UNITED STATES
SECURITIES AND EXCHANGE COMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )
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Filed by a Party other than the Registrant [ ]
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 Rule 14a-11(c) or 14a-12
NASB FINANCIAL, INC.
---------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
---------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(LOGO)
December 31, 2004
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of NASB Financial, Inc. (the "Company"), which will be held
on Friday, January 21, 2005, at 8:30 a.m. Central Standard Time, in the
lobby of our Grandview branch office located at 12498 South 71 Highway,
Grandview, Missouri.
At this Annual Meeting, you are being asked to elect directors and
ratify the appointment of our independent auditors. The attached Notice
of Annual Meeting and Proxy Statement describe the matters to be
presented at the Annual Meeting. The Board of Directors unanimously
recommends that stockholders vote "FOR" each matter to be considered.
YOUR VOTE IS IMPORTANT. You are urged to sign, date, and mail the
enclosed Proxy promptly in the postage-prepaid envelope provided. If
you attend the Meeting, you may vote in person even if you have already
mailed in your Proxy.
A copy of the Bank's Annual Report for the fiscal year ended
September 30, 2004 accompanies the Notice of Annual Meeting and the
Proxy Statement. On behalf of the Board of Directors, I wish to thank
you for your continued support. We appreciate your interest.
Sincerely,
/s/ David H. Hancock
David H. Hancock
Board Chairman
NASB FINANCIAL, INC.
12498 South 71 Highway
Grandview, Missouri 64030
(816) 765-2200
NOTICE
Annual Meeting of Stockholders
Friday, January 21, 2005
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
NASB Financial, Inc. will be held at the North American Savings Bank,
Grandview branch office located at 12498 South 71 Highway, Grandview,
Missouri, on Friday, January 21, 2005, at 8:30 a.m., Central Standard
Time, for the following purposes:
1. To elect three directors of the Company to serve three-year terms.
2. To ratify the appointment by the Board of Directors of the firm of
BKD, LLP as independent auditors of the Company and its subsidiaries for
the fiscal year ending September 30, 2005; and
3. To transact such other business as may properly come before the
meeting.
Pursuant to the Bylaws, the Board of Directors has fixed the close of
business on December 15, 2004, as the record date for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting,
or any adjournment thereof.
NASB FINANCIAL, INC.
/s/ Norma Rieck
Norm Rieck
Corporate Secretary
December 31, 2004
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY, THEREFORE, WHETHER OR
NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE VOTE,
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE
WHICH DOES NOT REQUIRE POSTAGE IF MAILED IN THE UNITED STATES. THIS
WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ARE PRESENT AT THE
ANNUAL MEETING.
NASB FINANCIAL, INC.
12498 South 71 Highway
Grandview, Missouri 64030
(816) 765-2200
PROXY STATEMENT
Annual Meeting of Stockholders
January 21, 2005
VOTING AND SOLICITATION OF PROXIES
This proxy statement and the accompanying form of proxy are
furnished in connection with the solicitation of proxies by the Board of
Directors of NASB Financial, Inc. ("NASB" or the "Company") for the
Annual Meeting of Stockholders (hereinafter called the "Meeting") to be
held at the North American Savings Bank, Grandview branch office located
at 12498 South 71 Highway, Grandview, Missouri on Friday, January 21,
2005, at 8:30 a.m. The Annual Report to stockholders for fiscal year
2004, including consolidated financial statements for the fiscal year
ended September 30, 2004, accompanies this statement. The Company is
required to file an Annual Report and Form 10-K for its fiscal year
ended September 30, 2004, with the Securities and Exchange Commission
("SEC").
This proxy statement and the accompanying proxy are first being
sent to the stockholders on or about December 31, 2004.
Regardless of the number of shares you own, it is important that
your stock be represented at the Meeting. No action can be taken unless
a majority of the outstanding shares of Common Stock is represented. To
make sure your shares are represented at the Meeting, please sign and
date the proxy card and return it in the enclosed prepaid envelope.
If the enclosed proxy is properly executed and returned, and is not
revoked, it will be voted in accordance with the specifications made by
the stockholder. The proxy form provides a space for you to withhold
your vote for the nominees for the Board of Directors, if you choose to
do so. You may indicate the way you wish to vote on each matter in the
space provided. Executed but unmarked proxies will be voted FOR the
election of the director nominees named in the proxy statement and FOR
the ratification of the selection of auditors.
You may revoke your proxy at any time prior to its exercise. NASB
has not established formal procedures for revocation. The cost of
soliciting the proxies will be borne by NASB. In addition to the
solicitation of proxies by mail, proxies may be solicited by directors,
officers or regular employees of the Company in person or by telephone
or telegraph. The Company will also request persons, firms, and
corporations holding shares in their names, or in the names of their
nominees, which are beneficially owned by others, to send proxy material
to and obtain proxies from such beneficial owners and will reimburse
such holders for their reasonable expenses in so doing. No additional
compensation shall be paid to directors, officers and regular employees
of the Company in consideration of services rendered to the solicitation
of proxies.
The securities which can be voted at the Meeting consist of shares
of Common Stock of NASB Financial, Inc., with each share entitling its
owner to one vote on matters other than the election of directors, in
respect of which cumulative voting is permitted, as discussed below.
The close of business on December 15, 2004, has been fixed by the Board
of Directors as the record date for determination of stockholders
entitled to vote at the meeting. The number of shares of Common Stock
outstanding on the record date was 8,455,442.
The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of Common Stock is necessary to
constitute a quorum at the Meeting. In the event there are not
sufficient votes for a quorum, the Meeting may be adjourned in order to
permit further solicitation of proxies.
No person is authorized to give any information or to make any
representation other than as contained in this proxy statement, and if
given or made, such information may not be relied upon as having been
authorized.
1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons and groups owning in excess of five percent (5%) of NASB's
Common Stock are required to file certain reports regarding such
ownership with NASB and with the SEC. The Company has not been
notified, nor does it have any reason to believe, that any person, other
than Mr. David H. Hancock and Michael G. Dunn, owns more than 5% of
NASB's Common Stock as of November 30, 2004.
Name and Address of Amount and Nature Percent of
Title of Class Beneficial Owner of Ownership Class (2)
------------------------------------------------------------------------
Common Stock David H. Hancock 4,282,901 50.7%
12498 South 71 Highway shares total (1)(2)
Grandview, MO 64030
Common Stock Michael G. Dunn 917,636 10.9%
102 Georgia St. shares total
St. Simons, GA 31522
1) Includes 10,000 shares which Mr. Hancock has the right to acquire
pursuant to the options he holds under the Stock Option Plan, but which
have not been exercised.
2) Includes 272,068 shares which are owned by Mr. Hancock's spouse,
Linda S. Hancock. Mr. Hancock disclaims beneficial ownership of these
shares and their inclusion in the totals above shall not be deemed as an
admission that Mr. Hancock is the beneficial owner of such shares for
purposes of Section 16 of the Exchange Act or for any other purposes.
3) The calculation of percent of class is based on the number of shares
of Common Stock outstanding as of November 30, 2004, excluding shares
held by the Company as treasury stock.
-----------------------
As of November 30, 2004, all executive officers and directors as a
group owned 4,464,999 shares of NASB's Common Stock and have options to
acquire an additional 12,000 shares for a total of 4,476,999, or 53.0%.
PROPOSAL 1: ELECTION OF DIRECTORS
At each election of directors, every stockholder entitled to vote
has the right to vote, in person or by proxy, the number of shares owned
by him for as many persons as there are directors to be elected to a
particular class. A stockholder may cumulate his votes by voting the
total number of votes to which he is entitled for any one candidate or
distribute them equally or unequally among the candidates. The total
votes for all candidates cannot be more than the number of all
candidates to be elected multiplied by the number of his shares.
Stockholders may exercise their right to cumulative voting by attaching
to their proxy card instructions indicating how many votes their proxy
should give each candidate. The Board of Directors reserves the right
to cumulate votes with respect to proxies assigned to the Board unless
authorization is expressly withheld or instruction is otherwise given.
The directors are divided into three classes. Two directors are to
be elected at this meeting. The three nominees for these positions
currently serve on the Board of Directors and are seeking election or
re-election to serve until the 2008 Annual Meeting; or until their
successors are elected and qualified to serve. The three nominees are
Barrett Brady, A. Ray Cecrle, and Keith Cox.
It is the intention of the Board of Directors to vote the proxies
for the election of all of the nominees named below for directors, or,
at their discretion, cumulatively vote for any one or more, unless the
proxy is marked to indicate that such authorization is expressly
withheld. Management believes that all such nominees will stand for
election, but if any person nominated fails to stand for election, the
Board of Directors reserves full discretion to vote for any other person
who may be nominated. Management believes that each nominee named
herein will serve if elected as a director.
Pursuant to the Bylaws of the Company, the Board of Directors acts
as a nominating committee for selecting the management nominees for
election as directors. Except in the case of a nominee substituted as a
result of the death or other incapacity of a management nominee, the
nominating committee shall deliver written nominations to the secretary
at least 20 days prior to the date of the annual meeting. No
nominations for directors except those made by the nominating committee
shall be voted upon at the annual meeting unless other nominations by
shareholders are made in writing and delivered to the secretary of the
Company at least one-hundred twenty days and not more than one-hundred
eighty days prior to the date of the annual meeting.
2
Ballots bearing the names of all persons nominated by the nominating
committee and by shareholders shall be provided for use at the annual
meeting. However, if the nominating committee shall fail or refuse to
act at least 20 days prior to the annual meeting, nominations for
directors may be made at the annual meeting by any shareholder entitled
to vote and shall be voted upon. Such recommendations must contain the
name, age, business address, residence address, and the principal
occupation or employment of each such recommended nominee as would be
required under the rules of the SEC in a proxy statement soliciting
proxies for the election of such recommended nominee as a director.
Such recommendations shall include a signed consent to serve as a
director of the Company, if elected, from each such recommended nominee.
BOARD OF DIRECTORS
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The nominees, their ages, principal occupations or employment for
the past five years and positions with the Company's subsidiary, North
American Savings Bank, F.S.B. (the "Bank"), the year each was first
elected as director of NASB, and the amount of Common Stock and percent
thereof beneficially owned by each on November 30, 2004, are shown on
the following table. "Beneficial ownership" includes: stock held in
joint tenancy; stock owned as tenants in common; stock owned or held by
a spouse or other member of the nominee's household; and stock in which
the nominee has or shares voting or investment power, even though the
nominee disclaims any beneficial interest in such stock. Each director
of the Company is also a member of the Board of Directors of the Bank.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
NOMINEE.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
NAME AND BUSINESS EXPERIENCE DIRECTOR OF COMMON STOCK AS PERCENT
DURING LAST FIVE YEARS AGE SINCE OF RECORD DATE OF CLASS
------------------------------------------------------------------------------------------------
NOMINEES - THREE YEAR TERMS EXPIRING IN 2008
--------------------------------------------
BARRETT BRADY 58 1993 8,900 shares (directly) 0.1%
Senior Vice President of Highwoods Properties, Inc.
President and Chief Executive Officer of J.C. Nichols
1995-1998.
KEITH B. COX 43 2001 28,724 shares 0.3%
President of North American Savings Bank. From 1996 (directly)(1)
to 2002, served as Executive Vice President and Chief
Financial Officer, and from 1990 to 1996, served as Vice
President and Controller of North American.
A. RAY CECRLE 64 2003 5,100 shares 0.1%
First Vice President of Stifel, Nicolaus and (directly)(2)
Company, Inc. since 1984. He joined Stifel,
Nicolaus and Company, Inc. in 1966.
DIRECTORS WHOSE TERMS EXPIRE IN 2006
--------------------------------------------
FREDERICK V. ARBANAS 65 1974 12,477 shares 0.2%
Retired President of Fred Arbanas, Inc., Advertising (9,409 directly and
Agency, Grandview, Missouri since 1969. 3,068 indirectly)
W. RUSSELL WELSH 55 1997 25,148 shares (directly) 0.3%
President & CEO of the law firm Polsinelli
Shalton Welte Suelthaus.
3
NOMINEES - THREE YEAR TERMS EXPIRING IN 2007
--------------------------------------------
DAVID H HANCOCK 59 1990 4,282,901 shares 50.7%
Board Chairman and Chief Executive Officer of (4,010,833 directly and
North American Savings Bank since 1990. Also 272,068 indirectly)(3)(4)
serves as Board Chairman of Nor-Am Service
Corporation, a wholly owned subsidiary of
North American.
LINDA S. HANCOCK 54 1995 4,282,901 shares 50.7%
Owner of Linda Smith Hancock Interiors (272,068 directly and
since 1974. 4,010,833 indirectly)(5)
-----------------------
(1) Includes 500 shares which Mr. Cox has the right to acquire pursuant
to options he holds under the 2004 Stock Option Plan, which have not
been exercised.
(2) In November 2003, Mr. Cecrle was appointed by the Board of Directors
to replace Mr. James Watson on the Board of NASB Financial, Inc. Mr.
Cecrle was also appointed to replace Director Welsh on the audit
committee and meets the audit committee independence requirements as
prescribed by provisions of the Sarbanes-Oxley Act. Mr. Watson
continues to serve as Vice President of NASB Financial, Inc., and
Executive Vice President of North American Savings Bank, F.S.B.
(3) Includes 10,000 shares which Mr. Hancock has the right to acquire
pursuant to options he holds under the 2004 Stock Option Plan, but which
have not been exercised.
(4) Includes 272,068 shares owned by Linda S. Hancock. David H. Hancock
is the spouse of Linda S. Hancock. David H. Hancock disclaims
beneficial ownership of securities owned by Linda S. Hancock and this
report shall not be deemed an admission that he is the beneficial owner
of such securities for purposes of Section 16 of the Exchange Act or for
any other purposes.
(5) Includes 4,010,833 shares owned by David H. Hancock. Linda S.
Hancock is the spouse of David H. Hancock. Linda S. Hancock disclaims
beneficial ownership of securities owned by David H. Hancock and this
report shall not be deemed an admission that she is the beneficial owner
of such securities for purposes of Section 16 of the Exchange Act or for
any other purposes.
-----------------------
The Board of Directors held 12 regular meetings during the fiscal
year ended September 30, 2004. All directors attended more than 75% of
the meetings of the Board of Directors and committees to which they
belong.
AUDIT COMMITTEE
The Audit Committee has the responsibility of reviewing the scope
and results of audits performed by the Bank's independent auditors and
reviewing the findings and recommendations of NASB's internal auditor
and compliance officer. The audit committee is comprised of Frederick
V. Arbanas, Barrett Brady, and A. Ray Cecrle.
In 1999, the SEC, the New York Stock Exchange ("NYSE"), the
National Association of Securities Dealers ("NASD"), and the American
Institute of Certified Public Accountants ("AICPA") partnered to
establish a Blue Ribbon Committee on Improving the Effectiveness of
Corporate Audit Committees. The Blue Ribbon Committee's report, which
was issued and adopted in February 1999, set forth new requirements
designed to strengthen the effectiveness of audit committees of publicly
traded companies. In meeting these new requirements, NASB's Board of
Directors adopted an amended Audit Committee Charter on June 26, 2003,
which is set forth in Appendix A.
AUDIT COMMITTEE REPORT
In accordance with the written charter adopted by the Board of
Directors, the Audit Committee of the Board (the "Committee") assists
the Board in fulfilling its responsibilities for oversight of the
quality and integrity of the accounting, auditing and financial
reporting practices of the Company. During fiscal 2004, the Committee
met four times, and the Committee chair, as representative of the
Committee, discussed the interim financial information contained in each
quarterly earnings announcement with the CFO and independent auditors
prior to public release.
4
In discharging its oversight responsibility as to the audit
process, the Audit Committee obtained from the independent auditors a
formal written statement describing all relationships between the
auditors and the Company that might bear on the auditors' independence
consistent with Independence Standards Board Standard No. 1,
"Independence Discussion with Audit Committees," discussed with the
auditors any relationships that may impact their objectivity and
independence and satisfied itself as to the auditors' independence. The
Committee also discussed with management, the Internal Audit Manager,
and the independent auditors the quality and adequacy of the Company's
internal controls and the internal audit function's organization,
responsibilities, budget and staffing. The Committee reviewed with both
the independent auditors and the Internal Audit Manager their audit
plans, audit scope, and identification of audit risks.
The Committee discussed and reviewed with the independent auditors
all communications required by generally accepted auditing standards,
including those described in Statement on Auditing Standards No. 61, as
amended, "Communication with Audit Committees" and, with and without
management present, discussed and reviewed the results of the
independent auditors' examination of the financial statements. The
Committee also discussed the results of the internal audit examinations.
The Committee reviewed the audited financial statements of the
Company as of and for the fiscal year ended September 30, 2004, with
management and the independent auditors. Management has the
responsibility for the preparation of the Company's consolidated
financial statements and the independent auditors have the
responsibility for the examination of those statements.
Mr. Barrett Brady serves as the Audit Committee's financial expert,
and is qualified to do so as prescribed by provisions of the Sarbanes-
Oxley Act.
Based on the above mentioned review and discussions with management
and the independent auditors, the Committee recommended to the Board
that the Company's audited financial statements be included in its
Annual Report on Form 10-K for the fiscal year ended September 30, 2004,
for filing with the Securities and Exchange Commission. The Committee
also recommended the appointment, subject to shareholder approval, of
BKD, LLP as the Company's independent auditors for the fiscal year ended
September 30, 2005, and the board concurred with that recommendation.
December 20, 2004 Barrett Brady, Audit Committee Chairman
Frederick V. Arbanas
A. Ray Cecrle
DIRECTORS' AND COMMITTEE MEMBERS' REMUNERATION
Directors who are not paid a salary by the Bank or a subsidiary
during the fiscal year ended September 30, 2004, received fees as
follows from October 1, 2003, through April 30, 2004: $1,000 per board
meeting attended, and $250 per meeting to members of all standing
committees, if such committee meeting was not held in conjunction with a
board meeting. Beginning May 1, 2004, fees were increased to $1,250 per
board meeting attended and $400 for committee meetings, if such
committee meeting was not held in conjunction with a board meeting.
EXECUTIVE OFFICERS
The following sets forth information about the executive officers
who are not directors of NASB or who have not been employed by the Bank
for five years. All executive officers are appointed by the Board of
Directors and serve at the discretion of the Board.
Paul L. Thomas, age 37, serves as the Bank's Executive Vice
President and Chief Credit Officer. From October 2000 to December 2002,
Mr. Thomas was the Chief Executive Officer and Board Chairman of
Community Bank in Excelsior Springs, which merged with the Bank on
December 19, 2002. Prior to that time, he was a Vice President of
Commercial Real Estate lending for North American Savings Bank.
James A. Watson, age 57, has served as the Bank's Executive Vice
President of Branch Operations since 1992. Prior to this, he served as
Vice President from 1984-1990 and as Senior Vice President from 1990 to
1992. Mr. Watson also served as Director of the Bank and the Company
from 1993 to 2003. During 2003, he was replaced on the Board of
Directors by Mr. A. Ray Cecrle because the Sarbanes-Oxley legislation
caused the Company's need to add an "outside" director to the Audit
Committee.
Rhonda Nyhus, age 39, is the Bank's Senior Vice President and Chief
Financial Officer. From February 1995 to August 1997, she worked as
Internal Audit Manager for the Bank. Prior to that time, she had six
years of experience with the accounting firm of Grant Thornton.
5
Wade Hall, age 37, is the Bank's Senior Vice President of
Commercial Real Estate Lending. Before joining the Bank in 2000, he was
an attorney in private practice. Prior to that he was Executive Vice
President of Strategic Development for a publicly-held financial
services company. He has fourteen years of lending experience.
Bradley A. Lee, age 50, has served as a Sr. Vice President in
Construction Lending with the Bank for eight years. His twenty-three
years of experience in banking include serving as VP at Mercantile Bank
in Commercial Lending from 1991 to 1995 and as Sr. Vice President at
Mark Twain Banks from 1981 to 1991.
John Nesselrode, age 45, has worked for the Bank for nineteen
years, first as Investment Officer, and now as Sr. Vice President/Chief
Investment Officer.
Bruce J. Thielen, age 44, started with the Bank thirteen years ago
as Manager of Loan Servicing. Since January 1995, he has assumed
additional responsibilities as the manager of the Residential Lending
Department and is presently a Sr. Vice President.
Dena Sanders, age 36, is Senior Vice President of Retail Banking
for North American. She joined the Bank in 1998 and has served as a
portfolio loan officer and as Vice President in both Construction and
Consumer lending.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the
compensation of the Chief Executive Officer and four most highly
compensated executive officers who received compensation of $100,000 or
more and served in such capacities as of September 30, 2004.
STOCK ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS OPTIONS COMP.
POSITION WITH BANK YEAR $ $ (NUMBER) $(1)
------------------------------------------------------------------------------------------------------
DAVID H. HANCOCK 2004 252,000 80,600 10,000 4,890
Board Chairman, CEO and Director 2003 252,000 250,600 -- 6,000
2002 246,000 225,500 -- 5,500
KEITH B. COX 2004 192,500 62,100 500 6,600
President and Director 2003 183,750 45,600 -- 6,349
2002 151,667 40,500 -- 5,750
PAUL L. THOMAS 2004 140,000 110,700 -- 3,153
Executiv Vice President and 2003 135,000 40,000 -- 4,340
Chief Credit Officer
BRAD LEE 2004 130,000 130,600 -- 6,250
Senior Vice President of 2003 125,000 103,201 -- 6,843
Construction Lending 2002 113,750 60,500 -- 5,227
JOHN M. NESSELRODE 2004 135,000 135,600 -- 5,794
Senior Vice President and 2003 132,500 45,600 -- 5,293
Chief Investment Officer 2002 127,500 30,500 -- 4,740
-----------------------
(1)Includes contributions to the Company's 401(k) Plan on behalf of
each of the named executive officers to match predefined portion of
the 2004 pre-tax elective deferral contribution (included under the
"salary" column) made to such plan and discretionary contributions
made to the plan on behalf of the named executive officer.
-----------------------
Cash compensation for the fiscal year ended September 30, 2004,
totaled $2,175,475 for all ten executive officers as a group.
OPTION GRANTS DURING THE FISCAL YEAR ENDED SEPTEMBER 30, 2004, TO THE
ABOVE NAMED EXECUTIVE OFFICERS.
On July 27, 2004, the Board granted to David H. Hancock the option
to acquire 10,000 shares, and to Keith B. Cox the option to acquire 500
shares of the Company's Common Stock. Also on July 27, 2004, the Board
granted the option to acquire a total of 1,500 shares to other executive
officers who are not listed above. The exercise price of all options
granted during fiscal 2004 was $35.50, which was equal to the fair
market value of the Company's Common Stock on the date of the grants.
6
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth all stock options exercised by the
named executives during the fiscal year ended September 30, 2004, and
the number and value of unexercised options held by such executive
officers at the fiscal year-end.
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE MONEY OPTIONS AT
ACQUIRED VALUE OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END (2)
----------------------------- --------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------------------------------------------------------------------------------
David H. Hancock -- -- -- 10,000 $ -- $ 39,200
Keith B. Cox -- -- -- 500 $ -- $ 1,960
-----------------------
(1) Difference between fair market value of underlying securities at
date of exercise and the exercise price.
(2) Difference between fair market value of underlying securities at
fiscal year-end and the exercise price.
-----------------------
EMPLOYMENT AGREEMENTS
There are currently no employment agreements.
EXECUTIVE COMPENSATION PLAN
The executive compensation program is based on beliefs and guiding
principles designed to align compensation with business strategy and
company values. The Company supports a performance-oriented environment
that rewards performance not only with respect to the individual's
contribution to the Company but also Company performance as compared to
that of the industry performance levels.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed of
independent directors Frederick V. Arbanas, Barrett Brady, and A. Ray
Cecrle. The Committee is responsible for setting and administering the
policies that govern both annual executive compensation and stock
ownership programs.
The Compensation Committee evaluated a variety of objective factors
to determine the base salaries, incentive bonuses, and stock option
awards to the Bank's executives. In setting the executive compensation
for the Chief Executive Officer and the President, the committee
examined the Company's corporate performance ratios compared to peer
group averages, the Company's stock price performance over the last five
years in relationship to peer groups and industry indexes, and the
Company's executive compensation compared to salary surveys of financial
institutions in the industry with similar characteristics of the
Company. Specifically, the Company's return on assets ("ROA") was 2.04%
during the year ended September 30, 2004, while its return on equity
("ROE") was 18.88%. Comparatively, information on the FDIC's web site
reports that, for the nine-month period ended September 30, 2004, all
savings institutions as a whole had an ROA of 1.19% and an average ROE
of 11.22%. The Compensation Committee also compares cash compensation
paid to executives to the Company's national peer group of institutions
with $1 billion in assets or greater as listed in the 2004 Key Executive
Total Compensation Survey published by The Delves Group in conjunction
with the Bank Administration Institute. Based on that survey, the total
cash compensation paid to the Company's Chief Executive Officer during
the year ended September 30, 2004, was approximately 41.9% below the
national peer group average for that position. The total cash
compensation paid to the Company's President for the year ended
September 30, 2004, was approximately 18.1% below the national peer
group average for that position.
COMPARATIVE STOCK PERFORMANCE GRAPH
The following graph shows the cumulative total return on the common
stock of the Bank over the last five fiscal years, compared with the
cumulative total return of the NASDAQ Stock Market (U.S. Companies)
Index and the NASDAQ Financial Institutions Index over the same period.
Cumulative total return on the stock or the index equals the total
increase in the value since September 30, 1999, assuming reinvestment of
all dividends paid into the stock or the index respectively. The graph
was prepared assuming that $100 was invested on September 30, 1999, in
common stock of the Bank in the indexes.
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NASB, NASDAQ Stock Market (U.S. Companies) and NASDAQ
INDEX 9/30/99 9/30/00 9/30/01 9/30/02 9/30/03 9/30/04
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NASB Financial, Inc. $ 100 $ 143 $ 148 $ 211 $ 354 $ 413
NASDAQ (U.S.) $ 100 $ 134 $ 55 $ 43 $ 65 $ 69
NASDAQ Financial Stocks $ 100 $ 106 $ 122 $ 131 $ 154 $ 177
BENEFITS
RETIREMENT PLAN
During the fiscal year ended September 30, 2004, North
American maintained a 401(k) Qualified Defined Contribution Plan
("Plan") for all employees who worked at least 1,000 hours per
year, were 21 years of age, and had been employed for one year.
This Plan complies with the requirements of the Employment
Retirement Income Security Act ("ERISA") of 1974. The Plan
provides, in general, that an employee may elect to contribute from
1% to 15% of annual salary on a pre-tax basis and the Bank will
contribute 50% of the employee's contribution, up to a maximum of
3% of the employee's salary, subject to IRS limits. Employees are
100% vested in the employer's contributions after three years of
service to the Bank. Benefits under the Plan are determined by the
contributions of the Bank and the participant. Normal retirement
age is 65. Upon retirement, the participant elects the manner in
which the accrued contributions plus earnings are to be received.
The aggregate contributions by the Bank under the Plan for
named executive officers during the fiscal year ended September 30,
2004, were: David Hancock, $4,890; Keith B. Cox, $6,600; Paul L.
Thomas, $3,153; Brad Lee, $6,250; John M. Nesselrode, $5,794; and
for all executive officers as a group were $48,173. Total accrued
contributions by the bank are: David Hancock, $66,134; Keith B.
Cox, $52,197; Paul L. Thomas, $7,493; Brad Lee, $34,256; and John
M. Nesselrode, $49,224.
2004 STOCK OPTION PLAN
On January 27, 2004, stockholders of NASB approved a new
equity stock option plan ("2004 Stock Option Plan"). Under the
2004 Stock Option Plan, options to purchase up to 250,000 shares of
Common Stock may be granted to officers and employees of the Bank
and its subsidiaries. As of September 30, 2004, there were 237,000
shares of Common Stock remaining available for issue under the 2004
Stock Option Plan.
The options granted are intended to be incentive stock options
under Section 442A of the Internal Revenue Code as amended.
Qualified stock options must be granted by the tenth anniversary of
the effective date of the 2004 Stock Option Plan. The option price
may not be less than 100% of the fair market value of the shares on
the date of the grant. No option shall be exercisable after the
expiration of ten years from its date of the grant.
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The Board of Directors administers the 2004 Stock Option Plan.
The Board selects the employees to whom options are to be granted
and the number of shares to be granted based upon, among other
things, an employee's length of service, the amount of
compensation, and the nature of responsibilities, duties and
functions.
The Board may, in its discretion, authorize NASB to accept the
surrender by the optionee of the right to exercise an option in
consideration for the payment by NASB of an amount equal to the
excess of the fair market value of the shares of Common Stock
subject to such option surrendered over the total exercise price.
Such payment may be made in Common Stock and/or cash.
Federal Income Tax Consequences
Incentive stock options are designed to result in beneficial
tax treatment to the optionee and do not result in a tax deduction
for the Company. The optionee is not taxed upon grant or exercise
of an incentive stock option; rather, taxation is deferred until
the sale or other disposition of the underlying shares.
During the year ended September 30, 2004, the Board issued new
stock options as follows: 10,000 at $35.50 with a 5-year
expiration and; 3,000 at $35.50 with a 10-year expiration. As of
September 30, 2004, outstanding options may be exercised as
follows:
First Exercise Date Number of Shares Exercise Price
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July 27, 2005 2,600 $35.50
July 27, 2006 2,600 $35.50
July 27, 2007 2,600 $35.50
July 27, 2008 2,600 $35.50
July 27, 2009 2,600 $35.50
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TOTAL 13,000
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As of September 30, 2004, none of the options granted under
the 2004 Stock Option Plan have been exercised. Options held by
executive officers who are directors are included in the table
under beneficial ownership. All executive officers as a group hold
options to purchase 12,000 shares.
1986 STOCK OPTION PLAN
During fiscal year 1986, stockholders of NASB approved a stock
option plan ("1986 Stock Option Plan"). Amendments to the 1986
Stock Option Plan were made in 1988 and 1994, and were submitted to
and approved by the shareholders. Under the 1986 Stock Option
Plan, options to purchase up to 931,592 shares of Common Stock
(adjusted to reflect subsequent stock dividends and stock split
less those exercised) were authorized to be granted to officers and
employees of the Bank and its subsidiaries. The time frame for
issuing new Option Agreements under the 1986 Stock Option Plan has
expired.
As of September 30, 2004, 712,576 of the options granted under
the 1986 Stock Option Plan have been exercised. There are no
outstanding options under the 1986 Stock Option Plan.
TRANSACTIONS WITH NORTH AMERICAN
NASB, prior to the Financial Institutions Reform Recovery and
Enforcement Act of 1989, followed the policy of offering mortgage
loans for the financing of personal residences and consumer loans
to its officers, directors and employees. These loans were made in
the ordinary course of business and on substantially the same terms
and collateral, except for fees, as those of comparable
transactions prevailing at the time. The loans did not involve
more than the normal risk of collectibility or present other
unfavorable features. NASB no longer makes portfolio loans to
executive officers and directors.
As of September 30, 2004, there were no loans made on
preferential terms, as explained above to, an executive officer or
director of the Company that exceeded $60,000 in the aggregate.
Loans to executive officers and directors or their associates,
which were not made on preferential terms, if any, are disclosed in
the notes to the consolidated financial statements in the 2003
Annual Report to Stockholders.
SECTION 16 COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's
directors and executive officers, and persons who own more than 10%
of a registered class of NASB Financial, Inc. equity securities, to
file reports of ownership and reports of changes in ownership with
the SEC. The Company's officers, directors and greater than 10%
stockholders are also required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
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To the best of the Company's knowledge, based solely on a review of
the copies of such reports furnished to the Company and written
representations that no other reports were required during the fiscal
year ended September 30, 2004, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10% beneficial
owners were met. Where applicable, transactions were properly filed on
Form 5 at the end of the Company's fiscal year-end.
PROPOSAL 2: RATIFICATION OF INDEPENDENT AUDITORS
Each year, the Audit Committee evaluates and approves the
scope and projected cost of services to be provided to the
Company by the independent auditors. The Audit Committee
recommended, and the Board of Directors appointed, the firm of
BKD, LLP to audit the accounts of NASB Financial, Inc. and its
subsidiaries for the fiscal year ended September 30, 2005. This
appointment is being presented to stockholders for ratification.
If the stockholders do not ratify the selection of BKD, LLP, the
Board of Directors will reconsider the selection. BKD, LLP has
advised NASB that neither the firm nor any present member or
associate of the firm has any financial interest, direct or
indirect, in the Company, nor any connection with NASB in the
capacity of promoter, underwriter, voting trustee, director,
officer or employee.
The Company's independent auditors for the fiscal year ended
September 30, 2004, and 2003, were BKD, LLP. For the fiscal year
ended September 30, 2002, Deloitte & Touche LLP issued their
unqualified opinion on the financial statements of NASB
Financial, Inc. The Board approved a change in independent
auditors for fiscal 2003 as a matter of corporate policy to
periodically rotate audit firms. There were no disagreements
with Deloitte & Touche LLP on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope
or procedure, which would have caused Deloitte & Touche LLP to
make reference to the subject matter of a disagreement in
connection with its report.
AUDIT FEES
BKD, LLP billed the Company a total of $92,100 for
professional services rendered for the audit of the Company's
annual financial statements for the fiscal year ended September
30, 2004, and the reviews of financial statements included in the
Company's quarterly reports on Forms 10-Q. For fiscal year ended
September 30, 2003, BKD, LLP billed the Company a total of
$74,500 for professional services rendered in connection with the
audit of annual financial statements and reviews of quarterly
reports.
TAX FEES
For the fiscal year ended September 30, 2004, BKD, LLP
billed the Company a total of $4,830 for professional services
rendered for the preparation of income tax returns, tax
compliance, tax advice, and tax planning. Tax related services
during the year ended September 30, 2003, which were provided by
Deloitte & Touche, totaled $8,775.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by BKD, LLP for financial
information systems design or implementation fees during the
Company's fiscal year ended September 30, 2004 or 2003.
ALL OTHER FEES
BKD, LLP billed the Company a total of $6,300 and $10,435
for all other fees for the fiscal years ended September 30, 2004
and 2003, respectively. Such other fees consisted of services
related to the audit of the Bank's retirement plan and, in fiscal
2003, a review of the Company's acquisition of CBES Bancorp, Inc.
The Audit Committee considered whether the provision of non-audit
services (which relate to audit of the Bank's retirement plan and to
preparation and review of tax returns) is compatible with maintaining
BKD's independence. The Audit Committee concluded that performance of
such services did not affect the independence of BKD, LLP in performing
its function as auditor of the Company. All services provided to the
Company by BKD, LLP, both audit and non-audit, are approved by the Audit
Committee.
BKD, LLP will not be attending the annual meeting of
stockholders and will not be available for questions at that
time. However, representatives of management will be available
to respond to appropriate questions with regard to accounting or
financial matters that pertain to the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF BKD, LLP
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The vote of a majority of a quorum of outstanding shares of common
stock is required to approve the proposal.
OTHER MATTERS
The Board of Directors is not aware of any business to come
before the Meeting other than those matters described above in
this Proxy Statement. However, if any other matters should
properly come before the Meeting, it is intended that proxies in
the accompanying form will be voted in respect thereof in
accordance with the judgment of the person or persons voting the
proxies.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy
materials for next year's Annual Meeting of Stockholders, any
stockholder proposal to take action at such Meeting must be
received at the NASB's main office at 12498 South 71 Highway,
Grandview, Missouri 64030, not later than September 10, 2005.
Any such proposals shall be subject to requirements of the proxy
rules adopted under the Securities Exchange Act of 1934, as
amended.
A COPY OF FORM 10-K (WITHOUT EXHIBITS) AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS
AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, NASB
FINANCIAL, INC., 12498 SOUTH 71 HIGHWAY, GRANDVIEW, MISSOURI 64030.
By Order of the Board of Directors
/s/ Norma Rieck
Norma Rieck
Corporate Secretary
Grandview, Missouri
December 31, 2004
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5. To resolve any material differences or disagreements that
may arise between the independent auditors and the Company's
management.
6. To review with management, the Internal Audit Manager, and
independent auditors the adequacy and effectiveness of the
Company's accounting and internal controls, its process to
monitor and manage business and financial risks, and its
compliance with laws and ethical standards.
7. To review with management and the independent auditors any
significant proposed or enacted changes of accounting policy,
tax laws, or financial reporting regulations that may have a
material impact on the Company.
8. To review and discuss with management and the independent
auditors the Company's audited financial statements, and to
recommend to the Board that the audited financial statements
be included in the Company's annual report on form 10-K.
9. To review with management and independent auditors the
Company's interim financial statements and other disclosures
prior to the filing of each Quarterly Report on Form 10-Q.
Also, to review information provided in any press release that
contain earnings information of the Company.
10. To review and approve any Audit Committee report to be
included in the Company's annual proxy statement for the
annual meeting of stockholders.
11. To establish and maintain procedures for the receipt,
retention, investigation and resolution of complaints
regarding any accounting, internal control, or audit matters.
Also, to establish and maintain procedures for the
confidential, anonymous submission of such matters by any of
the Company's employees.
12. To review and approve a audit plan, budget, and staffing
needs of the Company's internal audit function each year.
13. To periodically review the quality, quantity, and
experience of the Company's internal audit, accounting, and
finance staff.
14. To review and reassess the adequacy of the Audit Committee
charter each year, and recommend any changes to the Board for
approval.
15. To review and approve any related party transactions, if
applicable.
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APPENDIX B
NASB FINANCIAL, INC.
12498 South 71 Highway - Grandview, Missouri 64030
REVOCABLE PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JANUARY
21, 2005, SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints the John M. Nesselrode and Rhonda
Nyhus with full power of substitution, to act as proxies for the
undersigned, and to vote all shares of Common Stock of NASB
Financial, Inc., which the undersigned is entitled to vote at the
ANNUAL MEETING of STOCKHOLDERS, to be held in the lobby of the
Grandview Office, 12498 South 71 Highway, Grandview, Missouri, on
January 21, 2005, and at any and all adjournments thereof, as
follows:
1. Election of Directors:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
for all nominees listed below
If you wish to vote cumulatively:
FOR: WITHHOLD AUTHORITY:
[ ]Barrett Brady [ ]Barrett Brady
[ ]A. Ray Cecrle [ ]A. Ray Cecrle
[ ]Keith B. Cox [ ]Keith B. Cox
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2. PROPOSAL to ratify the appointment by the Board of Directors of
the firm of BKD, LLP as independent auditors of NASB Financial,
Inc. and its subsidiaries for the fiscal year ending September 30,
2005.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED
PROPOSALS.
REVOCABLE PROXY
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2 UNLESS
INSTRUCTIONS ARE GIVEN TO THE CONTRARY. THE BOARD HAS THE
DISCRETION TO VOTE CUMULATIVELY FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. Name(s),
address and number of shares of registered owner(s) appear(s)
below. SEE REVERSE SIDE FOR MATTERS TO BE VOTED ON.
Date: -------------------, -----
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Signature(s)
Please sign as name(s) appear(s) to the left, indicating official
position or representative capacity where applicable. Show address
changes.