CHANGE IN CONTROL SEVERANCE AGREEMENT
                      -------------------------------------
                              Amended and Restated

         THIS CHANGE IN CONTROL SEVERANCE AGREEMENT  ("Agreement")  entered into
this 22nd day of August 2003 ("Effective  Date"),  by and between Gallup Federal
Savings  Bank,  Gallup,  New Mexico (the  "Bank") and William W. Head,  Jr. (the
"Employee").

         WHEREAS,  the  Employee  is  currently  employed  by the  Bank as Chief
Lending  Officer and is  experienced  in certain  phases of the  business of the
Bank; and

WHEREAS,  the parties have previously entered into a Change in Control Severance
Agreement, dated June 14, 2001; and

         WHEREAS, the parties desire by this writing to set forth the continuing
rights and  responsibilities of the Bank and Employee if the Bank should undergo
a change  in  control  (as  defined  hereinafter  in the  Agreement)  after  the
Effective Date.

         NOW, THEREFORE, it is AGREED as follows:

         1.  Employment.  The  Employee  is  employed  in  the  capacity  as the
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Chief Lending Officer of the Bank. The Employee shall render such administrative
and management  services to the Bank and GFSB Bancorp,  Inc., its parent savings
and  loan  holding  company  ("Parent")  as are  currently  rendered  and as are
customarily  performed by persons situated in a similar executive capacity.  The
Employee's  other duties  shall be such as the Board of  Directors  for the Bank
(the "Board of Directors" or "Board") may from time to time  reasonably  direct,
including normal duties as an officer of the Bank and the Parent.

         2.  Term of  Agreement.  The  term of this  Agreement  shall be for the
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period  commencing  on the  Effective  Date and ending  thirty-six  (36)  months
thereafter ("Term").

         3.  Termination  of Employment  in  Connection  with or Subsequent to a
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Change in Control.
-----------------

         (a) Notwithstanding any provision herein to the contrary,  in the event
of the involuntary  termination of Employee's  employment  under this Agreement,
absent Just Cause, in connection with, or within  twenty-four (24) months after,
any Change in Control  of the Bank or Parent,  Employee  shall be paid an amount
equal to 200%  times  the base  annual  salary  in  effect  as of the end of the
calendar  year  prior to the date of  termination  of  employment  and the costs
associated  with  maintaining  coverage  under the  Bank's  medical  and  dental
insurance  reimbursement  plans  similar  to  that  in  effect  on the  date  of
termination of employment for a period of one year thereafter. Said sum shall be
paid  in one (1)  lump  sum not  later  than  the  date of such  termination  of
employment and such payments shall be in lieu of any other future payments which
the  Employee  would be  otherwise  entitled  to  receive.  Notwithstanding  the
forgoing, all sums

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<PAGE>

payable  hereunder shall be reduced in such manner and to such extent so that no
such payments made hereunder when  aggregated with all other payments to be made
to the Employee by the Bank or the Parent  shall be deemed an "excess  parachute
payment" in accordance  with Section 280G of the Internal  Revenue Code of 1986,
as amended  (the  "Code")  and be subject to the excise tax  provided at Section
4999(a) of the Code. The term "Change in Control" shall refer to (i) the sale of
all, or a material  portion,  of the assets of the Bank or the Parent;  (ii) the
merger or  recapitalization  of the Bank or the Parent  whereby  the Bank or the
Parent is not the surviving entity; (iii) a change in control of the Bank or the
Parent, as otherwise  defined or determined by the Office of Thrift  Supervision
or  regulations  promulgated  by  it;  or  (iv)  the  acquisition,  directly  or
indirectly,  of the beneficial  ownership (within the meaning of that term as it
is used in Section  13(d) of the  Securities  Exchange Act of 1934 and the rules
and regulations  promulgated thereunder) of twenty-five percent (25%) or more of
the  outstanding  voting  securities  of the Bank or the  Parent by any  person,
trust,  entity or group.  The term "person"  means an individual  other than the
Employee,  or a corporation,  partnership,  trust,  association,  joint venture,
pool, syndicate, sole proprietorship,  unincorporated  organization or any other
form of entity not specifically listed herein.

         (b)  Notwithstanding  any  other  provision  of this  Agreement  to the
contrary  except as  provided  at  Sections 4 and 5,  Employee  may  voluntarily
terminate  his  employment  under  this  Agreement  within   twenty-four  months
following  a  Change  in  Control  of the Bank or  Parent,  and  Employee  shall
thereupon be entitled to receive the payment and  benefits  described in Section
3(a) of this  Agreement,  upon the  occurrence,  or within 120 day of any of the
following events, which have not been consented to in advance by the Employee in
writing:  (i) if Employee  would be required to move his  personal  residence or
perform his principal  executive functions more than thirty-five (35) miles from
the Employee's  primary office as of the signing of this Agreement;  (ii) if the
Bank or Parent  should fail to maintain  the  Employee's  base  compensation  in
effect as of the date of the Change in Control and  existing  employee  benefits
plans,  including  material fringe benefit,  stock option and retirement  plans,
except to the  extent  that such  reduction  in benefit  programs  is part of an
overall  adjustment in benefits for all employees of the Bank or Parent and does
not disproportionately adversely impact the Employee; or (iii) if Employee would
be assigned  duties and  responsibilities  other than those normally  associated
with his position as referenced at Section 1, herein, or other comparable senior
management position.

         4.  Other Changes in Employment Status.
             ----------------------------------

         Except as provided for at Section 3, herein, the Board of Directors may
terminate  the  Employee's  employment  at any time with or  without  Just Cause
within its sole discretion.  This Agreement shall not be deemed to give Employee
any right to be  retained  in the  employment  or  service  of the  Bank,  or to
interfere with the right of the Bank to terminate the employment of the Employee
at any time. The Employee shall have no right to receive  compensation  or other
benefits for any period after termination for Just Cause.  Termination for "Just
Cause" shall include termination because of the Employee's personal  dishonesty,
incompetence,  willful  misconduct,  breach of fiduciary duty involving personal
profit,  intentional failure to perform

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<PAGE>

stated  duties,  willful  violation of any law, rule or  regulation  (other than
traffic  violations or similar  offenses) or final  cease-and-desist  order,  or
material breach of any provision of the Agreement.

         5.  Regulatory Exclusions.
             ---------------------

         (a) If the  Employee  is removed  and/or  permanently  prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Sections  8(e)(4) or 8(g)(1) of the Federal  Deposit  Insurance Act ("FDIA") (12
U.S.C.  1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the contracting parties shall not be affected.

         (b) If the Bank is in default (as  defined in Section  3(x)(1) of FDIA)
all obligations  under this Agreement shall terminate as of the date of default,
but this  paragraph  shall not  affect  any  vested  rights  of the  contracting
parties.

         (c) All obligations under this Agreement shall be terminated, except to
the extent  determined that  continuation of this Agreement is necessary for the
continued  operation  of the Bank:  (i) by the  Director of the Office of Thrift
Supervision  ("Director of OTS"),  or his or her designee,  at the time that the
Federal  Deposit  Insurance  Corporation  ("FDIC")  enters into an  agreement to
provide assistance to or on behalf of the Bank under the authority  contained in
Section  13(c)  of  FDIA;  or (ii) by the  Director  of the  OTS,  or his or her
designee,  at the time  that the  Director  of the OTS,  or his or her  designee
approves a supervisory  merger to resolve  problems  related to operation of the
Bank or when  the  Bank is  determined  by the  Director  of the OTS to be in an
unsafe or unsound condition. Any rights of the parties that have already vested,
however, shall not be affected by such action.

         (d) If the Employee is suspended  and/or  temporarily  prohibited  from
participating  in the  conduct of the Bank's  affairs by a notice  served  under
Section  8(e)(3) or (g)(1) of the FDIA (12 U.S.C.  1818(e)(3)  and (g)(1)),  the
Bank's  obligations  under the  Agreement  shall be  suspended as of the date of
service, unless stayed by appropriate proceedings.  If the charges in the notice
are  dismissed,  the Bank may within its  discretion (i) pay the Employee all or
part of the compensation  withheld while its contract obligations were suspended
and (ii)  reinstate  (in whole or in part)  any of its  obligations  which  were
suspended.

         (e) Notwithstanding  anything herein to the contrary, any payments made
to the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned   upon  compliance  with  12  USC  ss.1828(k)  and  any  regulations
promulgated thereunder.

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         6.  Successors and Assigns.
             ----------------------

         (a) This  Agreement  shall inure to the benefit of and be binding  upon
any corporate or other  successor of the Bank which shall  acquire,  directly or
indirectly,   by  merger,   consolidation,   purchase  or   otherwise,   all  or
substantially all of the assets or stock of the Bank or Parent.

         (b) The Employee  shall be precluded  from  assigning or delegating his
rights or duties  hereunder  without first  obtaining the written consent of the
Bank.

         7.  Amendments.  No amendments or additions to this Agreement  shall be
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binding  upon the  parties  hereto  unless  made in  writing  and signed by both
parties, except as herein otherwise specifically provided.

         8.  Applicable  Law. This  agreement  shall be governed by all respects
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whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of New Mexico,  except to the extent that Federal law shall be
deemed to apply.

         9.  Severability.  The  provisions  of this  Agreement  shall be deemed
             ------------
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof.

         10. Arbitration. Any controversy or claim arising out of or relating to
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this  Agreement,  or the breach  thereof,  shall be settled  by  arbitration  in
accordance  with the rules then in effect of the district office of the American
Arbitration  Association  ("AAA")  nearest to the home  office of the Bank,  and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof,  except to the extent  that the parties  may  otherwise  reach a mutual
settlement of such issue.  Further, the settlement of the dispute to be approved
by the Board of the Bank may include a provision  for the  reimbursement  by the
Bank to the Employee for all reasonable costs and expenses, including reasonable
attorneys' fees, arising from such dispute, proceedings or actions, or the Board
of the Bank or the Parent may authorize such  reimbursement  of such  reasonable
costs and expenses by separate action upon a written action and determination of
the Board following settlement of the dispute.  Such reimbursement shall be paid
within  ten (10) days of  Employee  furnishing  to the Bank or Parent  evidence,
which may be in the form, among other things, of a canceled check or receipt, of
any costs or expenses incurred by Employee.

         11. Confidential Information. The Employee acknowledges that during his
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or her  employment  he or  she  will  learn  and  have  access  to  confidential
information  regarding the Bank and the Parent and its customers and  businesses
("Confidential Information").  The Employee agrees and covenants not to disclose
or use for his or her own benefit, or the benefit of any other person or entity,
any such  Confidential  Information,  unless  or until  the Bank or tthe  Parent
consents to such disclosure or use or such information  becomes common knowledge
in the industry or is otherwise legally in the public domain. The Employee shall
not knowingly  disclose or reveal to any  unauthorized  person any  Confidential
Information relating to the Bank, the

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<PAGE>

Parent, or any subsidiaries or affiliates,  or to any of the businesses operated
by them,  and the  Employee  confirms  that  such  information  constitutes  the
exclusive  property of the Bank and the Parent. The Employee shall not otherwise
knowingly  act or conduct  himself (a) to the material  detriment of the Bank or
the Parent,  or its  subsidiaries,  or  affiliates,  or (b) in a manner which is
inimical  or  contrary  to the  interests  of the Bank or the  Parent.  Employee
acknowledges  and agrees that the existence of this  Agreement and its terms and
conditions  constitutes  Confidential  Information of the Bank, and the Employee
agrees not to disclose the  Agreement or its contents  without the prior written
consent of the Bank.  Notwithstanding the foregoing, the Bank reserves the right
in its  sole  discretion  to make  disclosure  of  this  Agreement  as it  deems
necessary  or   appropriate  in  compliance   with  its   regulatory   reporting
requirements.  Notwithstanding  anything herein to the contrary,  failure by the
Employee  to  comply  with the  provisions  of this  Section  may  result in the
immediate  termination of the Agreement  within the sole discretion of the Bank,
disciplinary  action against the Employee  taken by the Bank,  including but not
limited to the  termination  of  employment  of the  Employee  for breach of the
Agreement and the  provisions of this  Section,  and other  remedies that may be
available in law or in equity.

         12. Entire Agreement. This Agreement together with any understanding or
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modifications  thereof as agreed to in writing by the parties,  shall constitute
the entire agreement between the parties hereto.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and first hereinabove written.

                                            Gallup Federal Savings Bank



ATTEST:                                     By:   /s/Richard P. Gallegos
                                                  ------------------------------
                                                  Richard P. Gallegos, President

/s/G.S. Perce
------------------------------
G.S. Perce
Secretary


WITNESS:
                                                  /s/William W. Head, Jr.
                                                  ------------------------------
                                                  William W. Head, Jr., Employee

/s/Debra S. Fischer
------------------------------
Debra S. Fischer