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Exhibit 10.1

Written Description of
2010 Executive Incentive Compensation Annual Plan -
Chief Financial Officer and Chief Operating Officer

The following is a description of the material terms of the 2010 Executive
Incentive Compensation Annual Plan (the “Plan”) that was adopted by the
compensation committee of the Board of Directors of Guaranty Federal Bancshares,
Inc. (the “Company”) with respect to the bonus payable to Carter Peters, the
Company’s Chief Financial Officer and Chief Operating Officer (the "Executive"),
for 2010:

The Plan will pay a maximum of $50,000.  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 five 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) overhead ratio (20%); (iv)
pre-tax net income (20%); and (v) non-core funding dependence (20%). 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 2010 of at least 75%
of approved 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) no restatement of income for
any prior period previously released; (iv) the bank’s capital ratios must meet
the “well-capitalized” regulatory standards at each call report period during
2010; (v) 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 2011 for the calendar year 2010; and
(vi) the Board of Directors of the Company retains the right to make the final
determination of the bonus payment and amount, if any.

The Plan also includes a provision requiring the "clawback" of any bonus paid to
the Executive under the Plan.  In the event that any payment under the Plan was
based on materially inaccurate financial statements or any other materially
inaccurate performance metric criteria, the Executive shall immediately pay back
such payment to the Company.  In addition, in the event that, after a payment
has been made under the Plan, the Executive voluntarily terminates his
employment and at the time of such termination Guaranty Bank has a composite
rating lower than 2 under the CAMELS rating system, the Executive shall
immediately pay back the full amount of such bonus amount upon such voluntary
termination of employment.
 
 

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