What changed in this filing

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Item 9A. Controls and Procedures

2023-03-02 compared with 2022-02-28 · 55 added, 53 removed, 156 unchanged (41% of the section changed)

21 unchanged sentences

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule of the Company and our report dated February 28, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule of the Company and our report dated March 2, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

16 unchanged sentences

Detroit, Michigan

February 28, 2022

March 2, 2023

Other Information.

Credit Facility Amendment

Due to the ongoing impacts of the COVID-19 pandemic and supply chain disruptions on the Company’s end-markets and the resulting financial impacts on the Company, on February 28, 2022, the Company entered into Amendment No.

Due to continued supply chain disruptions and macroeconomic challenges on the Company’s end-markets and the resulting financial impacts on the Company, on March 1, 2023, the Company entered into Amendment No.

4 to the Fourth Amended and Restated Credit Agreement by and among the Company and certain of its subsidiaries as Borrowers, certain of its subsidiaries as Guarantors, PNC Bank, National Association, as Administrative Agent, and the financial parties thereto (the, “Lenders”) (“Amendment No.

Amendment No.

3 reduces the total revolving credit commitments from $400.0 million to $300.0 million and the maximum permitted amount of swing loans from $40.0 million to $30.0 million.

Amendment No.

3 provides for certain financial covenant relief and additional covenant restrictions during the “Specified Period” (the period from February 28, 2022 until the date that the Company delivers a compliance certificate for the quarter ending March 31, 2023 in form and substance satisfactory to the administrative agent).

During the Specified Period:

● the maximum net leverage ratio is changed to 4.0x for the year ended December 31, 2021, suspended for the quarters ending March 31, 2022 through September 30, 2022 and cannot exceed 4.75 to 1.00 for the quarter ended December 31, 2022 or 3.50 to 1.00 for the quarter ended March 31, 2023;

● the minimum interest coverage ratio of 3.50 is reduced to 2.50 for the quarter ended March 31, 2022, 2.25 for the quarter ended June 30, 2022 and 3.00 for the quarters ended September 30, 2022 and December 31, 2022;

● an additional condition to drawing on the Credit Facility has been added that restricts borrowings if the Company’s total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;

● there are certain additional restrictions on Restricted Payments (as defined);

● a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50x during the Specified Period.

Amendment No.

3 changes the leverage based LIBOR pricing grid through the maturity date and also retains a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remain subject to a LIBOR floor of 0 basis points .

Amendment No.

3 also incorporates hardwired mechanics to permit a future replacement of LIBOR as the interest reference rate without lender consent.

4 provides for certain financial covenant relief and additional covenant restrictions during the “Amendment No.

4 Specified Period” (the period from March 1, 2023 until the date that the Company delivers a compliance certificate for the quarter ending September 30, 2023 in form and substance satisfactory to the administrative agent).

During the Amendment No.

4 Specified Period:

• the maximum net leverage ratio was changed to 4.75 to 1.00 for the quarter ended March 31, 2023 and 4.25 to 1.00 for the quarter ended June 30, 2023;

• the minimum interest coverage ratio of 3.50 was reduced to 3.00 for the quarters ended March 31, 2023 and June 30, 2023;

• drawing on the Credit Facility continues to be restricted if the Company’s total of 100% of domestic and 65% of foreign cash and cash equivalents exceeds $70.0 million;

• there continue to be certain additional restrictions on Restricted Payments (as defined);

• consistent with Amendment No.

3, a Permitted Acquisition (as defined) may not be consummated unless the net leverage ratio is below 3.50 to 1.00 during the Amendment No.

4 Specified Period.

The description of Amendment No.

15 unchanged sentences

In May 2018, we adopted the 2018 Amended and Restated Director’s Restricted Shares Plan.

In May 2022, we adopted the 2018 Amended and Restated Director’s Restricted Shares Plan, as amended, to increase the number of shares available for issuance under the plan.

Our shareholders approved each plan.

6 unchanged sentences

Equity compensation plans not approved by shareholders —

_____________________________

(A) Excludes 1,286,196 share units issued to key employees pursuant to the Company’s 2016 Long-Term Incentive Plan.

9 unchanged sentences

Consolidated Statements of Operations for the Years Ended December 31, 2022, 2021 and 2020

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2022, 2021 and 2020

Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020

3 unchanged sentences

Schedule II – Valuation and Qualifying Accounts

Second Amended and Restated Articles of Incorporation of the Company (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1999).

(3) Exhibits:

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 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).

15 unchanged sentences

10.7 Form of Stoneridge, Inc.

Long-Term Incentive Plan 2021 Restricted Share Units Agreement (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on 10-Q for the quarter ended March 31, 2021)*.

Long-Term Incentive Plan 202 2 Restricted Share Units Agreement (incorporated by reference to Exhibit 10.

4 to the Company’s Quarterly Report on 10-Q for the quarter ended March 31, 202 2 )*.

10.8 Form of Stoneridge, Inc.

Long-Term Incentive Plan 2022 Restricted Share Units Agreement (one-time two-year vesting under 2021 AIP payment) (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on 10-Q for the quarter ended March 31, 2022)*.

10.9 Stoneridge, Inc.

2 unchanged sentences

2018 Amended and Restated Directors' Restricted Shares Plan (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed on May 16, 2018)*.

10.11 Amendment No.

1 to the Stoneridge, Inc.

2018 Amended and Restated Directors’ Restricted Shares Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 1 9 , 20 22 )*.

10.12 Form of Stoneridge, Inc.

Directors’ Restricted Shares Plan 2021 Grant Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021)*.

Directors’ Restricted Shares Plan 202 2 Grant Agreement (incorporated by reference to Exhibit 10.

2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 202 2 )*.

Number Exhibit

10.13 Amended and Restated Officers’ and Key Employees’ Severance Plan of Stoneridge, Inc.

8 unchanged sentences

DeGaynor (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on March 19, 2015).

Employment Agreement, dated January 3, 2020, by and between the Company and Kevin Heigel (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020)*.

10.18 Employment Agreement, dated January 29, 2021, by and between the Company and James Zizelman (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020)* .

Separation Agreement and Release by and between Stoneridge, Inc.

and Thomas M.

Dono, Jr., August 6, 2021 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on August 11, 2021)*.

Separation Agreement and Release by and between Stoneridge, Inc.

and Robert R.

Krakowiak, August 31, 2021 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on September 1, 2021)*.

10.19 Fourth Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 7, 2019).

2 unchanged sentences

10.21 Amendment No.

2 to the Fourth Amended and Restated Credit Agreement, filed herewith.

2 to the Fourth Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 202 1 ) .

10.22 Amendment No.

3 to the Fourth Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021).

10.23 Amendment No.

4 to the Fourth Amended and Restated Credit Agreement, filed herewith.

Real Estate Purchase and Sale Agreement, entered into on May 7, 2021, by and between Stoneridge, Inc., and Sun Life Assurance Company of Canada (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 12, 2021) .

First Amendment to Real Estate Purchase and Sale Agreement, entered into on May 20, 2021, by and between Stoneridge, Inc., and Sun Life Assurance Company of Canada (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed on May 24, 2021).

Second Amendment to Real Estate Purchase and Sale Agreement, entered into on May 27, 2021, by and between Stoneridge, Inc., and Sun Life Assurance Company of Canada (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on August 4, 2021).

Third Amendment to Real Estate Purchase and Sale Agreement, entered into on June 10, 2021, by and between Stoneridge, Inc., and Sun Life Assurance Company of Canada (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on August 4, 2021).

Share Purchase Agreement, dated November 2, 2021 by and among Stoneridge, Inc., Minda Corporation Limited and Minda Stoneridge Instruments Limited (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 2, 2021).

21.1 Principal Subsidiaries and Affiliates of the Company, filed herewith.

6 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

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Number Exhibit

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_____________________________

* - Reflects management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of this Annual Report on Form 10-K.

4 unchanged sentences

STONERIDGE, INC.

February 28, 2022

March 1, 2023

/s/ MATTHEW R.

2 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

February 28, 2022

/s/ JONATHAN B.

March 1, 2023

/s/ JAMES ZIZELMAN

James Zizelman

President, Chief Executive Officer and Director

(Principal Executive Officer)

February 28, 2022

March 1, 2023

/s/ MATTHEW R.

1 unchanged sentence

(Principal Financial Officer)

February 28, 2022

March 1, 2023

/s/ ROBERT J.

1 unchanged sentence

(Principal Accounting Officer)

February 28, 2022

March 1, 2023

/s/ WILLIAM M.

Chairman of the Board of Directors

February 28, 2022

March 1, 2023

/s/ JEFFREY P.

February 28, 2022

/s/ DOUGLAS C.

February 28, 2022

March 1, 2023

/s/ KIM KORTH

February 28, 2022

March 1, 2023

/s/ GEORGE S.

February 28, 2022

March 1, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures