SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table describes certain information regarding the beneficial ownership of our common shares as of February 18, 2005, by: (a) our directors; (b) each other person who is known by us to own beneficially more than 5% of our outstanding common shares; (c) our chief executive officer and the four other most highly compensated executive officers named in the Summary Compensation Table; and (d) our executive officers and directors as a group.

ELECTION OF DIRECTORS

      In accordance with our Code of Regulations, the number of directors has been fixed at ten. At the Annual Meeting of Shareholders, you will elect ten directors to hold office until our next Annual Meeting of Shareholders and until their successors are elected and qualified. The Board of Directors elected Gerald V. Pisani, the Company’s President and Chief Executive Officer, to the Board of Directors on May 10, 2004 to fill a vacancy that existed on the Board of Directors on that date. Pursuant to the Company’s Code of Regulations, the Board of Directors approved an increase in the size of the Board of Directors to nine on July 6, 2004 and elected Douglas C. Jacobs on that date to fill the vacancy created by the increase. Pursuant to the Company’s Code of Regulations, the Board of Directors approved an increase in the size of the Board of Directors to ten on February 11, 2005 and nominated Jeffrey P. Draime for election as a director at the Annual Meeting of Shareholders. Jeffrey P. Draime is the son of D.M. Draime, Chairman of the Company’s Board of Directors. The Board of Directors proposes that the nominees described below, all of whom, except for Jeffrey P. Draime, are currently serving as directors, be elected to the Board of Directors. At the Annual Meeting of Shareholders, the common shares represented by proxies, unless otherwise specified, will be voted for the election of the ten nominees hereinafter named.

      The director nominees are identified in the following table. If for any reason any of the nominees is not a candidate when the election occurs (which is not expected), the Board of Directors expects that proxies will be

voted for the election of a substitute nominee designated by management. The following information is furnished with respect to each person nominated for election as a director.

      The Board recommends that you vote “FOR” the following nominees.

Nominees for Election at the Annual Meeting

      Each of the nominees for election as a director has engaged in the principal occupation or activity indicated for at least five years, except for the following:

      Mr. D.M. Draime served as Interim President and Chief Executive Officer of the Company from January 2004 to May 2004, when Mr. Pisani was named as President and Chief Executive Officer.

      Mr. Pisani has served as Vice President of the Company since 1989 and President of the Stoneridge Engineered Products Group since 1992. Mr. Pisani became the Company’s Chief Operating Officer in December 2003 and the Company’s President and Chief Executive Officer in May 2004.

      Mr. Corey was the President and Chief Operating Officer of Safety Components International from 1999 to 2000, when he became that company’s President and Chief Executive Officer.

      Mr. Jeffrey P. Draime was a North American Sales Manager for the Alphabet Group from 1993 to 2000.

      Mr. Epstein was a principal in the independent public accounting firm Gaintner, Bandler & Reed, P.L.C., from June 1999 to December 2001.

      Mr. Jacobs, a former partner of the accounting firm Arthur Andersen LLP, was Vice President - Finance, Chief Financial Officer and Treasurer of the Cleveland Browns from 1999 to 2001, when he became the organization’s Executive Vice President - Finance, Chief Financial Officer and Treasurer.

      Legal Proceedings. On April 10, 2000, Safety Components International, the company for which Mr. Corey was the President and Chief Operating Officer, and certain of its U.S. subsidiaries (collectively, the “Safety Filing Group”), filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code (“Chapter 11”) with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On October 11, 2000, the Safety Filing Group emerged from Chapter 11 pursuant to a plan of reorganization confirmed by the Bankruptcy Court and at that time Mr. Corey became President and Chief Executive Officer of Safety Components International.

      Directorships. Mr. Corey is a director of Safety Components International. Mr. Jacobs is a director of Standard Pacific Corporation, serves as chairman of its audit committee and is a member of its nominating and corporate governance committee. Mr. Lasky is the chairman of the board of directors of JLG Industries, Inc. and is a member of its executive committee.

      Independent Directors. The New York Stock Exchange (“NYSE”) rules require listed companies to have a Board of Directors comprised of at least a majority of independent directors. Under the NYSE rules, a director qualifies as “independent” upon the affirmative determination that the director has no material relationship with the company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). The Board has determined that Messrs. Cheney, Corey, Epstein, Jacobs, Lasky and Linehan are independent.

      Committees of the Board and Meeting Attendance. In 2004, our Board of Directors held ten meetings and took action by unanimous written consent on one occasion. Our Board of Directors has appointed a compensation committee, an audit committee, and a nominating and corporate governance committee. Each member of the compensation, audit, and nominating and corporate governance committees is independent as defined under the listing standards of the NYSE. The Board of Directors does not currently have a finance committee. In 2004, each Board member attended at least 75% of the meetings of the Board of Directors and of the committees on which he serves. In addition, it is the Company’s policy that all directors attend the Annual Meeting of Shareholders. All directors who were directors at the time attended the 2004 Annual Meeting of Shareholders. Mr. Lasky has been appointed as the presiding director by the non-management directors to preside at the executive sessions of the non-management and independent directors. It is the Board’s practice to have the non-management directors meet regularly in executive session and to have the independent directors meet at least once a year in executive session.

      Compensation Committee. The compensation committee is comprised of Messrs. Cheney, Lasky and Linehan. This committee held six meetings during 2004. The compensation committee reviews employment, development, reassignment and compensation matters involving corporate officers and other executive level employees, including issues related to salary, bonus and incentive arrangements. The compensation committee also administers our Long-Term Incentive Plan. Our Board of Directors has adopted a charter for this committee, which is available on our website at www.stoneridge.com.

      Audit Committee. The audit committee is comprised of Messrs. Cheney, Corey, Epstein and Jacobs. This committee held six meetings during 2004. Information regarding the functions performed by the audit committee is set forth in the “Audit Committee Report,” included in this proxy statement. The audit committee is governed by a written charter, which was approved by the Board of Directors. This charter is available on our website at www.stoneridge.com.

      The Board of Directors has determined that all audit committee members are financially literate under the current listing standards of the NYSE. The Board also determined that Mr. Epstein qualifies as an “audit committee financial expert” as defined by the SEC rules adopted pursuant to the Sarbanes-Oxley Act of 2002. In addition, under the Sarbanes-Oxley Act of 2002 and the NYSE rules mandated by the SEC, members of the audit committee must have no affiliation with the issuer, other than their Board seat, and receive no compensation in any capacity other than as a director or committee member. Each member of our audit committee meets this additional independence standard applicable to audit committee members of NYSE listed companies.

      Nominating and Corporate Governance Committee. The nominating and corporate governance committee is comprised of Messrs. Epstein, Lasky and Linehan. This committee held two meetings in 2004. The purpose of the nominating and corporate governance committee is to evaluate and recommend candidates for election as directors, make recommendations concerning the size and composition of the Board of Directors, develop and implement the Company’s corporate governance policies and assess the effectiveness of the Board of Directors. Our Board of Directors has adopted a written charter for this committee, which is available on our website at www.stoneridge.com.

      It is the policy of the nominating and corporate governance committee to consider individuals recommended by shareholders for membership on the Board. If a shareholder desires to recommend an individual for membership on the Board, then that shareholder must provide a written notice (the “Recommendation Notice”) to the Secretary of the Company at Stoneridge, Inc., 9400 East Market Street, Warren, Ohio 44484, on or before January 15 for consideration by this committee for that year’s election of directors at the Annual Meeting of Shareholders. No shareholder nominee recommendations were received for this year’s Annual Meeting of Shareholders.

      In addition, in order for a recommendation to be considered by the nominating and corporate governance committee, the Recommendation Notice must contain, at a minimum, the following: the name and address, as they appear on the Company’s books, and telephone number of the shareholder making the recommendation, including information on the number of common shares owned and date(s) acquired, and if such person is not a shareholder of record or if such shares are owned by an entity, reasonable evidence of such person’s ownership of such shares or such person’s authority to act on behalf of such entity; the full legal name, address and telephone number of the individual being recommended, together with a reasonably detailed description of the background, experience and qualifications of that individual; a written acknowledgment by the individual being recommended that he or she has consented to that recommendation and consents to the Company’s undertaking of an investigation into that individual’s background, experience and qualifications in the event that the committee desires to do so; any information not already provided about the person’s background, experience and qualifications necessary for the Company to prepare the disclosure required to be included in the Company’s proxy statement about the individual being recommended; the disclosure of any relationship of the individual being recommended with the Company or any of its subsidiaries or affiliates, whether direct or indirect; the disclosure of any relation of the individual being recommended with the shareholder, whether direct or indirect, and, if known to the shareholder, any material interest of such shareholder or individual being recommended in any proposals or other business to be presented at the Company’s Annual Meeting of Shareholders (or a statement to the effect that no material interest is known to such shareholder).

      The nominating and corporate governance committee determines, and reviews with the Board on an annual basis, the desired skills and characteristics for directors as well as the composition of the Board as a whole. This assessment considers the directors’ qualifications and independence, as well as diversity, age, skill and experience in the context of the needs of the Board. At a minimum, directors should share the values of the Company and should possess the following characteristics: high personal and professional integrity; the ability to exercise sound business judgment; an inquiring mind; and the time available to devote to Board activities and the willingness to do so. In addition to the foregoing considerations, generally with respect to nominees recommended by shareholders, the committee will evaluate such recommended nominees considering the additional information regarding them contained in the Recommendation Notices. When seeking candidates for the Board, the committee may solicit suggestions from incumbent directors, management and third-party search firms. Ultimately, the nominating and corporate governance committee will recommend to the Board prospective Board members who the nominating and corporate governance committee believes will be effective, in conjunction with the other members of the Board, in collectively serving the long-term interests of the Company’s shareholders.

      The nominating and corporate governance committee recommended to the Board each of the nominees identified in “Election of Directors” on page 4. In connection with the appointment of Mr. Jacobs to fill the vacancy on the Board in July 2004, a third party individual professional services advisor recommended Mr. Jacobs to the Board. The nomination of Jeffrey P. Draime was recommended to the Board by the non-management directors.

      Directors’ Compensation. Each director who is not an employee of ours receives $35,000 per year for being a director, $1,000 for attending each meeting of the Board of Directors and $500 for each telephonic meeting of the Board of Directors. There is no additional fee received for attending committee meetings unless such meeting takes place on a day other than the same day as a meeting of the Board of Directors, in which case committee members receive $1,000 for attending such meetings and $500 when the meetings are held telephonically. The audit committee chairman receives additional compensation of $7,500 and the compensation committee chairman receives additional compensation of $4,000. Directors who are also employees of ours are not paid any director’s fee. We reimburse out-of-pocket expenses incurred by all directors in connection with attending Board and committee meetings. In 2004, each non-employee director who served on the board (except for Mr. Jacobs who did not become a board member until July of 2004) was granted an option to purchase 10,000 shares at a price per share equal to the fair market value of the common shares on the date of grant. These option grants to non-employee directors were made on May 10, 2004 at an exercise price of $15.73. These options expire in ten years and become exercisable in one year.

      Communications with the Board. Our Board of Directors believes that it is important for shareholders to have a process to send communications to the Board. Accordingly, shareholders who wish to communicate with the Board or a particular director may do so by sending a letter to the Secretary at 9400 East Market Street, Warren, Ohio 44484. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Stockholder-Board Communication” or “Stockholder-Director Communication.” All such letters must identify the author as a shareholder and clearly state whether the intended recipients are all members of the Board of Directors or certain specified individual directors. The Secretary will make copies of all such letters and circulate them to the appropriate director or directors. The directors are not spokespeople for the Company and shareholders should not expect a response or reply to any communication.

Compensation Committee Report

      Introduction. The compensation committee (the “Committee”), which is comprised entirely of independent and non-employee directors, is responsible for determining the compensation to be paid to our executive officers and for administering our Long-Term Incentive Plan (the “LTIP”). The Committee’s philosophy with respect to the compensation of our executive officers is (1) to provide a competitive total compensation package that enables us to attract and retain qualified executives and align their compensation with our overall business strategies, and (2) to provide each executive officer with a significant economic stake in our success. To this end, the Committee determines executive compensation with a focus on compensating executive officers based on their responsibilities and performance as well as our performance. The primary components of our executive compensation program are (1) base salaries, (2) bonuses, and (3) equity awards, including share options and restricted shares under the LTIP. The overall objectives of this strategy are not only to attract and retain the best possible executive talent but also to motivate our executives to achieve the goals inherent in our business strategy, to link executive and shareholder interests through equity-based plans and, finally, to provide a compensation package that recognizes individual contributions and overall business results.

      Each year the Committee conducts a review of our executive compensation program. In connection with the review of base salary compensation for 2004, the Committee considered a comprehensive report prepared by Ernst & Young LLP (“Ernst & Young”) in December 2003 (the “2003 Compensation Report”). The report compared the compensation of our top executive officers to a peer group of public corporations. The Committee also received a second similar comprehensive report prepared by Towers Perrin in December 2004 (the “2004 Compensation Report”). The Committee reviewed and considered the 2003 Compensation Report in determining base salaries for 2004 and considered the 2004 Compensation Report in determining bonuses for 2004.

      The Committee reviews the selection of peer companies used for compensation analysis. The peer groups used for compensation analysis are generally not the same as the peer group index in the Performance Graph included in this proxy statement. The Committee believes that our most direct competitors for executive talent are not necessarily all of the companies that would be included in the peer group established for comparing shareholder returns.

      The Committee determines the compensation of the most highly compensated corporate executives, including the individuals whose compensation is detailed in this proxy statement, and sets policies for and reviews the compensation awarded to other highly compensated corporate executives. This is designed to ensure consistency throughout the executive compensation program. In reviewing the individual performance of the executives whose compensation is detailed in this proxy statement, the Committee takes into account the views of Mr. D. M. Draime, our Chairman and Mr. Gerald V. Pisani, our President and Chief Executive Officer.

      Base Salaries and Other Annual Compensation. The Committee sets base salary levels for our executive officers on the basis of the executives’ responsibilities. However, in each case, due consideration is given to personal factors, such as the individual’s experience, performance and contributions. Also considered are external factors, such as salaries paid to similarly situated executive officers by peer companies. In the case of executive officers with responsibility for a particular business unit, that unit’s financial results are also considered.

      Annual adjustments to each executive officer’s salary are determined based on the foregoing factors but with due consideration also being given to the independent compensation reports referred to above, prevailing economic conditions, to the relationship of such adjustments to those being given to other employees, to the performance of the executive’s duties and responsibilities and to other individual performance-related criteria that may be relevant with respect to such executive officer at the time. Finally, the Committee, where appropriate, also considers non-financial performance measures. These include increases in market share, manufacturing efficiency gains, improvements in product quality and improvements in relations with customers, suppliers and employees. The base salaries for the Company’s named executive officers appear in the “Salary” column of the Summary Compensation Table.

      When determining the appropriate level of Mr. Pisani’s 2004 base salary, the Committee considered the 2003 Compensation Report and the same factors that it considers when determining compensation levels for our other executive employees. Mr. Pisani’s base salary for 2004 was set at $372,000. On June 1, 2004, in connection with Mr. Pisani’s election as President and Chief Executive Officer, Mr. Pisani’s base salary was increased to $450,000.

      Bonuses. Our executive officers are eligible for annual cash bonuses. The Committee believes that a substantial portion of each executive’s bonus should be tied to quantifiable measures of the Company’s financial performance. The Committee used the 2004 Compensation Report to establish targeted bonus levels for each position assuming achievement of targeted financial performance. The amount of bonus granted for 2004 to each executive relative to the target depended in large part on how the Company (or division) performed against certain financial metrics. For 2004 the metrics chosen were attainment of budgeted operating profit, performance relative to the flex budget, and control of working capital. A portion of the annual bonus was also based on the attainment of non-financial goals. Based upon the above, Mr. Pisani was awarded a bonus of $300,000. Bonuses for the Company’s named executive officers appear in the “Bonus” column of the Summary Compensation Table.

      Equity Awards. Under the Company’s LTIP, all executive officers may be granted Share Options and Restricted Shares. We believe that equity awards are a valuable motivating tool and provide a long-term incentive to management. The Committee did not grant any Share Options in 2004, but instead granted Restricted Shares. Information on the Restricted Shares granted during 2004 to the Company’s named executive officers appear in the “Restricted Share Awards” column of the Summary Compensation Table. The Committee granted Mr. Pisani 13,400 restricted shares in 2004.

      Conclusion. Through the programs described above, a significant portion of our executive compensation is linked directly to individual and Company performance. The Committee intends to continue this policy and in the future also plans to consider ways to better link the long-term incentive plan to financial performance and returns to shareholders, recognizing that the fluctuations of the business cycle from time to time may result in an imbalance for a particular period.