NOTE

13:

EMPLOYEE BENEFIT PLANS

Equity Plans

May

27,

2015,

the Company’s stockholders voted to approve the Guaranty Federal Bancshares, Inc.

2015

Equity Plan

(the”2015

Plan”). The Plan provides for the grant of up to

250,000

shares of Common Stock under equity awards including stock options, stock awards, restricted stock, stock appreciation rights, performance units, or other equity-based awards payable in cash or stock to key employees and directors of the Company and the Bank. As of

December

31,

2016,

restricted stock for

27,645

shares of Common Stock has been granted under the Plan.

May

26,

2010,

the Company’s stockholders voted to approve the Guaranty Federal Bancshares, Inc.

2010

Equity Plan

(the”2010

Plan”). The Plan provides for the grant of up to

200,000

December

31,

2016,

non-incentive stock options for

25,000

shares and restricted stock for

139,330

shares of Common Stock have been granted under the Plan.

In addition, the Company established

four

stock option plans for the benefit of certain directors, officers and employees of the Company and its subsidiary. A committee of the Company’s Board of Directors administers the plans. The stock options under these plans

may

be either incentive stock options or nonqualified stock options. Incentive stock options can be granted only to participants who are employees of the Company or its subsidiary. The option price must not be less than the market value of the Company stock on the date of grant. All options expire no later than

ten

years from the date of grant. The options vest at the rate of

20%

per year over a

five

-year period.

The tables below summarize transactions under the Company’s equity plans:

Stock Options

	Number of shares
	Incentive Stock Option			Non-Incentive Stock Option			Weighted Average Exercise Price
Balance outstanding as of January 1, 2014		168,100			121,000			16.54
Granted		-			-			-
Exercised		(25,100	)		(14,500	)		5.33
Forfeited		(2,700	)		(24,000	)		19.03
Balance outstanding as of December 31, 2014		140,300			82,500			18.23
Granted		-			-			-
Exercised		(10,800	)		(25,000	)		5.22
Forfeited		(38,000	)		-			25.19
Balance outstanding as of December 31, 2015		91,500			57,500			19.58
Granted		-			-
Exercised		(11,500	)		(5,000	)		5.20
Forfeited		(20,000	)		-			28.28
Balance outstanding as of December 31, 2016		60,000			52,500		$	20.15
Options exercisable as of December 31, 2016		60,000			52,500		$	20.15

Restricted Stock

	Number of shares			Weighted Average Grant- Date Price
Balance of shares non-vested as of January 1, 2014		27,629		$	7.39
Granted		34,562			10.99
Vested		(31,688	)		8.55
Forfeited		-			-
Balance of shares non-vested as of December 31, 2014		30,503			10.26
Granted		28,951			14.78
Vested		(15,083	)		11.64
Forfeited		(894	)		12.26
Balance of shares non-vested as of December 31, 2015		43,477			12.75
Granted		24,679			15.01
Vested		(7,201	)		13.13
Forfeited		-			-
Balance of shares non-vested as of December 31, 2016		60,955		$	13.62

As of

December

31,

2016,

total outstanding stock options of

112,500

had a remaining contractual life of

1.35

years.

The total intrinsic value of outstanding stock options was

$660,120

and

$565,025

December

31,

2016

and

2015,

respectively. The total intrinsic value of outstanding exercisable stock options was

$660,120

and

$565,025

December

31,

2016

and

2015,

respectively. The fair value of options vested during

2016,

2015,

and

2014

was

$0,

$143,350

and

$361,517,

respectively.

February

2016,

the Company granted

9,336

shares of restricted stock to directors that have a

one

year cliff vesting. In

February

2015

and

2014,

the Company granted

8,281

and

11,242

of restricted stock to directors that was fully vested and thus, expensed in full during the year ended

December

31,

2015

and

2014,

respectively. In

June

2015,

the Company granted

966

shares of restricted stock to directors that have a cliff vesting at the end of

three

years. The expense is being recognized over the applicable vesting period. The expense relating to these awards for the years ended

December

31,

2016,

2015

and

2014

was

$126,032,

$124,910

and

$122,538,

respectively.

During

2016,

the Company granted

15,343

shares of restricted stock to officers that have a cliff vesting at the end of

three

years. During

2015,

the Company granted

19,704

shares of restricted stock to officers that have a cliff vesting at the end of

three

years. During

2014,

the Company granted

23,320

shares of restricted stock to officers that have a cliff vesting at the end of

three

years. The expense is being recognized over the applicable vesting period. The expense relating to these awards for the years ended

December

31,

2016,

2015

and

2014

was

$267,606,

$176,644

and

$102,099,

respectively.

Total stock-based compensation expense is comprised of expense for restricted stock awards and stock options. Expense recognized for the years ended

December

31,

2016,

2015

and

2014

was

$393,638,

$297,295

and

$254,340,

respectively. As of

December

31,

2016,

there was

$287,443

of unrecognized compensation expense related to nonvested restricted stock awards, which will be recognized over the remaining vesting periods.