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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
HORIZON FINANCIAL SERVICES CORPORATION
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
44041R 10 9
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(CUSIP Number)
Thomas L. Gillespie
301 First Avenue East, Oskaloosa, Iowa 52577 (515) 673-8328
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 27, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box __.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however,
see the Notes).<PAGE>
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SCHEDULE 13D
CUSIP No. 44041R 10 9
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Thomas L. Gillespie - ###-##-####
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) __
(b) X
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) __
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF 7. SOLE VOTING POWER
9,798 (see Item 5)
SHARES -----------------------------------------
8. SHARED VOTING POWER
BENEFICIALLY 12,722 (see Item 5)
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OWNED BY 9. SOLE DISPOSITIVE POWER
6,972 (see Item 5)
EACH REPORTING -----------------------------------------
10. SHARED DISPOSITIVE POWER
PERSON WITH 14,536 (see Item 5)
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,520 (see Item 5)
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES __
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
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14. TYPE OF REPORTING PERSON
IN
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Item 1. Security and Issuer
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The class of equity securities to which this statement
relates is the common stock, $.01 par value (the "Common Stock"),
of Horizon Financial Services Corporation (the "Company"),
Oskaloosa, Iowa, a savings bank holding company with its main
office located at 301 First Avenue East, Oskaloosa, Iowa 52577.
Item 2. Identity and Background
-----------------------
The name and address of the person filing this statement is
Thomas L. Gillespie, 301 First Avenue East, Oskaloosa, Iowa. Mr.
Gillespie is a director and the Vice-President of the Company and
its subsidiary Horizon Federal Savings Bank ("Horizon Federal")
at the address stated above. During the last five years, Mr.
Gillespie has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction which resulted in him being subject to
a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or
state securities laws or being found in violation with respect to
such laws.
Mr. Gillespie is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration
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On June 28, 1994, in connection with the Company's initial
public offering of Common Stock, Mr. Gillespie acquired 900
shares through his individual retirement account and 6,600 shares
held jointly with his wife. On the same date, Mr. Gillespie's
wife acquired, in her own name, 1,600 shares of Common Stock, as
well as 900 shares for her individual retirement account. The
foregoing purchases were made with personal funds for an
aggregate purchase price of $100,000. Mr. Gillespie's wife
subsequently acquired 3,622 shares of the Company's Common Stock
through inheritance on August 1, 1996.
In addition, on October 27, 1994, 2,530 shares of Common
Stock were awarded to Mr. Gillespie pursuant to the Company's
Recognition and Retention Plan (the "RRP"). One-Fifth, or 506,
of the shares of Common Stock covered by the award to Mr.
Gillespie vested on October 27, 1994, 1995 and 1996,
respectively, for a total of 1,518 shares, with the remaining
1,012 shares of Common Stock scheduled to vest in equal
installments on October 27, 1997 and 1998, subject to Mr.
Gillespie's continued service as an officer and/or director of
the Company. Such shares do not vest in any year in which the <PAGE>
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Company is not in compliance with all applicable regulatory
capital requirements. Mr. Gillespie was also granted as of
October 27, 1994, options to purchase 7,590 shares of Common
Stock pursuant to the Company's 1994 Stock Option and Incentive
Plan (the "Stock Option Plan"), of which options relating to
4,554 shares of Common Stock are vested. The remaining 3,036
options are scheduled to vest in equal installments on October
27, 1997 and 1998, subject to Mr. Gillespie's continued service
as an officer and/or director of the Company. Mr. Gillespie also
had 1,814 shares allocated to his account under Horizon
Financial's Employee Stock Ownership Plan (the "ESOP") as of
October 15, 1996. As a result, Mr. Gillespie owns in excess of
five percent of Horizon Financial Common Stock.
Item 4. Purpose of Transaction
----------------------
All of the shares purchased or otherwise acquired by Mr.
Gillespie were acquired for investment. Mr. Gillespie may, from
time to time, depending upon market conditions and other
investment considerations, purchase additional shares of the
Company for investment or dispose of shares of the Company. As a
director and Vice President the Company, Mr. Gillespie regularly
explores potential actions and transactions which may be
advantageous to the Company, including, but not limited to,
possible mergers, acquisitions, reorganizations or other material
changes in the business, corporate structure, management,
policies, governing instruments, capitalization, securities or
regulatory or reporting obligations of the Company.
Except as noted above, Mr. Gillespie has no plans or
proposals which relate to or would result in:
(a) the acquisition by any person of additional securities
of the Company, or the disposition of securities by the Company;
(b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or
any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of
the Company or any of its subsidiaries;
(d) any change in the present Board of Directors or
management of the Company, including any plans or proposals to
change the number or term of directors or to fill any existing
vacancies on the Board;
(e) any material change in the present capitalization or
dividend policy of the Company;
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(f) any other material change in the Company's business or
corporate structure;
(g) changes in the Company's articles of incorporation,
bylaws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Company by any
person;
(h) causing a class of securities of the Company to be
delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-quotation system of a
registered national securities association;
(i) a class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
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The aggregate number of shares of Common Stock beneficially
owned by Mr. Gillespie for the purpose of this statement is
22,520 shares representing 5.24% of the shares of Common Stock
outstanding on the date hereof. Such amount includes options
granted to Mr. Gillespie to purchase 4,554 shares of Common Stock
pursuant to the Stock Option Plan and includes 2,530 shares of
restricted stock awarded to Mr. Gillespie pursuant to the RRP.
Of the 22,520 shares owned beneficially by Mr. Gillespie, Mr.
Gillespie has: (1) sole voting and dispositive power with
respect to the 900 shares of Common Stock owned individually
through Mr. Gillespie's individual retirement account; (2)
shared voting and dispositive power with his wife with respect to
the 6,600 shares of Common Stock owned by them jointly and the
6,122 shares of Common Stock owned by his wife individually; (3)
sole voting and shared dispositive power with the trustees of the
ESOP with respect to 1,814 shares of Common Stock allocated to
Mr. Gillespie under the ESOP; (4) sole voting and dispositive
power with respect to the 1,518 shares of Common Stock vested
under the RRP; (5) sole voting but no dispositive power with
respect to the remaining 1,012 shares of unvested, restricted
Common Stock under the RRP; and (6) sole voting and dispositive
power with respect to vested options to purchase 4,554 shares of
Common Stock granted pursuant to the Stock Option Plan.
No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares held by Mr. Gillespie.
Not included in the above amount are options to purchase
3,036 shares of Common Stock granted to Mr. Gillespie pursuant to
the Stock Option Plan. These remaining options are scheduled to<PAGE>
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vest in equal amounts on October 27, 1997 and 1998, subject to
Mr. Gillespie's continued service as an officer and/or director
of the Company or the Bank. Therefore, on July 29, 1998, Mr.
Gillespie will be deemed to be the beneficial owner of 25,556
shares of Common Stock. Assuming the Company's aggregate number
of issued and outstanding shares of Common Stock remains at
425,540 shares (the number of issued and outstanding shares of
Common Stock as of the date of this filing exclusive of the
unvested options) and that there are no other changes in Mr.
Gillespie's beneficial ownership of Common Stock, then Mr.
Gillespie will beneficially own 5.90% of the Company's stock on
July 29, 1998.
Mr. Gillespie shares voting and dispositive power of certain
shares with his spouse, Martha A. Gillespie. Ms. Gillespie's
address is 512 2nd Avenue East, Oskaloosa, Iowa 52577. Ms.
Gillespie is an elementary school teacher. During the last five
years, Ms. Gillespie has not been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors), or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction which
resulted in him being subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or being
found in violation with respect to such laws. Ms. Gillespie is a
citizen of the United States of America.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to the Securities of the
Issuer
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There are no contracts, arrangements, understandings or
relationships (legal or otherwise) between Mr. Gillespie and any
other person with respect to any securities of the issuer,
including but not limited to, transfer or voting of any of such
securities, finder's fees, joint ventures, loan or option
arrangements, put or calls, guarantees of profits, divisions of
profits or loss, or the giving or withholding of proxies. None
of the Company Common Stock beneficially owned by Mr. Gillespie
is pledged or otherwise subject to a contingency the occurrence
of which would give another person voting power or investment
power over such shares.
Item 7. Material to be Filed as Exhibits
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None.<PAGE>
SIGNATURE
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After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
Statement is true, complete and correct.
Date: October 28, 1996 /s/ Thomas L. Gillespie
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Thomas L. Gillespie
