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Exhibit 10.1
 
SHAREHOLDER AGREEMENT
 
This Agreement (“Agreement”) dated the 21st day of September 2009, is made by
and among Philip J. Timyan and Riggs Qualified Partners, LLC (the
“Shareholders”), GS Financial Corp. (the “Company”) and Guaranty Savings Bank
(the “Bank”).
 
RECITALS
 
WHEREAS, the Company, the Bank and the Shareholders have agreed that it is in
their mutual interests to enter into this Agreement as hereinafter described.
 
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, and other good and
valuable consideration, the parties hereto mutually agree as follows:
 
1.   Representations and Warranties of the Shareholders.  The Shareholders
hereby represent and warrant to the Company and the Bank as follows:
 
(a)  
The Shareholders have ownership of an aggregate amount of 59,024 shares of the
Company’s common stock (“Common Stock”) and have full and complete authority to
enter into this Agreement and to bind the entire number of shares of the capital
stock of the Company in which Shareholders have a beneficial ownership interest
to the terms of this Agreement;

 
(b)  
The Shareholders have full power and authority to enter into and perform the
Shareholders obligations under this Agreement, and the execution and delivery of
this Agreement by the Shareholders have been duly authorized.  This Agreement
constitutes a valid and binding obligation of Shareholders, and the performance
of its terms shall not constitute a violation of any limited partnership
agreement, operating agreement, bylaws, or any agreement or instrument to which
either of the Shareholders is a party;

 
(c)  
There are no other persons who, by reason of their personal, business,
professional or other arrangement with the Shareholders have agreed, in writing
or orally, explicitly or implicitly, to take any action on behalf of or in lieu
of the Shareholders that would be prohibited by this Agreement; and

 
(d)  
There are no arrangements, agreements or understandings between the Shareholders
and the Company and the Bank other than as set forth in this Agreement.

 
2.   Representations and Warranties of the Company and the Bank.  The Company
and the Bank hereby represent and warrant to the Shareholders as follows:
 
 
 

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(a)  
The Company and the Bank have full power and authority to enter into and perform
their obligations under this Agreement, and the execution and delivery of this
Agreement by the Company and the Bank have been duly authorized by the Boards of
Directors of the Company and the Bank and requires no other Board of Directors
or shareholder action.  This Agreement constitutes a valid and binding
obligation of the Company and the Bank, and the performance of its terms does
not constitute a violation of the Articles of Incorporation or Bylaws of the
Company and the Charter and Bylaws of the Bank; and

 
(b)  
There are no arrangements, agreements or understandings between the Company, the
Bank and the Shareholders other than as set forth in this Agreement.

 
3.   Covenants.
 
(a)  
During the term of this Agreement, the Company and the Bank covenant and agree
as follows:

 
(i)   Consultation with Chairman.  The Shareholders shall have the opportunity
to meet with the Chairman of the Boards of the Company and the Bank, on a
monthly basis, to discuss the condition of the Company and the Bank.  Such
meetings may be conducted either in-person in Louisiana, or telephonically, at
the Shareholders’ discretion, and shall last not more than two hours in
duration.  One person shall represent the Shareholders at these meetings.  Upon
the consent of the Shareholders’ representative, the Company and the Bank may
provide a suitable substitute to the Chairman’s attendance at this meeting.
 
(b)  
During the term of this Agreement, the Shareholders covenant and agree as
follows:

 
(i)   Nominations or Shareholder Proposals.  The Shareholders will not initiate,
propose or submit any shareholder proposal to the Company, nor encourage or
otherwise solicit or induce or attempt to induce any other person to initiate,
propose or submit any shareholder proposal to the Company, unless such action is
supported by a majority of the Company’s Board of Directors.  The Shareholders
will not seek election to, or seek to place a representative or other affiliate
or nominee on, or induce or attempt to induce or encourage any other person to
nominate one or more persons to the Company’s Board of Directors or seek removal
of any member of the Company’s Board of Directors unless such action is
supported by a majority of the Company’s Board of Directors.  The Shareholders
will not:
 
(A)  
(i) join with or assist any person or entity, directly or indirectly, in
opposing, or make any statement in opposition to, any proposal or director
nomination submitted by the Company’s Board of Directors to a vote of the
Company’s shareholders, or (ii) join with or assist any person or entity,
directly or indirectly, in supporting or endorsing (including supporting,
requesting or joining in any request for a meeting of shareholders in connection
with), or make any statement in favor of, any proposal submitted to a vote of
the Company’s shareholders that is opposed by the Company’s Board of Directors;
or

 
 
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(B)  
vote for any nominee or nominees for election to the Board of Directors of the
Company other than those nominated or supported by the Company’s Board of
Directors or consent to become a nominee for election as a director of the
Company unless nominated or supported by a majority of the Company’s Board of
Directors;

 
(ii)   Board Nominees and Proposals.  The Shareholders hereby agree to vote all
of the shares of Common Stock which the Shareholders directly or indirectly
beneficially own and have voting power over in favor of (i) nominees to the
Board of Directors of the Company recommended by the board and (ii) proposals
submitted to the Company’s shareholders which have been approved by a majority
of the Company’s Board of Directors, with the exception of any new stock
compensation plans or amendments to any existing stock compensation plans, other
than tax-qualified plans.
 
(iii)   Solicitations.  The Shareholders will not solicit proxies or written
consents or assist or participate in any other way, directly or indirectly, in
any solicitation of proxies or written consents, or otherwise become a
“participant” in a “solicitation,” or assist any “participant” in a
“solicitation” (as such terms are defined in Instruction 3 of Item 4 of Schedule
14A and Rule 14a-l of Regulation 14A, respectively, under the Securities
Exchange Act of 1934) in opposition to any recommendation or proposal of the
Company’s Board of Directors, or recommend or request or induce or attempt to
induce any other person to take any such actions, or seek to advise, encourage
or influence any other person with respect to the voting of (or the execution of
a written consent in respect of) the Company’s Common Stock, or execute any
written consent in lieu of a meeting of the holders of the Company’s Common
Stock or grant a proxy with respect to the voting of the capital stock of the
Company to any person or entity other than the Board of Directors of the
Company;
 
(iv)   No Company Transaction Proposals.  The Shareholders will not (A) propose
or seek to effect a merger, consolidation, recapitalization, reorganization,
sale, lease, exchange or other disposition of substantially all the assets of,
or other business combination involving, or a tender or exchange offer for
securities of, the Company or the Bank or any material portion of the Company’s
or the Bank’s business or assets or any other type of transaction that would
result in a change in control of the Company (any such action described in this
clause (A) is a “Company Transaction Proposal”), (B) seek to exercise any
control or influence over the management of the Company or the Boards of
Directors of the Company or the Bank or any of the businesses, operations or
policies of the Company or the Bank; (C) other than a presentation to the
Company’s Board of Directors, present to the Company, its shareholders or any
third party any proposal constituting or that could reasonably be expected to
result in a Company Transaction Proposal, or (D) seek to effect a change in
control of the Company.  None of the foregoing restrictions shall prevent the
Shareholders from engaging in the foregoing restricted actions if any such
action is supported by a majority of the Company’s Board of Directors.  In
addition, the Shareholders will not: (A) publicly suggest or announce their
willingness or desire to engage in a transaction or group of transactions or
have another person engage in a transaction or group of transactions that would
constitute or could reasonably be expected to result in a Company Transaction
Proposal or take any action that might require the Company to make a public
announcement regarding any such Company Transaction Proposal unless such action
is supported by a majority of the Company’s Board of Directors; or (B) initiate,
request, induce, encourage or attempt to induce or give encouragement to any
other person (other than to members of the Company’s Board of Directors) to
initiate any proposal constituting or that can reasonably be expected to result
in a Company Transaction Proposal, or otherwise provide assistance to any person
who has made or is contemplating making, or enter into discussions or
negotiations with respect to, any proposal constituting or that can reasonably
be expected to result in a Company Transaction Proposal; and
 
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(v)   Sale of 1% or More of Company Common Stock; Sale to a 5% Shareholder.  In
the event that at any time from the date of this Agreement and through the Term
of this Agreement, the Shareholders intend to sell 1% or more of the Company’s
outstanding Common Stock, based on the Company’s most recent public filing, in a
block trade, in a private sale or in the open market, or the Shareholders intend
to sell shares of Company Common Stock to any person the Shareholders believe,
after reasonable inquiry, would beneficially own immediately after any such sale
or transfer more than 5% of the outstanding shares of the Company Common Stock,
except where such sale is pursuant to an order, directive, or other requirement
of the Office of Thrift Supervision, or other appropriate regulator, the
Shareholders will provide written notice to the Company of such intent, which
notice shall include the proposed sale price, and the Company shall then have
the right to purchase the Common Stock from the Shareholders at the proposed
sale price (“Right of First Refusal”).  Within two (2) business days following
receipt of written notice from the Shareholders, the Company will provide
written notice to the Shareholders as to whether or not the Company will
exercise its Right of First Refusal, the Company can exercise its Right of First
Refusal in full or in part in its sole discretion.  If the Company chooses to
exercise the Right of First Refusal in full or in part, settlement of the
purchase of the shares being sold by the Shareholders pursuant to the Right of
First Refusal will be within three (3) business days of such exercise, with
payment by wire transfer to an account identified by the Shareholders.  If the
Company does not choose to exercise the Right of First Refusal, or does not
respond to the notice within two (2) business days, then the selling
Shareholders shall be free to sell the shares to the third party.
 
4.   Public Statements; Litigation.  During the term of this Agreement, no party
to this Agreement shall cause, discuss, cooperate or otherwise aid in the
preparation of any press release or other publicity other than filings required
by securities laws, concerning any other party to this Agreement or its
operations without prior approval of such other party unless required by law, in
which case notice of such requirement shall be given to the other party; and
provided there has been no material breach of this Agreement by the Company or
the Bank, the Shareholders shall not, directly or indirectly:
 
(a)  
make any statement, public or otherwise, in opposition to, or that would reflect
negatively against, the Company, the Bank, the Board of Directors of the Company
or the Bank, or any of the directors or officers of the Company or the Bank;

 
(b)  
directly or indirectly participate or act in concert with any affiliate, group
or other person to participate, by encouragement or otherwise, in any litigation
against or derivatively on behalf of the Company or the Bank, or any of their
respective officers or directors; or

 
 
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(c)  
provide, or act in concert with any person to provide, any funds, services or
facilities to any person in support of any activity by such person that would be
a violation of their covenants under the provisions of this Section 4 if
undertaken by any of them.  In addition, during the term of this Agreement,
provided there has been no material breach of this Agreement by the
Shareholders, neither the Company nor any officer or director of the Company
shall make any statement, public or otherwise, in opposition to, or that would
reflect negatively against the Shareholders, nor directly or indirectly
participate or act in concert with any affiliate, group or other person to
participate, by encouragement or otherwise, in any litigation against or
derivatively on behalf of the Shareholders.

 
5.   Remedies.  The Company, the Bank and the Shareholders acknowledge and agree
that a breach or threatened breach by any party may give rise to irreparable
injury inadequately compensable in damages, and accordingly each party shall be
entitled to injunctive relief to prevent a breach of the provisions hereof and
to enforce specifically the terms and provisions hereof in any state or federal
court having jurisdiction, in addition to any other remedy to which such
aggrieved party may be entitled to at law or in equity.  In the event either
party institutes any legal action to enforce such party’s rights under, or
recover damages for breach of, this Agreement, the prevailing party or parties
in such action shall be entitled to recover from the other party or parties all
reasonable costs and expenses, including but not limited to actual attorneys’
fees, court costs, witness fees, disbursements and any other expenses of
litigation or negotiation incurred by such prevailing party or parties.
 
6.   Term.  This Agreement shall terminate on the earlier of June 30, 2011 or
the date on which the Company ceases to exist by reason of merger, sale of
assets, liquidation, exchange of shares, or otherwise.
 
7.   Notices.  All notice requirements and other communications shall be deemed
given when delivered or on the third succeeding business day after being mailed
by registered or certified mail, return receipt requested, addressed to the
Shareholders and the Company and the Bank below:
 
Shareholders:
Philip J. Timyan Riggs
Qualified Partners, LLC
4324 Central Avenue
Western Springs, Illinois 60558
 
With a copy to:
Timothy R. McTaggart, Esq.
Pepper Hamilton LLP
Hamilton Square
600 Fourteenth Street, N.W.
Washington, D.C. 20005-2004
 
Facsimile: 202-220-1665

 
 
 
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The Company and the
Bank:
Bruce A. Scott, Esq.
Executive Vice President Guaranty
Savings Bank
3798 Veterans Blvd.
Metairie, Louisiana 70002
Facsimile: 504-883-5544
 
With a copy to:
Raymond A. Tiernan, Esq.
Eric M. Marion, Esq.
 
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W., 11th Floor
Washington, D.C. 20005
Facsimile: 202-347-2172
 

8.   Reimbursement of Expenses.  The Company shall, within five (5) business
days of submission by the Shareholders of reasonable documentation, reimburse
the Shareholders for all legal fees and expenses, up to $7,500 in the aggregate,
incurred in connection with their activities with respect to the Company since
January 1, 2009.  Such invoices need not include any detail that may be deemed
to waive the attorney-client privilege between the Shareholders and their
counsel.
 
9.   Entire Agreement.  This Agreement constitutes the entire agreement between
the parties hereto pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements, understandings, negotiations and
discussions of the parties in connection therewith not referred to herein.  This
Agreement supersedes the prior agreement among the parties entered into on April
3, 2009.
 
10.   Counterparts; Facsimile.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, and signature
pages may be delivered by facsimile, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
 
11.   Headings.  The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
 
12.   Governing Law.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Louisiana, without giving
effect to its principles of conflicts of laws.
 
13.   Severability.  If any term, provision, covenant or restriction of this
Agreement is held by any governmental authority or a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
 
 
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14.   Successors and Assigns.  This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the successors and assigns, and
transferees by operation of law, of the parties.
 
15.   Survival of Representations, Warranties and Agreements.  All
representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Agreement.
 
16.   Amendments.  This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
 
17.   Further Action.  Each party agrees to execute any and all documents, and
to do and perform any and all acts and things necessary or proper to effectuate
or further evidence the terms and provisions of this Agreement.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
 

 
GS FINANCIAL CORP.
      By:
/s/ Albert J. Zahn, Jr.   
   
Albert J. Zahn, Jr.
   
Chairman of the Board
         
GUARANTY SAVINGS BANK
      By:
/s/ Albert J. Zahn, Jr.   
Albert J. Zahn, Jr.
Chairman of the Board
     
RIGGS QUALIFIED PARTNERS, LLC
      By:
/s/ Philip J. Timyan   
Name: Philip J. Timyan
Managing Member
     
PHILIP J. TIMYAN
      By:
/s/ Philip J. Timyan   
 Philip J. Timyan
       

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