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.
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[GFSB BANCORP, INC. LETTERHEAD]
October 14, 1998
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 Gallup Federal Savings Bank's new Loan Center located
at 214 West Aztec Avenue, Gallup, New Mexico, on November 9, 1998, at 10:00 a.m.
(the "Meeting"). The attached Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the Meeting. During the
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 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 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 Meeting, but will ensure that your vote is counted if you are
unable to attend the Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/Jerry R. Spurlin
------------------------------
Jerry R. Spurlin
President
GFSB Bancorp, Inc.
<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 NOVEMBER 9, 1998
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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 Gallup Federal
Savings Bank's new Loan Center located at 214 West Aztec Avenue, Gallup, New
Mexico, on November 9, 1998 at 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 two 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, 1999.
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, 1998 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
October 14, 1998
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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
November 9, 1998
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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
Gallup Federal Savings Bank's new Loan Center located at 214 West Aztec Avenue,
Gallup, New Mexico, on November 9, 1998 at 10:00 a.m. local time (the
"Meeting"). The accompanying notice of the Meeting and this Proxy Statement are
being first mailed to stockholders on or about October 14, 1998. 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 two 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, 1999. 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.
The Company issued a 50% stock dividend for stockholders of record as
of the close of business on March 31, 1998. All numbers in this proxy statement
relating to shares and options to purchase shares have been adjusted for the
stock dividend.
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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, including
matters of which the registrant did not receive notice until after August 25,
1998.
<PAGE>
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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,
1998 (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 1,107,261 shares of Common Stock issued and
outstanding.
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 general
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 80,750 7.3%
Ownership Plan (the "ESOP")(1)
221 West Aztec Avenue, Gallup, New Mexico
Lance S. Gad(2) 65,701 5.9%
1250 Fence Raw Drive
Fairfield, Connecticut 06430
Charles L. Parker, Jr.(3) 63,414 5.7%
221 West Aztec Avenue
Gallup, New Mexico
Richard C. Kauzlaric(3) 96,412 8.7%
221 West Aztec Avenue
Gallup, New Mexico
George S. Perce(3) 63,750 5.8%
221 West Aztec Avenue
Gallup, New Mexico
Vernon I. Hamilton(3) 63,414 5.7%
221 West Aztec Avenue
Gallup, New Mexico
All Directors and Executive Officers as a
Group(4) (10 persons) 394,803 35.7%
</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 are 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, 14,498 shares have been
allocated under the ESOP to participant accounts. Based on a Schedule 13G
filed February 24, 1997, the ESOP reported shared voting and dispositive
power with respect to all shares.
(2) Based on a schedule 13G filed on February 10, 1998.
(3) Based, in part, on a Schedule 13G filed February 26, 1998, includes 2,439
shares that may be acquired within 60 days of the Record Date by the
exercise of options.
(4) Excludes 45,583 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 8,859 shares of Common Stock allocated to
executive officers under the ESOP which such individuals maintain shared
voting and investment power over. Excludes 66,252 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. In August 1998, Mr.
Marshall W. Coker filed a Form 5 approximately one week after the transaction
was required to be reported. 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, 1998.
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PROPOSAL I - ELECTION OF DIRECTORS
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The Certificate of Incorporation requires that the Board 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 Wallace R. Phillips and
Richard C. Kauzlaric, has a term of office expiring on the date of the Meeting.
A second class, consisting of James Nechero, Jr. and Vernon J. Hamilton, has a
term of office expiring at the annual meeting of stockholders to be held in
1999. A third class, consisting of Michael P. Mataya, Charles L. Parker, Jr. and
George S. Perce, has a term of office expiring at the annual meeting of
stockholders to be held in 2000. The Board of Directors currently consists of
seven members. Two directors will be elected at the Meeting to serve for
three-year terms or until a successor has been elected and qualified.
Wallace R. Phillips and Richard C. Kauzlaric have been nominated by the
Board to serve as directors for three-year terms to expire in 2001. 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 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 2001
<S> <C> <C> <C> <C> <C>
Wallace R. Phillips, D.D.S., Director 76 1971 1998 24,965(4)(5)(6) 2.2%
and Chairman of the Board of the
Company
Richard C. Kauzlaric, Director and 60 1983 1998 96,412(4)(6) 8.7%
Vice-Chairman of the Board of the
Company and Chairman of the Board of
the Bank
DIRECTORS CONTINUING IN OFFICE
James Nechero, Jr., Director and 64 1976 1999 33,316(4)(6) 3.0%
Assistant Secretary of the Company and
Vice Chairman of the Board of the Bank
Vernon I. Hamilton, Director 68 1990 1999 63,414(4)(6) 5.7%
Michael P. Mataya, Director 48 1994 2000 18,413(4)(6) 1.7%
Charles L. Parker, Jr., Director and 36 1994 2000 63,414(4)(5)(6) 5.7%
Treasurer of the Company
George S. Perce, Director and Secretary 59 1990 2000 63,750(4)(5)(6) 5.8%
of the Company, and Director, Treasurer
and Secretary of the Bank
CERTAIN EXECUTIVE OFFICERS
Jerry R. Spurlin, President of the 56 21,817(7) 2.0%
Company and Bank and Director of the
Bank
Total shares owned by directors and 394,803(8) 35.7%
executive officers (10 persons)
</TABLE>
- ----------------------------
(1) Unless otherwise indicated, individual serves in the disclosed position for
both the Company and the Bank.
(2) At June 30, 1998.
(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) Includes 2,439 shares of Common Stock that may be acquired within 60 days
of the Record Date pursuant to the exercise of stock options.
(5) Excludes 66,252 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.
(6) Excludes 45,583 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.
(7) Includes 3,420 shares of Common Stock that may be acquired within 60 days
of the Record Date pursuant to the exercise of stock options.
(8) Includes 26,193 shares of Common Stock that may be acquired within 60 days
of the Record Date pursuant to the exercise of stock options.
-5-
<PAGE>
Biographical Information on Directors and Executive Officers
Set forth below is certain information with respect to the directors
and executive officers of the Company. All persons 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.
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.
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.
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.
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.
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.
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.
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.
-6-
<PAGE>
Marshall W. Coker, age 41, 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.
William W. Head, Jr., age 58, 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.
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,
1998, the board of directors of the Company held four regular meetings and 14
special meetings and the board of directors of the Bank held 12 regular meetings
and 13 special meetings. No director, other than Mr. Mataya, 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, 1998.
The Company's full board of directors acts as a non-standing nominating
committee ("Nominating Committee") and selects the management nominees for
election of directors. In its deliberations, the Nominating Committee considers
each 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.
Nominations by stockholders must be made in accordance with the Certificate of
Incorporation and must be made in writing to the Secretary of the Company and
must be delivered to, or received at, the executive office of the Company not
less than 60 days prior to the anniversary date of the immediately preceding
annual meeting of stockholders. The notice must state for each nominee and the
nominating stockholder: (i) name, age, business address and residence address,
(ii) principal occupation or employment, (iii) shares of Common Stock owned, and
(iv) other information that would be required for a nominee in the Company's
proxy material. The notice must further state the name, address and ownership of
Common Stock of all stockholders known to support the nominee. During the fiscal
year ended June 30, 1998, the Board meet once as the Nominating Committee.
The Executive Committee of the Bank consists of Directors Kauzlaric,
Nechero, Perce and Spurlin. The Executive Committee met 12 times during the
fiscal year ended June 30, 1998 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 Perce, Parker, 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,
1998.
-7-
<PAGE>
The Audit/Investment Committee of the Bank, a standing committee, is
comprised of Directors 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, 1998.
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, 1998, the Company paid a
total of $120,450 in director fees.
Prior Awards. On January 5, 1996, the stockholders of the Company
approved the GFSB Bancorp, Inc. 1995 Stock Option Plan ("1995 Stock Option
Plan") and the Gallup Federal Savings Bank Management Stock Bonus Plan
("Management Stock Bonus Plan"). Directors Phillips, Kauzlaric, Nechero,
Hamilton, Mataya, Parker, and Perce, received (as of the date of stockholder
approval) options to purchase 6,099 shares of Common Stock under the 1995 Stock
Option Plan and 2,439 shares of restricted stock under the Management Stock
Bonus Plan. The options granted to these directors were first exercisable at a
rate of 20% the first year from the date of grant and 20% annually thereafter.
Similarly, restricted stock granted to the above named directors vested 20% the
first year from the date of grant and 20% annually thereafter.
Executive Compensation
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the President of the Company for
the fiscal years provided below.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
------------------------------------------ --------------------------------
Securities
Restricted Underlying
Name and Other Annual Stock Options/ All Other
Principal Position Year Salary Bonus Compensation(1) Awards($)(2) SARs(#) Compensation
- ------------------- ------ ------ ----- --------------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerry R. Spurlin 1998 $ 66,983 $ 12,500 $ 6,000 $ -- -- $ 40,289(4)
President 1997 $ 66,833 $ 0 $ 6,000 $ -- -- $ 37,302(5)
1996 $ 65,032 $ 0 $ 6,000 $41,625 (3) 8,550 $ 12,994(6)
</TABLE>
- --------------------------
(1) Represents annual automobile allowance.
(2) At June 30, 1998, Mr. Spurlin had 2,700 shares of restricted stock in
the aggregate which had a total value of $43,200 (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.
(footnotes continued on next page)
-8-
<PAGE>
(footnotes from prior page)
(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 $1,505 of health and life insurance paid on behalf of Mr.
Spurlin, and an allocation of 2,424 shares of Common Stock under the
Bank's ESOP for fiscal year 1998, valued at $38,784 (based upon the
Common Stock's closing market price of $16.00 on June 30, 1998).
(5) Includes $1,582 of health and life insurance paid on behalf of Mr.
Spurlin and an allocation of 2,820 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 approx. $12.67 per share on June
30, 1997).
(6) Includes $1,582 of health and life insurance paid on behalf of Mr.
Spurlin, and an allocation of 1,201 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 approx. $9.50 per share on June
30, 1996).
Other Benefits
1995 Stock Option Plan
The purpose of the 1995 Stock Option Plan is to provide additional
incentive to certain officers, directors, and key employees by facilitating
their purchase of a stock interest in the Company. The 1995 Stock Option Plan
became effective on January 5, 1996 and provides for a term of ten years, after
which no awards may be made, unless earlier terminated by the Board of Directors
pursuant to the terms of the 1995 Stock Option Plan.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- -----------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End
Exercise Realized (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jerry R. Spurlin -- -- 3,420 / 5,130 $23,085 / 34,628 (1)
</TABLE>
- ---------------
(1) Based upon an exercise price of $9.25 per share versus a closing price of
$16.00 at June 30, 1998.
- --------------------------------------------------------------------------------
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, or 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,
-9-
<PAGE>
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,
1998, the Bank's directors and executive officers had loans outstanding from the
Bank with current balances of $805,243 in the aggregate or approximately 10.0%
of retained earnings.
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, 1998. Furthermore, the Bank had no
"interlocking" relationships existing on or after June 30, 1998 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.
Set forth below is certain information as of June 30, 1998, 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 06/30/98
---------- ---------------------- ----------- ------- --------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
James Nechero, Jr. Home Mortgage 09/16/93 $ 50,000 6.75% 6.75% 6.75% 28,423
Nechero Ltd. Co. Equip. Lease/Purch. 01/12/95 $202,649 11.30% 11.30% 11.30% 120,344
Nechero Ltd. Co. Equip. Lease/Purch. 05/01/95 $ 26,886 11.32% 11.32% 11.32% 17,171
James Nechero, Jr. Home Mortgage 03/21/98 $112,000 6.63% 6.63% 5.63% 111,760
Michael P. Mataya
Revocable Trust Home Mortgage 03/17/95 $125,000 8.00% 8.00% 7.00% 93,686
Michael Mataya Airplane 12/19/97 $ 28,500 12.00% 12.00% 11.00% 26,298
Michael P. Mataya Automobile 02/04/98 $ 20,033 11.50% 11.50% 10.50% 18,977
Michael P. Mataya CD Secured 05/13/98 $ 11,390 7.30% 7.30% 6.30% 11,390
Jerry R. Spurlin Automobile 07/03/95 $22,393 8.95% 8.95% 8.50% 10,519
Jerry R. Spurlin Home Mortgage 12/03/93 $121,500 6.75% 6.75% 6.50% 96,497
Jerry R. Spurlin Home Equity LOC 04/23/97 $17,000 7.75%(1) 7.75%(1) 9.00%(1) 14,086
Marshall W. Coker Home Mortgage 02/12/96 $122,250 7.25% 7.25% 6.50% 118,415
William W. Head Automobile 03/04/96 $19,737 9.00% 9.00% 8.00% 9,332
William W. Head Home Mortgage 01/26/95 $95,000 7.00% 7.00% 6.50% 81,766
William W. Head Home Equity LOC 06/25/97 $25,000 7.75% (1) 7.75%(1) 9.00%(1) 22,968
</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
converted to a variable rate 0.5% over the Wall Street Journal Prime
six months after they were opened.
-10-
<PAGE>
- --------------------------------------------------------------------------------
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.
Neff & Company LLP. was the Company's independent public accountant for
the fiscal year ended June 30, 1998. The Board of Directors has approved the
selection of Neff & Company LLP. as its auditors for the fiscal year ending June
30, 1999, subject to ratification by the Company's stockholders. A
representative of Neff & Company LLP. is expected to be present at the Meeting
to respond to stockholders' questions and will have the opportunity to make a
statement if he or she so desires.
Ratification of the appointment of the auditors requires the approval
of a majority of the votes cast 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, 1999.
- --------------------------------------------------------------------------------
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 16, 1999.
In the event the Company receives notice of a stockholder proposal to
take action at next year's annual meeting of stockholders that is not submitted
for inclusion in the Company's proxy material, or is submitted for inclusion but
is properly excluded from the proxy material, the persons named in the proxy
sent by the Company to its stockholders intend to exercise their discretion to
vote on the stockholder proposal in accordance with their best judgment if
notice of the proposal is not received at the Company's main office by September
10, 1999. The Certificate of Incorporation provides that if notice of a
stockholder proposal to take action at next year's annual meeting is not
received at the
-11-
<PAGE>
Company's main office by September 10, 1999, the proposal will not be eligible
for presentation at that meeting.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB, INCLUDING
FINANCIAL STATEMENTS, FOR THE YEAR ENDED JUNE 30, 1998 WILL BE FURNISHED WITHOUT
CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE
SECRETARY, GFSB BANCORP, INC., 221 WEST AZTEC AVENUE, GALLUP, NEW MEXICO 87301.
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.
If the Company did not have notice of a matter on or before August 25, 1998, it
is expected that the persons named in the accompanying proxy will exercise
discretionary authority when voting on that matter.
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
October 14, 1998
-12-
<PAGE>
- --------------------------------------------------------------------------------
GFSB BANCORP, INC.
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
November 9, 1998
- --------------------------------------------------------------------------------
The undersigned hereby appoints the Board of Directors of GFSB Bancorp,
Inc. ("Company"), or its designee, and each of them, with full powers of
substitution in each of them, to act as attorneys and proxies for the
undersigned, to vote all shares of Common Stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of Stockholders
("Meeting"), to be held at Gallup Federal Savings Bank's new Loan Center located
at 214 West Aztec Avenue, Gallup, New Mexico on November 9, 1998, at 10:00 a.m.
and at any and all adjournments thereof, in the following manner:
FOR WITHHELD
--- --------
1. The election as director of all nominees
listed below: |_| |_|
Wallace R. Phillips
Richard C. Kauzlaric
INSTRUCTIONS: To withhold your vote for any individual nominee, insert the
nominee's name on the line provided below.
-------------------------------------------------
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, 1999. |_| |_| |_|
In their discretion, such attorneys and proxies are authorized to vote
upon such other business, if any, as may properly come before the Meeting or any
adjournments thereof.
The Board of Directors recommends a vote "FOR" all of the above listed
propositions.
- --------------------------------------------------------------------------------
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 SUCH 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.
- --------------------------------------------------------------------------------
<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 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 undersigned may also revoke this proxy by filing a
subsequently dated proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this proxy.
The undersigned hereby revokes any proxy previously given and
acknowledges receipt from the Company prior to the execution of this proxy of a
Notice of Annual Meeting of Stockholders and a proxy statement dated October 14,
1998.
Please check here if you
Dated: , 1998 |_| plan to attend the Meeting.
---------------
- ------------------------------------------ --------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------------------ --------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------
