EXHIBIT 4.1

                        GUARANTY FEDERAL BANCSHARES, INC.
                          2000 STOCK COMPENSATION PLAN


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                        GUARANTY FEDERAL BANCSHARES, INC.

                          2000 STOCK COMPENSATION PLAN


         1. Purpose of the Plan. The Plan shall be known as the Guaranty Federal
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Bancshares,  Inc.  ("Company") 2000 Stock  Compensation  Plan (the "Plan").  The
purpose of the Plan is to attract and retain  qualified  personnel for positions
of substantial  responsibility and to provide additional  incentive to officers,
directors  first elected or appointed  after July 22, 1998,  employees and other
persons  providing  services to the Company,  or any present or future parent or
subsidiary  of the Company to promote the success of the  business.  The Plan is
intended to provide  for the grant of Stock  Options  that do not qualify  under
Section 422 of the Internal  Revenue  Code of 1986,  as amended (the "Code") and
Shares of Common Stock of the Company granted as Stock Awards.

          2. Definitions. The following words and phrases when used in this Plan
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with an initial capital letter,  unless the context clearly indicates otherwise,
shall have the meaning as set forth below. Wherever  appropriate,  the masculine
pronoun  shall include the feminine  pronoun and the singular  shall include the
plural.

                  (a) "Award" means the grant by the Committee of Stock Options,
Stock Awards, or any combination thereof as provided in the Plan.

                  (b) "Board"  shall mean the Board of Directors of the Company,
or any successor or parent corporation thereto.

                  (c) "Change in Control"  shall mean: (i) the sale of all, or a
material   portion,   of  the  assets  of  the  Company;   (ii)  the  merger  or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company,  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 Company by any
person,  trust, entity or group. This limitation shall not apply to the purchase
of shares by underwriters in connection with a public offering of Company stock,
or the purchase of shares of up to 25% of any class of securities of the Company
by a tax-  qualified  employee  stock  benefit  plan  which is  exempt  from the
approval  requirements,  set forth under 12 C.F.R.  ss.574.3(c)(1)(vi) as now in
effect or as may hereafter be amended. The term "person" refers to an individual
or  a  corporation,   partnership,  trust,  association,  joint  venture,  pool,
syndicate, sole proprietorship, unincorporated organization or any other form of
entity not  specifically  listed  herein.  The  decision of the  Committee as to
whether a Change in Control has occurred shall be conclusive and binding.

                  (d) "Code"  shall mean the Internal  Revenue Code of 1986,  as
amended, and regulations promulgated thereunder.

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                  (e) "Committee" shall mean the Board or the Stock Compensation
Committee appointed by the Board in accordance with Section 5(a) of the Plan.

                  (f) "Common Stock" shall mean the common stock of the Company,
or any successor or parent corporation thereto.

                  (g)  "Continuous  Employment"  or  "Continuous  Status  as  an
Employee"  shall  mean  the  absence  of  any  interruption  or  termination  of
employment with the Company or any present or future Parent or Subsidiary of the
Company.  Employment  shall not be  considered  interrupted  in the case of sick
leave,  military leave or any other leave of absence  approved by the Company or
in the case of transfers  between payroll  locations,  of the Company or between
the Company, its Parent, its Subsidiaries or a successor.

                  (h) "Company" shall mean Guaranty  Federal  Bancshares,  Inc.,
the parent corporation of the Savings Bank, or any successor or Parent thereof.

                  (i)  "Director"  shall  mean  a  member  of the  Board  of the
Company, or any successor or parent corporation thereto.

                  (j)  "Director  Emeritus"  shall  mean a person  serving  as a
director emeritus,  advisory  director,  consulting  director,  or other similar
position as may be  appointed  by the Board of  Directors of the Savings Bank or
the Company from time to time.

                  (k) "Disability" means any physical or mental impairment which
renders the Participant  incapable of continuing in the employment or service of
the Savings Bank or the Parent in his then current capacity as determined by the
Committee.

                  (l) "Effective  Date" shall mean the date of Board adoption of
the Plan.

                  (m) "Employee"  shall mean any person  employed by the Company
or any present or future Parent or Subsidiary of the Company.

                  (n) "Fair Market Value" shall mean: (i) if the Common Stock is
traded otherwise than on a national  securities  exchange,  then the Fair Market
Value per Share shall be equal to the mean between the last bid and ask price of
such  Common  Stock on such  date or,  if there is no bid and ask  price on said
date,  then on the  immediately  prior business day on which there was a bid and
ask price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith;  or (ii) if the Common Stock
is listed on a national  securities  exchange,  then the Fair  Market  Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date,  then the Fair Market  Value shall be not less than the mean  between
the last bid and ask price on such date.

                  (o)  "Stock  Option"  or  "Option"  shall  mean an  option  to
purchase  Shares  granted  pursuant to the Plan which  option is not intended to
qualify under  Section 422 of the Code  providing the holder of such Option with
the right to purchase Common Stock.

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                  (p)  "Optioned  Stock"  shall mean stock  subject to an Option
granted pursuant to the Plan.

                  (q)  "Optionee"  shall mean any person who  receives an Option
pursuant to the Plan.

                  (r)  "Parent"  shall mean any  present  or future  corporation
which would be a "parent  corporation"  as defined in Sections 424(e) and (g) of
the Code.

                  (s)   "Participant"   means  any  Director  first  elected  or
appointed after July 22, 1998,  officer or Employee of the Company or any Parent
or  Subsidiary  of the  Company or any other  person  providing a service to the
Company  who is  selected by the  Committee  to receive an Award,  or who by the
express terms of the Plan is granted an Award.

                  (t) "Plan" shall mean the Guaranty  Federal  Bancshares,  Inc.
2000 Stock Compensation Plan.

                  (u)  "Retirement"  shall  mean  termination  of service in all
capacities as an Employee,  Director and Director Emeritus following  attainment
of not less than age 55 and  completion of not less than ten years of Service to
the Company or the  Savings  Bank.  Service to the  Company or the Savings  Bank
rendered  prior  to the  Effective  Date  shall  be  recognized  in  determining
eligibility to meet the requirements of Retirement under the Plan.

                  (v)  "Savings  Bank" or "Bank"  shall  mean  Guaranty  Federal
Savings Bank, or any successor corporation thereto.

                  (w) "Share" shall mean one share of the Common Stock.

                  (x) "Stock  Award"  means an Award  granted  to a  Participant
pursuant to Section 12 of the Plan.

                  (y) "Subsidiary"  shall mean any present or future corporation
which  constitutes a "subsidiary  corporation" as defined in Sections 424(f) and
(g) of the Code.

          3. Shares  Subject to the Plan.  Except as  otherwise  required by the
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provisions of Section 10 hereof,  the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed  *25,000  Shares.
The maximum  number of Shares  reserved  hereby for Stock  Awards is 7,125.  The
maximum number of Shares reserved  hereby for purchase  pursuant to the exercise
of Options granted under the Plan is the difference between (i) 25,000, and (ii)
the number of Shares granted pursuant to Stock Awards. Such Shares may either be
from authorized but unissued  shares or shares  purchased in the market for Plan
purposes.

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*Not to exceed 1% of shares outstanding as of date of Board adoption.



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         If an Award shall expire, become unexercisable, or be forfeited for any
reason  prior to its  exercise,  new Awards  may be granted  under the Plan with
respect to the number of Shares as to which such expiration has occurred.


         4.       Six Month Holding Period.  Subject to vesting requirements, if
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applicable,  except  in the  event of death or  disability  of the  Optionee,  a
minimum of six months must elapse between the date of the grant of an Option and
the date of the sale of the Common Stock  received  through the exercise of such
Option.

          5.      Administration of the Plan.
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                  (a) Composition  of   the   Committee.   The  Plan  shall   be
administered by the Board of Directors of the Company or a Committee which shall
consist of not less than two Directors of the Company appointed by the Board and
serving at the pleasure of the Board.  All persons  designated as members of the
Committee shall meet the  requirements of a "Non-Employee  Director"  within the
meaning of Rule 16b-3 under the Securities  Exchange Act of 1934, as amended, as
found at 17 CFR ss.240.16b-3.

                  (b) Powers of the Committee.  The Committee is authorized (but
only to the extent not  contrary  to the  express  provisions  of the Plan or to
resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind  rules and  regulations  relating to the Plan, to determine the form and
content of Awards to be issued  under the Plan and to make other  determinations
necessary or advisable for the  administration  of the Plan,  and shall have and
may  exercise  such other power and  authority  as may be delegated to it by the
Board from time to time. A majority of the entire  Committee shall  constitute a
quorum and the action of a majority  of the  members  present at any  meeting at
which a quorum is present  shall be deemed the  action of the  Committee.  In no
event may the Committee  revoke  outstanding  Awards  without the consent of the
Participant.

                  The President of the Company and such other  officers as shall
be  designated  by the  Committee  are  hereby  authorized  to  execute  written
agreements  evidencing  Awards on behalf of the  Company and to cause them to be
delivered to the  Participants.  For Awards of Stock  Options,  such  agreements
shall set forth the Option exercise price,  the number of shares of Common Stock
subject to such Option,  the  expiration  date of such  Options,  and such other
terms and restrictions  applicable to such Award as are determined in accordance
with the Plan or the actions of the Committee.

                   (c) Effect  of   Committee's   Decision.   All     decisions,
determinations  and   interpretations  of  the  Committee  shall  be  final  and
conclusive on all persons affected thereby.

          6.  Eligibility  for  Awards.  The  Committee  shall from time to time
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determine the officers,  Directors, and employees and other persons who shall be
granted  Awards under the Plan,  the number of Awards to be granted to each such
Participant.  In selecting  Participants and in determining the number of Shares
of Common  Stock to be  granted  to each such  Participant,  the  Committee  may
consider the nature of the prior and  anticipated  future  services  rendered by
each  such   Participant,   each  such   Participant's   current  and  potential
contribution  to the Company and such other factors as the Committee may, in its
sole discretion, deem relevant. Participants who have been granted an Award may,
if otherwise eligible, be granted additional Awards.

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          7. Term of the Plan.  The Plan shall  continue in effect for a term of
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ten (10) years from the Effective  Date,  unless sooner  terminated  pursuant to
Section 14  hereof.  No Option  shall be  granted  under the Plan after ten (10)
years from the Effective Date.

          8. Terms and Conditions of Stock Options. Stock Options may be granted
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by the Committee from time to time in its sole discretion and in accordance with
the Plan.  Stock Options  granted  pursuant to the Plan shall be evidenced by an
instrument in such form as the Committee  shall from time to time approve.  Each
Stock Option granted  pursuant to the Plan shall comply with, and be subject to,
the following terms and conditions:

                  (a)  Option  Price.  The price per Share at which  each  Stock
Option granted by the Committee under the Plan may be exercised shall not, as to
any  particular  Stock Option,  be less than the Fair Market Value of the Common
Stock on the date that such Stock Option is granted.

                  (b)  Payment.  Full  payment  for each  Share of Common  Stock
purchased  upon the exercise of any Stock Option granted under the Plan shall be
made at the time of exercise of each such Stock Option and shall be paid in cash
(in United States  Dollars),  Common Stock or a  combination  of cash and Common
Stock.  Common Stock  utilized in full or partial  payment of the exercise price
shall be valued at the Fair Market  Value at the date of  exercise.  The Company
shall  accept  full or  partial  payment  in  Common  Stock  only to the  extent
permitted  by  applicable  law. No Shares of Common  Stock shall be issued until
full payment has been received by the Company, and no Optionee shall have any of
the rights of a  stockholder  of the Company  until  Shares of Common  Stock are
issued to the Optionee.

                  (c) Term of Stock Option.  The term of  exercisability of each
Stock Option granted  pursuant to the Plan shall be not more than ten (10) years
from the date each such Stock Option is granted.

                  (d)  Exercise  Generally.  Except  as  otherwise  provided  by
Section 9 of the Plan or by action of the  Committee at the time of the grant of
a Stock Option,  Stock Options granted will be first  exercisable at the rate of
20% on the one year anniversary of the date of grant and 20% annually thereafter
during such  periods of service as an Employee,  Director or Director  Emeritus.
The Committee may impose additional conditions upon the right of any Optionee to
exercise any Stock Option granted  hereunder which is not inconsistent  with the
terms of the Plan.

                  (e) Cashless  Exercise.  Subject to vesting  requirements,  if
applicable,  an Optionee who has held a Stock Option for at least six months may
engage in the "cashless  exercise" of the Option.  Upon a cashless exercise,  an
Optionee  shall give the Company  written  notice of the  exercise of the Option
together with an order to a registered  broker-dealer or equivalent third party,
to sell part or all of the Optioned  Stock and to deliver enough of the proceeds
to the Company to pay the Option  exercise price and any applicable  withholding
taxes.  If the Optionee  does not sell the Optioned  Stock  through a registered
broker-dealer  or  equivalent  third  party,  the  Optionee can give the Company
written  notice of the  exercise of the Option and the third party  purchaser of
the  Optioned  Stock  shall pay the Option  exercise  price plus any  applicable
withholding taxes to the Company.

                  (f)  Transferability.  A Stock Option granted  pursuant to the
Plan shall be exercised  during an  Optionee's  lifetime only by the Optionee to
whom it was granted and shall not be assignable or  transferable  otherwise than
by will or by the laws of descent and distribution.

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         9. Effect of Termination of Service, Disability, Death  and  Retirement
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on Stock Options.
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                   (a) Termination of Service. Except as may be specified by the
Committee  at the time of grant of an Option,  in the event that any  Optionee's
service with the Company shall terminate for any reason,  other than Disability,
death or Retirement,  all of any such Optionee's  Stock Options,  and all of any
such  Optionee's  rights to purchase or receive  Shares of Common Stock pursuant
thereto,  shall  automatically  terminate on (A) the earlier of (i) or (ii): (i)
the  respective  expiration  dates  of any  such  Stock  Options,  or  (ii)  the
expiration of not more than three (3) months after the date of such  termination
of service;  or (B) at such later date as is  determined by the Committee at the
time of the grant of such Award based upon the Optionee's continuing status as a
Director or Director  Emeritus of the Savings Bank or the Company,  but only if,
and to the extent  that,  the  Optionee  was entitled to exercise any such Stock
Options  at the  date  of such  termination  of  service.  In the  event  that a
Subsidiary  ceases to be a Subsidiary of the Company,  the  employment of all of
its employees who are not immediately  thereafter employees of the Company shall
be  deemed  to  terminate  upon the  date  such  Subsidiary  so  ceases  to be a
Subsidiary of the Company.

                  (b)  Disability or  Retirement.  Except as may be specified by
the  Committee  at the  time of  grant  of an  Option,  in the  event  that  any
Optionee's  service  with the  Company  shall  terminate  as the  result  of the
Disability or Retirement of such  Optionee,  all such Stock Options shall become
immediately  100%  exercisable  and such Optionee may exercise any Stock Options
granted to the Optionee pursuant to the Plan at any time prior to the respective
expiration dates of any such Stock Options.

                  (c) Death.  Except as may be specified by the Committee at the
time of grant of an Option, in the event of the death of an Optionee,  any Stock
Options granted to such Optionee shall become  immediately  100% exercisable and
may be  exercised by the person or persons to whom the  Optionee's  rights under
any such Stock  Options pass by will or by the laws of descent and  distribution
(including the  Optionee's  estate during the period of  administration)  at any
time prior to the respective expiration dates of any such Stock Options.

                  (d) Stock  Options  Deemed  Exercisable.  For purposes of this
Section,  any Stock Option held by any Optionee shall be considered  exercisable
at the date of  termination  of service if any such Stock Option would have been
exercisable  at such  date of  termination  of  service  without  regard  to the
Disability or death of the Participant.

                  (e)  Termination of Stock Options.  Except as may be specified
by the Committee at the time of grant of an Option, to the extent that any Stock
Option  granted  under the Plan to any Optionee  whose  service with the Company
terminates shall not have been exercised within the applicable  period set forth
in this Section,  any such Stock  Option,  and all rights to purchase or receive
Shares of Common Stock pursuant thereto,  as the case may be, shall terminate on
the last day of the applicable period.

         10.  Recapitalization,  Merger,  Consolidation,  Change  in Control and
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 Other Transactions.
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                  (a)  Adjustment.   Subject  to  any  required  action  by  the
stockholders of the Company,  within the sole  discretion of the Committee,  the
aggregate  number of Shares of Common  Stock for which  Options  may be  granted
hereunder,  the number of Shares of Common  Stock  covered  by each  outstanding


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Option, the number of Shares subject to Stock Awards, and the exercise price per
Share of Common Stock of each such Option, shall all be proportionately adjusted
for any increase or decrease in the number of issued and  outstanding  Shares of
Common Stock resulting from a subdivision or consolidation of Shares (whether by
reason of merger, consolidation,  recapitalization,  reclassification, split-up,
combination  of shares,  or otherwise)  or the payment of a stock  dividend (but
only on the Common  Stock) or any other  increase  or  decrease in the number of
such  Shares  of Common  Stock  effected  without  the  receipt  or  payment  of
consideration   by  the  Company   (other   than   Shares  held  by   dissenting
stockholders).

                 (b) Change in Control.  All  outstanding  Awards  shall become
immediately  exercisable in the event of a Change in Control of the Company,  as
determined  by the  Committee.  In the  event of such a Change in  Control,  the
Committee  and the Board of  Directors  will  take one or more of the  following
actions to be effective as of the date of such Change in Control:

                  (i) provide that such Options shall be assumed,  or equivalent
options  shall  be  substituted,  ("Substitute  Options")  by the  acquiring  or
succeeding  corporation (or an affiliate thereof),  provided that: the shares of
stock  issuable upon the exercise of such  Substitute  Options shall  constitute
securities registered in accordance with the Securities Act of 1933, as amended,
("1933  Act") or such  securities  shall be  exempt  from such  registration  in
accordance  with  Sections  3(a)(2) or  3(a)(5) of the 1933 Act,  (collectively,
"Registered Securities"), or in the alternative, if the securities issuable upon
the  exercise  of  such  Substitute  Options  shall  not  constitute  Registered
Securities,  then the Optionee will receive upon  consummation  of the Change in
Control  transaction  a cash  payment for each Option  surrendered  equal to the
difference between (1) the Fair Market Value of the consideration to be received
for each share of Common  Stock in the Change in Control  transaction  times the
number of shares of Common Stock subject to such  surrendered  Options,  and (2)
the aggregate exercise price of all such surrendered Options, or

                  (ii) in the  event of a  transaction  under the terms of which
the holders of the Common Stock of the Company  will  receive upon  consummation
thereof a cash  payment  (the  "Merger  Price")  for each share of Common  Stock
exchanged in the Change in Control transaction, to make or to provide for a cash
payment to the Optionees  equal to the  difference  between (A) the Merger Price
times the number of Shares of Common Stock  subject to such Options held by each
Optionee (to the extent then  exercisable  at prices not in excess of the Merger
Price) and (B) the aggregate  exercise price of all such surrendered  Options in
exchange for such surrendered Options.

                  (c)  Extraordinary   Corporate  Action.   Notwithstanding  any
provisions  of the Plan to the contrary,  subject to any required  action by the
stockholders   of  the  Company,   in  the  event  of  any  Change  in  Control,
recapitalization,   merger,   consolidation,   exchange  of  Shares,   spin-off,
reorganization,   tender  offer,   partial  or  complete  liquidation  or  other
extraordinary  corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:

                            (i)   appropriately  adjust the number of  Shares of
Common Stock  subject to each  Option,  the Option  exercise  price per Share of
Common Stock, and the  consideration to be given or received by the Company upon
the exercise of any outstanding Option;

                           (ii)   cancel any or all previously granted  Options,
provided that  appropriate  consideration  is paid to the Optionee in connection
therewith; and/or

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                           (iii)  make such other adjustments in connection with
the Plan as the Committee, in its sole discretion,  deems necessary,  desirable,
appropriate or advisable.

                   (d)  Acceleration.  The Committee shall at all times have the
power to accelerate  the exercise date of Options  previously  granted under the
Plan.

         Except as expressly  provided in Sections  10(a) and 10(b)  hereof,  no
Optionee  shall have any rights by reason of the occurrence of any of the events
described in this Section 10.

         11. Time of Granting Options.  The date of grant of an Option under the
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Plan  shall,  for all  purposes,  be the date on which the  Committee  makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each  individual  to whom an Option is so granted  within a  reasonable
time after the date of such grant in a form determined by the Committee.

         12. Stock Awards. The Committee may make grants of Stock Awards,  which
             ------------
shall  consist  of the grant of some  number of  Shares  of Common  Stock,  to a
Participant  upon such terms and  conditions  as it may  determine to the extent
such terms and conditions are consistent with the following provisions:

                   (a) Grants of the Stock Awards. Stock Awards may only be made
in whole  shares of Common  Stock.  Stock Awards may only be granted from Shares
reserved  under the Plan and  available for award at the time the Stock Award is
made to the Participant.

                   (b) Terms of the Stock Awards.  The Committee shall determine
the dates on which  Stock  Awards  granted to a  Participant  shall vest and any
terms or  conditions  which must be satisfied  prior to the vesting of any Stock
Award or portion  thereof.  Any such terms or conditions  shall be determined by
the  Committee  as of the date of grant.  As  promptly  as  practicable  after a
determination  is made that a Stock  Award is to be made,  the  Committee  shall
notify the Participant in writing of the grant of the Stock Award, the number of
Shares  covered by the Stock Award,  and the terms upon which the Shares subject
to the Stock  Award may be  earned.  The date on which the  Committee  makes its
award  determination or the date the Committee so notifies the Participant shall
be  considered  the date of grant  of the  Stock  Awards  as  determined  by the
Committee. The Committee shall maintain records as to all grants of Stock Awards
under the  Plan.  Except as  otherwise  provided  by the terms of the Plan or by
action of the Committee at the time of the grant of the Stock Awards,  the Stock
Awards will be first  exercisable at the rate of 20% on the one year anniversary
of the date of grant and 20% annually  thereafter during such periods of service
as an Employee, Director or Director Emeritus.

                   (c)  Termination of Employment or Service  (General).  Unless
otherwise  determined by the Committee,  upon the termination of a Participant's
employment or service for any reason other than Retirement, Disability or death,
a Change in Control,  or  Termination  for Cause,  any Stock Awards in which the
Participant  has not  become  vested  as the date of such  termination  shall be
forfeited and any rights the  Participant  had to such Stock Awards shall become
null and void.

                   (d) Termination of Employment or Service (Retirement). Unless
otherwise  determined  by  the  Committee,  in  the  event  of  a  Participant's
Retirement,  any Stock Awards in which the  Participant has not become vested as
of  the  date  of   Retirement   shall   immediately   become  100%  earned  and

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non-forfeitable  as of  the  Participant's  date  of  Retirement  and  shall  be
distributed as soon as practicable thereafter.

                   (e)  Termination  of  Employment  or Service  (Disability  or
Death).  Unless  otherwise  determined  by  the  Committee,  in the  event  of a
termination  of the  Participant's  service  due to  Disability  or  death,  all
unvested Stock Awards held by such  Participant  shall  immediately  become 100%
earned  and non-  forfeitable  as of the date of such  termination  and shall be
distributed as soon as practicable thereafter.

                   (f) Change in Control.  Unless  otherwise  determined  by the
Committee,  in the event of a Change in Control,  any Stock  Awards in which the
Participant has not become vested as of the date of such Change in Control shall
become immediately 100% earned and  non-forfeitable on the date of the Change in
Control  and shall be  distributed  to the  Participant  as soon as  practicable
thereafter.

                   (g)  Termination  of Employment or Service  (Termination  for
Cause).  In the event of the  Participant's  Termination  for  Cause,  all Stock
Awards in which the  Participant  had not become vested as of the effective date
of such Termination for Cause shall be forfeited and any rights such Participant
had to such unvested  Stock Awards shall become null and void.  Termination  for
Cause is defined at 12 C.F.R.  563.39(b)(l)  and shall be determined  within the
sole discretion of the Board.

                   (h) Maximum Individual Award. No individual Employee shall be
granted an amount of Stock Awards which exceeds 25% of all Stock Awards eligible
to be  granted  under  Section 3 of the Plan.  In no event  shall  Stock  Awards
granted to  non-employee  Directors in the aggregate under this Plan exceed more
than 25% of the total number of Shares  authorized  for delivery under Section 3
of the Plan.

                   (i) Issuance of  Certificates.  As soon as practicable  after
the date of grant with  respect to shares of Common  Stock  pursuant  to a Stock
Award, the Company shall cause to be issued a stock  certificate,  registered in
the name of the  Participant  to whom such Stock Award was  granted,  evidencing
such Shares; provided, that the Company shall not cause such a stock certificate
to be issued  unless it has  received a stock power duly  endorsed in blank with
respect to such Shares.  Each such stock  certificate  shall bear the  following
legend:

         "The  transferability  of this  certificate  and the shares of
         stock  represented  hereby are  subject  to the  restrictions,
         terms and  conditions  (including  forfeiture  provisions  and
         restrictions  against  transfer)  contained  in  the  Guaranty
         Federal  Bancshares,  Inc.  2000 Stock  Compensation  Plan and
         award agreement  entered into between the registered  owner of
         such shares and Guaranty  Federal  Bancshares,  Inc. A copy of
         the Plan  and  award  agreement  is on file in the  office  of
         Guaranty  Federal  Bancshares,  Inc.,  located  at  1341  West
         Battlefield, Springfield, Missouri 65807.

         Such legend shall not be removed until the  Participant  becomes vested
in such Shares pursuant to the terms of the Plan and award agreement.

                   (j)   Non-Transferability.   A  Stock   Award  shall  not  be
transferable by a Participant, and during the lifetime of the Participant, Stock
Awards may only be earned by and paid to the  Participant  who was  notified  in
writing  of the Stock  Award by the  Committee  pursuant  to Section  12(b).  No
Participant or

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<PAGE>

beneficiary  shall  have any right in or claim to any  assets  of the Plan,  nor
shall the Company be subject to any claim for benefits hereunder.

                   (k) Payment of Dividends.  A Participant or beneficiary shall
also be entitled  to receive,  with  respect to each such Share  distributed,  a
payment  equal to any cash  dividends  and the number of Shares of Common  Stock
equal to any stock  dividends,  declared and paid with respect to a Share of the
Common Stock if the record date for determining shareholders entitled to receive
such  dividends  falls between the date the relevant Stock Award was granted and
the date the relevant  Stock Award or installment  thereof is issued.  Such cash
dividend  amounts shall be held in arrears and distributed to such  Participant,
less applicable income tax withholding, upon the earning of the applicable Stock
Award.

                   (l)  Voting  of Stock  Awards.  After a Stock  Award has been
granted and such Stock Award has been  issued in the form of Common  Stock,  but
for which the Shares  covered by such Stock  Award have not yet been  vested and
earned  to the  Participant  pursuant  to the  Plan,  the  Participant  shall be
entitled  to vote such  Shares  of Common  Stock  which the Stock  Awards  cover
subject to the rules and procedures adopted by the Committee for this purpose.

                   (m) Form of Distribution. All Stock Awards, together with any
Shares representing stock dividends,  shall be distributed in the form of Common
Stock.  One share of Common  Stock shall be given for each Stock  Award  earned.
Payments  representing  cash dividends  (and earnings  thereon) shall be made in
cash. Notwithstanding anything within the Plan to the contrary, upon a Change in
Control  whereby  substantially  all of the Common Stock of the Company shall be
acquired for cash, all Stock Awards, together with any Shares representing stock
dividends  associated with Stock Awards, shall be, at the sole discretion of the
Committee, distributed as of the effective date of such Change in Control, or as
soon as administratively  feasible thereafter,  in the form of cash equal to the
consideration  received in exchange  for such Common Stock  represented  by such
Stock Awards.

                   (n)   Regulatory   Exceptions.   No  Stock  Awards  shall  be
distributed, however, unless and until all of the requirements of all applicable
law and  regulations  shall have been fully  complied with, as determined by the
Committee.

         13.  Modification  of Options.  At any time and from time to time,  the
              ------------------------
Board may  authorize  the  Committee to direct the  execution  of an  instrument
providing  for the  modification  of any  outstanding  Option,  provided no such
modification, extension or renewal shall confer on the holder of said Option any
right or benefit  which could not be conferred on the Optionee by the grant of a
new  Option  at such  time,  or shall not  materially  decrease  the  Optionee's
benefits  under the Option  without  the  consent  of the holder of the  Option,
except as otherwise permitted under Section 14 hereof.

         14.  Amendment and Termination of the Plan.
              -------------------------------------

                   (a)  Action by the  Board.  The Board may  alter,  suspend or
discontinue the Plan at any time within its sole discretion.

                   (b)  Change  in  Applicable  Law.  Notwithstanding  any other
provision  contained  in the Plan,  in the event of a change in any  federal  or
state law,  rule or  regulation  which would make the exercise of all or part of
any previously  granted  Option  unlawful or subject the Company to any penalty,

                                       10
<PAGE>

the Committee may restrict any such exercise without the consent of the Optionee
or other holder thereof in order to comply with any such law, rule or regulation
or to avoid any such penalty.

         15. Conditions Upon Issuance of Shares; Limitations on Option Exercise;
             -------------------------------------------------------------------
Cancellation of Option Rights.
------------------------------

         (a) Shares shall not be issued with respect to any Option granted under
the Plan unless the  issuance  and delivery of such Shares shall comply with all
relevant  provisions of  applicable  law,  including,  without  limitation,  the
Securities  Act of 1933,  as  amended,  the  rules and  regulations  promulgated
thereunder,  any applicable  state  securities laws and the  requirements of any
stock exchange upon which the Shares may then be listed.

         (b) The   inability   of  the   Company   to  obtain   any    necessary
authorizations,  approvals or letters of non-objection  from any regulatory body
or  authority  deemed by the  Company's  counsel to be  necessary  to the lawful
issuance and sale of any Shares issuable  hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.

         (c) As a  condition  to the  exercise  of an Option,  the  Company  may
require  the  person  exercising  the  Option to make such  representations  and
warranties as may be necessary to assure the  availability  of an exemption from
the registration requirements of federal or state securities law.

         (d)  Notwithstanding   anything  herein  to  the  contrary,   upon  the
termination  of  employment  or service  of an  Optionee  by the  Company or its
Subsidiaries  for "cause" as defined at 12 C.F.R.  563.39(b)(1) as determined by
the Board of  Directors,  all Options  held by such  Optionee  shall cease to be
exercisable as of the date of such termination of employment or service.

         (e) Upon the  exercise of an Option by an Optionee  (or the  Optionee's
personal  representative),  the Committee,  in its sole and absolute discretion,
may make a cash  payment to the  Optionee,  in whole or in part,  in lieu of the
delivery  of Shares of Common  Stock.  Such cash  payment  to be paid in lieu of
delivery  of Common  Stock  shall be equal to the  difference  between  the Fair
Market  Value of the  Common  Stock on the date of the Option  exercise  and the
exercise  price per share of the Option.  Such cash payment shall be in exchange
for the cancellation of such Option.  Such cash payment shall not be made in the
event that such  transaction  would  result in  liability to the Optionee or the
Company under Section 16(b) of the Securities  Exchange Act of 1934, as amended,
and regulations promulgated thereunder.

         16. Reservation  of  Shares.  During  the term of the Plan, the Company
             -----------------------
will  reserve and keep  available a number of Shares  sufficient  to satisfy the
requirements of the Plan.

         17. Unsecured Obligation.  No Participant under the Plan shall have any
             --------------------
interest  in any fund or special  asset of the  Company by reason of the Plan or
the grant of any  Option  under the Plan.  No trust  fund  shall be  created  in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.

         18.  Withholding  Tax. The Company  shall have the right to deduct from
              ----------------
all amounts paid in cash with respect to the cashless  exercise of Options under
the Plan any taxes  required  by law to be  withheld  with  respect to such cash
payments.  Where a  Participant  or other  person is entitled to receive


                                       11
<PAGE>

Shares  pursuant to the exercise of an Option or the receipt of Shares  pursuant
to a Stock Award, the Company shall have the right to require the Participant or
such other  person to pay the  Company the amount of any taxes which the Company
is required to withhold  with respect to such Shares,  or, in lieu  thereof,  to
retain,  or to sell without notice, a number of such Shares  sufficient to cover
the amount required to be withheld.

         19. No Employment Rights.  No Director,  Employee or other person shall
             ---------------------
have a right to be selected as a  Participant  under the Plan.  Neither the Plan
nor any action  taken by the  Committee in  administration  of the Plan shall be
construed  as giving  any person any rights of  employment  or  retention  as an
Employee,  Director or in any other capacity with the Company,  the Savings Bank
or other Subsidiaries.

         20. Governing Law.  The  Plan  shall  be  governed  by and construed in
             -------------
accordance  with the laws of the State of  Missouri,  except to the extent  that
federal law shall be deemed to apply.

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