[GFSB BANCORP, INC. LETTERHEAD]
September 30, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of GFSB Bancorp,
Inc., (the "Company"), I cordially invite you to attend the Annual Meeting of
Stockholders to be held at the corporate office of the Company located at 221
West Aztec Avenue, Gallup, New Mexico, on October 24, 1997, at 10:00 a.m. The
attached Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the Annual Meeting. During the Annual Meeting, I
will also report on the operations of the Company. Directors and officers of the
Company will be present to respond to any questions stockholders may have.
The matters to be considered by stockholders at the Annual Meeting are
described in the accompanying Notice of Annual Meeting and Proxy Statement. The
Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID
RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from voting
in person at the Annual Meeting, but will ensure that your vote is counted if
you are unable to attend the Annual Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/Jerry R. Spurlin
Jerry R. Spurlin
President
GFSB Bancorp, Inc.
Gallup Federal Savings Bank
<PAGE>
GFSB BANCORP, INC.
221 WEST AZTEC AVENUE
GALLUP, NEW MEXICO 87301
(505) 722-4361
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 24, 1997
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of GFSB Bancorp, Inc. ("the Company"), will be held at the corporate
office of the Company located at 221 West Aztec Avenue, Gallup, New Mexico, on
October 24, 1997, 10:00 a.m. A proxy card and a proxy statement for the Meeting
are enclosed.
The Meeting is for the purpose of considering and acting upon the
following matters:
1. The election of three directors of the Company; and
2. The ratification of the appointment of Neff & Company LLP., as
independent auditors of the Company for the fiscal year ending
June 30, 1998.
The transaction of such other matters as may properly come before the
Meeting or any adjournments thereof may also be acted upon. 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, by original or later
adjournment, the Meeting may be adjourned. Stockholders of record at the close
of business on September 15, 1997 are the stockholders entitled to vote at the
Meeting and any adjournments thereof.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE
REVOKED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A
DULY EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING
MAY REVOKE HIS OR HER PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT BEFORE THE
MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN
YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO
VOTE IN PERSON AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/George S. Perce
George S. Perce
Secretary
Gallup, New Mexico
September 30, 1997
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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<PAGE>
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PROXY STATEMENT
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GFSB BANCORP, INC.
221 WEST AZTEC AVENUE
GALLUP, NEW MEXICO 87301
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ANNUAL MEETING OF STOCKHOLDERS
October 24, 1997
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of GFSB Bancorp, Inc. (the "Company") to be
used at the Annual Meeting of Stockholders of the Company which will be held at
the corporate office of the Company located at 221 West Aztec Avenue, Gallup,
New Mexico, on October 24, 1997, 10:00 a.m. local time (the "Meeting"). The
accompanying Notice of Meeting and this Proxy Statement are being first mailed
to stockholders on or about September 30, 1997. The Company is the sole
stockholder of Gallup Federal Savings Bank (the "Bank").
At the Meeting, stockholders will consider and vote upon (i) the
election of three directors and (ii) the ratification of the appointment of Neff
& Company LLP., as independent auditors of the Company for the fiscal year
ending June 30, 1998. The Board of Directors of the Company (the "Board" or the
"Board of Directors") knows of no additional matters that will be presented for
consideration at the Meeting. Execution of a proxy, however, confers on the
designated proxy holder discretionary authority to vote the shares represented
by such proxy in accordance with their best judgment on such other business, if
any, that may properly come before the Meeting or any adjournment thereof.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or by the filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors will be voted in
accordance with the directions given therein. Where no instructions are
indicated, signed proxies will be voted "FOR" the nominees for directors set
forth below and "FOR" the other listed proposal. The proxy confers discretionary
authority on the persons named therein to vote with respect to the election of
any person as a director where the nominee is unable to serve, or for good cause
will not serve, and matters incident to the conduct of the Meeting.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on September 15,
1997 (the "Record Date"), are entitled to one vote for each share of common
stock of the Company (the "Common Stock") held on the Record Date. As of the
Record Date, the Company had 800,708 shares of Common Stock issued and
outstanding.
<PAGE>
The certificate of incorporation of the Company ("Certificate of
Incorporation") provides that in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially owns in excess of 10% of the then outstanding shares
of Common Stock (the "Limit") be entitled or permitted to any vote with respect
to the shares held in excess of the Limit. Beneficial ownership is determined
pursuant to the definition in the Certificate of Incorporation and includes
shares beneficially owned by such person or any of his or her affiliates or
associates (as such terms are defined in the Certificate of Incorporation),
shares which such person or his or her affiliates or associates have the right
to acquire upon the exercise of conversion rights or options and shares as to
which such person and his or her affiliates or associates have or share
investment or voting power, but shall not include shares beneficially owned by
any employee stock ownership plan or similar plan of the issuer or any
subsidiary.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting. With respect to any matter, any shares for which a broker indicates on
the proxy that it does not have discretionary authority as to such shares to
vote on such matter (the "Broker Non-Votes") will not be considered present for
purposes of determining whether a quorum is present. In the event there are not
sufficient votes for a quorum or to ratify any proposals at the time of the
Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy being provided by the Board
enables a stockholder to vote for the election of the nominees proposed by the
Board, or to withhold authority to vote for one or more of the nominees being
proposed. Directors are elected by a plurality of the votes of the shares
present in person or represented by proxy at a meeting and entitled to vote in
the election of directors.
As to the ratification of independent auditors, by checking the
appropriate box, a stockholder may: vote "FOR" the item, (ii) vote "AGAINST" the
item, or (iii) vote to "ABSTAIN" on such item. Under the Company's Certificate
of Incorporation and Bylaws, unless otherwise required by law, all other matters
shall be determined by a majority of votes cast affirmatively or negatively
without regard to (a) Broker Non-Votes or (b) proxies marked "ABSTAIN" as to
that matter.
Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The following
table sets forth, as of the Record Date, persons or groups who own more than 5%
of the Common Stock and the ownership of all executive officers and directors of
the Company as a group. Other than as noted below, management knows of no person
or group that owns more than 5% of the outstanding shares of Common Stock at the
Record Date.
-2-
<PAGE>
<TABLE>
<CAPTION>
Percent of Shares of
Amount and Nature of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- --------------------
<S> <C> <C>
Gallup Federal Savings Bank Employee Stock 56,000(1) 7.00%
Ownership Plan
221 West Aztec Avenue, Gallup, New Mexico
Kennedy Capital Management, Inc. 54,500(2) 6.81%
10829 Olive Boulevard
St. Louis, Missouri 63141-7739
Charles L. Parker, Jr. 41,138 5.14%
221 West Aztec Avenue
Gallup, New Mexico
George S. Perce 41,363 5.17%
221 West Aztec Avenue
Gallup, New Mexico
Richard C. Kauzlaric 43,138 5.39%
221 West Aztec Avenue
Gallup, New Mexico
Vernon I. Hamilton 41,138 5.14%
221 West Aztec Avenue
Gallup, New Mexico
All Directors and Executive Officers as a Group 243,157(1)(3) 30.00%
(10 persons)
</TABLE>
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(1) The ESOP purchased such shares for the exclusive benefit of ESOP
participants with funds borrowed from the Company. These shares are
held in a suspense account and will be allocated among ESOP
participants annually on the basis of compensation as the ESOP debt is
repaid. The ESOP Trustee must vote all shares allocated to participant
accounts under the ESOP as directed by participants. Unallocated shares
and shares for which no timely voting directors is received will be
voted by the ESOP Trustee as directed by the ESOP Committee. As of the
Record Date, 7,491 shares have been allocated under the ESOP to
participant accounts.
(2) Information concerning this beneficial owner is based on a schedule 13G
filed, on February 10, 1997, by Kennedy Capital Management, Inc. This
beneficial owner maintains sole voting and dispositive power over the
entire 54,500 shares of Common Stock reported.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which
shares the individuals effectively exercise sole voting and investment
power, unless otherwise indicated. Excludes 33,875 shares held by the
Gallup Federal Savings Bank Management Stock Bonus Plan (the
"Management Stock Bonus Plan" or "MSBP"). Trustees of the MSBP disclaim
beneficial ownership with respect to such shares held in a fiduciary
capacity. Includes 3,908 shares of Common Stock allocated to executive
officers under the ESOP which such individuals maintain shared voting
and investment power over. Excludes 48,509 unallocated shares of Common
Stock held under the ESOP for which certain individuals in the group
serve as a member of the ESOP Committee or as ESOP Trustee. Such
individuals disclaim beneficial ownership with respect to such shares
held in a fiduciary capacity.
-3-
<PAGE>
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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The Common Stock of the Company is registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934 ("Exchange Act"). The executive officers
and directors of the Company and beneficial owners of greater than 10% of the
Company's Common Stock ("10% beneficial owners") are required to file reports on
Forms 3, 4, and 5 with the Securities and Exchange Commission ("SEC") disclosing
changes in beneficial ownership of the Common Stock. Mr. Jerry R. Spurlin filed
a Form 5 in September 1997 for a transaction that was required to be reported by
August 14, 1997. Mr. Richard C. Kauzlaric filed a Form 4 in December 1996 for a
transaction that was required to be reported by November 10, 1996. Except as
otherwise noted above, and based solely on the Company's review of Forms 3, 4,
and 5 filed by officers, directors and 10% beneficial owner of Common Stock, no
executive officer, director or 10% beneficial owner of Common Stock failed to
file such ownership reports on a timely basis during the fiscal year ended June
30, 1997.
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PROPOSAL I - ELECTION OF DIRECTORS
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The Certificate of Incorporation requires that the Board of Directors
be divided into three classes, each of which contains approximately one-third of
the members of the Board. The directors are elected by the stockholders of the
Company for staggered three-year terms, or until their successors are elected
and qualified. One class of directors, consisting of George S. Perce, Michael P.
Mataya, and Charles L. Parker, has a term of office expiring on the date of the
Meeting. A second class, consisting of Wallace R. Phillips, and Richard C.
Kauzlaric, has a term of office expiring at the annual meeting of stockholders
to be held in 1998. A third class, consisting of Vernon I. Hamilton and James
Nechero, Jr., has a term of office expiring at the annual meeting of
stockholders to be held in 1999. The Board of Directors currently consists of
seven members. Three directors will be elected at the Meeting to serve for
three-year terms or until a successor has been elected and qualified.
George S. Perce, Michael P. Mataya, and Charles L. Parker have been
nominated by the Board of Directors to serve as directors for three-year terms
to expire in 2000. The nominees are currently members of the Board. It is
intended that the persons named in the proxies solicited by the Board will vote
for the election of the named nominees. If a nominee is unable to serve, the
shares represented by all valid proxies will be voted for the election of such
substitute as the Board of Directors may recommend or the size of the Board may
be reduced to eliminate the vacancy. At this time, the Board knows of no reason
why either nominee might be unavailable to serve.
The following table sets forth the nominees and the directors
continuing in office, their name, age, the year they first became a director of
the Company or the Bank, the expiration date of their current term as a
director, and the number and percentage of the Common Stock beneficially owned.
Each director of the Company is also presently a member of the Board of
Directors of the Bank. The following table also sets forth the name, age, and
the number and percentage of the Common Stock beneficially owned by the
Company's and the Bank's executive officers.
-4-
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Year First Current Stock
Elected or Term to Beneficially Percent
Name and Position(s)(1) Age(2) Appointed(3) Expire Owned(4) of Class
- ----------------------- ------ ------------ ------ -------- --------
BOARD NOMINEES FOR TERM TO EXPIRE IN 2000
<S> <C> <C> <C> <C> <C>
Michael P. Mataya, Director 47 1994 1997 11,138(5)(16) 1.39%
Charles L. Parker, Jr., Director and 35 1994 1997 41,138(6)(7)(16) 5.14%
Treasurer of the Company
George S. Perce, Director and Secretary 58 1990 1997 41,363(7)(8)(16) 5.17%
of the Company, and Director, Treasurer
and Secretary of the Bank
DIRECTORS CONTINUING IN OFFICE
Wallace R. Phillips, D.D.S., Director 75 1971 1998 15,506(7)(9)(16) 1.94%
and Chairman of the Board of the
Company
Richard C. Kauzlaric, Director and 59 1983 1998 43,138(10)(16) 5.39%
Vice-Chairman of the Board of the
Company and Chairman of the Board of
the Bank
James Nechero, Jr., Director and 63 1976 1999 31,073(11)(16) 3.88%
Assistant Secretary of the Company and
Vice Chairman of the Board of the Bank
Vernon I. Hamilton, Director 67 1990 1996 41,138(12)(16) 5.14%
EXECUTIVE OFFICERS
Jerry R. Spurlin, President of the 55 11,183(13) 1.40%
Company and Bank and Director of the
Bank
Marshall W. Coker, Chief 40 1,160(14) *%
Administrative Officer
William W. Head, Jr., Chief Lending 57 6,320(15) *%
Officer of the Bank
Total shares owned by directors and 243,157 30.00%
executive officers (10 persons)
</TABLE>
(footnotes to table appear on following page)
-5-
<PAGE>
(footnotes to table on prior page)
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* Less than 1.0%.
(1) Unless otherwise indicated, individual serves in the disclosed position for
both the Company and the Bank.
(2) At June 30, 1997.
(3) Refers to the year the individual first became a director of the Company or
the Bank. All directors of the Bank, except Mr. Spurlin, became directors
of the Company when it was incorporated in March 1995.
(4) For the purposes of this table, pursuant to rules promulgated under the
1934 Act, an individual is considered to beneficially own shares of Common
Stock if he or she directly or indirectly has or shares (1) voting power,
which includes the power to vote or to direct the voting of the shares; or
(2) investment power, which includes the power to dispose or to direct the
disposition of the shares. Unless otherwise indicated, a director has sole
voting power and sole investment power with respect to the indicated
shares.
(5) Includes 9,832 shares held in a revocable trust for which Mr. Mataya is
trustee and 493 shares held by Mr. Mataya's son in an IRA, which Mr. Mataya
is deemed to beneficially own because he indirectly shares voting and
investment power over such shares. Also includes 813 shares of Common Stock
that may be acquired pursuant to the exercise of stock options.
(6) Includes 20,000 shares owned by Mr. Parker's wife, which Mr. Parker is
deemed to beneficially own because he indirectly shares voting and
investment power over such shares. Also includes 813 shares of Common Stock
that may be acquired pursuant to the exercise of stock options.
(7) Excludes 48,509 unallocated shares of Common Stock held under the ESOP for
which such individual serves as either an ESOP Trustee or as a member of
the ESOP Committee. Beneficial ownership is disclaimed with respect to such
ESOP shares held in a fiduciary capacity.
(8) Includes 2,211 shares held by Mr. Perce's IRA, 8,034 shares held pursuant
to a defined benefit plan trust, 17,913 shares owned by Mr. Perce's wife
and 2,199 shares held by Mr. Perce's wife in an IRA, which Mr. Perce is
deemed to beneficially own because he indirectly shares voting and
investment power over such shares. Also includes 813 shares of Common Stock
that may be acquired pursuant to the exercise of stock options.
(9) Includes 983 shares held by Dr. Phillips in an IRA and 3,385 shares held by
Dr. Phillips' wife in an IRA, which Dr. Phillips is deemed to beneficially
own because he indirectly shares voting and investment power over such
shares. Also includes 813 shares of Common Stock that may be acquired
pursuant to the exercise of stock options.
(10) Includes 36,235 shares held in a revocable trust for which Mr. Kauzlaric
serves as trustee, 4,023 shares held in Mr. Kauzlaric's IRA and 2,067
shares held by Mr. Kauzlaric's wife in an IRA, all of which Mr. Kauzlaric
is deemed to beneficially own because he indirectly shares voting and
investment power over such shares. Also includes 813 shares of Common Stock
that may be acquired pursuant to the exercise of stock options.
(11) Includes 6,000 shares held by Mr. Nechero's IRA and 10,000 shares held by
Mr. Nechero's son, which Mr. Nechero is deemed to beneficially own because
he indirectly shares voting and investment power over such shares. Also
includes 813 shares of Common Stock that may be acquired pursuant to the
exercise of stock options.
(12) Includes 16,126 shares held by Mr. Hamilton in an IRA, 3,874 shares held by
Mr. Hamilton's wife in an IRA and 20,000 shares owned by Vernon Hamilton
Construction Company, which Mr. Hamilton is deemed to beneficially own
because he indirectly shares voting and investment power over such shares.
Also includes 813 shares of Common Stock that may be acquired pursuant to
the exercise of stock options.
(13) Includes 25 shares owned by Mr. Spurlin's wife, 1,635 shares held in Mr.
Spurlin's IRA, 2,682 shares allocated to Mr. Spurlin's account under the
ESOP, which Mr. Spurlin is deemed to beneficially own because he indirectly
shares voting and investment power over such shares. Also includes 1,140
shares of Common Stock that may be acquired pursuant to the exercise of
stock options.
(14) Includes 950 shares of Common Stock that may be acquired pursuant to the
exercise of stock options.
(15) Includes 4,970 shares held in Mr. Head's IRA, which Mr. Head is deemed to
beneficially own because he indirectly shares voting and investment power
over such shares. Also includes 950 shares of Common Stock that may be
acquired pursuant to the exercise of stock options.
(16) Excludes 33,875 shares held under the MSBP for which all members of the
Board of Directors serve as trustee and maintain shared voting and
dispositive power over such shares.
-6-
<PAGE>
Biographical Information on Directors and Executive Officers
Set forth below is certain information with respect to the directors of
the Company. All directors have held their present positions for five years
unless otherwise stated.
Wallace R. Phillips, D.D.S. is Chairman of the Board of Directors of
the Company and has served as Director of the Bank since 1971. Dr. Phillips is a
retired dentist. He currently serves as Commissioner of the Gallup Municipal
Airport.
James Nechero, Jr. serves as Assistant Secretary of the Company and has
served as a Director of the Bank since 1976 and became the Vice-Chairman of the
Board of Directors of the Bank in 1989. Mr. Nechero is the President of Eagle
Energy, Inc., a real estate investment company and is a member of the New Mexico
Amigos.
Richard C. Kauzlaric has served as Chairman of the Board of Directors
of the Bank since 1989 and as a Director since 1983. He is Vice-Chairman of the
Board of Directors of the Company. Mr. Kauzlaric is President of Bubany
Insurance Agency, Inc. He is President of Western New Mexico Gallup Foundation,
past Regent of Western New Mexico University, Past President of New Mexico
Amigos, and a sustaining member of the Amigos. Mr. Kauzlaric has been
instrumental in the redevelopment of downtown Gallup.
George S. Perce currently serves as Secretary of the Company and has
served as Director of the Bank since 1990 and has been its Secretary and
Treasurer for four years. Mr. Perce is the owner of Perce Engineering, a
professional engineering and surveying company, and Perce Farms of Deming, a
producing pecan grove.
Vernon I. Hamilton has served as Director of the Bank since 1990. Mr.
Hamilton is President of V.I. Hamilton Construction Co., Inc. Mr. Hamilton is a
member of the United Methodist Church, Elks, BPOE, the Masons, and the Community
Concert Association.
Charles L. Parker, Jr. serves as Treasurer of the Company and was
elected Director of the Bank in August of 1994. Mr. Parker is President of
Sanders Trading Corp. and Twin Lakes Trading Corp., and he is an employee of
Thriftway Marketing Corp. Mr. Parker is currently a member of the New Mexico
Amigos.
Michael P. Mataya was elected Director of the Bank in August of 1994.
Mr. Mataya is President and Chief Executive Officer of Indian Capital
Distributing Co., a wholesale gasoline marketer. Mr. Mataya is President of the
Gallup Shrine Club, a member of the Royal Order of Jesters and Director of the
New Mexico Petroleum Marketers Association.
Jerry R. Spurlin has been with the Bank since September of 1990 and has
served as President since February 1991. Mr. Spurlin was elected Director of the
Bank in March of 1995. Previously, he was an Executive Vice President, Senior
Vice President and Vice President at a financial institution in Alamogordo, New
Mexico. He has served twice as President of the Gallup-McKinley County Chamber
of Commerce, and is the Chairman of the Administrative Council for the First
United Methodist Church of Gallup. Mr. Spurlin is Secretary/ Treasurer of New
Mexico Western University Gallup Foundation, a former director of the Gallup
Downtown Development Group and President Elect of the Gallup Rotary Club. He is
a director of the Navajo Partnership for Housing.
-7-
<PAGE>
William W. Head, Jr. joined the Bank as Chief Lending Officer on
November 1, 1995. Prior to that, Mr. Head was a lawyer in private practice for
30 years, with emphasis the last 20 years in banking, commercial, real estate
and probate law. He has been a member of the Board of Directors and President of
the Inter-Tribal Indian Ceremonial Association. He is a director of the Housing
Authority of the City of Gallup.
Marshall W. Coker has been with the Bank since October of 1995 as Chief
Administrative Officer. Previously, Mr. Coker was a Vice President and an
Assistant Vice President at a financial institution in Albuquerque, New Mexico.
Prior to Mr. Coker's experience at New Mexico financial institutions, he worked
for the Office of Thrift Supervision as an Examiner and a Corporate Analyst.
While with the Office of Thrift Supervision, Mr. Coker earned the distinction as
a Federal Thrift Regulator. He is a member of the First Baptist Church of Gallup
and the Kiwanis Club of Gallup.
Meetings and Committees of the Board of Directors
The Board of Directors of the Company conducts its business through
meetings of the Board and through activities of its committees. All committees
act for both the Company and the Bank. During the fiscal year ended June 30,
1997, the Board of Directors of the Company held 6 regular meetings and 7
special meetings and the Board of Directors of the Bank held 12 regular meetings
and 12 special meetings. With the exception of Director Mataya, no director
attended fewer than 75% of the aggregate of: (1) the total meetings of the Board
of Directors of the Bank and the Company and (2) the total number of meetings
held by all committees on which such director served during the fiscal year
ended June 30, 1997.
The Company's full Board of Directors acts as a non-standing nominating
committee ("Nominating Committee") for selecting the management nominees for
election of directors in accordance with the Company's Bylaws. In its
deliberations, the Nominating Committee considers the candidate's knowledge of
the banking business and involvement in community, business, and civic affairs.
While the Board of Directors will consider nominees recommended by stockholders,
it has not actively solicited recommendations from the Company's stockholders
for nominees nor, subject to the procedural requirements set forth in the
Company's Certificate of Incorporation and Bylaws, established any procedures
for this purpose. During the fiscal year ended June 30, 1997, the Board of
Directors met once as the Nominating Committee.
The Executive Committee of the Bank consists of Directors Kauzlaric,
Nechero, Perce and Spurlin. The Executive Committee met 21 times during the
fiscal year ended June 30, 1997 and exercises the powers of the Board of
Directors between meetings of the Board of Directors.
The Personnel and Compensation Committee of the Bank, a standing
committee, consists of Directors Parker, Perce, Phillips, and Spurlin. The
Personnel and Compensation Committee meets as needed to review all personnel
matters. As a member of the Personnel and Compensation Committee, Mr. Spurlin
does not act on matters related to his compensation. The Personnel and
Compensation Committee met three times during the fiscal year ended June 30,
1997.
The Audit/Investment Committee of the Bank, a standing committee, is
comprised of Messrs. Parker, Kauzlaric, Nechero and Spurlin. The
Audit/Investment Committee meets monthly to select independent auditors and to
review audit reports. The Audit/Investment Committee further meets to review and
approve internal controls for financial reporting. The Audit/Investment
Committee met 12 times during the fiscal year ended June 30, 1997.
-8-
<PAGE>
Stockholder Nominations
Pursuant to the Company's Certificate of Incorporation, nominations,
other than those made by or at the direction of the Board of Directors, shall be
made pursuant to timely notice in writing to the Secretary of the Company as set
forth in the Company's Certificate of Incorporation. To be timely, a
stockholder's notice shall be delivered to, or mailed and received at, the
principal executive offices of the Company not less than 60 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders of
the Company.
Such stockholder's notice shall set forth all the information required
by the Company's Certificate of Incorporation. At the request of the Board of
Directors, any person nominated by, or at the direction of, the Board for
election as a director at an annual meeting shall furnish to the Secretary of
the Company that information required to be set forth in a stockholder's notice
of nomination which pertains to the nominee. The Board of Directors may reject
any nomination by a stockholder not timely made in accordance with the
requirements of the Certificate of Incorporation. If the presiding officer at
the meeting determines that a nomination was not made in accordance with the
terms of the Certificate of Incorporation, he shall so declare at the annual
meeting and the defective nomination shall be disregarded.
Director Compensation
Each member of the Board of Directors of the Company receives an annual
retainer of $1,200 plus $100 per regular or special board meeting attended. Each
member of the Board of Directors of the Bank who attends a minimum of ten
regular meetings receives an annual fee of $12,000. The Chairman of the Board of
the Bank receives an additional fee of $3,000. Committee members receive fees of
$100 per meeting attended. Three former directors receive Advisory Director fees
of $250 per month. No Board or Committee fees are paid to Board members who are
also employees. During the fiscal year ended June 30, 1997, the Company paid a
total of $122,950 in director fees.
Stock Awards. On January 5, 1996, the stockholders of the Company
approved the GFSB Bancorp, Inc. 1995 Stock Option Plan ("1995 Stock Option
Plan") and the Gallup Federal Savings Bank Management Stock Bonus Plan
("Management Stock Bonus Plan"). Directors Phillips, Kauzlaric, Nechero,
Hamilton, Mataya, Parker, and Perce, received (as of the date of stockholder
approval) options to purchase 4,066 shares of Common Stock under the 1995 Stock
Option Plan and 1,626 shares of restricted stock under the Management Stock
Bonus Plan. The options granted to these directors will be first exercisable at
a rate of 20% one year from the date of grant and 20% annually thereafter.
Similarly, restricted stock granted to the above named directors will vest 20%
one year from the date of grant and 20% annually thereafter.
Executive Compensation
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the President of the Company for
the fiscal years provided below. No executive officer of the Company or the Bank
had a salary and bonus during the year ended June 30, 1997 that exceeded
$100,000 for services rendered in all capacities to the Company and the Bank.
-9-
<PAGE>
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
--------------------------------------- --------------------------------------------------
Securities
Restricted Underlying
Name and Other Annual Stock Options/ All Other
Principal Position Year Salary Bonus Compensation(1) Awards($)(2) SARs(#) Compensation
- ------------------- ------ ------ ----- --------------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerry R. Spurlin 1997 $ 66,833 $ 0 $6,000 $ -- -- $37,302(4)
President 1996 $ 65,032 $ 0 $6,000 $41,625 (3) 5,700 $12,994(5)
1995 $ 64,097 $15,000 $6,000 0 0 $ 5,221(6)
</TABLE>
- --------------------
(1) Represents annual automobile allowance. Except as otherwise disclosed,
there were no (a) perquisites over the lesser of $50,000 or 10% of any
of the Named Executive Officer's total salary and bonus for the year;
(b) payments of above-market preferential earnings on deferred
compensation; (c) payments of earnings with respect to long-term
incentive plans prior to settlement or maturation; (d) tax payment
reimbursements; or (e) preferential discounts on stock.
(2) At June 30, 1997, Mr. Spurlin had 2,400 shares of restricted stock in
the aggregate which had a total value of $45,600 (calculated by
multiplying the aggregate number of restricted stock by the Common
Stock's closing market price as of the last day of the fiscal year).
Dividends will be paid on the restricted stock awarded.
(3) The value of restricted stock granted is calculated by multiplying (i)
the number of restricted stock granted by (ii) the Common Stock's
closing market price as of the date of grant.
(4) Includes $1,582 of health and life insurance paid on behalf of Mr.
Spurlin and an allocation of 1,880 shares of Common Stock under the
Bank's ESOP for fiscal year 1997, valued at $35,720 (based upon the
Common Stock's closing market price of $19.00 on June 30, 1997).
(5) Includes $1,582 of health and life insurance paid on behalf of Mr.
Spurlin, and an allocation of 801 shares of Common Stock under the
Bank's ESOP for fiscal year 1996, valued at $11,412 (based upon the
Common Stock's closing market price of $14.25 on June 30, 1996).
(6) Consists of approximately $3,591 of contributions by the Company to the
Company's tax-qualified defined contribution plan on behalf of Mr.
Spurlin and $1,631 of health and life insurance premiums paid on behalf
of Mr. Spurlin.
Other Benefits
1995 Stock Option Plan
The purpose of the 1995 Stock Option Plan is to provide additional
incentive to certain officers, directors, and key employees by facilitating
their purchase of a stock interest in the Company. The 1995 Stock Option Plan
became effective on January 5, 1996 and provides for a term of ten years, after
which no awards may be made, unless earlier terminated by the Board of Directors
pursuant to the terms of the 1995 Stock Option Plan.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End
Exercise Realized (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------- ------------------- --------------- ----------------------------- --------------------------------
<S> <C> <C> <C> <C>
Jerry R. Spurlin 0 $0 1,140 / 4,560 $5,843 / $23,370 (1)
</TABLE>
- ---------------
(1) Based upon an exercise price of $13.875 per share versus a closing price of
$19.00 at June 30, 1997.
-10-
<PAGE>
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
The Bank, like many financial institutions has followed a policy of
granting various types of loans to officers, directors, and employees. Such
loans have been made in the ordinary course of business and on substantially the
same terms including collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of collectibility, nor present other unfavorable features. In addition
loans made to a director or executive officer in excess of the greater of
$25,000 or 5% of the Bank's capital and surplus (up to a maximum of $500,000)
must be approved in advance by a majority of the disinterested members of the
Board of Directors. However, as part of the Bank's compensation program, the
Bank sets the interest rate for loans approved for full-time employees, officers
and directors for personal, non-business purposes at a rate which is 1% lower
than the rate for non-employees for the same type of loan, as long as the
resulting interest rate is not lower than the Bank's cost of funds. Such rates
are only effective while such persons are employees, officers, or directors of
the Bank.
As of June 30, 1997, the Bank's directors and executive officers had
loans outstanding from the Bank with current balances of $922,282 in the
aggregate or approximately 14.0% of retained earnings. All such loans were made
in the ordinary course of business and do not have favorable terms nor involve
more than the normal risk of collectibility or present unfavorable features.
Except as noted below, no directors or executive officers were engaged
in transactions with the Bank or any subsidiary involving more than $60,000
during the fiscal year ended June 30, 1997. Furthermore, the Bank had no
"interlocking" relationships existing on or after June 30, 1997 in which (1) any
executive officer is a member of the Board of Directors/Trustees of another
entity, one of whose executive officers is a member of the Bank's Board of
Directors, or where (ii) any executive officer is a member of the compensation
committee of another entity, one of whose executive officers is a member of the
Bank's Board of Directors.
-11-
<PAGE>
Set forth below is certain information as of June 30, 1997, relating to
loans given to executive officers and directors who had aggregate outstanding
loan balances with the Bank of $60,000 or greater.
<TABLE>
<CAPTION>
Prevailing
Original Interest Rate at Unpaid
Name of Officer of Date Loan Rate Time of Employee Balance
Director Type of Loan Originated Amount On Note Loan Rate 06/30/97
---------- ---------------------- ----------- ------- --------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
James Nechero, Jr. Home Mortgage 09/16/93 $50,000 6.75% 6.75% 6.75% $31,693
Nechero Ltd. Co. Equip. Lease/Purch. 01/12/95 $202,649 11.30% 11.30% 11.30% $146,879
Nechero Ltd. Co. Equip. Lease/Purch. 05/01/95 $26,886 11.32% 11.32% 11.32% $20,606
Michael P. Mataya 02/20/92 $125,000 8.00% 8.00% 7.00% $104,913
Revocable Trust Home Mortgage
Michael Mataya Automobile 01/29/97 $25,000 10.00% 10.00% 10.00% $25,000
Jerry R. Spurlin Automobile 07/03/95 $22,393 8.95% 8.95% 8.50% $14,997
Jerry R. Spurlin Home Mortgage 12/03/93 $121,500 6.75% 6.75% 6.50% $103,235
Jerry R. Spurlin Home Equity LOC 04/23/97 $17,000 7.75%(1) 7.75%(1) 6.75%(1) $14,900
Marshall W. Coker Home Mortgage 02/12/96 $122,250 7.25% 7.25% 6.50% $120,670
Marshall W. Coker CD Secured 04/30/97 $30,506 7.50% 7.50% 6.50% $30,506
William W. Head Automobile 03/04/96 $19,737 9.00% 9.00% 8.00% $14,263
William W. Head Home Mortgage 01/26/95 $95,000 7.00% 7.00% 6.50% $86,633
William W. Head Home Equity LOC 06/25/97 $25,000 7.75% (1) 7.75%(1) 6.75%(1) $5,976
</TABLE>
- ---------------
(1) The Bank offers to the public a Hometown Advantage Home Equity Line of
Credit at an initial fixed rate of 7.75% for the first six months. At
the end of six months the rate converts to a variable rate 1.5% over
the Wall Street Journal Prime. Therefore the rate on these two loans
will convert to a variable rate 0.5% over the Wall Street Journal Prime
six months after they were opened.
- --------------------------------------------------------------------------------
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
On March 12, 1997, the board of directors of the Company determined to
engage Neff & Company LLP. as its independent auditors for the fiscal year ended
June 30, 1998. On March 12, 1997, the Company orally notified Atkinson & Co.,
Ltd. ("Atkinson"), its independent auditors for the fiscal year ended June 30,
1997 and for the fiscal years ended June 30, 1996 and 1995, of this
determination and that Atkinson would not be engaged for the fiscal year ending
June 30, 1998 but that Atkinson remained engaged for the fiscal year ended June
30, 1997 and that the Company expected that Atkinson would issue a report for
the fiscal year ended June 30, 1997. The determination to replace Atkinson was
recommended by the audit committee and approved by the full board of directors
of the Company.
The report of Atkinson for the fiscal years ended June 30, 1995 and
1996 contained no adverse opinion or disclaimer of opinion and was not qualified
or modified as to uncertainty, audit scope or accounting principles. During the
fiscal years ended June 30, 1995 and 1996 and during the period from June 30,
1996 to March 12, 1997, there were no disagreements between the Company and
Atkinson concerning accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
The Board of Directors has approved the selection of Neff & Company
LLP., as its auditors for the fiscal year ending June 30, 1998, subject to
ratification by the Company's stockholders. No
-12-
<PAGE>
representatives from Atkinson or Neff & Company LLP. will be attending the
Meeting and as a result, such representatives will not be available to make a
statement or answer questions at the Meeting. Ratification of the appointment of
the auditors requires the approval of a majority of the votes cast on this
matter by the stockholders of the Company at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF NEFF & COMPANY LLP., AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1998.
- --------------------------------------------------------------------------------
ANNUAL REPORTS AND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Company for its fiscal year
ended June 30, 1997, prepared in conformity with generally accepted accounting
principles, are included in the Company's 1997 Annual Report to Stockholders,
which accompanies this Proxy Statement. An additional copy of the Company's 1997
Annual Report to Stockholders may be obtained by writing to the Secretary of the
Company. The Annual Report is not to be treated as a part of the Company's proxy
solicitation materials or as having been incorporated herein by reference.
Upon written request, the Company will furnish to any stockholder
without charge a copy of the Company's Annual Report on Form 10-KSB filed with
the Securities and Exchange Commission under the Securities Exchange Act of 1934
for the year ended June 30, 1997. Upon written request and a payment of a
copying charge, the Company also will furnish to any such stockholder a copy of
the exhibits to the Annual Report on Form 10-KSB. All written requests should be
directed to the Secretary, GFSB Bancorp, Inc., 221 West Aztec Avenue, Gallup,
New Mexico 87301.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the persons named in the accompanying proxy.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be considered for inclusion in the Company's proxy
materials for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the Company's
executive offices at 221 West Aztec Avenue, Gallup, New Mexico 87301, no later
than June 1, 1998. Any such proposals shall be subject to the requirements of
the proxy rules adopted under the 1934 Act. It is urged that any such proposals
be sent certified mail, return receipt requested.
-13-
<PAGE>
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting 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 solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
BY ORDER OF THE BOARD OF DIRECTORS
/s/George S. Perce
George S. Perce
Secretary
Gallup, New Mexico
September 30, 1997
-14-
<PAGE>
[__] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE GFSB BANCORP, INC.
- -------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
October 24, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
With- For All
For hold Except
The undersigned hereby appoints the Board of Directors of GFSB 1. The election as director of all [__] [__] [__]
Bancorp, Inc. ("Company"), or its designee, with full powers of all nominees listed below, each
substitution, to act as attorneys and proxies for the undersigned, for a three year term (except
to vote all shares of Common Stock of the Company which the undersigned as marked to the contrary:
is entitled to vote at the 1997 Annual Meeting of Stockholders
("Meeting"), to be held at the corporate offices of the Company George S. Perce
located at 221 West Aztec Avenue, Gallup, New Mexico on October 24, Michael P. Mataya
1997, at 10:00 a.m. and at any and all adjournments thereof, in the Charles L. Parker, Jr.
following manner:
INSTRUCTION: To withhold authority to vote for any
individual nominee, mark "For All Except" and write
that nominee's name in the space provided brlow.
---------------------------------------------------------
For Against Abstain
2. The ratification of the [__] [__] [__]
appointment of Neff &
Company LLP as independent
auditors of GFSB Bancorp, Inc.,
for the fiscal year
ending June 30, 1998.
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING [__]
In their discretion, such attorneys and proxies are
authorized to vote any other business that may properly
come before the Meeting or any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE
ABOVE LISTED PROPOSITIONS.
Please be sure to sign and date | Date | Please sign exactly as your name appears on this proxy.
This Proxy in the box below. | | When signing as attorney, executor, administrator,
_______ | | trustee or guardian, please give your full title. If
| | shares are held jointly, each holder should sign.
| |
|_______Stockholder sign above______Co-holder (if any) sign above_____| THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
</TABLE>
- --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
GFSB BANCORP, INC.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
Should the undersigned be present and elect to vote at the Meeting, or at
any adjournments thereof, and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, the power
of said attorneys and proxies shall be deemed terminated and of no further force
and effect. The above-signed may also revoke this proxy by filing a subsequently
dated proxy or by notifying the Secretary of the Company of his or her decision
to terminate this proxy.
The above-signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting and a proxy statement
dated September 30, 1997.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
GFSB Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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. (set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] 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:
- --------------------------------------------------------------------------------
