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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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 26, 2008
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of NASB Financial, Inc. (the "Company"), which will be held
on Tuesday, January 27, 2009, 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, 2008, 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
Tuesday, January 27, 2009
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 Tuesday, January 27, 2009, 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, 2009; 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 19, 2008, 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/ Shauna Olson
Shauna Olson
Corporate Secretary
December 26, 2008
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.
TABLE OF CONTENTS
General Information About Proxies and Voting 3
Structure and Practices of the Board of Directors 4
Independence of Directors 4
Audit Committee 4
"Whistleblower" Policy 4
Nomination of Directors 5
Compensation of Directors and Committee Members 5
PROPOSAL 1 - Election of Directors 5
Information as to Nominees and Continuing Directors 6
Executive Compensation 7
Compensation Discussion and Analysis 7
General 7
Overview of Compensation Philosophy 7
Compensation Setting Process 8
Company Performance Versus Peers 9
Components of Executive Compensation 9
Employment Agreements 9
Summary Compensation Table 10
Grants of Plan-Based Awards 10
Outstanding Equity Awards at Fiscal Year-End 11
Option Exercises and Stock Vested 11
Benefits 12
Retirement Plan 12
2004 Stock Option Plan 12
Compensation Committee Report 13
Audit Committee Report 13
Security Ownership of Certain Beneficial Owners 14
Security Ownership of Directors and Executive Officers 15
Transactions Between the Company and its Directors,
Officers, or Their Affiliates 15
Section 16 Compliance 15
PROPOSAL 2 - Ratification of Appointment of Independent Auditors 16
Audit Fees 16
Other Matters 17
Stockholder Proposals 17
Appendix A - Audit Committee Charter 18
2
NASB FINANCIAL, INC.
12498 South 71 Highway
Grandview, Missouri 64030
(816) 765-2200
PROXY STATEMENT
Annual Meeting of Stockholders
January 27, 2009
GENERAL INFORMATION ABOUT VOTING AND SOLICITATION OF PROXIES
These proxy materials 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 Tuesday, January 27, 2009, at 8:30 a.m. The
Annual Report to stockholders for the 2008 fiscal year, including
consolidated financial statements for the fiscal year ended September
30, 2008, accompanies this statement. The Company is required to file
an Annual Report and Form 10-K for its fiscal year ended September 30,
2008, 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 26, 2008.
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.
The securities which can be voted at the Meeting consist of shares
of Common Stock of NASB Financial, Inc. Each share entitles its owner
to one vote on matters other than the election of directors, for which
cumulative voting is permitted (see section entitled - PROPOSAL 1:
ELECTION OF DIRECTORS). The Board of Directors has declared the close
of business on December 18, 2008, 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 7,867,614.
For a quorum to exist at the annual meeting, at least a majority of
the total number of outstanding shares of Common Stock must be present,
either in person or by proxy, to constitute a quorum at the Meeting. In
the event there are not sufficient votes represented for a quorum,
management may adjourn the meeting in order to further solicitation
enough proxies to establish a quorum.
If the enclosed proxy is properly executed and returned, and is not
revoked, it will be voted according to the specifications you make as
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. Any 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 before the proxy is voted at
the annual meeting. You can revoke your proxy or change your vote in
any one of the following ways:
- by sending a signed notice of revocation to our corporate secretary
that states your intent to revoke your proxy, or;
- by attending the annual meeting and revoking your proxy in person
or voting in person, which will automatically cancel any proxy
previously given, however, your attendance alone will not revoke
any proxy that you have given previously unless you vote or state
your specific intention to revoke a previously given proxy.
If you chose to revoke a proxy in either of the methods, above, you
must do so no later than the beginning of the 2009 Annual Meeting. Once
voting on a particular matter is completed at the Annual Meeting, you
will not be able to revoke your proxy or change your vote as to that
matter. If your shares are held in "street" name by a broker, bank, or
other financial institution, you must contact that institution to change
your vote.
The Company is assuming all the cost of soliciting the proxies. 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, fax, or other methods of communication. The
Company will also ask any firms or corporations that are holding shares
in their names, or in the names of their nominees, which are
beneficially owned by others, to forward proxy material to and obtain
proxies from such beneficial owners. The Company will reimburse those
forwarding proxies 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.
3
The Company has not authorized any person to give any information
or to make any representations other than those contained in this proxy
statement. If any such information is given or representation is made,
you should not rely upon it as having been authorized by the Company.
STRUCTURE AND PRACTICES OF THE BOARD OF DIRECTORS
NASB's business is managed under the direction of its Board of
Directors. The Board of Directors exercises general oversight toward
the goal that NASB's management performs in the long-term best interest
of stockholders. NASB's independent Directors have professional
experience and expertise to capably oversee the functioning of the
Company's management team. The Board of Directors is also committed to
maintaining high standards of corporate governance.
On June 13, 2008, the Board accepted the resignation of Dr.
Fletcher M. Lamkin and appointed Ms. Laura Brady to serve the remaining
portion of Dr. Lamkin's term. On July 18, 2008, the Board accepted the
resignation of Mr. A. Ray Cecrle. Both resignations of Dr. Lamkin and
Mr. Cecrle were the result of out-of-town relocations of their personal
residences and neither gentleman resigned as result of any disagreements
with the Board or management. After a period of consideration, on
October 28, 2008, the Board decided to amend the Company's Bylaws and
reduce the number of the Company's directors to eight (8), in accordance
with its authority as prescribed by the Company's Articles of
Incorporation.
Currently, the Company's Board consists of eight (8) directors.
Three employee directors are: David H. Hancock, Keith B. Cox, and Paul
L. Thomas. Five non-employee directors are: Frederick V. Arbanas,
Barrett Brady, Laura Brady, Linda S. Hancock, Fletcher M. Lamkin, and W.
Russell Welsh.
Independence of Directors
The listing standards of NASDAQ require listed companies to have a
Board of Directors that have a majority of independent directors.
Within the listing standards, there is an exemption from this
requirement for "controlled companies," those for which more than 50% of
the voting power is held by one individual, a group of individuals, or
another company. Controlled companies can be exempt from complying with
the NASDAQ requirements for majority of independent directors and from
Compensation and Nominating Committees that are composed entirely of
independent directors. Because Mr. David H. Hancock beneficially owns
51.2% of the Company's outstanding shares, the Company qualifies as a
"controlled company" under NASDAQ listing standards and chooses to rely
on the exemption, since the Company has determined that a majority of
directors are not independent. However, the Compensation and Nominating
Committees of the Board are composed entirely of independent directors.
In evaluating the independence of each director, the Board takes
into account the applicable laws and regulations, the listing standards
of the NASDAQ, and criteria set forth by Company policy. These
standards include evaluating any material relationships a director may
have with NASB, if any, including vendor, supplier, consulting, legal,
banking, accounting, charitable, and family relationships. Based on
NASDAQ Marketplace Rule 4200(a)(15), the Board of Directors has
identified the following non-employee directors that are "independent"
of the Company: Frederick V. Arbanas, Barrett Brady, Laura Brady, and W.
Russell Welsh. Specifically, because of her spousal relationship to
David H. Hancock, the Board has determined that Ms. Linda S. Hancock is
not independent of the Company.
Audit Committee
The Audit Committee has the responsibility of reviewing the scope
and results of audits performed by the Company's independent auditors
and reviewing the findings and recommendations of NASB's internal audit
staff. The Audit Committee is comprised of Frederick V. Arbanas,
Barrett Brady, and Laura Brady. Barrett Brady serves as the Audit
Committee Chairman and, in accordance with NASDAQ regulations, has the
appropriate background and experience to fully qualify him as the Audit
Committee's financial expert.
The Company's Board of Directors has adopted an Audit Committee
Charter, which, as most recently amended on September 24, 2008, and
ratified by the Board on October 28, 2008, is provided in Appendix A.
"Whistleblower" Policy
The Board of Directors has adopted a "Whistleblower" Policy, which
outlines a procedure for any employee to submit confidential complaints,
concerns, violations, or suspected violations for any and all matters
pertaining to accounting, internal control, or auditing of the Company.
4
Nomination of Directors
The independent directors act as a Nominating Committee for
selecting the nominees for election as directors. All nominees must be
approved by a majority of independent 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 delivers its nominations to
the secretary at least 20 days prior to the annual meeting date. Only
those persons nominated for directors made by the Nominating Committee
will be voted upon at the annual meeting, unless any shareholders make
other nominations in writing and deliver them to the secretary of the
Company at least one-hundred twenty days and not more than one-hundred
eighty days prior to the annual meeting date. The Company will provide
ballots with the names of all persons nominated by the Nominating
Committee and those names nominated by shareholders (if any) for use at
the annual meeting. However, if the Nominating Committee shall fail or
refuse to make nominations for directors 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. 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 from the
nominated person to serve as a director of the Company, if elected.
Each nominee for director is an existing director standing for re-
election. The Company did not receive any shareholder proposals for
additional Board nominee(s) within the required timeframe.
Compensation of Directors and Committee Members
Non-employee directors are paid a directors' fee for each regular
monthly board meeting and, where applicable, for each Audit Committee
meeting that they attend. During the fiscal year ended September 30,
2008, non-employee director fees were $1,250 for each monthly board
meeting attended, and $400 for each Audit Committee meeting attended.
The Chairman of the Audit Committee received $750 for each Audit
Committee meeting attended. These board meeting fees and Audit
Committee meeting fees are the only compensation that the Company pays
to its non-employee directors.
The following table provides compensation information for non-
employee directors for their service to the Company during fiscal 2008.
Those directors who are also executive officers of the company do not
receive compensation for their service as a director, other than
compensation they receive as an executive officer of the Company (see
section entitled: Executive Compensation).
Change in
Pension
Value and
Fees Earned Nonqualified
or Paid in Stock Option Deferred All other
Name Cash ($) Awards ($) Awards ($) Compensation Compensation ($) Total ($)
------------------------------------------------------------------------------------------------------
Frederick V. Arbanas 18,250 -- -- -- -- 18,250
Barrett Brady 20,000 -- -- -- -- 20,000
Laura Brady (1) 5,800 -- -- -- -- 5,800
A. Ray Cecrle (2) 14,950 -- -- -- -- 14,950
Linda S. Hancock 16,250 -- -- -- -- 16,250
Fletcher M. Lamkin (3) 10,000 -- -- -- -- 10,000
W. Russell Welsh 16,250 -- -- -- -- 16,250
-----------------------
(1) On June 13, 2008, the Board appointed Ms. Laura Brady to serve the
remaining term of Dr. Fletcher M. Lamkin.
(2) Mr. A. Ray Cecrle resigned from the Board effective July 18, 2008.
(3) Dr. Fletcher M. Lamkin resigned from the Board effective June 13,
2008.
-----------------------
PROPOSAL 1: ELECTION OF DIRECTORS
Each time the Company elects directors, every stockholder entitled
to vote has the right to vote the number of shares he or she owns
multiplied by the number of directors that are to be elected. A
stockholder may cumulate votes by voting the total number of votes for
any one candidate or by distributing votes equally or unequally among
the candidates. The total votes for all candidates cannot exceed the
number of nominees multiplied by the number of shares owned by that
stockholder.
5
For example, presuming a stockholder owns 1,000 shares of stock in
the Company and there are three directors nominated for election at the
Annual Meeting, the stockholder has 3,000 total votes to be spread among
the nominees. The stockholder may either cast a) 1,000 votes for each
of the three nominees; b) 1,500 votes for each of two of the nominees;
c) 3,000 votes for one of the nominees, or; d) votes for any combination
of the nominees, provided the total votes cast for directors does not
exceed 3,000 (the total cumulative votes for directors in this example).
Stockholders may exercise their rights to cumulative voting by
attaching instructions to their proxy card 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. Three directors are
to be elected at this meeting. All the nominees, Frederick V. Arbanas,
Laura Brady, and W. Russell Welsh, currently serve on the Company's
Board of Directors and are seeking re-election to serve until the 2012
Annual Meeting; or until their successors are elected and qualified to
serve.
The Board of Directors intends to vote the proxies for the election
of all of the director 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 Director nominee named in
this proxy statement will serve if elected.
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"), and the year each was first
elected as director of NASB are shown on the following table. 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.
Director Principal Occupation, Business
Since Age Experience, and Other Information
------------------------------------------------------------------------------------------------
NOMINEES - THREE YEAR TERMS EXPIRING IN 2012
-----------------------------------------------
Frederick V. Arbanas 1974 69 Retired President of Fred Arbanas, Inc.,
Advertising Agency, Grandview, Missouri
since 1969. Member of Jackson County,
Missouri legislature.
Laura Brady 2008 32 Former Vice President and General
Manager of Wolferman's, Lenexa, Kansas.
W. Russell Welsh 1997 59 President & CEO of the law firm
Polsinelli Shalton Flanigan Suelthaus.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 2011
-----------------------------------------------
Barrett Brady 1993 62 Senior Vice President of Highwoods
Properties, Inc.
Keith B. Cox 2001 47 President of North American Savings
Bank. From 1996 to 2002, served as
Executive Vice President and Chief
Financial Officer.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 2010
-----------------------------------------------
David H. Hancock 1990 63 Board Chairman and Chief Executive
Officer of North American Savings Bank
since 1990. Is the spouse of Linda S.
Hancock.
Linda S. Hancock 1995 58 Owner of Linda Smith Hancock Interiors
since 1974. Is the spouse of David H.
Hancock.
Paul L. Thomas 2005 41 Executive Vice President of North
American Savings Bank since 2002.
Previously served as Chairman and CEO of
CBES Bancorp.
The Board of Directors held 13 regular meetings during the fiscal
year ended September 30, 2008. All directors attended more than 75% of
the meetings of the Board of Directors and committees to which they
belong.
6
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
General
The Company's executive compensation programs are designed to
attract and retain quality executives and to motivate them to a high
level of performance. Executive compensation is administered by the
Compensation Committee, which sets executive compensation and makes
grants of stock options in accordance with the Company's Incentive Stock
Option Plan. The non-employee Directors receive only fees for the
monthly directors meetings and committee meetings. Non-employee
Directors do not participate in any incentive programs, health insurance
programs, retirement benefit programs, or incentive stock option
programs. All compensation that the Company paid to non-employee
Directors is presented in the Directors' compensation table provided on
Page 5.
Overview of Compensation Philosophy
Executive officers of the Company (NASB Financial, Inc.) are also
executive officers of the subsidiary Bank (North American Savings Bank,
F.S.B.). All executive officers are considered employees of the Bank
and all cash compensation paid to them is from the Bank. The various
components of compensation that the Bank uses to pay its executive
officers are: base salary, annual bonus awards, grants of stock options
from the Company's incentive stock option plan, health and dental
insurance, disability insurance, and company contributions to the Bank's
401(k) plan. The insurance and 401(k) contributions are offered to all
executives under the same terms and conditions that they are offered to
all employees. Cash bonuses and incentive stock options are awarded to
executive officers at the discretion of the Compensation Committee but
are not necessarily offered to all executives in every year.
The Company does not use any other types of incentive compensation,
other than those listed above. The Company does not provide its
executives any of the other types of compensation or arrangements that
similar companies provide such as stock appreciation rights, stock
awards, employee stock purchase plans, deferred compensation plans,
employment agreements, termination agreements, change-in-control
agreements, company vehicles, or club memberships.
The Company's compensation philosophy has several key objectives,
including:
- to attract and retain quality executives that can understand and
accomplish the Company's goals and objectives;
- to provide incentive for executives to assure the Company's (and
the Bank's) compliance with various regulations;
- to provide incentive for executives to administer the assets of the
Company in a manner that maximizes earnings, returns on assets, and
returns on equity, and;
- to closely align the interests of management with those of
stockholders, especially with regard to creating long-term
shareholder value.
The Compensation Committee believes that, although one of the key
objectives is to create shareholder value, this does not necessarily
mean that stock performance, as measured in the short-term (i.e. year-
to-year), is a clear indication of the shareholder value being built.
Based on average daily trading volume, the Company's stock is somewhat
illiquid compared to similar institutions. Therefore, the Compensation
Committee makes executive compensation decisions based only on their
view of each executive's contribution to long-term stockholder value.
The Board of Directors and the Compensation Committee believe that
objective measures of executive performance may place too much emphasis
on quantity of transaction volume over the quality of assets that
executives are creating. For example, since the latter part of 2006 and
continuing to this point, the banking industry has seen a slow down in
the residential and commercial real estate markets, both for
construction and existing properties. This is having a significant
impact on the Company's ability to originate new loans. At the same
time, market interest rates have moved to levels that are significantly
reducing the Company's net interest margin. Certain borrowers,
especially those in residential construction and commercial real estate
investment, are also affected by the real estate slow down, hold more
real estate inventory, and become lesser quality borrowers than during
boon times. The Committee also believes that a formulaic compensation
structure would have an undesired affect of motivating executive
officers to sacrifice sustainable long-term profitability to achieve
short-term earnings ratios. For these reasons, the Compensation
Committee believes in using subjective measures for determining
executive compensation, rather than formulating strict policies
regarding levels and various elements of compensation. The Committee
believes that purely objective, formulaic, and volume based measures
would create incentives for executives to emphasize the quantity of new
assets produced over the quality of those assets.
7
Since management has no control over how the Company's stock is
traded in the marketplace, the Compensation Committee does not view
price fluctuations in the Company's stock as a relevant factor with
regard to setting executive compensation.
Compensation Setting Process
The Compensation Committee evaluates the performance of its
executive officers, mostly using a subjective analysis. The Committee
does not use any specifically predefined target levels of transaction
volumes or quantitative measures when determining executive officer
compensation each year. The Compensation Committee believes that using
more subjective criteria to measure each executive's performance ensures
that each executive will focus on the quality of assets that he or she
is producing, rather than merely the quantity. The Compensation
Committee generally attempts to set total compensation near the 75th
percentile of the Bank's custom peer group.
The Compensation Committee reviewed peer data to compile a
benchmarking analysis for the purpose of comparing NASB's operating
results and performance ratios to that of other, similar institutions.
The Committee reviewed the performance data from a custom peer group of
29 publicly traded and non-public institutions in the Midwest region of
varying sizes and a greater-than 50% concentration of assets in mortgage
lending. Data from the following financial institutions (and their
holding companies, where applicable) was included:
Publicly Traded Non-public
--------------- ----------
BankFinancial, FSB (IL) Bank Midwest (MO)
Bank Mutual (WI) Fidelity Bank (KS)
Bank of Blue Valley (KS) First Federal Bank, FSB (MO)
Capitol Federal Savings Bank (KS) Guaranty Bank (WI)
Citizens Financial Bank (IN) Heartland Bank (MO)
First Federal Bank (AR) Hillcrest Bank (KS)
Great Southern Bank (MO) Inter Savings Bank, FSB (MN)
Home Federal Savings Bank (MN) Liberty Bank (IA)
MetaBank (IA) MidCountry Bank (IL)
Pulaski Bank (MO) Mutual Federal Savings Bank (IN)
TierOne Bank (NE) National Bank of Kansas City (KS)
United Western Bank (CO) Northwest Bank (IA)
Vantus Bank (IA) Platte Valley Bank of Missouri (MO)
Principal Bank (IA)
Security Savings Bank, FSB (KS)
Think Mutual Bank (MN)
The Compensation Committee obtained peer performance data from SEC
filings of the publicly traded companies and from Thrift Report and Call
Report data published by the non-public companies. The institutions
included in the custom peer group were deemed by the Committee as
generally comparable in size, business focus, real estate lending
concentration, and in the level of responsibility of the executive
officers. All the institutions identified are located in the Midwest
region, which the Committee believes is also a relevant factor for this
analysis. The institutions included in the custom peer group may be
changed from time to time based on each peer's relevancy to NASB. The
Committee believes that operating results and performance ratios should
be just one component of its overall decision process. The Committee
recognizes a myriad of non-executive factors that can influence the
Company's performance and cause it to differ from that of its peers in
any given period.
In addition to this custom peer group, the Compensation Committee
reviewed the weighted average performance ratios of all national thrift
institutions and of those national thrift institutions with total assets
between $1 billion and $5 billion. The Committee obtained the
operating results and performance ratios from Call Report and Thrift
Financial Report data presented on the FDIC website.
The Compensation Committee also reviewed a compensation analysis
consisting of data from various sources so they could compare the total
compensation practices for the Company's executive officers with those
compensation practices of similar institutions. For this analysis, the
Committee used data obtained from the proxies of the publicly-traded
institutions. The Committee also reviewed data presented in the Bank
Cash Compensation Survey provided by the Delves Group and originated by
the Bank Administration Institute. In its review of compensation
surveys and peer compensation data, the Committee recognizes that each
institution has unique objectives. Also, because of those unique
objectives, the responsibilities of any specific executive are likely to
vary greatly from institution to institution, even though their titles
may be exactly the same.
8
Typically, the Compensation Committee gives consideration to
recommendations from the Company's CEO and majority stockholder, David
H. Hancock, for all components of executive compensation. The CEO's
recommendations are based on several factors including: individual
performance evaluations of each of the Company's executive officers, an
analysis of the Company's performance versus previous periods and versus
peer performance, and executive pay compared to similar positions in the
marketplace. The Compensation Committee reviews this evidence plus the
recommendations from Mr. Hancock, as well as input from the Company's
President, Chief Financial Officer, and Human Resources Director. The
Committee then sets, for each of the executive officers, the base salary
for the new fiscal year, the annual bonus payments (if any) for the
recently completed fiscal year and the level of incentive stock option
awards (if any) under the Company's Incentive Stock Option Plan. The
Compensation Committee works with these officers in a collaborative
nature with respect to decisions about compensation and benefits.
However, regardless of the input from management, the Compensation
Committee reserves the right to make final determinations on all
compensation paid to executive officers.
Company Performance Versus Peers
For the 2007 calendar year, the Bank's Return on Assets ("ROA") was
0.92% and its Return on Equity ("ROE") was 9.12%, which placed it in the
83rd and 73rd percentiles, respectively, versus the Company's custom peer
group. Comparatively, the weighted average ROA and ROE for national
thrift institutions with total assets between $1 billion and $5 billion
(109 institutions) was 0.70% and 6.53%, respectively. For all national
thrift institutions (1,251 institutions), weighted average ROAs were
0.13% and weighted average ROEs were 1.08%.
For the 2006 calendar year, the Bank's ROA of 1.31% and ROE of
14.43% ranked the Company in the 87th and 83rd percentiles, respectively,
compared to the custom peer group. Comparatively, the weighted average
ROA and ROE for national thrift institutions with total assets between
$1 billion and $5 billion (109 institutions) was 0.78% and 7.37%,
respectively. For all national thrift institutions (1,279
institutions), weighted average ROAs were 0.99% and weighted average
ROEs were 8.68%.
Components of Executive Compensation
Base Salary. This component is established and reviewed based on
each executive's level of influence, scope of responsibility, prior
experience, past accomplishments, individual performance, and
competitive market practices. The Compensation Committee reviews and
considers the range and allocation of total compensation (base salary,
annual cash incentives, and long-term equity based compensation) that
other companies pay their executives. The Compensation Committee sets
base salary at a level that, when considered in combination with annual
cash bonuses and equity based compensation, puts the level of total
compensation near the 75th percentile compared to the custom peer group.
Annual Cash Bonus. In addition to base salary, the Compensation
Committee awards annual cash bonuses to executive officers. The annual
cash bonus awards are not administered as part of any formal cash bonus
program. Executive officers are included, or excluded, each year at the
sole discretion of the Compensation Committee, with input from a
management committee that includes the Chief Executive Officer,
President, Chief Financial Officer, and Human Resources Manager. The
criteria for an annual cash bonus is subjective. However, the
Compensation Committee does review the Company's earnings ratios versus
peer data, including Return on Assets and Return on Equity.
Stock Option Awards. Incentive Stock Options ("ISOs") are granted
at the sole discretion of the Compensation Committee. In general, ISOs
are used to align the interest and goals of executive officers with
those of the shareholders. Additionally, they are intended to foster
long-term service and to motivate executives to make decisions that
maximize long-term shareholder value.
ISOs are not necessarily granted every year and are not necessarily
granted to every executive officer. The Compensation Committee makes
ISO grants whenever it deems appropriate that such grant would properly
help motivate and retain specific executive officers to achieve the
long-term goals of the Company. The Compensation Committee intends that
ISO grants function as long-term incentives.
Other Compensation. Executive officers are eligible to receive
health insurance benefits and 401(k) retirement contributions in the
same manner as all other employees of the Bank (See Benefits: Retirement
Plan). There are no benefits or payments to executive officers that
would qualify as "perquisites."
Employment Agreements
The Company has not entered into any employment agreements or any
post-termination benefit agreements with any of its employees, officers,
or executive officers.
9
Summary Compensation Table
The following tables set forth information concerning the
compensation of the Principal Executive Officer, Principal Financial
Officer, and three most highly compensated executive officers who
received compensation of $100,000 or more and served in such capacities
as of September 30, 2008.
Stock Option
Name and Principal Fiscal Salary Bonus Awards Awards
Position with Bank Year $ $ $ $
------------------------------------------------------------------------------------------------------
David H. Hancock 2008 252,000 650 -- 26,305
Board Chairman, CEO and Director 2007 252,000 600 -- 26,305
(Principal Executive Officer) 2006 252,000 600 -- 26,305
Rhonda Nyhus 2008 102,083 27,650 -- 4,336
Senior Vice President and Chief 2007 100,000 45,650 -- 3,614
Financial Officer (Principal 2006 100,000 55,600 -- 2,947
Financial Officer)
Keith B. Cox 2008 193,542 30,650 -- 6,945
President and Director 2007 192,500 40,650 -- 4,059
2006 192,500 50,600 -- 2,394
Wade Hall 2008 153,125 70,650 -- 8,916
Senior Vice President, Commercial 2007 138,125 95,650 -- 4,928
Real Estate Lending 2006 135,000 110,600 -- 1,758
Bruce Thielen 2008 152,083 125,000 -- 6,868
Senior Vice President, Residential 2007 150,000 75,000 -- 3,982
Lending 2006 147,500 100,000 -- 1,816
Non-Equity Nonqualified All Other
Incentive Deferred Compensation
Plan Compensation (including
Name and Principal Fiscal Compensation Earnings Perquisites) Total
Position with Bank Year $ $ $ (1) $
------------------------------------------------------------------------------------------------------
David H. Hancock 2008 -- -- 6,750 285,705
Board Chairman, CEO and Director 2007 -- -- 6,600 285,505
(Principal Executive Officer) 2006 -- -- 5,670 284,575
Rhonda Nyhus 2008 -- -- 3,892 137,961
Senior Vice President and Chief 2007 -- -- 4,212 153,476
Financial Officer (Principal 2006 -- -- 3,900 162,447
Financial Officer)
Keith B. Cox 2008 -- -- 5,585 236,722
President and Director 2007 -- -- 5,100 242,309
2006 -- -- 4,331 249,825
Wade Hall 2008 -- -- 6,356 239,047
Senior Vice President, Commercial 2007 -- -- 6,544 245,247
Real Estate Lending 2006 -- -- 6,465 253,823
Bruce Theilen 2008 -- -- 6,750 290,701
Senior Vice President, Residential 2007 -- -- 6,063 235,045
Lending 2006 -- -- 6,300 255,616
-----------------------
(1)Consists of the Company's matching contributions under the
Company's 401(k) Plan.
-----------------------
Total compensation for the fiscal years ended September 30, 2008,
2007, and 2006 totaled $2,298,073, $2,109,488, and $2,229,056,
respectively, for all ten executive officers as a group.
Grant of Plan-Based Awards
The following tables provide information about grants of plan-based
awards as long-term incentives to named executive officers during fiscal
2008, in accordance with the Company's Incentive Stock Option Plan of
2004.
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
Grant ---------------------------------
Name Date Threshold Target Maximum
------------------------------------------------------------------------
David H. Hancock -- -- -- --
Rhonda Nyhus -- -- -- --
Keith B. Cox -- -- -- --
Wade Hall -- -- -- --
Bruce Thielen -- -- -- --
Estimated Future Payouts
Under Equity
Incentive Plan Awards
Grant ---------------------------------
Name Date Threshold Target Maximum
-----------------------------------------------------------------------
David H. Hancock -- -- -- --
Rhonda Nyhus -- -- -- --
Keith B. Cox -- -- -- --
Wade Hall -- -- -- --
Bruce Thielen -- -- -- --
All Other
All Other Option Exercise
Share Awards: or Base Grant Date
Awards: Number of Price of Fair Value
Number Securities Option of Stock
Grant of Shares Underlying Awards and Option
Name Date or Units Options (1) Awards
------------------------------------------------------------------------
David H. Hancock -- -- -- -- --
Rhonda G. Nyhus -- -- -- -- --
Keith B. Cox -- -- -- -- --
Wade Hall -- -- -- -- --
Bruce Thielen -- -- -- -- --
-----------------------
(1)Options vest at the rate of 20% per year for five years and are
exercisable, subject to vesting, over a 10-year period.
-----------------------
10
During fiscal 2008, there were no options granted by the
Compensation Committee of the Board to either named or non-named
executive officers.
Outstanding Equity Awards at Fiscal Year-End
The following tables provide information regarding outstanding
awards to the named executive officers that have been granted but not
yet vested or exercised as of September 30, 2008.
Option Awards
---------------------------------------------------------------------
Equity
Incentive Plan
Awards:
Number of Number of Number of
Securities Securities Securities
Underlying Underlying Underlying
Unexercised Unexercised Unexercised Option Option
Options (#) Options (#) Unearned Exercise Expiration
Name Exercisable Unexercisable Options Price Date
-----------------------------------------------------------------------------------
David H. Hancock 8,000 2,000 -- $35.50 7/24/2009
7,200 4,800 -- 42.17 8/1/2010
------ ------
Total 15,200 6,800
Rhonda Nyhus 1,200 300 -- 35.50 7/27/2014
300 200 -- 42.17 8/1/2015
200 300 -- 32.91 7/21/2016
120 480 -- 30.33 7/24/2017
------ ------
Total 1,820 1,280
Keith B. Cox 400 100 -- 35.50 7/27/2014
600 400 -- 42.17 8/1/2015
400 600 -- 32.91 7/21/2016
480 1,920 -- 30.33 7/24/2017
------ ------
Total 1,880 3,020
Wade Hall 600 400 -- 42.17 8/1/2015
300 200 -- 42.53 8/4/2015
1,000 1,500 -- 32.91 7/21/2016
480 1,920 -- 30.33 7/24/2017
------ ------
Total 2,380 4,020
Bruce Thielen 600 400 -- 42.17 8/1/2015
600 900 -- 32.91 7/21/2016
480 1,920 -- 30.33 7/24/2017
------ ------
Total 1,680 3,220
Stock Awards
---------------------------------------------------------------------
Equity Incentive
Equity Incentive Plan Awards:
Market Plan Awards: Market or
Number Value of Number of Payout Value of
of Shares Shares or Unearned Unearned
or Units of or Units of Shares, Units or Shares, Units or
Stock that Stock that Other Rights Other Rights
Have Not Have Not that Have Not that Have Not
Name Vested Vested Vested Vested
-----------------------------------------------------------------------------------
David H. Hancock -- -- -- --
Rhonda Nyhus -- -- -- --
Keith B. Cox -- -- -- --
Wade Hall -- -- -- --
Bruce Thielen -- -- -- --
Option Exercises and Stock Vested
The following table provides information regarding option exercises
by our named executive officers. No stock options were exercised during
fiscal 2008. The Company does not make stock awards.
Option Awards Stock Awards
------------------------------------- ----------------------------------------
Number of Shares
Acquired on Value Realized on Number of Shares Value Realized on
Name Exercise Exercise Acquired on Vesting Vesting
---------------------------------------------------------------------------------------------------
David H. Hancock -- -- -- --
Rhonda Nyhus -- -- -- --
Keith B. Cox -- -- -- --
Wade Hall -- -- -- --
Bruce Thielen -- -- -- --
11
BENEFITS
Retirement Plan
During the fiscal year ended September 30, 2008, 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 100% of annual salary on a pre-tax basis, subject to certain
IRS dollar limits. The Bank will contribute 50% of the employee's
contribution, up to a maximum of 3% of the employee's salary, also
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,
2008, were: David H. Hancock, $6,750; Rhonda Nyhus, $3,892; Keith
B. Cox, $5,585; Wade Hall, $6,356; Bruce Thielen, $6,750, and for
all executive officers as a group were $58,564. Total accrued
contributions by the Bank are: David H. Hancock, $91,454; Rhonda
Nyhus, $27,549; Keith B. Cox, $73,513; Wade Hall, $39,795; and
Bruce Thielen, $77,069.
The Company does not offer any other pension benefits that
would be considered either qualified or non-qualified defined
benefit plans.
The Company does not offer any type of benefit plans that
would be considered either qualified or non-qualified deferred
compensation plans.
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, 2008, there were 170,343
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.
The Compensation Committee of 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.
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, 2008, there were no new stock
options issued by the Board.
12
As of September 30, 2008, 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. The total of all named and non-named executive officers as a
group hold options to purchase 53,819 shares.
The following table provides information about the shares of Common
Stock that may be issued upon exercise of options granted in the 2004
Stock Option Plan.
Number of Securities
Remaining Available for
Future Issuance Under
Number of Securities Equity Compensation
to be Issued Upon Weighted-Average Plans (Excluding
Exercise of Exercise Price of Securities Reflected in
Plan Category Outstanding Options Outstanding Options Column (a))
---------------------------------------------------------------------------------------------------
Equity compensation plans
approved by shareholders 72,038 $ 36.42 170,343
Equity compensation plans
not approved by shareholders -- -- --
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is composed of
independent directors Frederick V. Arbanas, Barrett Brady, and Laura
Brady. The Committee is responsible for setting and administering the
policies that govern both annual executive compensation and stock
ownership programs.
The Compensation Committee of the Board of Directors has reviewed
and discussed the information provided in "Compensation Discussion and
Analysis" with management and, based on the review and discussions, the
Compensation Committee recommended to the Board of Directors that the
"Compensation Discussion and Analysis" be included in this proxy
statement.
By the Compensation Committee: Frederick V. Arbanas
Barrett Brady
Laura Brady
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 2008, the Committee
met five (5) times, and the Committee chair, as representative of the
Committee, discussed the interim financial information contained in each
quarterly earnings announcement with the Chief Financial Officer and
independent auditors prior to public release.
In fulfilling its oversight responsibility as to the audit process,
the Audit Committee obtained from the independent auditors a formal
written statement describing any and 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." The Committee
discussed and reviewed, with and without management present, the results
of the independent auditors' integrated audit, which included an
examination of the Company's financial statements and internal control
over financial reporting in accordance with Sarbanes-Oxley Section 404.
The Committee also discussed the results of the internal audit
examinations.
13
The Committee reviewed the audited financial statements of the
Company as of and for the fiscal year ended September 30, 2008, 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, 2008,
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
ending September 30, 2009, and the Board concurred with that
recommendation.
The Audit Committee charter is provided in Appendix A of this proxy
statement.
By the Audit Committee: Barrett Brady, Audit Committee Chairman
Frederick V. Arbanas
Laura Brady
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Section 16(a) of the Exchange Act requires that our directors,
executive officers, and any other holders of more than ten percent (10%)
of share of our Common Stock to file reports with the Securities
Exchange Commission ("SEC") regarding their ownership and any changes in
their ownership of our shares.
We believe that, during fiscal 2008, our directors and executive
officers complied with all the filing requirements of Section 16(a). In
making this statement, we have relied upon an examination of the copies
of Forms 3 and 4 and any amendments furnished to us under Exchange Act
Rule 16a-3(e) plus any Forms 5 and amendments furnished to us, along
with written representations of our directors and executive officers.
The following table provides information about the only known
beneficial owners of five percent (5%) or more of our voting Common
Stock based on our stock outstanding at November 30, 2008. Any persons
or groups that own more than five percent (5%) are required to file
certain reports with the SEC regarding their ownership. Except for Mr.
David H. Hancock and Mr. Michael G. Dunn (listed in the table, below),
we are not aware of any other persons or groups that own more than 5% of
NASB's Common Stock.
Name and Address of Amount and Nature Percent of Shares
Title of Class Beneficial Owner of Ownership Outstanding (3)
------------------------------------------------------------------------
Common Stock David H. Hancock 4,288,901 54.5%
12498 South 71 Highway shares total (1)(2)
Grandview, MO 64030
Common Stock Michael G. Dunn 538,967 6.9%
102 Georgia St. shares total
St. Simons, GA 31522
-----------------------
1) Includes 22,500 shares which Mr. Hancock has the right to acquire
pursuant to the options he holds under the 2004 Stock Option Plan, but
which have not been exercised.
2) Includes 264,068 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, 2008, excluding shares
held by the Company as treasury stock.
-----------------------
14
Security Ownership of Directors and Executive Officers
The following table states the number of shares of our Common Stock
that is beneficially owned by each director, current named executive
officers, and all directors and executive officers as a group as of
November 30, 2008.
Shares Percent of
Beneficially Shares
Name of Beneficial Owner Owned (1) Outstanding (4)
-------------------------------------------------------------------
David H. Hancock (2) 4,288,901 54.5%
Rhonda Nyhus 5,100 *
Keith B. Cox 33,124 *
Paul L. Thomas 20,200 *
Wade Hall 6,600 *
Bruce Thielen 44,900 *
Frederick V. Arbanas 13,044 *
Barrett Brady 10,400 *
Laura Brady 1,000 *
Linda S. Hancock (3) 4,288,901 54.5%
W. Russell Welsh 19,092 *
All directors and executive officers
as a group (15 persons) (5) 4,476,979 56.9%
* Less than one percent (1%).
-----------------------
(1) Includes the following shares which each of the named
individuals have the right to acquire pursuant to the options each
one holds under the 2004 Stock Option Plan, but have not yet been
exercised: David H. Hancock (22,500), Rhonda Nyhus (3,100), Keith B. Cox
(4,900), Paul L. Thomas (4,400), Wade Hall (6,400), Bruce Thielen
(4,900), and all executive officers as a group (53,819). None of
the non-employee directors hold any Stock Options.
(2) Includes 264,068 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) Includes 4,024,833 shares which are owned by Ms. Hancock's
spouse, David H. Hancock. Ms. Hancock disclaims beneficial
ownership of these shares and their inclusion in the totals above
shall not be deemed as an admission that Ms. Hancock is the
beneficial owner of such shares for the purposes of Section 16 of
the Exchange Act or for any other purposes.
(4) The calculation of percent of class is based on the number of
shares of Common Stock outstanding as of November 30, 2008,
excluding shares held by the Company as treasury stock.
(5) Includes an aggregate of 53,819 shares for which the executive
officers as a group have the right to acquire pursuant to the
options they individually hold under the 2004 Stock Option Plan,
but have not yet been exercised.
-----------------------
Transactions Between the Company and its Directors, Officers, or
Their Affiliates
Prior to the Financial Institutions Reform Recovery and Enforcement
Act of 1989, the Company 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 does
not make portfolio loans to executive officers and directors.
As of September 30, 2008, 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 2008 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.
15
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, 2008, 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, 2009. 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.
Audit Fees
The following table sets forth information regarding the
fees for professional services that were provided to the Company
by BKD, LLP during fiscal 2008 and 2007.
2008 2007
-------- --------
Audit Fees (1) $ 287,425 275,000
Audit-Related Fees (2) 6,500 5,600
Tax Preparation Fees (3) 12,232 27,768
All Other Fees -- --
-------- --------
Total Fees $ 306,157 308,368
======== ========
-----------------------
(1) Amounts for Audit Fees represents fees for the audit of the
Company's annual financial statements and internal control over
financial reporting for the fiscal years ended September 30, 2008, and
2007, plus reviews of the Company's quarterly financial statements
during those fiscal years.
(2) Amounts for Audit-Related Fees for fiscal 2008 and 2007 consist of
services related to the annual audit of the Bank's 401(k) retirement
plan.
(3) Amounts for Tax Preparation Fees consist of services rendered for
the review of income tax returns, tax compliance, tax advice, and tax
planning.
-----------------------
There were no other services provided by BKD, LLP to the
Company for the fiscal years ended September 30, 2008 and 2007.
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. The vote of a majority of a quorum of
outstanding shares of common stock is required to approve the proposal.
16
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, 2009.
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/ Shauna Olson
Shauna Olson
Corporate Secretary
Grandview, Missouri
December 26, 2008
17
APPENDIX A
AUDIT COMMITTEE CHARTER FOR NASB FINANCIAL, INC.
ORGANIZATION
The Audit Committee of NASB Financial, Inc. is a standing
committee of the Board of Directors. It shall consist of at
least three Directors who are generally knowledgeable in
financial and auditing matters, and who have the skills and
experience to read and understand the Company's financial
statements. One member shall be designated as the Audit
Committee Chairman. At least one member of the Committee
shall have accounting or related financial management
expertise, in accordance with NASDAQ listing standards and at
least one member shall be designated the Audit Committee
"financial expert" in accordance with the definition set forth
in regulations of the Securities and Exchange Commission
("SEC") and NASDAQ.
Each member of the Audit Committee shall be free of any
relationship that, in the opinion of the Board of Directors,
would interfere with his or her individual exercise of
independent judgment, and shall meet the Director independence
requirements for serving on an audit committee in accordance
with the rules and regulations of the SEC and NASDAQ.
The Audit Committee shall meet at least four times each
year.
STATEMENT OF POLICY
The Audit Committee will assist the Board of Directors in
fulfilling its responsibilities by overseeing:
- The integrity of the Company's financial Statements,
financial process, and internal controls.
- The independence of the Company's independent auditors and
the performance of the independent audit.
- The adequacy of the Company's accounting processes and its
systems of disclose controls and procedures, and internal
controls over financial reporting.
- Compliance with applicable laws and the Company's policies
on business ethics and conduct.
In fulfilling their responsibilities, the Audit Committee
shall maintain free and open communication with the
independent auditors, the Internal Audit Manager, Internal
Audit Staff, and the management of the Company. The Audit
Committee will have regular communication to the Board with
regard to all significant issues it addresses. In discharging
its role of oversight, the Audit Committee shall have all
necessary resources and authority, with full power to retain
independent council, outside advisors, or other experts as it
may deem appropriate.
RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee
believes its policies and procedures should remain flexible,
in order to best react to changing conditions and to ensure
that the Company's accounting and reporting practices are in
accordance with all requirements and proper safeguards of the
Company's assets. Specific responsibilities of the Audit
Committee include:
1. To evaluate the performance of the independent auditors
each year and to have exclusive responsibility over their
selection (subject to shareholder ratification), compensation,
and discharge (if appropriate).
2. To review and approve the entire scope of services provided
by the independent auditors each year, including the annual
audit of the Company's financial statements, the audit of the
Company's pension plan, tax preparation services, and any non-
audit services.
3. To receive and review each year from the independent
auditors a written affirmation that they are, in-fact,
independent from the Company. To discuss with the independent
auditors any relationships or non-audit services that may
impair their objectivity and independence and take any action
that may be necessary.
4. To meet separately with the independent auditors, with and
without management present, to discuss the results of their
audits, management letters, management's responses, and any
other matters the Audit Committee or independent auditors wish
to discuss. To also review with the independent auditors any
matters required to be discussed under generally accepted
auditing standards relating to the conduct of the audit.
18
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,
Internal Audit Staff, 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
contains 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 evaluate the performance of the Internal Audit
Department each year and to have exclusive responsibility over
their selection, compensation, and discharge (if appropriate).
13. To review and approve an audit plan, budget, and staffing
needs of the Company's internal audit function each year.
14. To periodically review the quality, quantity, and
experience of the Company's internal audit, accounting, and
finance staff.
15. To review and reassess the adequacy of the Audit Committee
charter each year, and recommend any changes to the Board for
approval.
16. To review and approve any related party transactions, if
applicable.
The Audit Committee Charter is signed into effect on September 24,
2008:
Barrett Brady
Audit Committee, Chairman
Laura Brady
Audit Committee
Frederick V. Arbanas
Audit Committee
Rick P. Speciale
Vice President
Internal Audit Manager
19
APPENDIX B
NASB FINANCIAL, INC.
12498 South 71 Highway - Grandview, Missouri 64030
REVOCABLE PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JANUARY
27, 2009, SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints 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 27, 2009, at 8:30 a.m. 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:
[ ]Frederick V. Arbanas [ ]Frederick V. Arbanas
[ ]Laura Brady [ ]Laura Brady
[ ]W. Russell Welsh [ ]W. Russell Welsh
-------------------------------------------------------------------
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,
2009.
[ ]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: -------------------, -----
-----------------------
-----------------------
Signature(s)
Please sign as name(s) appear(s) to the left, indicating official
position or representative capacity where applicable. Show address
changes.