<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, if Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) 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, 1997
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 Thursday, October 23, 1997
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, 1997
Notice is hereby given that an Annual Meeting of
Stockholders (the "Meeting") of GFS Bancorp, Inc. (the "Company")
will be held on Thursday, October 23, 1997 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 two 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, 1998; 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, 1997 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, 1997
_________________________________________________________________
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, 1997
_________________________________________________________________
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 Thursday, October 23, 1997, 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, 1997.
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 two 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, 1998.
On April 25, 1997, the Company effected a two-for-one stock
split in the form of a 100% stock dividend on its common stock,
par value $.01 per share (the "Common Stock"). All stock
ownership information presented in this Proxy Statement has been
adjusted to reflect this stock split.
_________________________________________________________________
VOTE REQUIRED AND PROXY INFORMATION
_________________________________________________________________
Regardless of the number of shares of the Common Stock
owned, it is important that stockholders be represented by proxy
or present in person at the 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
<PAGE>
<PAGE>
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.
_________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
_________________________________________________________________
Stockholders of record as of the close of business on
September 3, 1997 (the "Record Date"), are entitled to one vote
for each share then held. As of the Record Date, the Company had
988,242 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 99,000 10.02%
Manatt Enterprises Limited
Box 535
Brooklyn, Iowa 52211 73,500 7.44%
GFS Bancorp, Inc.
Employee Stock Ownership Plan
1025 Main Street
Grinnell, Iowa 50112 (1) 84,640 8.56%
Steven L. Opsal, President
and Chief Executive Officer (2) 59,087 5.82%
All directors and executive
officers of the Company
as a group (10 persons) (3) 275,827 24.94%
<FN>
_____________
(1) The amount reported represents shares held by the Company's
Employee Stock Ownership Plan ("ESOP"), 46,351 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 17,788 shares held directly, 5,520 shares held by
Mr. Opsal's spouse, 250 shares held by Mr. Opsal's minor
children, 7,351 shares allocated to Mr. Opsal's account under
the ESOP, 26,406 shares subject to option 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 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 22,675 shares allocated to
the accounts of executive officers under the ESOP, options to
purchase 117,686 shares of Common Stock granted to directors
and executive officers and 6,340 shares of restricted Common
Stock awarded pursuant to the RRP.
</FN>
</TABLE>
2<PAGE>
<PAGE>
_________________________________________________________________
PROPOSAL I - ELECTION OF DIRECTORS
_________________________________________________________________
GENERAL
The Company's Board of Directors will consist of eight
members following the Meeting. The Board is divided into three
classes. Approximately 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 Board
has recommended and 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>
LeRoy E. Meredith 54 Director, Chairman of the Board 1975 1997 50,351 (4) 4.96%
Katherine A. Rose 42 Sr. Vice President, Chief Financial 1993 1997 30,199 (5) 3.00
Officer and Director
DIRECTORS CONTINUING IN OFFICE
Donald H. Howig 69 Director 1972 1998 9,560 (6) .96
Scott A. Jensen 43 Director 1992 1998 9,230 (7) .93
David S. Clay 39 Director 1995 1998 10,741 1.08
Thomas M. Groth 46 Director 1984 1999 22,864 2.30
Theodore Mokricky 50 Director 1990 1999 29,452 (8) 2.97
Steven L. Opsal 43 President, Chief Executive Officer 1993 1999 59,087 (9) 5.82
<FN>
_____________
(1) At June 30, 1997.
(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 26,406, 17,522,
5,760, 3,856, 4,456, 4,808, 4,808 and 26,406 shares subject to options
granted to Directors Meredith, Rose, Howig, Jensen, Clay, Groth,
Mokricky and Opsal, respectively, which are exercisable within 60 days of
September 3, 1997 and awards of 1,772, 1,772, 1,324 and 572 shares of
restricted Common Stock granted to Directors Opsal, Meredith, Rose and Clay,
respectively, over which such individuals have voting but no dispositive
power.
(4) Includes 11,016 shares held directly, 4,300 shares held by Mr. Meredith's
spouse and 6,857 shares allocated to Mr. Meredith's account under the ESOP.
(5) Includes 5,966 shares held directly, 80 shares held by Ms. Rose's minor
child and 5,307 shares allocated to Ms. Rose's account under the ESOP.
(6) Includes 1,502 shares held directly and 2,298 shares held by Mr. Howig's
spouse.
(7) Includes 3,374 shares held directly and 2,000 shares held by Mr. Jensen's
spouse.
(8) Includes 19,844 shares held directly and 4,800 shares held by Mr. Mokricky's
spouse.
(9) Includes 17,788 shares held directly, 5,520 shares held by Mr. Opsal's
spouse, 250 shares held by Mr. Opsal's minor children and 7,351 shares
allocated to Mr. Opsal's account under the ESOP.
</FN>
</TABLE>
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.
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 thrift industry.
Katherine A. Rose is Senior Vice President and Chief
Financial Officer of the Company, positions she has held since
December 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 was the owner and President of Howig &
Associates, a distributor of commercial lockers and athletic
equipment located in Grinnell, Iowa, from 1976 until 1997, when
he retired.
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.
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.
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 47 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>
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 eight times during fiscal 1997. During
fiscal 1997, no director of the Company attended fewer than 75%
of the aggregate of (i)the total number of Board meetings and
(ii) the 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, Stock Plan and
Nominating Committees.
The members of the Audit Committee are Directors Mokricky
and Jensen, Directors Emeritus Sams and Pinder, Senior Vice
President Nassif and John Ruchotzke, CPA (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
1997, this committee met four times.
The members of the Compensation Committee are Directors
Clay, Mokricky, Groth, Opsal and Meredith. This Committee
reviews compensation and benefit matters. This committee met
once during fiscal 1997.
The members of the Nominating Committee are Directors
Groth, Meredith, Opsal and Eisenman. 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 did not meet during fiscal 1997. Nominees were
selected by the full Board of Directors.
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 1997, all Bank
non-employee directors received a fee of $600 per month. No fee
is paid to directors of the Bank for committee membership except
for members of the Audit Committee who are paid $50 per meeting
attended.
Directors are also eligible to receive options under the
Company's 1997 Stock Option Plan, and received 42,920 options to
purchase an aggregate of 42,920 shares at an exercise price of
$10.44 (the market value of the Common Stock on the date of
grant) in February 1997 pursuant to this plan. See " -- 1997
Stock Option Plan" herein.
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 for services rendered during the fiscal year
ended June 30, 1997. No other executive officer made in excess
of $100,000 in salary and bonus during fiscal 1997.
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------
Awards Payouts
Annual Compensation -------------------- -------
Name and -------------------------------- Restricted
Principal Fiscal Other Annual Stock Options/ LTIP All Other
Position Year Salary Bonus Compensation Award(s) SARs (2) Payouts Compensation
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steven L. Opsal 1997 $79,750 $16,450 (1) $ -- (2) 13,710 (3) $ -- $ --
President and Chief 1996 56,700 12,100 (1) -- -- -- --
Executive Officer 1995 51,500 6,680 (1) -- -- -- --
<FN>
______________
(1) Pursuant to the Securities and Exchange Commission regulations, no disclosure is provided with
respect to perquisites which do not exceed the lesser of $50,000 or 10% of salary and bonus.
(2) At June 30, 1997, Mr. Opsal owned 1,772 shares of restricted stock with a value of $23,922 (calculated
by multiplying the closing market price of unrestricted Common Stock at June 30, 1997 ($13.50 per
share) by the number of restricted shares held at such date (1,772 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 Mr. Opsal maintains continuous service (as defined in the RRP) with the Bank. During
this restricted period Mr. Opsal is entitled to receive cash dividends (if any are paid) with respect
to the restricted shares. Dividends are held in trust until awards vest.
(3) These options were granted pursuant to the 1997 Stock Option Plan, adopted by the Company's Board of
Directors in February 1997. See " -- 1997 Stock Option Plan" herein.
</FN>
</TABLE>
1997 Stock Option Plan. In February 1997, the Board of
Directors of the Company adopted the GFS Bancorp, Inc. 1997
Stock Option Plan. The purpose of this plan is to provide the
Company's directors and select employees with additional
motivation and incentive to promote the Company's business by
encouraging their ownership of the Common Stock. An aggregate
of 98,870 shares of Common Stock have been reserved for issuance
under this plan and options to purchase 61,920 shares were
granted to officers and directors under this plan in March 1997.
All such options have an exercise price of $10.44 per share,
representing the market value of the Common Stock on the date of
grant, and all are immediately exercisable. The plan will be in
effect for ten years from its effective date unless earlier
terminated by the Board.
1997 401(k) Plan. In May 1997, the Bank adopted a 401(k)
Plan. The purpose of this plan is to provide a tax deferred
savings vehicle for Bank employees. At this time, the Bank
makes no plan contributions on behalf of its employees.
Option Grants in Last Fiscal Year. The following table
contains information concerning grants of stock options to the
Company's Chief Executive Officer during fiscal year 1997.
<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 13,710 25.66% 10.44 2/19/07
</TABLE>
6<PAGE>
<PAGE>
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, 1997 held by the Company's Chief Executive Officer. No
stock options were exercised during fiscal 1997 by Mr. Opsal.
<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 26,406 $149,869 $
<FN>
- -------------
(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 $13.50 per share of the Common Stock as reported on the Nasdaq Market on
June 30, 1997.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS AND SALARY CONTINUATION PLAN
Employment Agreements. Effective upon completion of the
Bank's conversion to stock form in January 1994, the Bank
entered into an employment agreement (the "Agreement") with
Mr. Opsal, President of the Company and the Bank (the
"Employee"). The Agreement provides for an annual base salary
to be reviewed and adjusted by the Board of Directors annually,
which is currently $90,000. The Agreement provides for an
initial term of three years, and 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 Agreement provides for termination upon the Employee's
death, for cause or in certain events specified by applicable
banking regulations. The Agreement is also terminable by the
Employee upon 90 days' notice to the Bank.
The Agreement provides for payment to the 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, 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 Agreement,
"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
Agreement, 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. The Employee will be
considered to be involuntarily terminated if: (1) 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 the 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 his current salary, if Mr. Opsal had been
terminated as of June 30, 1997, under circumstances entitling
him to severance pay as described above, he would have been
entitled to receive a lump sum cash payment not to exceed
approximately $237,000.
7<PAGE>
<PAGE>
Salary Continuation Plan. In March 1993, the Bank adopted
a Salary Continuation Plan ("SCP") for the benefit of Mr. LeRoy
Meredith, Chairman of the Board and former Chief Executive
Officer. 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, 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.
________________________________________________________________
PROPOSAL II -- RATIFICATION OF THE APPOINTMENT OF AUDITORS
________________________________________________________________
McGladrey & Pullen, LLP, which was the Company's
independent auditors for the 1997 fiscal year, has been retained
by the Board of Directors to be the Company's independent
auditors for the 1998 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, 1998.
________________________________________________________________
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, 1997, 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 28, 1998. 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 the determination of the
Company's Board of Directors.
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, 1997
9<PAGE>
<PAGE>
REVOCABLE PROXY
________________________________________________________________
GFS BANCORP, INC.
Grinnell, Iowa
________________________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
October 23, 1997
The undersigned hereby appoints LeRoy Meredith, David Clay
and Thomas Groth, 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 Thursday, October 23, 1997, 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:
1. The election as directors of all
nominees listed below (except as
marked to the contrary below).
LeRoy E. Meredith
Katherine A. Rose
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, 1998 [ ] [ ] [ ]
</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/her proxy by filing a subsequent proxy or notifying the
Secretary in writing of his/her decision to revoke his/her
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, 1997.
Dated: ________________, 1997
__________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ __________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this 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.
