obligations applicable thereto shall have been complied with.
Section 6. Definitions. For the purposes of this Division:
(a) Whenever reference is made to shares "ranking prior to Serial
Preferred Shares," such reference shall mean all shares of the Corporation in
respect of which the rights of the holders thereof as to the payment of
dividends or as to distributions in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation are
given preference over the rights of the holders of Serial Preferred Shares;
(b) Whenever reference is made to shares on a parity with Serial
Preferred Shares, such reference shall mean all shares of the Corporation in
respect of which the rights of the holders thereof as to the payment of
dividends and as to distributions in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of a Corporation rank
equally (except as to the amounts fixed therefor) with the rights of the holders
of Serial Preferred Shares; and
(c) Whenever reference is made to shares "ranking junior to Serial
Preferred Shares," such reference shall mean all shares of the Corporation other
than those defined under Subsections (a) and (b) of this Section 6 as shares
"ranking prior to" or "on a parity with" Serial Preferred Shares.
DIVISION B
The Common Shares shall have the following express terms:
The Common Shares shall be subject to the express terms of Serial Preferred
Shares and any series thereof. Each Common Share shall be equal to each other
Common Share and the holders thereof shall be entitled to one vote for each
Common Share on all matters presented to the shareholders of the Corporation.
Each Class A and Class B Common Share issued and outstanding immediately prior
to the filing of these Second Amended and Restated Articles of Incorporation,
and each share held at such time by the Corporation as a treasury share, is
changed, effective upon that filing, into 139.0856 Common Shares, with any
fractional Common Share to which a holder would otherwise be entitled being
rounded down to the nearest whole share.
<PAGE>
FIFTH: No holder of shares of the Corporation of any class shall be
entitled as such, as a matter of right, to subscribe for or purchase shares of
the Corporation of any class, now or hereafter authorized, or to subscribe for
or purchase securities convertible into or exchangeable for shares of the
Corporation of any class or to which shall be attached or appertain any warrants
or rights entitling the holder thereof to subscribe for or purchase shares of
the Corporation of any class, except such rights of subscription or purchase, if
any, for such consideration and upon such terms and conditions as its Board of
Directors from time to time may determine.
SIXTH: To the extent permitted by law, the Corporation, by action of
its Board of Directors and without action by its shareholders, may purchase or
otherwise acquire shares of any class issued by it at such times, for such
consideration and upon such terms and conditions as its Board of Directors may
determine.
SEVENTH: Except as otherwise provided in these Second Amended and
Restated Articles of Incorporation or the Code of Regulations of the Corporation
as in effect from time to time, notwithstanding any provision of Sections
1701.01 to 1701.98, inclusive, of the Ohio Revised Code and any amendments
heretofore or hereafter made thereto, requiring for any purpose the vote,
consent, waiver, or release of the holders of shares entitling them to exercise
two-thirds or any other proportion of the voting power of the Corporation or of
any class or classes of shares thereof, any action may be taken by the vote of
the holders of shares entitling them to exercise a majority of the voting power
of the Corporation, or of such class or classes, unless the proportion
designated by such statute cannot be altered by these Second Amended and
Restated Articles of Incorporation.
EIGHTH: No shareholder may cumulate such shareholder's voting power
in the election of directors.
NINTH: No person who is serving or has served as a director of the
Corporation shall be personally liable to the Corporation or any of its
shareholders for monetary damages for breach of any fiduciary duty of such
person as a director by reason of any act or omission of such person as a
director; but the foregoing provision shall not eliminate or limit the liability
of any person (a) for any breach of such person's duty of loyalty as a director
to the Corporation or its shareholders, (b) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, (c)
under Section 1701.95 of the Ohio Revised Code, (d) for any transaction from
which such person derived any improper personal benefit, or (e) to the extent
that such liability may not be limited or eliminated by virtue of Section
1701.13 of the Ohio Revised Code or any successor section or statute. Any repeal
or modification of this NINTH Article by the shareholders of the Corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of such
repeal or modification.
TENTH: If any provision (or portion thereof) of these Second Amended
and Restated Articles of Incorporation shall be found to be invalid, prohibited,
or unenforceable for any reason, the remaining provisions (or portions thereof)
of these Second Amended and Restated Articles of Incorporation shall remain in
full force and effect, and shall be construed
<PAGE>
as if such invalid, prohibited, or unenforceable provision had been stricken
herefrom or otherwise rendered inapplicable, it being the intent of the
Corporation and its shareholders that each such remaining provision (or portion
thereof) of these Second Amended and Restated Articles of Incorporation remain,
to the fullest extent permitted by law, applicable and enforceable as to all
shareholders, notwithstanding any such finding.
ELEVENTH: These Second Amended and Restated Articles of Incorporation
supersede and take the place of the heretofore existing Amended and Restated
Articles of Incorporation and all amendments thereto.
<PAGE>
Exhibit 3.2
AMENDED AND RESTATED CODE OF REGULATIONS
OF
STONERIDGE, INC.
ARTICLE I
---------
Meetings of Shareholders
------------------------
Section 1. Annual Meetings. The annual meeting of shareholders shall
---------------
be held at such time and on such date as may be fixed by the Board of Directors
and stated in the notice of the meeting, for the election of directors, the
consideration of reports to be laid before such meeting and the transaction of
such other business as may properly come before the meeting.
Section 2. Special Meetings. Special meetings of the shareholders
----------------
shall be called upon the written request of the president, the directors by
action at a meeting, a majority of the directors acting without a meeting, or of
the holders of shares entitling them to exercise fifty percent (50%) of the
voting power of the Corporation entitled to vote thereat. Special meetings may
not be called by any other person. Calls for such meetings shall specify the
purposes thereof. No business other than that specified in the call shall be
considered at any special meeting.
Section 3. Notices of Meetings. Unless waived, written notice of
-------------------
each annual or special meeting stating the time, place, and the purposes thereof
shall be given by personal delivery or by mail to each shareholder of record
entitled to vote at or entitled to notice of the meeting, not more than sixty
(60) days nor less than seven (7) days before any such meeting. If mailed, such
notice shall be directed to the shareholder at his address as the same appears
upon the records of the Corporation and shall be deemed to have been given at
the time when it was mailed. Any shareholder, either before or after any
meeting, may waive any notice required to be given by law or under these
Regulations.
Section 4. Place of Meetings. Meetings of shareholders shall be held
-----------------
at the principal office of the Corporation unless the Board of Directors
determines that a meeting shall be held at some other place within or without
the State of Ohio and causes the notice thereof to so state.
Section 5. Quorum. The holders of shares entitling them to exercise
------
a majority of the voting power of the Corporation entitled to vote at any
meeting, present in person or by proxy, shall constitute a quorum for the
transaction of business to be considered at such meeting; provided, however,
that no action required by law or by the Second
<PAGE>
Amended and Restated Articles of Incorporation (as they may be amended from time
to time, the "Articles of Incorporation") or these Regulations to be authorized
or taken by the holders of a designated proportion of the shares of any
particular class or of each class may be authorized or taken by a lesser
proportion. The holders of a majority of the voting shares represented at a
meeting, whether or not a quorum is present, may adjourn such meeting from time
to time until a quorum shall be present.
Section 6. Record Date. The Board of Directors may fix a record date
-----------
for any lawful purpose, including, without limiting the generality of the
foregoing, the determination of shareholders entitled to (i) receive notice of
or to vote at any meeting, (ii) receive payment of any dividend or distribution,
(iii) receive or exercise rights of purchase of or subscription for, or exchange
or conversion of, shares or other securities, subject to any contract right with
respect thereto, or (iv) participate in the execution of written consents,
waivers or releases. Said record date shall not be more than sixty (60) days
preceding the date of such meeting, the date fixed for the payment of any
dividend or distribution or the date fixed for the receipt or the exercise of
rights, as the case may be.
If a record date shall not be fixed, the record date for the
determination of shareholders who are entitled to notice of, or who are entitled
to vote at, a meeting of shareholders shall be the close of business on the date
next preceding the day on which notice is given, or the close of business on the
date next preceding the day on which the meeting is held, as the case may be.
Section 7. Proxies. A person who is entitled to attend a
-------
shareholders' meeting, to vote thereat, or to execute consents, waivers or
releases, may be represented at such meeting or vote thereat, and execute
consents, waivers and releases, and exercise any of his other rights, by proxy
or proxies appointed by a writing signed by such person.
Section 8. Conduct of Meeting. Unless otherwise determined by the
------------------
Board of Directors prior to the meeting, the chairman of any meeting of the
shareholders shall determine the order of business and shall have the authority
in his discretion to regulate the conduct of such meeting, including, without
limitation, by imposing restrictions on the persons (other than shareholders of
the Corporation or their duly appointed proxies) who may attend any such meeting
of shareholders, whether any shareholder or his proxy may be excluded from any
shareholders' meeting based upon any determination by the chairman, in his sole
discretion, that any such person has unduly disrupted or is likely to disrupt
the proceedings thereat, and the circumstances under which any person may make a
statement or ask questions at any meeting of shareholders.
ARTICLE II
----------
Directors
---------
Section 1. Number of Directors. Until changed in accordance with the
-------------------
provisions of this section (or as otherwise provided in the Corporation's
Articles of Incorporation), the number of directors of the Corporation, none of
whom need be
<PAGE>
shareholders, shall be six (6). The number of directors may be increased or
decreased by action of the Board of Directors upon the vote of the majority of
the board or by the vote of the shareholders that are present in person or by
proxy at a meeting to elect directors at which a quorum is present and that are
holders of a majority of the shares represented at the meeting and entitled to
vote on the proposal; provided, however, that in no case shall the number be
fewer than five (5) or more than twelve (12); and provided, further, that no
decrease in the number of directors shall have the effect of removing any
director prior to the expiration of his term of office. Notwithstanding the
foregoing, the aggregate number of members of the Board of Directors shall
automatically increase by the number of directors elected pursuant to Article
Fourth, Division A, subsection 5(b) of the Articles of Incorporation of the
Company, such directors to be elected and hold office in accordance with such
provisions of the Articles of Incorporation of the Company, notwithstanding any
other provision of this Code of Regulations.
Section 2. Election of Directors. (a) Directors shall be elected at
---------------------
the annual meeting of shareholders, but when the annual meeting is not held or
directors are not elected thereat, they may be elected at a special meeting
called and held for that purpose. Such election shall be by ballot whenever
requested by any shareholder entitled to vote at such election; but, unless such
request is made, the election may be conducted in any manner approved at such
meeting.
At each meeting of shareholders for the election of directors, the
candidates receiving the greatest number of votes entitled to be cast shall be
elected as directors.
Section 3. Nominations.
-----------
(a) Qualifications. Directors of the Corporation need not be
--------------
shareholders or residents of the State of Ohio. No person shall be appointed or
elected a director of the Corporation unless:
(i) such person is elected to fill a vacancy in the Board of
Directors pursuant to section 6 of this Article II; or
(ii) such person is nominated for election as a director of the
Corporation in accordance with this section.
Nominations of candidates for election as directors at any meeting of
shareholders called for election of directors (an "Election Meeting") may be
made by the Board of Directors or a committee thereof or any shareholder of
record providing written notification to the Secretary of the Company of such
nomination(s). At the request of the Secretary, each proposed nominee shall
provide the Corporation with such information concerning himself as is required
under the rules and regulations of the Securities and Exchange Commission (the
"Commission") to be included in the Corporation's proxy statement soliciting
proxies for the election of such nominee as a director.
(b) Substitution of Nominees. In the event that a person is validly
------------------------
designated as a nominee in accordance with this Code of Regulations and shall
thereafter become unable
<PAGE>
or unwilling to stand for election to the Board of Directors, the Board of
Directors or a committee thereof may designate a substitute nominee upon
delivery, not fewer than five (5) days prior to the date of an Election Meeting,
of a written notice of the Secretary setting forth such information regarding
such substitute nominee as would have been required to be delivered to the
Secretary pursuant to this Code of Regulations had such substitute nominee been
initially proposed as a nominee.
Section 4. Term of Office. Each director shall hold office until the
--------------
annual meeting next succeeding his election and until his successor is elected
and qualified, or until his earlier resignation, removal from office or death.
Section 5. Removal. All the directors or any individual director may
-------
be removed from office, without assigning any cause, by the vote of the holders
of a majority of the voting power entitling them to elect directors in place of
those to be removed. In case of any such removal, a new director may be elected
at the same meeting for the unexpired term of each director removed.
Section 6. Vacancies. Vacancies in the Board of Directors may be
---------
filled by a majority vote of the remaining directors until an election to fill
such vacancies is had. A vacancy or vacancies in the Board of Directors shall
be deemed to exist if the number of directors is increased by the Board of
Directors. Shareholders entitled to elect directors shall have the right to
fill any vacancy in the board (whether the same has been temporarily filled by
the remaining directors or not) at any meeting of the shareholders called for
that purpose, and any directors elected at any such meeting of shareholders
shall serve until the next annual election of directors and until their
successors are elected and qualified.
Section 7. Quorum and Transaction of Business. A majority of the
----------------------------------
whole authorized number of directors shall constitute a quorum for the
transaction of business, except that a majority of the directors in office shall
constitute a quorum for filling a vacancy on the board. Whenever less than a
quorum is present at the time and place appointed for any meeting of the board,
a majority of those present may adjourn the meeting from time to time until a
quorum shall be present. The act of a majority of the directors present at a
meeting at which a quorum is present shall be the act of the board.
Section 8. Annual Meeting. Annual meetings of the Board of Directors
--------------
shall be held immediately following annual meetings of the shareholders, or as
soon thereafter as is practicable. If no annual meeting of the shareholders is
held, or if directors are not elected thereat, then the annual meeting of the
Board of Directors shall be held immediately following any special meeting of
the shareholders at which directors are elected, or as soon thereafter as is
practicable. If such annual meeting of directors is held immediately following
a meeting of the shareholders, it shall be held at the same place at which such
shareholders' meeting was held.
Section 9. Regular Meetings. Regular meetings of the Board of
----------------
Directors shall be held at such times and places, within or without the State of
Ohio, as the Board of Directors may, by resolution or by-law, from time to time
determine. The secretary shall
<PAGE>
give notice of each such resolution or by-law to any director who was not
present at the time the same was adopted, but no further notice of such regular
meeting need be given.
Section 10. Special Meetings. Special meetings of the Board of
----------------
Directors may be called by the chairman of the board, the president, any vice
president, or a majority of the Board of Directors, and shall be held at such
times and places, within or without the State of Ohio, as may be specified in
such call.
Section 11. Notice of Annual or Special Meetings. Notice of the time
------------------------------------
and place of each annual or special meeting shall be given to each director by
the secretary or by the person or persons calling such meeting. Such notice
need not specify the purpose or purposes of the meeting and may be given in any
manner or method and at such time so that the director receiving it may have
reasonable opportunity to participate in the meeting. Such notice shall, in all
events, be deemed to have been properly and duly given if mailed at least forty-
eight (48) hours prior to the meeting and directed to the residence of each
director as shown upon the secretary's records and, in the event of a meeting to
be held through the use of communications equipment, if the notice sets forth
the telephone number at which each director may be reached for purposes of
participation in the meeting as shown upon the secretary's records and states
that the secretary must be notified if a director desires to be reached at a
different telephone number. The giving of notice shall be deemed to have been
waived by any director who shall participate in such meeting and may be waived,
in a writing, by any director either before or after such meeting.
Section 12. Telephonic Meetings. To the extent permitted by law,
-------------------
members of the Board of Directors or any committee thereof may participate in a
meeting of such body through the use of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participants in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
Section 13. Compensation. The directors, as such, shall be entitled
------------
to receive such reasonable compensation for their services as may be fixed from
time to time by resolution of the board, and expenses of attendance, if any, may
be allowed for attendance at each annual, regular or special meeting of the
Board of Directors. Nothing herein contained shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor. Members of the executive committee, if any, or of any
standing or special committee may by resolution of the board be allowed such
compensation for their services as the Board of Directors may deem reasonable,
and additional compensation may be allowed to directors for special services
rendered.
Section 14. By-laws. For the government of its actions, the Board of
-------
Directors may adopt by-laws consistent with the Articles of Incorporation of the
Corporation and this Code of Regulations.
<PAGE>
ARTICLE III
-----------
Committees
----------
Section 1. Executive Committee. The Board of Directors may from time
-------------------
to time, by resolution passed by a majority of the whole board, create an
executive committee of three or more directors, the members of which shall be
elected by the Board of Directors to serve at the pleasure of the board. If the
Board of Directors does not designate a chairman of the executive committee, the
executive committee shall elect a chairman from its own number. Except as
otherwise provided herein and in the resolution creating an executive committee,
such committee shall, during the intervals between the meetings of the Board of
Directors, possess and may exercise all of the powers of the Board of Directors
in the management of the business and affairs of the Corporation, other than
that of filling vacancies among the directors or in any committee of the
directors. The executive committee shall keep full records and accounts of its
proceedings and transactions. All action by the executive committee shall be
reported to the Board of Directors at its meeting next succeeding such action
and shall be subject to control, revision and alteration by the Board of
Directors, provided that no rights of third persons shall be prejudicially
affected thereby. Vacancies in the executive committee shall be filled by the
directors, and the directors may appoint one or more directors as alternate
members of the committee who may take the place of any absent member or members
at any meeting.
Section 2. Meetings of Executive Committee. Subject to the
-------------------------------
provisions of this Code of Regulations, the executive committee shall fix its
own rules of procedure and shall meet as provided by such rules or by
resolutions of the Board of Directors, and it shall also meet at the call of the
president, the chairman of the executive committee or any two members of the
committee. Unless otherwise provided by such rules or by such resolutions, the
provisions of Section 10 of Article II relating to the notice required to be
given of meetings of the Board of Directors shall also apply to meetings of the
executive committee. A majority of the executive committee shall be necessary
to constitute a quorum. The executive committee may act in a writing, or by
telephone with written confirmation, without a meeting, but no action by writing
of the executive committee shall be effective unless concurred in by all members
of the committee.
Section 3. Other Committees. The Board of Directors may by
----------------
resolution provide for such other standing or special committees as it deems
desirable, and discontinue the same at pleasure. Each such committee shall have
such powers and perform such duties, not inconsistent with law, as may be
delegated to it by the Board of Directors. The provisions of Section 1 and
Section 2 of this Article shall govern the appointment and action of such
committees so far as the same are consistent with such appointment and unless
otherwise provided by the Board of Directors. Vacancies in such committees
shall be filled by the Board of Directors or as the Board of Directors may
provide.
<PAGE>
ARTICLE IV
----------
Officers
--------
Section 1. General Provisions. The Board of Directors shall elect a
------------------
president, such number of vice presidents as the board may from time to time
determine, a secretary and a treasurer and, in its discretion, a chairman of the
Board of Directors. The Board of Directors may from time to time create such
offices and appoint such other officers, subordinate officers and assistant
officers as it may determine. The president, any vice president who succeeds to
the office of the president, and the chairman of the board shall be, but the
other officers need not be, chosen from among the members of the Board of
Directors. Any two of such offices, other than that of president and vice
president, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity.
Section 2. Term of Office. The officers of the Corporation shall
--------------
hold office at the pleasure of the Board of Directors, and, unless sooner
removed by the Board of Directors, until the annual meeting of the Board of
Directors following the date of their election and until their successors are
chosen and qualified. The Board of Directors may remove any officer at any
time, with or without cause. A vacancy in any office, however created, shall be
filled by the Board of Directors.
ARTICLE V
---------
Duties of Officers
------------------
Section 1. Chairman of the Board. The chairman of the board, if one
---------------------
be elected, shall preside at all meetings of the Board of Directors and shall
have such other powers and duties as may be prescribed by the Board of
Directors.
Section 2. President. The president shall be the chief executive
---------
officer of the Corporation and shall exercise supervision over the business of
the Corporation and over its several officers, subject, however, to the control
of the Board of Directors. He shall preside at all meetings of shareholders,
and, in the absence of the chairman of the board, or if a chairman of the board
shall not have been elected, shall also preside at meetings of the Board of
Directors. He shall have authority to sign all certificates for shares and all
deeds, mortgages, bonds, agreements, notes, and other instruments requiring his
signature; and shall have all the powers and duties prescribed by Chapter 1701
of the Revised Code of Ohio and such others as the Board of Directors may from
time to time assign to him.
Section 3. Vice Presidents. The vice presidents shall have such
---------------
powers and duties as may from time to time be assigned to them by the Board of
Directors or the president. At the request of the president, or in the case of
his absence or disability, the vice president designated by the president (or in
the absence of such designation, the vice president designated by the board)
shall perform all the duties of the president and, when so acting, shall have
all the powers of the president. The authority of vice presidents to sign in
<PAGE>
the name of the Corporation certificates for shares and deeds, mortgages, bonds,
agreements, notes and other instruments shall be coordinate with like authority
of the president.
Section 4. Secretary. The secretary shall keep minutes of all the
---------
proceedings of the shareholders and Board of Directors and shall make proper
record of the same, which shall be attested by him; shall have authority to
execute and deliver certificates as to any of such proceedings and any other
records of the Corporation; shall have authority to sign all certificates for
shares and all deeds, mortgages, bonds, agreements, notes and other instruments
to be executed by the Corporation which require his signature; shall give notice
of meetings of shareholders and directors; shall produce on request at each
meeting of shareholders a certified list of shareholders arranged in
alphabetical order; shall keep such books and records as may be required by law
or by the Board of Directors; and, in general, shall perform all duties incident
to the office of secretary and such other duties as may from time to time be
assigned to him by the Board of Directors or the president.
Section 5. Treasurer. The treasurer shall have general supervision
---------
of all finances; he shall receive and have in charge all money, bills, notes,
deeds, leases, mortgages and similar property belonging to the Corporation, and
shall do with the same as may from time to time be required by the Board of
Directors. He shall cause to be kept adequate and correct accounts of the
business transactions of the Corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, stated capital and shares,
together with such other accounts as may be required, and upon the expiration of
his term of office shall turn over to his successor or to the Board of Directors
all property, books, papers and money of the Corporation in his hands; and shall
have such other powers and duties as may from time to time be assigned to him by
the Board of Directors or the president.
Section 6. Assistant and Subordinate Officers. The Board of
----------------------------------
Directors may appoint such assistant and subordinate officers as it may deem
desirable. Each such officer shall hold office during the pleasure of the Board
of Directors, and perform such duties as the Board of Directors or the president
may prescribe.
The Board of Directors may, from time to time, authorize any officer
to appoint and remove subordinate officers, to prescribe their authority and
duties, and to fix their compensation.
Section 7. Duties of Officers May be Delegated. In the absence of
-----------------------------------
any officer of the Corporation, or for any other reason the Board of Directors
may deem sufficient, the Board of Directors may delegate, for the time being,
the powers or duties, or any of them, of such officer to any other officer or to
any director.
<PAGE>
ARTICLE VI
----------
Indemnification and Insurance
-----------------------------
Section 1. Indemnification in Non-Derivative Actions. The
-----------------------------------------
Corporation shall 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
he is or was a director or officer of the Corporation, or is or was serving at
the request of the Corporation as a director, trustee, officer, employee, or
agent of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust, or other enterprise, against expenses,
including attorneys' fees, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit, or
proceeding if he acted in good faith and in a manner he 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 his
conduct was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation and, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section 2. Indemnification in Derivative Actions. The Corporation
-------------------------------------
shall indemnify any person who was or is a party, or is threatened to be made a
party to any threatened, pending, or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director or officer of the Corporation, or is or was serving at
the request of the Corporation as a director, trustee, officer, employee, or
agent of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust, or other enterprise against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, except that no indemnification shall be made in
respect of (a) any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Corporation unless, and only to the extent that the Court of
Common Pleas, or the court in which such action or suit was 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 as the Court of Common Pleas or such
court shall deem proper, or (b) any action or suit in which the only liability
asserted against a director is pursuant to Section 1701.95 of the Ohio Revised
Code.
Section 3. Indemnification as Matter of Right. To the extent that a
----------------------------------
director, trustee, officer, employee, or agent has been successful on the merits
or otherwise in defense of any action, suit, or proceeding referred to in
Section 1 or 2 of this Article VI, or in defense of any claim, issue, or matter
therein, he shall be indemnified against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection therewith.
<PAGE>
Section 4. Determination of Conduct. Any indemnification under
------------------------
Sections 1 and 2 of this Article VI, unless ordered by a court, shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, trustee, officer, employee, or agent is
proper in the circumstances because he has met the applicable standard of
conduct set forth in Sections 1 and 2 of this Article VI. Such determination
shall be made (a) by a majority vote of a quorum consisting of directors of the
Corporation who were not and are not parties to or threatened with any such
action, suit, or proceeding, or (b) if such a quorum is not obtainable or if a
majority vote of a quorum of disinterested directors so directs, in a written
opinion by independent legal counsel, other than an attorney or a firm having
associated with it an attorney who has been retained by or who has performed
services for the Corporation or any person to be indemnified within the past
five years, or (c) by the shareholders or (d) by the Court of Common Pleas or
the court in which such action, suit, or proceeding was brought. Any
determination made by the disinterested directors under Section 4(a) or by
independent legal counsel under Section 4(b) of this Article VI shall be
promptly communicated to the person who threatened or brought the action or
suit, by or in the right of the Corporation under Section 2 of this Article VI,
and within ten days after receipt of such notification, such person shall have
the right to petition the Court of Common Pleas or the court in which such
action or suit was brought to review the reasonableness of such determination.
Section 5. Advance Payment of Expenses. Expenses, including
---------------------------
attorneys' fees, incurred in defending any action, suit, or proceeding referred
to in Sections 1 or 2 of this Article VI, shall be paid by the Corporation in
advance of the final disposition of such action, suit, or proceeding as
authorized by the directors in the specific case upon receipt of an undertaking
by or on behalf of the director, trustee, officer, employee, or agent to repay
such amount, unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article VI.
Section 6. Nonexclusivity. The indemnification provided by this
--------------
Article VI shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under the Articles of Incorporation or
the Amended and Restated Code of Regulations or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such office
and shall continue as to a person who has ceased to be a director, trustee,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
Section 7. Liability Insurance. The Corporation may purchase and
-------------------
maintain insurance on behalf of any person who 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, trustee, officer, employee, or agent of another
corporation, domestic or foreign, nonprofit or for profit, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article VI or of Chapter 1701 of the
Ohio Revised Code.
<PAGE>
ARTICLE VII
-----------
Certificates for Shares
-----------------------
Section 1. Form and Execution. Certificates for shares, certifying
------------------
the number of fully paid shares owned, shall be issued to each shareholder in
such form as shall be approved by the Board of Directors. Such certificates
shall be signed by the president or a vice president and by the secretary or an
assistant secretary or the treasurer or an assistant treasurer; provided,
however, that if such certificates are countersigned by a transfer agent and/or
registrar, the signatures of any of said officers and the seal of the
Corporation upon such certificates may be facsimiles, engraved, stamped or
printed. If any officer or officers, who shall have signed, or whose facsimile
signature shall have been used, printed or stamped on any certificate or
certificates for shares, shall cease to be such officer or officers, because of
death, resignation or otherwise, before such certificate or certificates shall
have been delivered by the Corporation, such certificate or certificates, if
authenticated by the endorsement thereon of the signature of a transfer agent or
registrar, shall nevertheless be conclusively deemed to have been adopted by the
Corporation by the use and delivery thereof and shall be as effective in all
respects as though signed by a duly elected, qualified and authorized officer or
officers, and as though the person or persons who signed such certificate or
certificates, or whose facsimile signature or signatures shall have been used
thereon, had not ceased to be an officer or officers of the Corporation.
Section 2. Transfer and Registration of Certificates. The Board of
-----------------------------------------
Directors shall have authority to make such rules and regulations, not
inconsistent with law, the Second Amended and Restated Articles of Incorporation
or this Amended and Restated Code of Regulations, as it deems expedient
concerning the issuance, transfer and registration of certificates for shares
and the shares represented thereby.
Section 3. Lost, Destroyed or Stolen Certificates. A new share
--------------------------------------
certificate or certificates may be issued in place of any certificate
theretofore issued by the Corporation which is alleged to have been lost,
destroyed or wrongfully taken upon (a) the execution and delivery to the
Corporation by the person claiming the certificate to have been lost, destroyed
or wrongfully taken of an affidavit of that fact, specifying whether or not, at
the time of such alleged loss, destruction or taking, the certificate was
endorsed, and (b) the furnishing to the Corporation of indemnity and other
assurances satisfactory to the Corporation and to all transfer agents and
registrars of the class of shares represented by the certificate against any and
all losses, damages, costs, expenses or liabilities to which they or any of them
may be subjected by reason of the issue and delivery of such new certificate or
certificates or in respect of the original certificate.
Section 4. Registered Shareholders. A person in whose name shares
-----------------------
are of record on the books of the Corporation shall conclusively be deemed the
unqualified owner and holder thereof for all purposes and to have capacity to
exercise all rights of ownership. Neither the Corporation nor any transfer
agent of the Corporation shall be bound to recognize any equitable interest in
or claim to such shares on the part of any other person,
<PAGE>
whether disclosed upon such certificate or otherwise, nor shall they be obliged
to see to the execution of any trust or obligation.
ARTICLE VIII
------------
Fiscal Year
-----------
The fiscal year of the Corporation shall end on December 31 of each
year, or on such other date as may be fixed from time to time by the Board of
Directors.
ARTICLE IX
----------
Seal
----
The Board of Directors may provide a suitable seal containing the name
of the Corporation. If deemed advisable by the Board of Directors, duplicate
seals may be provided and kept for the purposes of the Corporation.
ARTICLE X
---------
Amendments
----------
This Amended and Restated Code of Regulations may be amended, or new
regulations may be adopted, at any meeting of shareholders called for such
purpose by the affirmative vote of, or without a meeting by the written consent
of, the holders of shares entitling them to exercise a majority of the voting
power of the Corporation on such proposal.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STONERIDGE,
INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 1999 AND
FOR THE YEAR ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,764
<SECURITIES> 0
<RECEIVABLES> 103,404
<ALLOWANCES> (1,006)
<INVENTORY> 57,323
<CURRENT-ASSETS> 181,942
<PP&E> 160,611
<DEPRECIATION> (60,641)
<TOTAL-ASSETS> 663,399
<CURRENT-LIABILITIES> 118,454
<BONDS> 332,449
0
0
<COMMON> 0
<OTHER-SE> 201,400
<TOTAL-LIABILITY-AND-EQUITY> 663,399
<SALES> 177,654
<TOTAL-REVENUES> 177,654
<CGS> 128,214
<TOTAL-COSTS> 128,214
<OTHER-EXPENSES> 23,183
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,250
<INCOME-PRETAX> 18,007
<INCOME-TAX> 7,234
<INCOME-CONTINUING> 10,773
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,773
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.48
</TABLE>
