Exhibit 10.10

 

 

Written Description of

2014 Executive Incentive Compensation Annual Plan -

Chief Credit Officer

 

The following is a description of the material terms of the 2014 Executive
Incentive Compensation Annual Plan (the “Plan”) that was adopted by the
Compensation Committee (the “Committee”) of the Board of Directors of Guaranty
Federal Bancshares, Inc. (the “Company”) with respect to the bonus payable to
Sheri Biser, the Company’s Chief Credit Officer (the "Executive"), for 2014:

 

The Plan will pay a maximum of $60,000 of which thirty-three and one-third
percent (33 1/3%) of the bonus amount will be paid in cash and sixty-six and
two-thirds percent (66 2/3%) will be paid in the form of restricted stock
grants. There are three possible levels of incentive awards: threshold (25%);
target (50%); and maximum (100%). For any bonus amount to be paid, the threshold
level of performance must be achieved. The bonus amount will be prorated for
performance achievements between the threshold and target levels and between the
target and maximum levels. The four performance measurements of the Company (and
the weight given to each measurement) applicable to each award level are as
follows: (i) revenue growth (20%); (ii) net interest margin (20%); (iii) pre-tax
net income (30%); and (iv) non-performing assets to average total assets (30%).
The following minimum criteria must all be satisfied before an award is paid
under the Plan: (i) net income of the Company for calendar year 2014 of at least
75% of approved budget to receive full performance incentive and incentive will
be reduced by 50% if Company achieves between 50% and 74.99% of budget net
income; No incentive will be paid if net income is below 50% of budget; (ii)
satisfactory audits as determined by the Board of Directors of the Company after
review of findings from regulatory examination reports and applicable audits and
reviews; (iii) the bank’s tier 1 leverage capital and total risk-based capital
ratios must not fall below 9% and 12%, respectively, and adversely classified
assets to tier 1 capital and allowance for loan losses must not exceed 45%; and
(iv) satisfactory performance appraisal, actively employed by Guaranty Bank, and
in good standing at the time the bonus is paid, which will not be prior to the
public release of earnings in 2015 for the calendar year 2014. The Board of
Directors of the Company retains the right to make the final determination of
the bonus payment and amount, if any, and may consider other pertinent facts
prior to making an award of restricted stock. All incentive payments shall be
subject to the Company’s Compensation Clawback Policy.

 

The Plan also includes vesting and holding periods for the restricted stock
grants. The vesting period for these grants shall be three (3) years from the
date of grant. Also, the Executive agrees not to sell, transfer or otherwise
dispose of such shares for a period of three (3) years from the date of the
award. Exceptions to such restriction on sale, transfer or disposition may be
granted for hardship circumstances to be determined by the Committee.