SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant: Yes.
Filed by a Party other than the Registrant: No.
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
RIVER VALLEY BANCORP
(Name Of Registrant As Specified In Its Charter)
RIVER VALLEY BANCORP
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing. N/A
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
River Valley Bancorp
430 Clifty Drive
P.O. Box 1590
Madison, Indiana 47250-0590
(812) 273-4949
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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To Be Held On April 16, 2003
Notice is hereby given that the Annual Meeting of Shareholders of River
Valley Bancorp (the "Holding Company") will be held at 430 Clifty Drive,
Madison, Indiana, on Wednesday, April 16, 2003, at 3:00 p.m., Eastern Standard
Time.
The Annual Meeting will be held for the following purposes:
1. Election of Directors. Election of two directors of the Holding
Company for terms expiring in 2006.
2. Other Business. Such other matters as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on February 25, 2003, are
entitled to vote at the meeting or any adjournment thereof.
We urge you to read the enclosed Proxy Statement carefully so that you may
be informed about the business to come before the meeting, or any adjournment
thereof. At your earliest convenience, please sign and return the accompanying
proxy in the postage-paid envelope furnished for that purpose.
A copy of our Annual Report for the fiscal year ended December 31, 2002, is
enclosed. The Annual Report is not a part of the proxy soliciting material
enclosed with this letter.
By Order of the Board of Directors
By: /s/ Matthew P. Forrester
--------------------------------
Matthew P. Forrester, President
Madison, Indiana
March 12, 2003
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
River Valley Bancorp
430 Clifty Drive
P.O. Box 1590
Madison, Indiana 47250-0590
(812) 273-4949
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PROXY STATEMENT
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FOR
ANNUAL MEETING OF SHAREHOLDERS
April 16, 2003
This Proxy Statement is being furnished to the holders of common stock,
without par value (the "Common Stock"), of River Valley Bancorp (the "Holding
Company"), an Indiana corporation, in connection with the solicitation of
proxies by the Board of Directors of the Holding Company to be voted at the
Annual Meeting of Shareholders to be held at 3:00 p.m., Eastern Standard Time,
on April 16, 2003, at 430 Clifty Drive, Madison, Indiana, and at any adjournment
of such meeting. The principal asset of the Holding Company consists of 100% of
the issued and outstanding shares of common stock, $.01 par value per share, of
River Valley Financial Bank (the "Bank"). This Proxy Statement is expected to be
mailed to the shareholders of the Holding Company on or about March 12, 2003.
The proxy solicited hereby, if properly signed and returned to the Holding
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted for each of the matters described below and, upon
the transaction of such other business as may properly come before the meeting,
in accordance with the best judgment of the persons appointed as proxies.
Any shareholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Holding Company
written notice thereof (Lonnie D. Collins, 430 Clifty Drive, P.O. Box 1590,
Madison, Indiana 47250-0590), (ii) submitting a duly executed proxy bearing a
later date, or (iii) by appearing at the Annual Meeting and giving the Secretary
notice of his or her intention to vote in person. Proxies solicited hereby may
be exercised only at the Annual Meeting and any adjournment thereof and will not
be used for any other meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only shareholders of record at the close of business on February 25, 2003
("Voting Record Date"), will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 813,820 shares of the Common Stock issued and
outstanding, and the Holding Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the Annual Meeting. The holders of
over 50% of the outstanding shares of Common Stock as of the Voting Record Date
must be present in person or by proxy at the Annual Meeting to constitute a
quorum. In determining whether a quorum is present, shareholders who abstain,
cast broker non-votes, or withhold authority to vote on one or more director
nominees will be deemed present at the Annual Meeting.
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of February 25, 2003, by each person who is
known by the Holding Company to own beneficially 5% or more of the Common Stock.
Unless otherwise indicated, the named beneficial owner has sole voting and
dispositive power with respect to the shares.
Number of Shares
Name and Address of Common Stock Percent
of Beneficial Owner(1) Beneficially Owned (1) of Class
- --------------------------------------- ---------------------- --------
First Bankers Trust Company, as Trustee 84,460 (2) 10.4%
1201 Broadway
Quincy, IL 62301
Jeffrey L. Gendell 77,500 (3) 9.5%
Tontine Financial Partners, L.P.
Tontine Management, L.L.C.
237 Park Avenue, 9th Floor
New York, NY 10017
Wellington Management Company, LLP 45,000 (4) 5.5%
First Financial Fund, Inc.
75 State Street
Boston, MA 02109
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(1) The information in this chart is based on Schedule 13D and 13G Report(s)
filed by the above-listed person(s) with the Securities and Exchange
Commission (the "SEC") containing information concerning shares held by
them. It does not reflect any changes in those shareholdings which may have
occurred since the date of such filings.
(2) These shares are held by the Trustee of the River Valley Bancorp Employee
Stock Ownership Plan and Trust (the "ESOP"). The Employees participating in
the ESOP are entitled to instruct the Trustee how to vote shares held in
their accounts under the ESOP. Unallocated shares held in a suspense
account under the ESOP are required under the ESOP terms to be voted by the
Trustee in the same proportion as allocated shares are voted.
(3) These shares are held by Tontine Partners, L.P., a Delaware limited
partnership. Tontine Management, L.L.C. is its general partner and Mr.
Gendell is the managing member of the general partner. These persons share
voting and investment power with respect to the shares.
(4) In a Schedule 13G filed with the SEC, the entities listed above indicate
that they may be the beneficial owners of the foregoing shares. Wellington
Management Company, LLP ("WMC"), is a Massachusetts limited partnership and
a registered investment advisor. First Financial Fund, Inc. is one of its
clients, with whom WMC shares investment power. First Financial Fund, Inc.,
Gateway Center Three, 100 Mulberry Street, 9th Floor, Newark, New Jersey
07102-7503, has sole voting power with respect to these shares.
PROPOSAL I -- ELECTION OF DIRECTORS
The Board of Directors consists of seven members. The By-Laws provide that
the directors are to be divided into three classes as nearly equal in number as
possible. The members of each class are to be elected for a term of three years
and until their successors are elected and qualified. One class of directors is
to be elected annually. Directors must have their principal domicile in either
Jefferson County, Indiana or Trimble County, Kentucky, must have had a loan or
deposit relationship with the Bank for a continuous period of twelve months
prior to their nomination to the Board, and non-employee directors must have
served as a member of a civic or community organization based in Jefferson
County, Indiana or Trimble County, Kentucky for at least a continuous period of
twelve months during the five years prior to their nomination to the Board.
The two nominees for election as a director this year are Robert W. Anger
and Matthew P. Forrester, each of whom currently serves as a director whose
current term will expire upon completion of the election at the Annual Meeting.
Messrs. Anger and Forrester have been nominated to serve for three-year terms
expiring in 2006.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted for the election of the nominees listed below. If any
person named as a nominee should be unable or unwilling to stand for election at
the time of the Annual Meeting, the proxy holders will nominate and vote for a
replacement nominee recommended by the Board of Directors. At this time, the
Board of Directors knows of no reason why the nominees listed below may not be
able to serve as directors if elected.
The following table sets forth certain information regarding the nominees
for the position of director of the Holding Company, including the number and
percent of shares of Common Stock beneficially owned by such persons as of the
Voting Record Date. Unless otherwise indicated, each nominee has sole investment
and/or voting power with respect to the shares shown as beneficially owned by
him. Fred W. Koehler is the cousin of John Muessel, the Bank's Vice President -
Trust Services. Apart from this relationship, no nominee for director or
director is related to any other nominee for director, director, or executive
officer of the Holding Company by blood, marriage, or adoption, and there are no
arrangements or understandings between any nominee and any other person pursuant
to which such nominee was selected. The table also sets forth the number of
shares of Holding Company Common Stock beneficially owned by all directors and
executive officers of the Holding Company as a group.
Common Stock
Expiration of Director of the Beneficially
Term as Holding Owned as of Percentage
Name Director Company Since February 25, 2003(1) of Class
- ----------------------------- ------------- ------------- -------------------- -----------
Director Nominees
- -----------------
Robert W. Anger 2006 1996 12,290(2) 1.5%
Matthew P. Forrester 2006 1999 21,217(3) 2.6%
Directors
Continuing in Office
- --------------------
Jonnie L. Davis 2004 1997 6,444(4) .8%
Michael J. Hensley 2005 1996 13,416(5) 1.6%
Fred W. Koehler 2005 1996 29,240(6) 3.6%
L. Sue Livers 2005 2002 100 .01%
Charles J. McKay 2004 2000 1,700(7) .2%
All directors and
executive officers
as a group (15 persons) 145,063(8) 16.7%
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(1) Based upon information furnished by the respective director nominees. Under
applicable regulations, shares are deemed to be beneficially owned by a
person if he or she directly or indirectly has or shares the power to vote
or dispose of the shares, whether or not he or she has any economic power
with respect to the shares. Includes shares beneficially owned by members
of the immediate families of the directors residing in their homes.
(2) Of these shares, 1,023 are held jointly by Mr. Anger and his spouse and
6,356 are subject to stock options granted under the River Valley Bancorp
Stock Option Plan (the "Option Plan").
(3) Of these shares, 4,926 are held jointly by Mr. Forrester and his spouse,
2,000 are held under the River Valley Bancorp Recognition and Retention
Plan and Trust (the "RRP"), 96 are held by him as custodian for his minor
children, 8,000 are subject to a stock option granted under the Option
Plan, and 1,090 were held under the ESOP as of December 31, 2001. Excludes
7,000 shares subject to stock options granted under the Option Plan which
may not be exercised within 60 days following the Voting Record Date.
(4) Of these shares, 1,600 are held jointly by Mrs. Davis and her spouse and
3,471 are subject to stock options granted under the Option Plan.
(5) Of these shares, 5,000 are held jointly by Mr. Hensley and his spouse and
6,356 are subject to stock options granted under the Option Plan.
(6) Of these shares, 6,951 are subject to stock options granted under the
Option Plan.
(7) Includes 700 shares held jointly by Mr. McKay and his spouse and 700 shares
subject to a stock option granted under the Option Plan.
(8) Of these shares, 4,220 are held under the RRP, 53,713 are subject to stock
options granted under the Option Plan, and 11,889 were allocated to such
persons under the ESOP as of December 31, 2001. Excludes 17,600 shares
subject to stock options granted under the Option Plan which may not be
exercised within 60 days following the Voting Record Date.
Presented below is certain information concerning the director nominees of
the Holding Company:
Robert W. Anger (age 65) served as the Bank's Vice President -- Lending
from August, 1995 until his retirement in January, 1999. Prior to that, Mr.
Anger served as the Bank's President and Chief Executive Officer.
Jonnie L. Davis (age 68) is retired. From July, 1995 to December, 1998, Ms.
Davis served as an administrative assistant with Fewel, Pettitt, Bender &
Associates, a surveying firm in Hanover, Indiana. From July 1994 to July 1995,
Ms. Davis served as an accounting clerk for Stockdale Motors, an automobile
retailer in Madison, Indiana. From April 1984 to December 1994, Ms. Davis served
as a bookkeeping clerk for D&B Enterprises, a partnership involved in owning and
operating apartment complexes and other nonresidential real estate ventures.
Matthew P. Forrester (age 46) became President and Chief Executive Officer
of the Holding Company and the Bank in October, 1999; theretofore he served as
Senior Vice President, Treasurer and Chief Financial Officer of Home Loan Bank
and Home Loan Bancorp in Fort Wayne, Indiana for more than five years.
Sue Livers, M.S., R.D. (age 53) has served as Director of Nutrition
Services, The King's Daughters' Hospital and Health Services since 1971.
Michael J. Hensley (age 47) is a partner in the law firm Kemper, Collins &
Hensley. Mr. Hensley served as a Compliance Officer, Assistant Trust Officer and
the General Counsel to The Madison Bank & Trust Company from 1980 to January,
1989.
Fred W. Koehler (age 62) is retired. He formerly owned and operated Koehler
Tire Co., a tire and automotive parts store in Madison, Indiana, and served as
the Jefferson County Auditor for eight years.
Charles J. McKay (age 50) is a partner with the accounting firm Scott,
Callicotte, & McKay LLC, which is based in Madison, Indiana.
THE DIRECTORS SHALL BE ELECTED UPON RECEIPT OF A PLURALITY OF VOTES CAST AT THE
ANNUAL SHAREHOLDERS MEETING. PLURALITY MEANS THAT INDIVIDUALS WHO RECEIVE THE
LARGEST NUMBER OF VOTES CAST ARE ELECTED UP TO THE MAXIMUM NUMBER OF DIRECTORS
TO BE CHOSEN AT THE MEETING. ABSTENTIONS, BROKER NON-VOTES, AND INSTRUCTIONS ON
THE ACCOMPANYING PROXY TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE
NOMINEES WILL RESULT IN THE RESPECTIVE NOMINEE RECEIVING FEWER VOTES. HOWEVER,
THE NUMBER OF VOTES OTHERWISE RECEIVED BY THE NOMINEE WILL NOT BE REDUCED BY
SUCH ACTION.
The Board of Directors and its Committees
During the fiscal year ended December 31, 2002, the Board of Directors of
the Holding Company acted by written consent or held meetings six times. No
director attended fewer than 75% of the aggregate total number of meetings
during the last fiscal year of the Board of Directors of the Holding Company
held while he served as director and of meetings of committees which he served
during that fiscal year. The Board of Directors of the Holding Company has an
Audit Committee, a Stock Compensation Committee and a Nominating Committee,
among its other Board Committees. All committee members are appointed by the
Board of Directors.
The Audit Committee, comprised of all directors except Matthew P.
Forrester, recommends the appointment of the Holding Company's independent
accountants, and meets with them to outline the scope and review the results of
such audit. The Audit Committee met five times during the fiscal year ended
December 31, 2002.
The Stock Compensation Committee administers the Option Plan and the RRP.
The members of that Committee are all directors except Matthew P. Forrester. The
Stock Compensation Committee met one time during the fiscal year ended December
31, 2002.
The Nominating Committee selects the individuals who will run for election
to the Holding Company's Board of Directors each year. Its members for this
year's nominations were Fred W. Koehler, Jonnie L. Davis and Michael J. Hensley.
It did not meet in 2002 as it was recently constituted. Although the Nominating
Committee will consider nominees recommended by shareholders, it has not
actively solicited recommendations for nominees from shareholders nor has it
established procedures for this purpose. Directors must satisfy certain
qualification requirements set forth in the Holding Company's By-Laws. Article
III, Section 12 of the Holding Company's By-Laws provides that shareholders
entitled to vote for the election of directors may name nominees for election to
the Board of Directors but there are certain requirements that must be satisfied
in order to do so. Among other things, written notice of a proposed nomination
must be received by the Secretary of the Holding Company not less than 120 days
prior to the Annual Meeting; provided, however, that in the event that less than
130 days' notice or public disclosure of the date of the meeting is given or
made to shareholders (which notice or public disclosure includes the date of the
Annual Meeting specified in the Holding Company's By-Laws if the Annual Meeting
is held on such date), notice must be received not later than the close of
business on the 10th day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made.
Management Remuneration and Related Transactions
Remuneration of Named Executive Officer
During the fiscal year ended December 31, 2002, no cash compensation was
paid directly by the Holding Company to any of its executive officers. Each of
such officers was compensated by the Bank.
The following tables set forth information as to annual, long term and
other compensation for services in all capacities to the President and Chief
Executive Officer of the Holding Company (the "Named Executive Officer") for the
last three fiscal years. There were no other executive officers of the Holding
Company who earned over $100,000 in salary and bonuses during the fiscal year
ended December 31, 2002.
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards
------------------------------------- -----------------------
Other All
Annual Restricted Securities Other
Name and Fiscal Compen- Stock Underlying Compen-
Principal Position Year Salary ($)(1) Bonus sation(2) Awards($) Options(#) sation($)(3)
- ------------------ ------ ------------- ----- --------- ----------- ---------- ------------
Matthew P. Forrester, 2002 $133,251 $6,144 --- --- --- $3,881
President and Chief 2001 $122,892 $3,934 --- --- --- $3,381
Executive Officer 2000 $106,239 $3,925 --- --- 5,000 $ 762
- -----------------------
(1) Includes directors fees.
(2) The Named Executive Officer received certain perquisites, but, except as
otherwise noted, the incremental cost of providing such perquisites did not
exceed the lesser of $50,000 or 10% of his salary and bonus.
(3) Constitutes matching contributions made by the Bank to the Holding
Company's 401(k) Plan.
Stock Options
The following table includes the number of shares covered by stock options
held by Matthew P. Forrester as of December 31, 2002. Also reported are the
values for "in-the-money" options (options whose exercise price is lower than
the market value of the shares at fiscal year end) which represent the spread
between the exercise price of any such existing stock options and the fiscal
year-end market price of the stock.
Option Values as of 12/31/02
----------------------------
Number of Unexercised Value of Unexercised In-the-Money
Options at Fiscal Year End Options at Fiscal Year End (1)
--------------------------------- ----------------------------------
Name Exercisable Unexercisable(2) Exercisable Unexercisable(2)
- ------------------------- ----------- ---------------- ----------- ----------------
Matthew P. Forrester 8,000 7,000 $140,230 $121,020
- ----------------------
(1) Amounts reflecting gains on outstanding options are based on the closing
price for the shares on December 31, 2002, which was $30.49 per share.
(2) The shares represented could not be acquired by the Named Executive Officer
as of December 31, 2002.
No stock options were granted to or exercised by the Named Executive
Officer during the fiscal year ended December 31, 2002.
Employment Contracts
The Bank has entered into an employment agreement with Matthew P.
Forrester, the Bank's President and Chief Executive Officer. The agreement is
for a three-year term and extends annually for an additional one-year term to
maintain its three-year term if the Bank's Board of Directors determines to so
extend it. Under the agreement, the employee receives an initial annual salary
equal to his current salary, subject to increases approved by the Board of
Directors. The agreement also provides, among other things, for the employee's
participation in other bonus and fringe benefit plans available to other
employees. The employee may terminate his employment upon ninety (90) days'
prior written notice to the Bank. The Bank may discharge the employee for just
cause (as defined in the agreement) at any time or in certain events specified
by applicable law or regulations. If the Bank terminates the employee's
employment for other than just cause or the employee is constructively
discharged and such termination does not occur within twelve months after a
change in control of the Bank or the Holding Company, the agreement provides for
the employee's receipt of a lump-sum or periodic payment of an amount equal to
the sum of (A) his base salary through the end of the then-current term, plus
(B) his base salary for an additional twelve-month period, plus (C) in the
employee's sole discretion and in lieu of continued participation in his
employer's fringe benefit plans, cash in an amount equal to the cost of
obtaining all health, life, disability and other benefits in which the employee
would otherwise be eligible to participate. In the event the Bank terminates the
employee's employment for other than just cause or the employee is
constructively discharged within twelve months following a change in control of
the Bank or the Holding Company, the agreement provides for the employee's
receipt of a lump-sum payment of an amount equal to the difference between (A)
the product of 2.99 times his "base amount" (as defined in Section 280G(b)(3) of
the Internal Revenue Code of 1986, as amended ("Code")) and (B) the sum of any
other parachute payments, as determined under Section 280G(b)(2) of the Code. If
the payments provided for under the agreement, together with any other payments
made to the employee by the Bank, are determined to be payments in violation of
the "golden parachute" rules of the Code, such payments will be reduced to the
largest amount which would not cause the Bank to lose a tax deduction for such
payments under those rules. As of the date hereof, the cash compensation that
would be paid to Mr. Forrester under the agreement if such agreement was
terminated after a change in control of the Bank would be $396,000. The Holding
Company has guaranteed the obligations of the Bank under this employment
agreement.
A similar contract has been entered into with one other executive officer
of the Holding Company. The cash compensation which would be paid under this
contract if the affected employee were terminated after a change of control of
the Holding Company without cause by the Bank, or for cause by the employee,
would be $225,000.
Compensation of Directors
Outside directors of the Holding Company are paid directors' fees of $250
for each meeting attended.
All directors of the Bank are entitled to receive monthly director fees in
the amount of $835 for their services. Jerry Allen also receives $835 per month
as a Director Emeritus of the Bank. Outside directors of the Bank also receive
fees in the amount of $250 for each special meeting of the Board. Directors
attending Loan Committee meetings are paid $50 for each such meeting. Total fees
paid to or deferred by directors, former advisory directors, and Mr. Allen for
the year ended December 31, 2002 were $104,930.
The Bank's directors and directors emeritus may, pursuant to deferred
compensation agreements, defer payment of some or all of such monthly directors'
fees or salary for a maximum period of five years. Upon reaching the retirement
age specified in their respective joinder agreements, directors who participate
in the deferred compensation plan receive fixed monthly payments for a specific
period ranging from 60 to 180 months, depending on the specific director's
election in his joinder agreement, but may also elect to receive their benefits
in a lump sum in the event of financial hardship. The agreements also provide
for death and disability benefits.
The Bank has purchased paid-up life insurance on the lives of directors and
directors emeritus participating in the deferred compensation plan to fund
benefits payable thereunder. The insurance is provided by Jefferson Pilot,
Pacific Mutual, Southland and Transamerica. At December 31, 2002, the cash
surrender value of the policies was carried on the books of the Bank at
approximately $1,325,640. The Bank expensed $3,250 in connection with these
agreements for the year ended December 31, 2002.
Transactions With Certain Related Persons
The Bank has followed a policy of offering to its directors, officers, and
employees real estate mortgage loans secured by their principal residence and
other loans. These loans are made in the ordinary course of business with the
same collateral, interest rates and underwriting criteria as those of comparable
transactions prevailing at the time and do not involve more than the normal risk
of collectibility or present other unfavorable features.
The law firm Hensley, Walro, Collins and Hensley, based in Madison,
Indiana, of which Michael J. Hensley, a director of the Holding Company, is a
partner, serves as counsel to the Bank in connection with loan delinquencies and
related matters. The Bank expects to continue using the services of this law
firm for such matters in the current fiscal year.
Audit Committee Report, Charter, and Independence
Audit Committee Report. The Audit Committee reports as follows with respect
to the audit of the Holding Company's financial statements for the fiscal year
ended December 31, 2002, included in the Holding Company's Shareholder Annual
Report accompanying this Proxy Statement ("2002 Audited Financial Statements"):
The Committee has reviewed and discussed the Holding Company's 2002 Audited
Financial Statements with the Company's management.
The Committee has discussed with its independent auditors (BKD, LLP) the
matters required to be discussed by Statement on Auditing Standards 61, which
include, among other items, matters related to the conduct of the audit of the
Holding Company's financial statements. BKD, LLP did not use any employees other
than its full-time permanent employees on its audit of the Holding Company's
2002 Audited Financial Statements.
The Committee has received written disclosures and the letter from the
independent auditors required by Independence Standards Board Standard No. 1
(which relates to the auditor's independence from the Holding Company and its
related entities) and has discussed with the auditors the auditors' independence
from the Holding Company. The Committee considered whether the provision of
services by its independent auditors, other than audit services and reviews of
Forms 10-Q, is compatible with maintaining the auditors' independence.
Based on review and discussions of the Holding Company's 2002 Audited
Financial Statements with management and discussions with the independent
auditors, the Audit Committee recommended to the Board of Directors that the
Holding Company's 2002 Audited Financial Statements be included in the Holding
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2002.
This Report is respectfully submitted by the Audit Committee of the Holding
Company's Board of Directors.
Audit Committee Members
-----------------------
Robert W. Anger L. Sue Livers
Jonnie L. Davis Fred W. Koehler
Michael J. Hensley Charles J. McKay
Audit Committee Charter. The Board of Directors has adopted a written
charter for the Audit Committee. The Board of Directors reviews and approves
changes to the Audit Committee Charter annually.
Independence of Audit Committee Members. The Holding Company's Audit
Committee is comprised of all of the directors except Matthew P. Forrester. A
majority of these members meets the requirements for independence set forth in
the Listing Standards of the National Association of Securities Dealers. Mr.
Anger retired from his position as an employee of the Bank in January, 1999, and
Mr. Hensley provided certain legal services to the Bank in 2002.
ACCOUNTANTS
BKD, LLP has served as auditors for the Holding Company since 2000. It is
anticipated that a representative of BKD, LLP will be present at the Annual
Meeting with the opportunity to make a statement if he or she so desires. He or
she will also be available to respond to any appropriate questions shareholders
may have. The Board of Directors of the Holding Company has not yet completed
the process of selecting an independent public accounting firm to audit its
books, records and accounts for the fiscal year ended December 31, 2003.
Accountants' Fees
Audit Services. The aggregate fees billed by BKD, LLP for audit services
relating to the audit of the 2002 Audited Financial Statements and for reviews
of the Holding Company's financial statements included in its Forms 10-Q for the
year 2002 were $47,000.
Financial Information System Design and Implementation Fees. BKD, LLP did
not bill the Holding Company for any information technology services rendered
during 2002.
All Other Fees. BKD, LLP billed the Holding Company $23,460 for services
other than those described above rendered during 2002.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 ("1934 Act")
requires that the Holding Company's officers and directors and persons who own
more than 10% of the Holding Company's Common Stock file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"SEC"). Officers, directors and greater than 10% shareholders are required by
SEC regulations to furnish the Holding Company with copies of all Section 16(a)
forms that they file.
Based solely on its review of the copies of such forms received by it,
and/or written representations from certain reporting persons that no Forms 5
were required for those persons, the Holding Company believes that during the
fiscal year ended December 31, 2002, all filing requirements applicable to its
officers, directors and greater than 10% beneficial owners with respect to
Section 16(a) of the 1934 Act were satisfied in a timely manner, except that
Mark A. Goley, Senior Loan Officer of the Bank, reported the sale of 745 shares
in July of 2001 for $19.81 per share approximately eight months late and Sue
Livers filed her Form 3 due April 27, 2002, reporting ownership of 100 shares
about two weeks late.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder wishes to have presented at the next
Annual Meeting of the Holding Company must be received at the main office of the
Holding Company for inclusion in the proxy statement no later than 120 days in
advance of March 12, 2004. Any such proposal should be sent to the attention of
the Secretary of the Holding Company at 430 Clifty Drive, P.O. Box 1590,
Madison, Indiana 47250, and will be subject to the requirements of the proxy
rules under the Securities Exchange Act of 1934 and, as with any shareholder
proposal (regardless of whether included in the Holding Company's proxy
materials), the Holding Company's articles of incorporation, by-laws and Indiana
law.
A shareholder proposal being submitted for presentation at the Annual
Meeting but not for inclusion in the Holding Company's proxy statement and form
of proxy, will normally be considered untimely if it is received by the Holding
Company later than 120 days prior to the Annual Meeting. If, however, less than
130 days' notice or prior public disclosure of the date of the next Annual
Meeting is given or made to shareholders (which notice or public disclosure of
the date of the meeting shall include the date of the Annual Meeting specified
in publicly available By-Laws, if the Annual Meeting is held on such date), such
proposal shall be considered untimely if it is received by the Holding Company
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made.
If the Holding Company receives notice of such proposal after such time, each
proxy that the Holding Company receives will confer upon it the discretionary
authority to vote on the proposal in the manner the proxies deem appropriate,
even though there is no discussion of the proposal in the Holding Company's
proxy statement for the next Annual Meeting.
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described in the Proxy Statement. However, if any other
matters should properly come before the Annual Meeting, it is intended that the
proxies solicited hereby will be voted with respect to those other matters in
accordance with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Holding Company.
The Holding Company will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them in sending
proxy material to the beneficial owners of the Common Stock. In addition to
solicitation by mail, directors, officers, and employees of the Holding Company
may solicit proxies personally or by telephone without additional compensation.
Each shareholder is urged to complete, date and sign the proxy and return
it promptly in the enclosed envelope.
By Order of the Board of Directors
By: /s/ Matthew P. Forrester
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Matthew P. Forrester
March 12, 2003
REVOCABLE PROXY RIVER VALLEY BANCORP
Annual Meeting of Shareholders
April 16, 2003
The undersigned hereby appoints Lonnie D. Collins and Larry C. Fouse, with
full powers of substitution, to act as attorneys and proxies for the undersigned
to vote all shares of common stock of River Valley Bancorp which the undersigned
is entitled to vote at the Annual Meeting of Shareholders to be held at 430
Clifty Drive, Madison, Indiana, on Wednesday, April 16, 2003, at 3:00 p.m., and
at any and all adjournments thereof, as follows:
1. The election as directors of all nominees listed below, except as marked to
the contrary
|_| FOR |_| VOTE WITHHELD
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name on the list below:
Robert W. Anger Matthew P. Forrester
(each for a three-year term)
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" each of the listed propositions.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This Proxy may be revoked at any time prior to the voting thereof.
The undersigned acknowledges receipt from River Valley Bancorp, prior to the
execution of this Proxy, of a Notice of the Meeting, a Proxy Statement and an
Annual Report to Shareholders.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
__________________, 2003
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Signature of Shareholder
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Signature of Shareholder
Please sign as your name appears on the envelope
in which this card was mailed. When signing as
attorney, executor, administrator, trustee or
guardian, please give your full title. If shares
are held jointly, each holder should sign.