<PAGE>
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Subsection 240.14a-11(c) or
Subsection 240.14a-12
GFS BANCORP, INC.
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
GFS BANCORP, INC.
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Rules 0-11(c)(1)(iii), 14a-6(i)(1), or
14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1. Title of each class of securities to which
transaction applies:
_________________________________________________________________
2. Aggregate number of securities to which transaction
applies:
_________________________________________________________________
3. Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11:
_________________________________________________________________
4. Proposed maximum aggregate value of transaction:
_________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1. Amount Previously Paid:
____________________________________________
2. Form, Schedule or Registration Statement No.:
____________________________________________
3. Filing Party:
____________________________________________
4. Date Filed:
____________________________________________<PAGE>
<PAGE>
[GFS BANCORP, INC. LETTERHEAD]
September 25, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of GFS
Bancorp, Inc. (the "Company"), we cordially invite you to attend
the Annual Meeting (the "Meeting") of Stockholders of the
Company. The Meeting will be held on Wednesday, October 23, 1996
at 9:30 a.m., local time, at the office of the Company located at
1025 Main Street, Grinnell, Iowa.
The attached Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the Meeting.
During the Annual Meeting, we will also report on the operations
of Grinnell Federal Savings Bank (the "Bank"), the Company's
wholly owned subsidiary. Directors and officers of the Company,
as well as representatives of McGladrey & Pullen, LLP, the
Company's independent auditors, will be present to respond to
appropriate questions from stockholders.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN,
DATE AND RETURN THE ACCOMPANYING FORM OF PROXY AS SOON AS
POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING.
This will not prevent you from voting in person but will assure
that your vote is counted if you are unable to attend the
meeting. Your vote is important, regardless of the number of
shares you own.
Thank you for your attention to this important matter.
Very truly yours,
/s/ Steven L. Opsal
STEVEN L. OPSAL
President and Chief Executive Officer<PAGE>
<PAGE>
GFS BANCORP, INC.
1025 Main Street
Grinnell, Iowa 50112
(515) 236-3121
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 23, 1996
Notice is hereby given that an Annual Meeting of
Stockholders (the "Meeting") of GFS Bancorp, Inc. (the "Company")
will be held on Wednesday, October 23, 1996 at 9:30 a.m., local
time, at the office of the Company located at 1025 Main Street,
Grinnell, Iowa.
A Proxy Card and a Proxy Statement for the Meeting are
enclosed.
The Meeting is for the purpose of considering and acting
upon:
1. The election of three directors of the Company;
2. The ratification of the appointment of McGladrey &
Pullen, LLP as auditors for the Company for the
fiscal year ending June 30, 1997; and
3. Such other matters as may properly come before the
Meeting, or any adjournment thereof.
Note: The Board of Directors is not aware of any other
business to come before the Meeting.
Any action may be taken on the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to
which the Meeting may be adjourned. Stockholders of record at
the close of business on September 3, 1996 are the stockholders
entitled to vote at the Meeting and any adjournment thereof.
You are requested to complete and sign the enclosed form of
proxy which is solicited on behalf of the Board of Directors, and
to mail it promptly in the enclosed envelope. The proxy will not
be used if you attend and vote at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Leroy E. Meredith
LEROY E. MEREDITH
Chairman of the Board
Grinnell, Iowa
September 25, 1996
________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT
THE MEETING. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED
STATES.
________________________________________________________________<PAGE>
<PAGE>
PROXY STATEMENT
GFS BANCORP, INC.
1025 MAIN STREET
GRINNELL, IOWA 50112
(515) 236-3121
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 23, 1996
________________________________________________________________
GENERAL
________________________________________________________________
This Proxy Statement is furnished to stockholders of GFS
Bancorp, Inc. (the "Company") in connection with the solicitation
by the Board of Directors of proxies to be used at the Annual
Meeting of Stockholders of the Company (the "Meeting") which will
be held on Wednesday, October 23, 1996, at 9:30 a.m., local time,
at the office of the Company, located at 1025 Main Street,
Grinnell, Iowa, and all adjournments of the Meeting. The
accompanying Notice of Meeting and this Proxy Statement are first
being mailed to stockholders on or about September 25, 1996.
Certain of the information provided herein relates to Grinnell
Federal Savings Bank ("Grinnell Federal" or the "Bank"), a wholly
owned subsidiary of the Company.
At the Meeting, stockholders of the Company are being asked
to consider and vote upon the election of three directors of the
Company and a proposal to ratify the appointment of McGladrey &
Pullen, LLP as the Company's auditors for the fiscal year ending
June 30, 1997.
________________________________________________________________
VOTE REQUIRED AND PROXY INFORMATION
________________________________________________________________
Regardless of the number of shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), owned, it
is important that stockholders be represented by proxy or present
in person at the Annual Meeting. Stockholders are requested to
vote by completing the enclosed proxy card and returning it
signed and dated in the enclosed postage-paid envelope.
Stockholders are urged to indicate their vote in the spaces
provided on the proxy card. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY WILL BE VOTED IN ACCORDANCE WITH THE
DIRECTIONS GIVEN THEREIN. WHERE NO INSTRUCTIONS ARE INDICATED,
PROXIES WILL BE VOTED FOR THE APPROVAL OF THE SPECIFIC PROPOSALS
PRESENTED IN THIS PROXY STATEMENT. The Company does not know of
any matters, other than as described in the Notice of Meeting,
that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named
in the enclosed form of proxy and acting thereunder will have the
discretion to vote on such matters as directed by the Company's
Board of Directors.
Directors shall be elected by a plurality of the votes
present in person or represented by proxy at the Meeting and
entitled to vote on the election of directors. In all matters
other than the election of directors presented at the Meeting,
the affirmative vote of the majority of shares present in person
or represented by proxy at the Meeting and entitled to vote on
the matter shall be the act of the stockholders. Proxies marked
as abstentions will not be counted as votes cast. In addition,
shares held in street name which have been designated by brokers
on proxy cards as not voted will not be counted as votes cast.
Proxies marked as abstentions or as broker nonvotes, however,
will be treated as shares present for purposes of determining
whether a quorum is present.
A proxy given pursuant to the solicitation may be revoked at
any time before it is voted. Proxies may be revoked by: (i)
filing a written notice of revocation bearing a later date than
the proxy with the Secretary of the Company at or before the
Meeting; (ii) duly executing a subsequent proxy relating to the
same shares and delivering it to the Secretary of the Company at
or before the Meeting; or (iii) attending the Meeting and voting
at the Meeting (although attendance at the Meeting will not in
and of itself constitute revocation of a proxy). Any written
notice revoking a proxy should be delivered to Ginger L. Sterk,
Secretary, GFS Bancorp, Inc., 1025 Main Street, Grinnell, Iowa
50112. <PAGE>
<PAGE>
________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
________________________________________________________________
Stockholders of record as of the close of business on
September 3, 1996 (the "Record Date"), are entitled to one vote
for each share then held. As of the Record Date, the Company had
502,600 shares of Common Stock issued and outstanding. The
following table sets forth information regarding share ownership
of those persons or entities known by management to beneficially
own more than five percent of the Company's Common Stock, the
executive officers named in the Summary Compensation Table and
all directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Percent of
Nature of Shares of
Beneficial Common Stock
Beneficial Owner Ownership Outstanding
- ------------------ --------- ------------
<S> <C> <C>
I.S.B. Bancorporation, Inc.
L.B.T. Bancorporation
4201 Westown Parkway, Suite 320
West Des Moines, Iowa 50266 49,500 9.8%
GFS Bancorp, Inc.
Employee Stock Ownership Plan
1025 Main Street
Grinnell, Iowa 50112 (1) 42,320 8.4%
Steven L. Opsal, President
and Chief Executive Officer (2) 21,089 4.1%
LeRoy E. Meredith
Chairman of the Board and
Former Chief Executive Officer (3) 17,576 3.5%
All directors and executive
officers of the Company
as a group (10 persons) (4) 107,503 20.1%
</TABLE>
__________________
(1) The amount reported represents shares held by the Company's
Employee Stock Ownership Plan ("ESOP"), 17,024 shares of
which were allocated to accounts of participants. First
Bankers Trust Company, N.A., the trustee of the ESOP, may
be deemed to beneficially own the shares held by the ESOP
which have not been allocated to the accounts of
participants or are not voted by participants. Pursuant to
the terms of the
ESOP, participants in the ESOP have the right to direct the
voting of shares allocated to participant accounts.
(2) Includes 7,508 shares held directly, 2,760 shares held by
Mr. Opsal's spouse, 75 shares held by Mr. Opsal's minor
children, 2,626 shares allocated to Mr. Opsal's account
under the ESOP, 6,348 shares subject to options granted to
Mr. Opsal under the Company's 1993 Stock Option and
Incentive Plan (the "Stock Option Plan") and 1,772 shares
of restricted stock awarded under the Recognition and
Retention Plan (the "RRP") over which Mr. Opsal has voting
but no dispositive power.
(3) Includes 4,622 shares held directly, 2,150 shares held by
Mr. Meredith's spouse, 2,684 shares allocated to
Mr. Meredith's account under the ESOP over which he has
voting but no dispositive power, 6,348 shares subject to
options granted to Mr. Meredith under the Stock Option Plan
and 1,772 shares of restricted stock awarded under the RRP.
(4) Includes shares held directly, as well as jointly with
family members, and shares held in retirement accounts in a
fiduciary capacity or by certain family members, with
respect to which shares the listed individuals or group
members may be deemed to have sole or shared voting and/or
investment power. This table also includes 8,087 shares
allocated to the accounts of executive officers under the
ESOP, options to purchase 33,383 shares of Common Stock
granted pursuant to the Stock Option Plan to directors and
executive officers and 7,340 shares of restricted Common
Stock awarded pursuant to the RRP.
2<PAGE>
<PAGE>
________________________________________________________________
PROPOSAL I - ELECTION OF DIRECTORS
________________________________________________________________
GENERAL
The Company's Board of Directors currently consists of nine
members. The Board is divided into three classes, each of which
contains one-third of the Board. One-third of the directors are
elected annually. Directors of the Company are generally elected
to serve for a three-year period or until their respective
successors are elected and qualified.
The table below sets forth certain information, as of the
Record Date, regarding the composition of the Company's Board of
Directors, including each director's term of office. The
nominating committee has recommended and the Board has approved
the nominees identified in the following table. It is intended
that the proxies solicited on behalf of the Board of Directors
(other than proxies in which the vote is withheld as to a
nominee) will be voted at the Meeting for the election of the
nominees identified below. If a nominee is unable to serve, the
shares represented by all valid proxies will be voted for the
election of such substitute nominee as the Board of Directors may
recommend. At this time, the Board of Directors knows of no
reason why any nominee may be unable to serve if elected. Except
as disclosed herein, there are no arrangements or understandings
between the nominee and any other person pursuant to which the
nominee was selected.
<TABLE>
<CAPTION>
Shares of
Current Common Stock Percent
Age Director Term to Beneficially of
Name (1) Position(s) Held in the Company Since(2) Expire Owned (3) Class
- ------------------------------------------------------------------------------------------------------------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
Thomas M. Groth 45 Director 1984 1996 10,932 2.2%
Theodore Mokricky 49 Director 1990 1996 14,626 (4) 2.9
Steven L. Opsal 42 President, Chief Executive Officer
and Director 1993 1996 21,089 (5) 4.2
DIRECTORS CONTINUING IN OFFICE
LeRoy E. Meredith 53 Director, Chairman of the Board 1975 1997 17,576 (6) 3.5
Albert C. Eisenman 69 Director 1963 1997 7,680 (7) 1.5
Katherine A. Rose 41 Sr. Vice President, Chief Financial
Officer and Director 1993 1997 10,401 (8) 2.1
Donald H. Howig 68 Director 1972 1998 4,280 (9) 0.9
Scott A. Jensen 42 Director 1992 1998 4,115 (10) 0.8
David S. Clay 38 Director 1995 1998 2,006 0.4
</TABLE>
_____________
(1) At June 30, 1996.
(2) Includes service as a director of the Bank.
(3) Amounts include shares held directly and jointly with
family members, as well as shares which are held in
retirement accounts, or held by certain members of the
named individual's family, or held by trusts of which the
named individual is a trustee or substantial beneficiary,
with respect to which shares the respective directors may
be deemed to have sole or shared voting and/or investment
power. Amounts also include 1,904, 1,904, 6,348, 6,348,
3,332, 4,761, 2,380, 1,428 and 978 shares subject to
options granted to Directors Groth, Mokricky, Opsal,
Meredith, Eisenman, Rose, Howig, Jensen and Clay,
respectively, under the Stock Option Plan which are
exercisable within 60 days of September 3, 1996 and awards
of 229, 1,772, 1,772, 1,323 and 428 shares of restricted
Common Stock granted to each non-employee director and
Directors Opsal, Meredith, Rose and Clay, respectively,
over which such individuals have voting but no dispositive
power.
(4) Includes 9,693 shares held directly, 2,400 shares held by
Mr. Mokricky's spouse and 400 shares held by Mr. Mokricky's
minor child.
(5) Includes 7,508 shares held directly, 2,760 shares held by
Mr. Opsal's spouse, 75 shares held by Mr. Opsal's minor
children and 2,626 shares allocated to Mr. Opsal's account
under the ESOP.
(6) Includes 4,622 shares held directly, 2,150 shares held by
Mr. Meredith's spouse and 2,684 shares allocated to
Mr. Meredith's account under the ESOP.
(7) Includes 1,520 shares held directly and 2,599 shares held
by Mr. Eisenman's spouse.
(8) Includes 2,322 shares held directly, 40 shares held by Ms.
Rose's minor child and 1,955 shares allocated to Ms. Rose's
account under the ESOP.
(9) Includes 522 shares held directly and 1,149 shares held by
Mr. Howig's spouse.
(10) Includes 1,458 shares held directly and 1,000 shares held
by Mr. Jensen's spouse.
3<PAGE>
<PAGE>
The principal occupation of each director and director
nominee is set forth below. All directors have held their
present position for at least five years unless otherwise
indicated.
Thomas M. Groth is district sales representative with ASI
Signs, a position he has held since September 1993. Prior to
that time, he was a development officer for Grinnell College from
1990 to 1993.
Theodore Mokricky has served as Executive Director of
Mayflower Homes, Inc., a continuing care retirement community
located in Grinnell, Iowa since 1981. Mr. Mokricky is Vice
Chairman of the Board of the Bank, a position he has held since
1992.
Steven L. Opsal became President and Chief Executive Officer
in October 1995. Prior to that time, he was Vice President and
Chief Operating Officer of the Company and the Bank, positions he
had held since 1993. Before joining Grinnell Federal in March
1993, Mr. Opsal was Assistant Director of the Des Moines District
Office of the Office of Thrift Supervision ("OTS") from 1989 to
1993. Mr. Opsal was employed by the Federal Home Loan Bank of
Des Moines from 1977 to 1989 in a variety of positions, including
Supervisory Agent, from 1980 to 1989.
LeRoy E. Meredith was President and Chief Executive Officer
of the Company and the Bank, from 1993 and 1988, respectively,
until he became Chairman of the Board in October 1995.
Mr. Meredith has been employed by the Bank since 1968 and has
held a variety of positions including Executive Vice President
from 1981 to 1988. Mr. Meredith has over 28 years of experience
in the savings and loan industry.
Albert C. Eisenman was President of Grinnell Federal from
1975 until his retirement in 1988. From 1988 to 1994,
Mr. Eisenman was employed by the Bank on a part-time basis as a
consultant.
Katherine A. Rose is Senior Vice President and Chief
Financial Officer of the Company, positions she has held since
October 1995 and September 1993, respectively. She is also
Senior Vice President, Chief Financial Officer and Treasurer of
the Bank, positions she has held since 1995 and 1988,
respectively. Ms. Rose has been employed by the Bank in a
variety of positions since 1975.
Donald H. Howig is the owner and President of Howig &
Associates, a distributor of commercial lockers and athletic
equipment located in Grinnell, Iowa, a position he has held since
1976.
Scott A. Jensen is an optometrist and part owner of Jensen
Optometrists, located in Grinnell, Iowa, a position he has held
since 1977.
David S. Clay is the Vice President for Business and
Treasurer of Grinnell College. He has been employed by Grinnell
College since 1986.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following sets forth information with respect to the
executive officer of the Company who does not serve on the Board
of Directors.
<TABLE>
<CAPTION>
Age
as of the
Name Record Date Title
- ---- ----------- -----
<S> <C> <C>
William T. Nassif 46 Senior Vice President
and Chief Operating Officer
</TABLE>
William T. Nassif is Senior Vice President and Chief
Operating Officer of the Company and the Bank, positions he has
held since December 1995. Prior to joining Grinnell Federal in
April 1994, Mr. Nassif was Assistant Regional Counsel stationed
in the Des Moines and Kansas City Area Offices of the Office of
Thrift Supervision from 1989 to 1994. Mr. Nassif was employed by
the Federal Home Loan Bank of Des Moines from 1984 to 1989 as
Supervisory Counsel.
4<PAGE>
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Meetings and Committees of the Company. Meetings of the
Company's Board of Directors are generally held on a quarterly
basis and special meetings are held on an as needed basis. The
Board of Directors met nine times during fiscal 1996. During
fiscal 1996, no director of the Company attended fewer than 75%
of the aggregate of (i) the total number of Board meetings and
(ii) total number of meetings held by the committees of the Board
of Directors on which he or she served.
The Board of Directors of the Company has standing
Executive, Audit, Investment, Compensation and Nominating
Committees.
The members of the Executive Committee are Directors
Meredith, Opsal, Clay, Groth and Mokricky. The Executive
Committee meets on an as needed basis and exercises the power of
the Board of Directors between Board meetings. This committee
met three times during fiscal 1996.
The members of the Audit Committee are Directors Mokricky
and Jensen, Directors Emeritus Sams and Pinder, Vice President
Nassif and John Ruchotzke (outside consultant). The Audit
Committee recommends independent auditors to the Board, reviews
the results of the auditors' services, reviews with management
and the internal auditors the systems of internal control and
internal audit reports and assures that the books and records of
the Company are kept in accordance with applicable accounting
principles and standards. During fiscal 1996, this committee met
four times.
The members of the Investment Committee are Directors Clay,
Opsal, Rose and Howig. The Investment Committee has the
authority to act on behalf of the full Board of Directors with
respect to investments made at the Company level. The Investment
Committee met two times during fiscal 1996.
The members of the Compensation Committee are Directors
Clay, Mokricky, Groth, Opsal and Meredith. This Committee is
responsible for administering the Company's Stock Option Plan and
the RRP. This Committee also reviews compensation and benefit
matters. This committee met two times during fiscal 1996.
The members of the Nominating Committee are Directors Groth,
Meredith, Eisenman and Opsal. The Nominating Committee selects
nominees for appointment to the Board of Directors. While the
Nominating Committee will consider nominees recommended by
stockholders, it has not actively solicited such nominations.
Pursuant to the Company's Bylaws, nominations by stockholders
must be delivered in writing to the Secretary of the Company at
least 30 days before the date of the Meeting. This committee met
once during fiscal 1996.
DIRECTOR COMPENSATION
Cash Compensation. The Company's directors do not receive a
fee for serving on the Company's Board of Directors. No fee is
paid for membership on the Company's committees. All present
members of the Company's Board of Directors are also members of
the Bank's Board of Directors. During fiscal 1996, all Bank non-
employee directors received a fee of $500 per month. This fee
was increased to $600 per month beginning in fiscal 1997. No fee
is paid to directors of the Bank for committee membership.
EXECUTIVE COMPENSATION
The Company has not paid any compensation to its executive
officers since its formation. The Company does not presently
anticipate paying any compensation to such persons until it
becomes actively involved in the operation or acquisition of a
business other than the Bank.
5<PAGE>
<PAGE>
Summary Compensation Table. The following table sets forth
information regarding compensation paid by the Bank to its Chief
Executive Officer and its former Chief Executive Officer for
services rendered during the fiscal year ended June 30, 1996. No
executive officer made in excess of $100,000 in salary and bonus
during fiscal 1996.
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------------
Awards Payouts
Annual Compensation ------------------------- -------
Name and -------------------------------- Restricted All
Principal Fiscal Other Annual Stock Options/ LTIP Other
Position Year Salary Bonus Compensation Award(s) SARs(2)(#) Payouts Compensation
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steven L. Opsal 1996 $56,700 $12,100 (1) $ -- (3) -- $ -- $ --
President and Chief 1995 51,500 6,680 (1) -- -- -- --
Executive Officer 1994 50,000 2,500 (1) 35,440(4) 6,348 -- --
LeRoy E. Meredith 1996 57,225 9,084 (1) -- (3) -- -- 16,556 (2)
Chairman of the Board 1995 54,500 7,040 (1) -- -- -- 24,716
and Former Chief 1994 53,000 2,500 (1) 35,440(4) 6,348 -- 21,747
Executive Officer
</TABLE>
_______________
(1) Pursuant to the Securities and Exchange Commission
("SEC") regulations, no disclosure is provided with respect
to prerequisites which do not exceed the lesser of $50,000
or 10% of salary and bonus.
(2) Represents the Bank's contribution of $16,556 during fiscal
1996 to the Salary Continuation Plan. The Salary
Continuation Plan, which is funded through life insurance
premiums, provides for annual payments to Mr. Meredith of
$30,000 per year for a period of seven years, commencing
upon his retirement in 1998, provided Mr. Meredith remains
employed by the Bank until his retirement date.
(3) At June 30, 1996, Messrs. Opsal and Meredith each owned
3,544 shares of restricted stock with an aggregate value of
$71,766 (calculated by multiplying the closing market price
of unrestricted Common Stock at June 30, 1996 ($20.25 per
share) by the number of restricted shares held at such date
(3,544 shares). The shares of restricted stock are earned
in equal annual installments over a four-year period
commencing one-year after January 5, 1994, provided Messrs.
Opsal and Meredith maintain continuous service (as defined
in the RRP) with the Bank. During this restricted period
Messrs. Opsal and Meredith will be entitled to receive cash
dividends (if any are paid) with respect to the restricted
shares. Any dividends will be held in trust until awards
vest.
(4) Value calculated by multiplying the closing market price of
unrestricted Common Stock on the date of grant ($10.00 per
share) by the number of shares awarded (3,544 shares).
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year End Option Values. The following table sets forth
information regarding the number and value of stock options at
June 30, 1996 held by the Company's Chief Executive Officer and
its former Chief Executive Officer. No stock options or stock
appreciation rights were awarded to such persons during fiscal
1996. No stock options were exercised during fiscal 1996 by Mr.
Opsal or Mr. Meredith.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year-End at Fiscal Year-End (1)
---------------------------- -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Steven L. Opsal 6,348 -- $65,067 --
LeRoy E. Meredith 6,348 -- 65,067 --
</TABLE>
______________
(1) Represents the aggregate market value (market price of the
Common Stock less the exercise price) of the option granted
based upon the average of the bid and asked price of $20.25
per share of the Common Stock as reported on the Nasdaq
Market on June 30, 1996.
6<PAGE>
<PAGE>
EMPLOYMENT AGREEMENTS AND SALARY CONTINUATION PLAN
Employment Agreements. Effective upon completion of the
Bank's conversion to stock form (the "Conversion") in January
1994, the Bank entered into employment agreements (the
"Agreements") with Mr. Opsal, the current President of the
Company and the Bank, and Mr. Meredith, the Chairman of the Board
of the Company and the Bank (the "Employees"). Mr. Opsal's and
Mr. Meredith's Agreements provide for annual base salaries to be
reviewed and adjusted by the Board of Directors on an annual
basis. The current annual base salaries of Messrs. Opsal and
Meridith are $79,750 and $58,950, respectively. Both Agreements
provide for an initial term of three years. Each Agreement
provides for an extension of one year, in addition to the
then-remaining term under the Agreement, on each anniversary of
the effective date of the Agreement, subject to a formal
performance evaluation performed by disinterested members of the
Board of Directors of the Bank. The Agreements provide for
termination upon an Employee's death, for cause or in certain
events specified by applicable banking regulations. The
Agreements are also terminable by the employee upon 90 days'
notice to the Bank.
The Agreements provide for payment to an Employee of his
salary for the remainder of the term of the Agreement, plus up to
299% of the Employee's base compensation, in the event he is
involuntarily terminated in connection with or within one year
after a "change in control" or if the Employee voluntarily
terminates his employment within 30 days of a "change-in-
control". This termination payment is subject to reduction by
the amount of all other compensation to the Employee deemed, for
purposes of the Internal Revenue Code of 1986, as amended (the
"Code"), to be contingent on a "change in control," and may not
exceed three times the Employee's average annual compensation
over the most recent five-year period or be non-deductible by the
Bank for federal income tax purposes. For the purposes of the
Agreements, "control" generally refers to the acquisition, by any
person or entity, of the ownership or power to vote more than 25%
of the Bank's or the Company's voting stock, the ability to
control the election of a majority of the Bank's or the Company's
directors, or the exercise of a controlling influence over the
management or policies of the Bank or the Company. In addition,
under the Agreements, a change in Control occurs when, during any
consecutive two-year period, directors of the Company or the Bank
at the beginning of such period cease to constitute at least a
majority of the Board of the Company or the Bank, unless the
replacement directors were approved by at least a majority of the
initial directors then in office. An Employee will be considered
to be involuntarily terminated if: (1) if he is terminated for
any reason other than "cause", death, disability or pursuant to
certain specified banking regulations, or (2) there occurs a
material diminution of or interference with the Employee's
duties, responsibilities and benefits.
Additionally, in the event of an Employee's continued
employment with the Bank or a successor following a "change-in-
control," the Employee will be entitled to receive salary and
discretionary bonuses at least equal to the average salary and
bonuses received by him for the three years preceding the change-
in-control.
Based on their current salaries, if Mr. Opsal or Mr.
Meredith had been terminated as of June 30, 1996, under
circumstances entitling them to severance pay as described above,
they would have been entitled to receive lump sum cash payments
not to exceed approximately $238,453 and $176,261, respectively.
Salary Continuation Plan. In March 1993, the Bank adopted a
Salary Continuation Plan ("SCP") for the benefit of LeRoy
Meredith. The SCP is a non-qualified plan which provides for the
payment to Mr. Meredith of annual retirement benefits equal to
$30,000 per year for a period of seven years provided that
Mr. Meredith remains employed at Grinnell Federal until his
retirement. The SCP was funded through the purchase of life
insurance policies.
CERTAIN TRANSACTIONS
The Bank has followed a policy of granting consumer loans
and loans secured by the borrower's personal residence to
officers, directors and employees. The loans to employees,
executive officers and directors are currently made in the
ordinary course of business and on substantially the same terms,
including interest rates and collateral,
7<PAGE>
<PAGE>
as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of
collectibility or present other unfavorable features. Loans to
executive officers and directors must be approved by a majority
of the disinterested directors and loans to other officers and
employees must be approved by the Bank's Loan Committee. All
loans by the Bank to its directors and executive officers are
subject to OTS regulations restricting loan and other
transactions with affiliated persons of the Bank. Federal law
currently requires that all loans to directors and executive
officers be made on terms and conditions comparable to those for
similar transactions with non-affiliates.
_________________________________________________________________
PROPOSAL II -- RATIFICATION OF THE APPOINTMENT OF AUDITORS
_________________________________________________________________
On August 18, 1995, the Company dismissed Vroman, McGowen,
Hurst, Clark & Smith, P.C. ("Vroman McGowen") as their
independent auditors. The change of independent auditors was
recommended by the Audit Committee and subsequently approved by
the Board of Directors. There have been no disagreements between
the Company and Vroman McGowen on any matter of accounting
principles or practices, financial statement disclosure or
auditing scope of procedure in connection with the audit of the
consolidated financial statements of the Company for two years
ended June 30, 1995 and subsequent interim periods through August
18, 1995, which, if not resolved to the satisfaction of Vroman
McGowen, would have caused them to make reference to the subject
matter of such disagreements in connection with their report.
The reports of Vroman McGowen on the consolidated financial
statements of the Company for the two years ended June 30, 1995
did not contain an adverse opinion or a disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or
accounting principles.
The Board of Directors has engaged McGladrey & Pullen, LLP
to be its independent auditors for the 1997 fiscal year, subject
to the ratification of the appointment by the Company's
stockholders. Representatives of McGladrey & Pullen, LLP are
expected to attend the Meeting to respond to appropriate
questions and will have an opportunity to make a statement if
they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF MCGLADREY & PULLEN,
LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING JUNE 30, 1997.
_________________________________________________________________
BENEFICIAL OWNERSHIP REPORTS
_________________________________________________________________
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") requires the Company's directors and
executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with
the SEC initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than 10% stockholders
are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. To 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 June 30,
1996, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10 percent beneficial owners
were complied with.
_________________________________________________________________
STOCKHOLDER PROPOSALS
_________________________________________________________________
In order to be eligible for inclusion in the Company's proxy
materials for the next Annual Meeting of Stockholders, any
stockholder proposal to take action at such meeting must be
received at the Company's main office located at 1025 Main
Street, Grinnell, Iowa 50112, no later than May 29, 1997. Any
such proposal shall be subject to the requirements of the proxy
rules adopted under the Securities Exchange Act of 1934, as
amended.
8<PAGE>
<PAGE>
_________________________________________________________________
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 matter should
properly come before the Meeting, it is intended that holders of
the proxies will act in accordance with their best judgment.
The cost of solicitation of proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or
the Bank may solicit proxies personally or by telegraph or
telephone without additional compensation.
Grinnell, Iowa
September 25, 1996
9<PAGE>
<PAGE>
REVOCABLE PROXY
_________________________________________________________________
GFS BANCORP, INC.
Grinnell, Iowa
_________________________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
October 23, 1996
The undersigned hereby appoints LeRoy E. Meredith, David S.
Clay and Scott A. Jensen, with full powers of substitution, to
act as attorneys and proxies for the undersigned, to vote all
shares of the common stock of the Company which the undersigned
is entitled to vote at the Annual Meeting of Stockholders, to be
held on Wednesday, October 23, 1996, at 9:30 a.m., local time,
at the office of the Company located at 1025 Main Street,
Grinnell, Iowa (the "Annual Meeting"), and at any and all
adjournments thereof, as follows:
VOTE
FOR WITHHELD
--- --------
1. The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
Thomas M. Groth
Theodore Mokricky
Steven L. Opsal
INSTRUCTION: To withhold your vote for any individual
nominee, insert that nominee's name on the line provided
below.
___________________________________
[CAPTION]
<TABLE>
APPROVE DISAPPROVE ABSTAIN
------- ---------- -------
<S> <C> <C> <C>
2. Ratification of the appointment of
McGladrey & Pullen, LLP as the Company's
independent auditors for the fiscal year
ending June 30, 1997 [ ] [ ] [ ]
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES
LISTED ABOVE AND THE APPOINTMENT OF MCGLADREY & PULLEN LLP AS THE
COMPANY'S INDEPENDENT AUDITORS.
_________________________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED.
IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING,
INCLUDING MATTERS RELATING TO THE CONDUCT OF THE MEETING, THIS
PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN ACCORDANCE
WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS.
AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
_________________________________________________________________
<PAGE>
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the
Meeting or at any adjournment thereof, then the power of said
attorneys and prior proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke his
proxy by filing a subsequent proxy or notifying the Secretary in
writing of his decision to revoke his proxy.
The undersigned acknowledges receipt from the Company prior
to the execution of this proxy of a Notice of Annual Meeting and
a Proxy Statement dated September 25, 1996.
Dated: _______________________, 1996
__________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ __________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the enclosed
card. When signing as attorney, executor, administrator, trustee
or guardian, please give your full title. Corporation proxies
should be signed in corporate name by an authorized officer. If
shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
