Document:

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                                                                    Exhibit 10.6

                        GUARANTY FEDERAL BANCSHARES, INC.

                          2000 STOCK COMPENSATION PLAN

         1. Purpose of the Plan. The Plan shall be known as the Guaranty Federal
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
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.

            (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.

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            (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.

            (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

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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
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.

         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
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.

            (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
6b-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
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*Not to exceed 1% of shares outstanding as of date of Board adoption.

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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
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.

         7. Term of the Plan. The Plan shall continue in effect for a term of
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
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

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taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or 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.

         9. Effect of Termination of Service, Disability, Death and Retirement
on Stock Options.

            (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 Other
Transactions.

            (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 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

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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

                (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.
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        11. Time of Granting Options. The date of grant of an Option under the
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
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.

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            (h) [Reserved]

            (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
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.

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            (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, 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.

                                      9

<PAGE>

        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 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.
                                       10<PAGE>

                                                                    Exhibit 10.7

                       GUARANTY FEDERAL BANCSHARES, INC.

                          2001 STOCK COMPENSATION PLAN

         1. Purpose of the Plan. The Plan shall be known as the Guaranty Federal
Bancshares, Inc. ("Company") 2001 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
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.

            (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

                                     Page 1

<PAGE>

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.

            (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. 2001
Stock Compensation Plan.

                                     Page 2

<PAGE>

            (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
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 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.

         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
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.

            (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.

                                     Page 3

<PAGE>

            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
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.

         7. Term of the Plan. The Plan shall continue in effect for a term of
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
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

                                     Page 4

<PAGE>

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 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.

         9. Effect of Termination of Service, Disability, Death and Retirement
on Stock Options.

            (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 Other
Transactions.
                                     Page 5

<PAGE>

            (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 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

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

                                     Page 6

<PAGE>

            (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
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
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.

                                     Page 7

<PAGE>

            (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) [Reserved]

            (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. 2001 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
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,
                                     Page 8

<PAGE>
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, 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

                                     Page 9

<PAGE>

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 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.

                                     Page 10

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