-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000891554-01-501397.txt : 20010402
<SEC-HEADER>0000891554-01-501397.hdr.sgml : 20010402
ACCESSION NUMBER:		0000891554-01-501397
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010417
FILED AS OF DATE:		20010315

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GUARANTY BANCSHARES INC /TX/
		CENTRAL INDEX KEY:			0001058867
		STANDARD INDUSTRIAL CLASSIFICATION:	6022
		IRS NUMBER:				751656431
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		
		SEC FILE NUMBER:	000-24235
		FILM NUMBER:		1568633

	BUSINESS ADDRESS:	
		STREET 1:		100 WEST ARKANSAS
		CITY:			MT PLEASANT
		STATE:			TX
		ZIP:			75456
		BUSINESS PHONE:		9035729881

	MAIL ADDRESS:	
		STREET 1:		100 WEST ARKANSAS
		CITY:			MT PLEASANT
		STATE:			TX
		ZIP:			75456
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>d70396_def14a.htm
<DESCRIPTION>PROXY
<TEXT>

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     <!-- Project:        X:\JOBS\70396\a70396.hep                                         -->
     <!-- Control Number: a70396                                                           -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Guaranty Bancshares                                              -->
     <!-- Project Name:   DEF 14A                                                          -->
     <!-- Firm Name:      ADP                                                              -->
     <TITLE>Def 14a</TITLE>
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<HR NOSHADE SIZE=5>
<BR>

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<H1 ALIGN=CENTER><FONT SIZE=2>SCHEDULE 14A</FONT></H1>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>(Rule 14a-101) </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>INFORMATION REQUIRED IN
PROXY STATEMENT </FONT></P>

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<H1 ALIGN=CENTER><FONT SIZE=2>SCHEDULE 14A INFORMATION</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT SIZE=2>Proxy Statement Pursuant to Section 14(a) of<BR>the Securities
Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&nbsp;)</FONT></P>

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<P><FONT SIZE=2>Filed by the Registrant [X] </FONT></P>

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<P><FONT SIZE=2>Filed by a Party other than the Registrant [_] </FONT></P>

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<P><FONT SIZE=2>Check the appropriate box: </FONT></P>
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</TD>
</TR>
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<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=50%><FONT SIZE=2>[_]&nbsp;&nbsp;Preliminary Proxy Statement</FONT></TD>
<TD ALIGN=LEFT WIDTH=50%><FONT SIZE=2>[_]&nbsp;&nbsp;Soliciting Material Under Rule 14a-12</FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=50%><FONT SIZE=2>[_]&nbsp;&nbsp;Confidential, For Use of the<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commission Only (as permitted by <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rule 14a-6(e)(2))</FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=50%><FONT SIZE=2>[X]&nbsp;&nbsp;Definitive Proxy Statement</FONT></TD>
<TD ALIGN=LEFT WIDTH=50%><FONT SIZE=2>&nbsp; </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=80%><FONT SIZE=2>[_]&nbsp;&nbsp;Definitive Additional Materials</FONT></TD>
<TD ALIGN=LEFT WIDTH=20%><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
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<TD>


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<P ALIGN=CENTER><FONT SIZE="2"><B>Guaranty Bancshares</B><BR>(Name of Registrant as Specified
In Its Charter)</FONT> </P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT SIZE=2>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>(Name of Person(s) Filing Proxy
Statement, if other than the
Registrant) </FONT></P>

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<P><FONT SIZE=2>Payment of Filing Fee (Check the appropriate box): </FONT></P>
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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2>[X] </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT SIZE=2>No
fee required.</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2>[_] </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT SIZE=2>Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(1) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Title
of each class of securities to which transaction applies:<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(2) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Aggregate
number of securities to which transaction applies:<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
</TABLE>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(3) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Per
unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
was determined):<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
</TABLE>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(4) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Proposed
maximum aggregate value of transaction:<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
</TABLE>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(5) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Total
fee paid:<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2>[_] </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT SIZE=2>Fee
paid previously with preliminary materials:</FONT></TD>
</TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2>[_] </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT SIZE=2>Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.</FONT></TD>
</TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(1) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Amount
Previously Paid:<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(2) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Form,
Schedule or Registration Statement No.:<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(3) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Filing
Party:<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT SIZE=2>(4) </FONT></TD>
<TD WIDTH=3%><FONT SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT SIZE=2>Date
Filed:<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
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<BR>


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<HR NOSHADE SIZE=5>
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<A NAME="A001"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY
BANCSHARES, INC.</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>100 West Arkansas <BR>Mount Pleasant, Texas
75455</FONT></H2>

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<A NAME="A004"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE OF
2001 ANNUAL MEETING OF SHAREHOLDERS<BR>TO BE HELD ON TUESDAY, APRIL 17, 2001</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders
of Guaranty Bancshares, Inc.: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2001 Annual Meeting of Shareholders (the &#147;Meeting&#148;) of Guaranty
Bancshares, Inc. (the &#147;Company&#148;) will be held at 100 West Arkansas,
Mount Pleasant, Texas, on Tuesday, April 17, 2001, beginning at 2:00 p.m. (local
time), for the following purposes: </FONT></P>

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<BR>

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<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To elect three directors
of Class I to serve on the Board of Directors of the Company until
the Company&#146;s 2004 Annual Meeting of Shareholders and until their successors are duly
elected and qualified;</FONT></TD>
</TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
consider and act upon a proposal to ratify the appointment of Fisk &amp; Robinson,P.C. as the
independent auditors of the books and accounts of the Company for the year ending
December 31, 2001; and</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
transact such other business as may properly come before the meeting or any adjournment
thereof.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
close of business on March 7, 2001 has been fixed<B> </B>as the record date for
the determination<B> </B>of shareholders entitled to notice of and to vote at
the Meeting or at any adjournments thereof. A list of shareholders entitled to
vote at the Meeting will be available for inspection by any shareholder at the
offices of the Company during ordinary business hours for a<B> </B>period of at
least ten days prior to the Meeting. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are cordially invited and urged to attend the Meeting. If you are unable to
attend the Meeting, you are requested to sign and date the enclosed proxy and
return it promptly in the enclosed envelope. If you attend<B> </B>the Meeting,
you may vote in person, regardless of whether you have given your proxy. Your
proxy may be revoked at any time before it is voted. </FONT></P>
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<BR>

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<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By
order of the Board of Directors,<BR><BR>
<BR>/s/ Arthur B. Scharlach, Jr.<BR><BR>
Arthur B. Scharlach, Jr.<BR>President</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD>

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<A NAME="A007"></A>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Mount
Pleasant, Texas<BR>March 16, 2001</FONT> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A008"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>YOUR VOTE IS
IMPORTANT.</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>To
ensure your representation at the Meeting, you are urged to complete, date, and
sign the enclosed proxy and return it in the accompanying envelope at your
earliest convenience, regardless of whether you plan to attend the Meeting. No
additional postage is necessary if the proxy is mailed in the United States. The
proxy is revocable at any time before it is voted at the Meeting.</B> </FONT></P>

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<HR SIZE=5 NOSHADE><BR>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A009"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY
BANCSHARES, INC.<BR>100 West Arkansas<BR>Mount
Pleasant, Texas 75455</FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A012"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>March 16,
2001</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A013"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY
STATEMENT<BR>FOR<BR>2001 ANNUAL
MEETING OF SHAREHOLDERS<BR>TO BE HELD ON TUESDAY, APRIL 17, 2001</FONT></H1>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A016"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SOLICITATION,
REVOCABILITY AND VOTING OF PROXIES</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Proxy Statement is being issued in connection with the solicitation of proxies
by the<B> </B>Board of Directors of Guaranty Bancshares, Inc. (the
&#147;Company&#148;) for use at the 2001 Annual Meeting of Shareholders of the
Company to be held at 100 West Arkansas, Mount Pleasant, Texas, on Tuesday,
April 17, 2001, beginning at 2:00 p.m. (local time), and any adjournment thereof
(the &#147;Meeting&#148;), for the purposes set forth in this Proxy Statement
and the accompanying<B> </B>Notice of 2001 Annual Meeting of Shareholders
(&#147;Notice of Meeting&#148;). This Proxy Statement, the Notice of Meeting and
the enclosed form of proxy will first be sent to shareholders on or about March
16, 2001. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A017"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Voting of
Proxies</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
represented at the Meeting by an executed and unrevoked proxy in the form
enclosed will be voted in accordance with the instructions contained therein. If
no instructions are given on an executed and returned form of proxy, the proxies
intend to vote the shares represented thereby in favor of each of the proposals
to be presented to and voted upon by the shareholders as set forth herein. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors knows of no other matters to be presented at the Meeting. If
any<B> </B>other matter should be presented at the Meeting upon which a vote may
be properly taken, shares represented by an executed and unrevoked proxy
received by the Board of Directors may be voted with respect thereto in
accordance with the judgment of the proxies. The proxy also confers on the
proxies the discretionary authority to vote with respect to any matter presented
at the Meeting for which the Company, in accordance with the Company&#146;s
Bylaws, did not receive advance notice. </FONT></P>

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<A NAME="A018"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Revocability
of Proxies</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
proxy given by a shareholder may be revoked by such shareholder at any time
before it is exercised by submitting to the Secretary of the<B> </B>Company a
duly executed proxy bearing a later date, delivering to the Secretary of the
Company a written notice of revocation, or attending the Meeting and voting in
person. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-2- </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD><HR NOSHADE SIZE=5>
<BR>


<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A019"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Solicitation</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
cost of this solicitation of proxies is being borne by the Company.
Solicitations will be made only by the use of the mail, except that, if deemed
desirable, officers and regular employees of the Company may solicit proxies by
telephone, telegraph or personal calls, without being paid additional
compensation for such services. Brokerage houses, custodians, nominees and
fiduciaries will be requested to forward the proxy soliciting material to the
beneficial owners of the common stock, par value $1.00 per share, of the Company
(the &#147;Common Stock&#148;) held of record by such persons, and the Company
will reimburse them for their reasonable expenses incurred in this connection. </FONT></P>

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<A NAME="A020"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Annual Report</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Annual Report to Shareholders, including condensed financial
information, for the year ended December 31, 2000, accompanies but does not
constitute part of this Proxy Statement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A021"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>VOTING
SHARES AND VOTING RIGHTS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
holders of record of Common Stock at the close of business on March 7, 2001 (the
&#147;Record Date&#148;), are entitled to notice of and to vote at the Meeting
and any adjournments or postponements thereof. At that time, there were
outstanding 3,037,632 shares of Common Stock, which is the only outstanding
class of voting securities of the Company. A majority of the outstanding shares
of Common Stock must be represented at the Meeting in person or by proxy in
order to constitute a quorum for the transaction of business. Each holder of
Common Stock shall have one vote for each share of Common Stock registered on
the Record Date, in such holder&#146;s name on the books of the Company. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
affirmative vote of the holders of a plurality of the outstanding shares of
Common Stock represented at the Meeting is required to elect the Class I
nominees to the Board of Directors. There will be no cumulative voting in the
election of directors. Abstentions and shares held of record by a broker or
nominee that are voted on any matter are included in determining whether a
quorum exists. An abstention, a non-vote or a withholding of authority to vote
with respect to one or more nominees for director will not have the effect of a
vote against such nominee or nominees. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock represented at the Meeting is required to approve the appointment
of the auditors. An abstention or a non-vote will have the effect of a vote
against the appointment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A022"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ELECTION OF
DIRECTORS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A023"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Election
Procedures; Term of Office</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors currently consists of eight directors. In accordance with the
Company&#146;s Amended and Restated Bylaws, members of the Board of Directors
are divided into three classes, Class I, Class II and Class III. The members of
each class are elected for a term of office to expire at the third succeeding
annual meeting of shareholders following their election. The term of office of
the current Class I directors expires at the Meeting. The terms of the current
Class II and Class III directors expire at the annual meeting of
    shareholders  in 2002 and 2003,  respectively.  The three Class I nominees,  if elected at the  Meeting,  will
    serve until the annual meeting of shareholders in 2004.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-3- </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD><HR NOSHADE SIZE=5>
<BR>


<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has nominated John A. Conroy, Clifton A. Payne and D. R. Zachry, Jr.
for election as Class I directors at the Meeting. Messrs. Conroy, Payne and Zachry are
currently serving as Class I directors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Class I nominees receiving the affirmative vote of the holders of a plurality of the
shares of Common Stock represented at the Meeting will be elected. Unless the authority
to vote for the election of directors is withheld as to one or more of the nominees, all
shares of Common Stock represented by proxy will be voted <B>FOR</B> the election of the
nominees. If the authority to vote for the election of directors is withheld as to one
but not all of the nominees, all shares of Common Stock represented by any such proxy
will be voted <B>FOR</B> the election of the nominee as to whom such authority is not
withheld. </FONT></P>



<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a
nominee becomes unavailable to serve as a director for any reason before the election,
the shares represented by proxy will be voted for such other person, if any, as may be
designated by the Board of Directors. The Board of Directors, however, has no reason to
believe that any nominee will be unavailable to serve as a director. All of the nominees
have consented to being named herein and to serve if elected. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
director vacancy occurring after the election may be filled only by a majority of the
remaining directors, even if less than a quorum of the Board of Directors. A director
elected to fill a vacancy will be elected for the unexpired portion of the term of his
predecessor in office. </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Nominees for Election</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth information with respect to each nominee for election as a
director of the Company:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Name</B></FONT></FONT><HR WIDTH=60% SIZE=1 NOSHADE></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Age</B></FONT></FONT> <HR WIDTH=40% SIZE=1 NOSHADE></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Positions with Company and<BR>Guaranty Bank (the &#147;Bank&#148;)</B> </FONT></FONT><HR WIDTH=80% SIZE=1 NOSHADE></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="27%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">John A. Conroy</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="15%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">83</FONT></TD>
        <TD WIDTH="10%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="40%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Class I Director of the Company;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Director of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Clifton A. Payne</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">43</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Class I Director, Senior Vice President</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">and Controller of the Company;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Director; Executive Vice President and</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Chief Financial Officer of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">D. R. Zachry, Jr</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">77</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Class I Director of the Company</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>John
A. Conroy.</I> Mr. Conroy has served as a director of the Company since it was formed in 1980
and as a director of the Bank since 1975. Mr. Conroy has been the owner of Conroy Ford
Tractor Company in Mount Pleasant, Texas for more than the past five years.</FONT></FONT> </P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Clifton
A. Payne.</I> Mr. Payne joined the Bank in 1984 after four years in private practice with a
Certified Public Accountant firm. He became a Vice President of the Bank in 1986 and was
elected an Executive Vice President in 1996 and Chief Financial Officer in 1998. In 1995,
Mr. Payne was elected to the Board of Directors of the Company and the Bank. Mr. Payne is
also a Senior Vice President and Controller of the Company.</FONT></FONT> </P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>D. R
Zachry, Jr.</I> Mr. Zachry served as a director of the Bank from 1957 to 2001 and as a
director of the Company since its inception. He has been retired for more than the past
five years.</FONT></FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-4- </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>




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<TR VALIGN=TOP>
<TD><HR NOSHADE SIZE=5>
<BR>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THE
BOARD OF DIRECTORS RECOMMENDS A VOTE <U>FOR</U> THE ELECTION OF EACH OF THE
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A025"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CONTINUING
DIRECTORS AND EXECUTIVE OFFICERS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth certain information with respect to the
Company&#146;s Class II and Class III directors, whose terms of office do not
expire at the Meeting, and certain officers of the Company (other than Mr.
Clifton A. Payne): </FONT></P>
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</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TD WIDTH="32%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Name</B> </FONT></FONT><HR WIDTH=70% SIZE=1 NOSHADE></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="54%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Positions</B> </FONT></FONT><HR WIDTH=70% SIZE=1 NOSHADE></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Age</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="32%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Jonice Crane</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="54%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Class II Director of the Company;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">74</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Director of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">C. A. Hinton, Sr</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Class II Director of the Company;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">77</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Director of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Bill G. Jones</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Chairman of the Board, Class III</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">71</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Director and Chief Executive Officer</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">of the Company; Chairman of the</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Board of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Weldon Miller</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Class III Director of the Company;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">65</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Director of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Arthur B. Scharlach, Jr</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Class II Director and President of the</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">61</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Company; Director, President and Chief</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Executive Officer of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>

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<TD>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Jonice
Crane.</I> Ms. Crane joined the Bank in 1943 and had 53 years of continuous service until her
retirement as an officer of the Bank in 1996. She served as an Executive Vice President
of the Bank from 1971 to 1996 and has served as a director of the Bank since 1971 and a
director of the Company since its inception. </FONT></FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>C. A.
Hinton, Sr.</I> Mr. Hinton has served as a director of the Bank since 1960 and as a director
of the Company since it was formed in 1980. Mr. Hinton has been the Chairman of Hinton
Production Company in Mount Pleasant, Texas for more than the past five years. </FONT></FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Bill
G. Jones.</I> Mr. Jones joined the Bank as President and a director in 1969 and became
Chairman of the Board in 1979. He retired as an officer of the Bank in 1996 but continues
to serve as Chairman of the Board. Mr. Jones has been Chairman of the Board of the
Company since 1992 and Chief Executive Officer of the Company since its formation in 1980. </FONT></FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Weldon
Miller.</I> Mr. Miller became a director of the Company in 1980 and has served as a director
of the Bank since 1969. Mr. Miller has been the President of Everybody&#146;s Furniture
Company in Mount Pleasant, Texas for more than the past five years. </FONT></FONT> </P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-5- </FONT></P>

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</TR>
</TABLE>
<BR>




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<BR>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Arthur
B. Scharlach, Jr.</I> Mr. Scharlach is the President and a director of the Company and
President, Chief Executive Officer and a director of the Bank. He joined the Bank in 1970
as a Vice President and Loan Officer and was elected to the Bank&#146;s Board of Directors in
1971. He was elected a Senior Vice President of the Bank in 1974, President in 1979,
Chief Operating Officer in 1983 and Chief Executive Officer in 1989. He has served as a
director of the Company since its inception and as President since 1992. Mr. Scharlach is
a director and Immediate Past Chairman of The Independent Bankers Bank, formerly Texas
Independent Bank, Dallas, Texas. </FONT></FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
officer of the Company is elected by the Board of Directors of the Company and holds
office until his successor is duly elected and qualified or until his or her earlier
death, resignation or removal. </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Operation of the Board
of Directors</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors of the Company held 12 meetings during 2000. None of the
directors attended less than 75% of the aggregate of the (i) total number of
meetings of the Board and (ii) total number of meetings held by committees on
which each such director served, except for Mr. Zachry who attended 41% of such
meetings. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has an Audit Committee and a Compensation Committee. The
Audit Committee reviews the general scope of the audit conducted by the
Company&#146;s independent auditors and matters relating to the Company&#146;s
internal control systems. In performing its function, the Audit Committee meets
separately with representatives of the Company&#146;s independent auditors and
with representatives of senior management. During 2000, the Audit Committee held
six meetings. The Audit Committee is comprised of Messrs. Miller (Chairman) and
Conroy and Ms. Crane, each of whom is an outside director. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee is responsible for making recommendations to the Board of
Directors with respect to the compensation of the Company&#146;s executive
officers and is responsible for the establishment of policies dealing with
various compensation and employee benefit matters. The Compensation Committee
also administers the Company&#146;s stock option plans and makes recommendations
to the Board of Directors as to option grants to Company employees under such
plans. During 2000, the Compensation Committee held five meetings. The
Compensation Committee is comprised of Messrs. Hinton (Chairman) and Miller and
Ms. Crane, each of whom is an outside director. </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Compensation Committee
Interlocks and Insider Participation</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee consists of Jonice Crane, C.A. Hinton, Sr., and Weldon Miller,
each of whom is an outside director of the Company. During 2000, no member of the
Compensation Committee was an officer or employee of the Company or the Bank. Ms. Crane
served as an Executive Vice President of the Bank until 1996. </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Directors Compensation</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors
of the Company receive fees for attending Company Board meetings. Inside
directors are paid $200 for each meeting attended, and outside directors are
paid $450 for each meeting attended. The Board of Directors of the Bank also
meets monthly. Inside directors of the Bank are paid $400 for each meeting of
the Bank&#146;s Board of Directors attended, and outside directors are paid $500
for each meeting attended. An Executive Committee meets weekly and consists of
all members of the Board of Directors of the Company. Inside directors are paid
$250 for each Executive Committee meeting attended and outside directors are
paid $300 for each Executive Committee meeting attended. </FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-6- </FONT></P>
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</TD>
</TR>
</TABLE>
<BR>

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<BR>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A029"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXECUTIVE
COMPENSATION AND OTHER MATTERS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A030"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Summary
Compensation Table</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides certain summary information concerning compensation
paid or accrued by the Company to or on behalf of the Company&#146;s Chairman of
the Board and Chief Executive Officer and each of the other five most highly
compensated Executive Officers of the Company and the Bank (determined as of the
end of the last fiscal year) for each of the three fiscal years ended December
31: </FONT></P>
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</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TD WIDTH="57%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Name and Principal Position</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Year</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Salary</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Bonus</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="11%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>All Other<BR>Compensation</B></FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TD WIDTH="57%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Bill G. Jones</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2000</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$50,400</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$14,482</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$39,219</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(1)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board and Chief Executive Officer</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1999</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">48,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">16,400</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">40,156</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1998</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">48,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13,900</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">39,968</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Arthur B. Scharlach, Jr</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">228,750</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">63,032</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">98,688</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(2)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;President</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1999</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">219,933</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">69,605</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">101,809</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1998</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">207,600</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">61,191</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">42,226</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Clifton A. Payne</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">112,700</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">41,512</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13,458</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;Senior Vice President and Controller</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1999</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">106,400</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">43,930</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15,497</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1998</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">96,800</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">37,382</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13,657</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Kirk Lee</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">88,250</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">24,961</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">9,441</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(4)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;Bank President - Paris location</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1999</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">77,870</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">23,505</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">9,939</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1998</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">69,859</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">19,768</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8,818</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Tyson T. Abston</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">88,200</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">32,070</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,751</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(5)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;Executive Vice President of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1999</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">78,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">21,750</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,601</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1998</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">65,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13,655</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8,499</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Byron M. Rhea</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">108,250</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">35,390</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11,515</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(6)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;Executive Vice President of the Bank</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1999</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">100,666</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">37,615</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">14,450</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> &nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1998</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">92,971</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">32,716</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11,869</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>
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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Consists of contributions by the Company to the 401(k) Plan of $3,893, $4,830,
and $4,642 in 2000, 1999 and 1998, respectively, and the payment of $35,326,
$35,326 and $35,326 in 2000, 1999 and 1998 respectively in connection with a
supplemental retirement plan.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Consists of contributions by the Company to the 401(k) Plan of $10,200, $12,000
and $12,290 in 2000, 1999 and 1998, respectively, and the accrual of $99,809,
$89,809 and $29,936 in 2000, 1999 and 1998, respectively, in connection with a
salary continuation plan.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Consists of contributions by the Company to the 401(k) Plan of $9,022, $11,313
and $10,064 in 2000, 1999 and 1998, respectively, and the accrual of $4,436,
$4,184, and $3,800 in 2000, 1999 and 1998, respectively, in connection with an
incentive retirement plan.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Consists of contributions by the Company to the 401(k) Plan of $6,793, $7,603
and $6,722 in 2000, 1999 and 1998, respectively, and the accrual of $2,648,
$2,336 and $2,096 in 2000, 1999 and 1998, respectively, in connection with an
incentive retirement plan.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Consists of contributions by the Company to the 401(k) Plan of $7,223, $7,481
and $5,899 in 2000, 1999, and 1998, respectively, and the accrual of $3,528,
$3,120 and $2,600, in 2000, 1999 and 1998, respectively, in connection with an
incentive retirement plan.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Consists of contributions by the Company to the 401(k) Plan of $7,185, $10,423
and $8,462 in 2000, 1999 and 1998, respectively, and the accrual of $4,330,
$4,027 and $3,719 in 2000, 1999 and 1998, respectively, in connection with an
incentive retirement plan.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-7- </FONT></P>
<!-- MARKER FORMAT-SHEET="Page Width End" -->
</TD>
</TR>
</TABLE>
<BR>

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<BR>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A031"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Stock Option
Plan</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Board of Directors and shareholders approved the Guaranty
Bancshares, Inc. 1998 Stock Incentive Plan in 1998 (the &#147;1998 Plan&#148;),
which authorizes the issuance of up to 1,000,000 shares of Common Stock under
both &#147;non-qualified&#148; and &#147;incentive&#148; stock options to
employees and &#147;non-qualified&#148; stock options to directors who are not
employees. Generally, under the 1998 Plan it is intended that the options will
vest 60% at the end of the third year following the date of grant and an
additional 20% at the end of each of the two following years; however, an
individual option may vest as much as 20% at the end of the first or second year
following the date of grant if necessary to maximize the &#147;incentive&#148;
tax treatment to the optionee for the particular option being granted. Options
under the 1998 Plan generally must be exercised within ten years following the
date of grant or no later than three months after optionee&#146;s termination
with the Company, if earlier. The 1998 Plan also provides for the granting of
restricted stock awards, stock appreciation rights, phantom stock awards and
performance awards on substantially similar terms. The l998 Plan provides that
in the event of a change in control of the Company, all options granted
immediately vest and become exercisable. In addition, the 1998 Plan permits the
Compensation Committee, which administers the 1998 Plan, discretion in the event
of a change in control to modify in certain respects the term of awards under
the 1998 Plan, including (i) providing for the payment of cash in lieu of such
award, (ii) limiting the time during which an option may be exercised (iii)
making adjustments to options to reflect the change in control and (iv)
providing that options shall be exercisable for another form of consideration in
lieu of the Common Stock pursuant to the terms of the transaction resulting in a
change in control. On December 31, 2000, certain officers received the stock
options indicated on page 11. </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Bonus Plan</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has established an incentive compensation program (the &#147;Bonus
Plan&#148;) for its officers, including executive officers, and employees of the
Company and the Bank which provides for a bonus pool in an amount based on a
graduated percentage of the Bank&#146;s return on equity. For the year ended
December 31, 2000, the bonus pool is funded with 10% of after-tax income based
upon the Bank achieving a return on equity of 11.3%. The bonus pool increases to
a maximum of 14.5% of after-tax income if the Bank achieves a return on equity
of 14.8% or greater. The Bank&#146;s actual return on equity for the year ended
December 31, 2000 is 11.7%. The percent of after-tax income used to fund the
bonus pool and the minimum return on equity requirements are determined annually
by the Board of Directors based on the Company&#146;s budget for that year.
Allocation of the bonus pool is in the discretion of the Board of
Director&#146;s and is generally based upon management&#146;s recommendations
regarding an employee&#146;s merit. The bonus pool was $266,000, $419,000, and
$387,000 for the year ended December 31, 2000, 1999 and 1998, respectively. </FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-8- </FONT></P>


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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Benefit Plans</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employee</I>
<I>Stock Ownership Plan. </I>Effective January 1, 1992, the Board of Directors
of the Company voted to restate the existing 401(k) profit sharing (defined
contribution) plan as an Employee Stock Ownership Plan (with 401(k) provisions)
(&#147;401(k) Plan&#148;). The 401(k) Plan covers substantially all employees of
the Company and six persons, four of whom are members of the Board of Directors,
serve as trustees. The 401(k) Plan calls for an employer matching contribution
on behalf of each 401(k) Plan participant of up to 4.0% of such
participant&#146;s qualified compensation. At December 3l, 2000, the book value
of 401(k) Plan assets was approximately $5.5 million, with an approximate market
value of $7.3 million. Contributions to the 401(k) Plan charged to expenses are
as follows: </FONT></P>
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</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Years Ended December 31,</FONT><HR WIDTH=92% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1999</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1998</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="41%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Profit sharing plan expense</FONT></TD>
     <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$280,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$294,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$271,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="8"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Supplemental
Retirement Plan. </I>In l992, the Company established a non-qualified,
non-contributory retirement plan for the Company&#146;s Chairman Bill G. Jones
who retired from the Bank in 1996. The plan generally provides benefits equal to
amounts payable under the Bank&#146;s retirement plan and certain social
security benefits to aggregate a predetermined percentage of Mr. Jones&#146;
average salary over the five year period immediately prior to his retirement.
Accordingly, this plan amount is not based on the salary and bonus of Mr. Jones
as listed in the Executive Compensation table on page 7. The recorded accrued
liability with respect to this plan accrues an annual interest rate of 9%. The
Company pays to Mr. Jones $35,326 each year with respect to this plan without
withholding any social security tax from such amount. The Plan expenses are as
follows: </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Years Ended December 31,</FONT><HR WIDTH=92% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1999</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1998</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="41%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Supplemental retirement plan expense</FONT></TD>
     <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$15,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$17,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$18,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="8"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<BR>

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<TD>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Executive
Incentive Retirement Plan. </I>In 1998, the Company established a non-qualified,
non-contributory incentive retirement plan for certain executive officers of the
Company and the Bank. The plan provides retirement benefits in amounts based on
a selected percentage of salary, which varies depending upon each officer&#146;s
responsibility and longevity with the Company or the Bank. Accordingly, the
executive officers bonus as listed in the Executive Compensation table on page 7
is not used in calculating this benefit. The percentage of salary which is
contributed to the retirement plan by the Company is determined by the
performance of the Company, however, no contribution to this plan is made in any
given year in which the Company&#146;s earnings fail to meet the targeted
performance goal for that year. The executive officer is not required to pay
social security tax until a payment is received by the executive officer under
the plan. The plan is non-funded. Plan expenses are as follows: </FONT></P>
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</TABLE>
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<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Years Ended December 31,</FONT><HR WIDTH=92% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1999</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1998</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="41%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Executive incentive retirement plan expense</FONT></TD>
     <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$29,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$23,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$18,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="8"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Salary
Continuation Plan.</I> In August 1998, the Company established a non-qualified,
non-contributory salary continuation plan for the Company&#146;s President Arthur B.
Scharlach, Jr. The plan is designed to provide benefits over a ten-year period equal to
75% of Mr. Scharlach&#146;s projected compensation at retirement as adjusted for amounts
payable under the Company&#146;s retirement plan and certain social security benefits. Mr.
Scharlach pays social security tax on this benefit on an annual basis. The plan is
non-funded. Plan expenses are as follows: </FONT></FONT> </P>

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</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Years Ended December 31,</FONT><HR WIDTH=92% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1999</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1998</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="41%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Salary continuation plan ex</FONT></TD>
     <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$100,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$90,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="15%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$30,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="8"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-9- </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" -->
</TD>
</TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD><HR NOSHADE SIZE=5>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BOARD COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following is a report from the Compensation Committee of the Company describing
the policies pursuant to which compensation is paid to officers of the Company
and the Bank during 2000. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee of the Board of Directors is responsible for developing and making
recommendations to the Board with respect to the Company&#146;s executive compensation
policies. C. A. Hinton, Sr. (Chairman), Weldon Miller and Jonice Crane serve on the
Compensation Committee. The Compensation Committee prepares a report which sets forth the
components of the Company&#146;s officer compensation program, and describes the basis on which
the 2000 compensation determinations are made by the Compensation Committee with respect
to the officers of the Company and the Bank. </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A032"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Compensation
Philosophy and Base Salary</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company believes that compensation of its executive officers should enhance and
reinforce the goals of the Company for profitable growth and continuation of a
sound overall condition by providing key employees with additional financial
rewards for the attainment of such growth and stable financial and operating
conditions. The Compensation Committee believes that these goals are best
supported by rewarding individuals for outstanding contributions to the
Company&#146;s success and by compensating its officers competitively with the
compensation of similarly situated executive officers. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
base salary levels for each officer are determined by comparisons to salary
levels for executive officers of banks and bank holding companies of similar
size in the Company&#146;s market. In addition, the Compensation Committee takes
into account individual experience, individual performance, individual potential
cost of living considerations and specific issues particular to the Company.
Base levels approximate the median level of such comparative rates and are
considered by the Compensation Committee to be competitive and reasonable. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee monitors the base salary levels and the various
incentives of the named Executive Officers to ensure that overall compensation
is consistent with the Company&#146;s objectives and remains competitive within
the area of the Company&#146;s operations. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A033"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Bonus Plan</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the base salary, the Bonus Plan allows certain officers, including
Executive Officers, of the Company and the Bank to receive incentive
compensation which is based on individual as well as Company performance. The
aggregate amount of bonus awarded to all eligible participants is based on the
funding of the bonus pool. For the year ended December 31, 2000, the maximum
funding occurred if the Bank&#146;s return on equity was 14.8% or greater. The
bonus pool is allocated among all employees, including Executive Officers, of
the Company and the Bank based on a number of factors including level of
responsibility, individual performance and Company and Bank performance. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A034"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Contributory
Profit Sharing Plan</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, each of the named Executive Officers are participants in the
Company&#146;s 401(k) Plan established pursuant to Internal Revenue Code Section
401(k) covering substantially all employees. The Company partially matches
employee contributions to this plan up to 4% of the employee&#146;s base salary. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-10- </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR NOSHADE SIZE=5>
<BR>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Incentive Stock Option
Plan</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the named Executive Officers and other senior officers of the Company and the
Bank are eligible to participate in the Company&#146;s 1998 Plan. During the
year ended December 31, 2000, the following non-qualified stock options vesting
20% per year for five years and expiring in eight years are granted by the Board
of Directors to the following officers: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Option Grants for Year
Ended December 31, 2000</FONT></H1>
<!-- MARKER FORMAT-SHEET="Page Width End" -->
</TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Individual Grants  </FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Potential Realizable Value at<BR>Assumed Annual Rates of Stock<BR>Price<BR>Appreciation for Option Term (1) </FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="34%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Name</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Number<BR>of Shares<BR>Underlying<BR>Options</B>  </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>% of<BR>Total<BR>Options<BR>Granted to<BR>Employees<BR>in Year</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Exercise<BR>Price</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Expiration<BR>Date</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>5%<BR>Appreciation<BR>$ Gain</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>10%<BR>Appreciation<BR>$ Gain</B> </FONT></FONT><HR WIDTH=100% SIZE=1 NOSHADE></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TD WIDTH="30%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Arthur B. Scharlach, Jr</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">20,000</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">22.3</FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD WIDTH="6%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$88,806</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$212,707</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Clifton A. Payne</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11.2</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$44,403</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$106,354</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Byron M. Rhea</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11.2</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$44,403</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$106,354</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Tyston T. Abston</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11.2</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$44,403</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$106,354</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Kirk Lee</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7,500</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.4</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$33,303</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;79,766</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Martin Bell</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.6</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$22,202</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;53,177</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Stanley V. Garrett</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.6</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$22,202</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;53,177</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Bruce Harwell</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.6</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$22,202</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;53,177</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Virgil Jones</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.6</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$22,202</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;53,177</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Devry Garrett</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.6</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$22,202</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;53,177</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Joseph M. Rose</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.6</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$22,202</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;53,177</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Robert Clark</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.2</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$9.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3/28/08</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;8,881</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;21,271</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="14"><HR NOSHADE SIZE="1"></TD></TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) The potential realizable value
portion of the foregoing table illustrates values that might be realized upon exercise of
the options immediately prior to the expiration of their term assuming the specified
compounded rates of appreciation of the Company&#146;s Common Stock over the term of the
options. These numbers do not take into account provisions of certain options providing
for termination of the options following termination of employment, non-transferability
or differences in vesting periods. Regardless of the theoretical value of an option, its
ultimate value will depend on the market value of the Common Stock at a future date, and
that value will depend on a variety of factors, including the overall condition of the
stock market and the Company&#146;s results of operations and financial condition.
Accordingly, the ultimate value realized may be materially different from the amounts
presented in the foregoing table.  </FONT></P>

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<A NAME="A036"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>2000
Compensation of the Chief Executive Officer and President</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
reviewing the 2000 compensation of the Company&#146;s Chief Executive Officer,
Bill G. Jones, and the Company&#146;s President Arthur B. Scharlach, Jr., the
Compensation Committee undertook the same evaluation set forth above with
respect to its other executive officers. In addition, the Compensation Committee
reviewed each of their compensation history, executive compensation survey data
and comparative performance information. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base
Salary. For comparative compensation purposes for the year 2000, the
Compensation Committee identified a peer group of banks. The base salary for
each officer was determined on the basis of the peer group banks (determined on
the basis of their published 1998 market data), the experience and personal
performance of the officer and internal comparable considerations. The weight
given to each of these factors differs from individual to individual, as the
Compensation Committee deems appropriate. The compensation levels for these
officers for the year 2000 is within the same range as other executive officers
holding comparable positions at peer group banks, based on the published 1998
market data for those banks. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-11- </FONT></P>
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<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the stock price performance graph, which appears later in this proxy
statement, the Company has selected the Southwest Bank Index and the S&amp;P 500
Total Return Index. However, in selecting companies to survey for such
comparison purposes, the Compensation Committee considers many factors not
directly associated with stock price performance, such as geographic location,
growth rate, annual revenue, profitability, and market capitalization. For this
reason, the number of companies surveyed for compensation data was substantially
less than the number of companies included in the stock price performance graph. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual
Incentive Compensation. Annual bonuses are earned by each officer primarily on
the basis of the Company&#146;s achievement of certain corporate financial
performance targets established each year. For the year ended December 31, 2000,
bonuses are earned on the basis of the following factors: (i) Company revenue
and net earnings targets established for each six month period; and (ii) the
Company&#146;s achievement of certain established goals and objectives for the
year. The actual bonus paid for the three years ended December 31 to each of the
officers is listed in the Summary Compensation Table as indicated in the bonus
column. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actual
Compensation. Upon recommendation by the Compensation Committee, the Board of Directors
of the Company set Mr. Jones&#146; salary for 2000 at $50,400 and the Board of Directors of
the Bank set Mr. Scharlach&#146;s salary for 2000 at $228,750. In addition to his base salary,
Mr. Jones and Mr. Scharlach each participates in the Company&#146;s Bonus Plan and the amount
of bonus received is based primarily on the Company&#146;s Return on Equity. From the Bonus
Plan 2000, Mr. Jones earned a bonus of $14,482 resulting in approximately 29% of his 2000
compensation being dependent on the success of the Company, and Mr. Scharlach earned a
bonus of $63,032 resulting in approximately 28% of his 2000 compensation being dependent
on the success of the Company. The amount contributed by the Company to the 401(k) Plan
in fiscal year 2000 for the benefit of Mr. Jones was $3,893 and for the benefit of Mr.
Scharlach was $10,200. Mr. Jones also received a payment of $35,326 in 2000 pursuant to a
supplemental retirement plan. During 2000, the Company accrued approximately $100,000 for
the benefit of Mr. Scharlach pursuant to a salary continuation plan. The Compensation
Committee believes that each of Mr. Jones&#146; and Mr. Scharlach&#146;s total compensation is
reasonable and competitive based on comparative performance information and the overall
performance of the Company. </FONT></P>

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<BR>




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<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Compensation Committee<BR><BR>
C.A. Hinton, Sr.<BR>Weldon Miller<BR>Jonice Crane</FONT></TD>
</TR>
</TABLE>
<BR>


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<TD>
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INTERESTS OF
MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many
of the directors, executive officers and principal shareholders of the Company
(i.e., those who own 10% or more of the Common Stock) and their associates,
which include corporations, partnerships and other organizations in which they
are officers or partners or in which they and their immediate families have at
least a 5% interest, are customers of the Company. During 2000, the Company made
loans in the ordinary course of business to many of the directors, executive
officers and principal shareholders of the Company and their associates, all of
which were on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
persons unaffiliated with the Company and did not involve more than the normal
risk of collectability or present other unfavorable features. Loans to
directors, executive officers and principal shareholders of the Company are
subject to limitations contained in the Federal Reserve Act the principal effect
of which is to require that extensions of credit by the Company to executive
officers, directors and principal shareholders satisfy the foregoing standards.
As of December 31, 2000, all of such loans aggregated $2.2 million which was
approximately 6.5% of the Company&#146;s Tier I capital at such date. The
Company expects to continue to enter into such transactions, or transactions on
a similar basis, with its directors, executive officers and principal
shareholders and their associates in the future. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-12- </FONT></P>

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<TD><HR SIZE=5 NOSHADE><BR>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BENEFICIAL OWNERSHIP
OF COMMON STOCK BY MANAGEMENT OF THE COMPANY AND PRINCIPAL SHAREHOLDERS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth certain information regarding the beneficial
ownership of the Company Common Stock as of the Record Date, by (i) directors,
executive officers of the Company and certain officers of the Bank listed in the
Summary Compensation Table on page 7 herein, (ii) each person who is known by
the Company to own beneficially 5% or more of the Common Stock and (iii) all
directors and executive officers as a group. Unless otherwise indicated, based
on information furnished by such shareholders, each person has sole voting and
dispositive power over the shares indicated as owned by such person and the
address of each shareholder is the same as the address of the Company. </FONT></P>

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</TR>
</TABLE>
<BR>



<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name </FONT><HR WIDTH=100% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Number of Shares </FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Percentage<BR>Beneficially Owned </FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="64%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">John A. Conroy</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">127,350</FONT></TD>
        <TD WIDTH="10%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.18%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Jonice Crane</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">97,692</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(1)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.21%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Guaranty Bancshares, Inc. Employee</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;Stock Ownership Plan (with 401 (k)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;provisions)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">417,441</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.71%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">C. A. Hinton, Sr</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">179,676</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(2)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.90%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Kirk Lee</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">23,144</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(3)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Bill G. Jones</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">352,485</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(4)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.58%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Tyson T. Abston</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7,552</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(5)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Weldon Miller</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">224,872</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(6)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.39%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Clifton A. Payne</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">30,831</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(7)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.01%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Byron M. Rhea</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">28,402</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(8)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Arthur B. Scharlach, Jr</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">148,235</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(9)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.87%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">D. R. Zachry, Jr</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">80,029</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(10)</FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.63%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Directors and Executive Officers as a Group</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,300,268</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">42</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.72%</FONT></TD></TR>
</TABLE>
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<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>* Indicates ownership, which does
not exceed 1.0%. </FONT></P>
<!-- MARKER FORMAT-SHEET="Page Width End" -->
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
3,500 shares held of record by the Jonice Crane IRA and 1,715 shares held of record by
Ms. Crane&#146;s husband.</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
2,884 shares held of record by the Charles A. Hinton IRA.</FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Includes 2,792 shares held of record by the Kirk Lee IRA and 18,472 shares held
of record by the Company&#146;s 401(k) Plan, over which Mr. Lee has investment
control.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4) </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
22,827 shares held of record by the Bill G. Jones IRA Rollover, 161 shares held of record
by Mr. Jones&#146; wife&#146;s IRA and 17,291 shares held of record by the Company&#146;s 401(k) Plan,
over which Mr. Jones has investment control</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Includes 2,650 shares held of record by the Tyson Abston IRA and 4,617 shares
held of record by the Company&#146;s 401(k) Plan, over which Mr. Abston has
investment control.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6)</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Includes 8,463 shares held of record by Everybody&#146;s Furniture Company, of
which Mr. Miller is the President, 38,657 shares held of record by the
Everybody&#146;s Furniture Company Profit Sharing Plan &amp; Trust of which Mr.
Miller is the trustee, 865 shares held of record by the Weldon Miller IRA and
865 shares of held of record by Mr. Miller&#146;s wife&#146;s IRA.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7) </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
25,144 shares held of record by the Company&#146;s 401(k) Plan, over which Mr. Payne has
investment control.</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(8) </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
28,346 shares held of record by the Company&#146;s 401(k) Plan, over which Mr. Rhea has
investment control.</FONT></TD>
</TR>
</TABLE>
<BR>




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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9) </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
10,338 shares held of record by the Arthur B. Scharlach, Jr. IRA, 34,041 shares held of
record by Mr. Scharlach&#146;s wife, and 63,703 shares held of record by the Company&#146;s 401(k)
Plan, over which Mr. Scharlach has investment control.</FONT></TD>
</TR>
</TABLE>
<BR>




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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(10) </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
2,884 shares held of record by the D. R. Zachry IRA.</FONT></TD>
</TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD>
<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-13- </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" -->
</TD>
</TR>
</TABLE>




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<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE><BR>



<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A037"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PERFORMANCE
GRAPH</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following Performance Graph compares the cumulative total shareholder return on
the Company&#146;s Common Stock for the period from May 21, 1998, when the
Common Stock was first listed on the Nasdaq National Market, to December 31,
2000, with the cumulative total return of the S&amp;P 500 Total Return Index
(&#147;S&amp;P 500&#148;) and the Southwest Bank Index (&#147;SWBI&#148;) for
the same period. Dividend reinvestment has been<B> </B>assumed. The Performance
Graph assumes $100 invested on May 2l, 1998 in the Company&#146;s Common
Stock<B>, </B>the S&amp;P 500 Total Return Index and the Southwest Bank Index.
The historical stock price performance for<B> </B>the Company&#146;s stock shown
on the graph below is not necessarily indicative of future stock performance. </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A038"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Composite of
Cumulative Total Return*<BR>
Guaranty
Bancshares, Inc., the S&amp;P 500 Total Return Index<BR>and the
Southwest Bank Index</FONT></H1>



<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL.] </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2"><B>The Performance Graph<BR>
Guaranty Bancshares, Inc.</B> <BR>(Linear Graph Plotted from Data below)</FONT></FONT> </P>


<!-- MARKER FORMAT-SHEET="Page Width End" -->
</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">5/21/1998</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">12/31/1998</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">12/31/1999</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">12/31/2000</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="42%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Guaranty (GNTY)</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$100.00</FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;64.00</FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;68.86</FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;82.72</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Southwest Bank Index (SWBI)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$100.00</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;94.51</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;90.68</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;98.25</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">S &amp; P 500</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$100.00</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$111.80</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$135.19</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$122.97</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>* Assumes $100 invested
on May 21, 1998 and that all dividends were reinvested. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-14- </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Width End" -->
</TD>
</TR>
</TABLE>



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<TD><HR SIZE=5 NOSHADE><BR>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</FONT></H1>


<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
16(a) of the Securities Exchange Act of 1934, as amended, (the &#147;Exchange
Act&#148;) requires the Company&#146;s directors and executive officers and
persons who own more than 10% of the outstanding Common Stock to file initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company with the Securities and Exchange
Commission (the &#147;Commission&#148;). Officers, directors and greater than
10% shareholders are required to provide the Company with copies of all forms
they file pursuant to Section 16(a) of the Exchange Act. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the Company&#146;s knowledge, based solely on review of the copies of such
reports furnished to the Company, during the year ended December 31, 2000, all
Section 16(a) reporting requirements applicable to the Company&#146;s officers,
directors and greater than 10% shareholders were complied with except that
Clifton A. Payne was late filing one report covering one transaction, and D. R.
Zachry, Jr. was late in filing one report covering one transaction. The required
reports have been filed with the Commission. </FONT></P>



<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL TO RATIFY
APPOINTMENT OF INDEPENDENT AUDITORS</FONT></H1>


<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has appointed Fisk &amp; Robinson, P.C. (&#147;Fisk &amp;
Robinson&#148;) as the independent auditors of the books and accounts of the
Company for the year ending December 3l, 2001. Fisk &amp; Robinson, P.C. served
as independent auditors of the books and accounts of the Company during fiscal
year 2000 while Arnold, Walker, Arnold &amp; Co., P.C. (&#147;Arnold
Walker&#148;) served as the independent auditors of the books and accounts of
the Company during fiscal year 1999. On January 19, 2000, Arnold Walker was
notified that they would be dismissed following the issuance of their report on
the Company&#146;s 1999 financial statements and their review of the
Company&#146;s 1999 Form 10-K. Arnold Walker&#146;s dismissal was effective on
February 23, 2000. The decision to change accountants was recommended by the
Audit Committee of the Board of Directors of the Company and approved by the
Company&#146;s Board of Directors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arnold
Walker&#146;s report on the financial statements for the fiscal year 1999 did
not contain an adverse opinion or disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles. In connection
with the audits of the Company&#146;s financial statements during the fiscal
year ended December 31, 1999 and the subsequent interim period prior to the
dismissal of Arnold Walker, there were no disagreements between the Company and
Arnold Walker on any matters of accounting principles or practices, financial
statement disclosure or auditing scope and procedures which, if not resolved to
the satisfaction of Arnold Walker, would have caused Arnold Walker to make
reference to the matter in their reports. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the Company&#146;s fiscal year 1999 and the subsequent interim period prior to
the dismissal of Arnold Walker, Arnold Walker did not advise the Company with
respect to any of the matters listed in paragraphs (a)(1)(v)(A) through (D) of
Item 304 of Regulation S-K. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
January 21, 2000, the Board of Directors of the Company appointed Fisk &amp;
Robinson as its principal accountant to audit the Company&#146;s 2000 financial
statements. During the Company&#146;s fiscal year ended December 31, 1999 and
subsequent interim period prior to the engagement of Fisk &amp; Robinson neither
the Company, nor anyone on its behalf, consulted Fisk &amp; Robinson regarding
the application of accounting principals to a specified completed or proposed
opinion Fisk &amp; Robinson might render on the Company&#146;s financial
statements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting, the shareholders will be asked to consider and act upon a proposal
to ratify the appointment of Fisk &amp; Robinson. The ratification of such
appointment will require the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock entitled to vote and present in person or
represented by proxy at the Meeting. Representatives of Fisk &amp; Robinson will
not be present at the Meeting. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THE
BOARD OF DIRECTORS RECOMMENDS A VOTE <U>FOR</U> THE PROPOSAL TO RATIFY SUCH
APPOINTMENT.</B> </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-15- </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" -->
</TD>
</TR>
</TABLE>






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<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A041"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DATE FOR
SUBMISSION OF SHAREHOLDER PROPOSALS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order for shareholder proposals submitted pursuant to Rule 14a-8 of the Exchange
Act to be presented at the Company&#146;s 2002 Annual Meeting of Shareholders
and to be included in the Company&#146;s proxy statement and form of proxy
relating to such meeting, such proposals must comply with Rule 14a-8 and be
submitted to the Secretary of the Company at the Company&#146;s principal
executive offices not later than November l6, 2001. Shareholder proposals should
be submitted to the Secretary of the Company at 100 West Arkansas, Mount
Pleasant, Texas 75455. A shareholder choosing not to use the procedures
established in Commission Rule 14a-8 to submit a proposal for action at the
Company&#146;s 2002 Annual Meeting of Shareholders must deliver the proposal to
the Secretary of the Company not later than the close of business on February
16, 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, the Company&#146;s Amended and Restated Bylaws provide that only such
business which is properly brought before a shareholder meeting will be
conducted. For business to be properly brought before a meeting or nominations
of persons for election to the Board of Directors to be properly made at a
meeting by a shareholder, notice must be received by the Secretary of the
Company at the Company&#146;s principal executive offices no later than the
close of business on the 60<SUP>th</SUP> day prior to the meeting. Such notice
must also provide certain information set forth in the Amended and Restated
Bylaws. A copy of the Amended and Restated Bylaws may be obtained upon written
request to the Secretary of the Company. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A042"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REPORT OF
THE AUDIT COMMITTEE</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with its written charter adopted by the Board of Directors (the
&#147;Board&#148;) (a copy of which is attached as Appendix &#147;A&#148; to
this Proxy Statement), the Audit Committee assists the Board in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company. All of the members of
the Audit Committee are independent (as independence is defined in Rule
4200(a)(15) of the National Association of Securities Dealers&#146; listing
standards). During fiscal 2000, the Committee met six times. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
discharging its responsibility for oversight of the audit process, the Audit
Committee obtained from the independent auditors, Fisk &amp; Robinson, P.C., a
formal written statement describing any relationships between the auditors and
the Company that might bear on the auditors&#146; independence consistent with
the Independent Standards Board Standard No. 1, &#147;Independence Discussions
with Audit Committees,&#148; discussed with the auditors any relationships that
might impact the auditors&#146; objectivity and Independence and satisfied
itself as to the auditors&#146; independence. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee discussed and reviewed with the independent auditors the
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
&#147;Communication with Audit Committees&#148; and discussed and reviewed the
results of the independent auditors&#146; examination of the financial
statements for the year ended December 31, 2000. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee reviewed the audited financial statements of the Company as of
and for the fiscal year ended December 31, 2000, with management and the
independent auditors. Management has the responsibility for preparation of the
Company&#146;s financial statements and the independent auditors have the
responsibility for examination of those statements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
upon the above-mentioned review and discussions with management and the
independent auditors, the Audit Committee recommended to the Board that the
Company&#146;s audited financial statements be included in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2000, for filing with the
Securities Exchange Commission. </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Audit Committee<BR><BR>
Weldon Miller<BR>Jonice Crane<BR>John Conroy</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-16- </FONT></P>

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</TD>
</TR>
</TABLE>



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<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE><BR>



<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A043"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OTHER MATTERS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors does not intend to bring any other matter before the Meeting.
Additionally, no shareholder of the Company has complied with the advance notice
provisions contained in the Company&#146;s Bylaws, which preclude the bringing
of matters before a meeting of shareholders unless such provisions are complied
with. Accordingly, no other matter is expected to be brought before the Meeting.
However, if any other matter does properly come before the Meeting, the proxies
will be voted in accordance with the discretion of the person or persons voting
the proxies. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are cordially invited to attend the Meeting. Regardless of whether you plan to
attend the Meeting, you are urged to complete, date, sign and return the
enclosed proxy in the accompanying envelope at your earliest convenience. </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Signature (Single)" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By order of the Board of Directors,<BR><BR>
<BR>By: /s/ Arthur B. Scharlach, Jr.<BR><BR>
Arthur B. Scharlach, Jr.<BR>President</FONT></TD>
</TR>
</TABLE>
<BR>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-17- </FONT></P>


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</TD>
</TR>
</TABLE>



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<TD><HR SIZE=5 NOSHADE><BR>




<!-- MARKER FORMAT-SHEET="Head Major 12" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Appendix &#147;A&#148;</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A045"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Guaranty Bancshares,
Inc.</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<A NAME="A046"></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Audit
Committee Charter</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A047"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Purpose</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
primary function of the Audit Committee (Committee) is to assist the Board of
Directors (Board) in fulfilling its oversight responsibilities by reviewing the
financial information which will be provided to the shareholders and others, the
systems of internal controls which management and the Board have established,
and the audit process. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A048"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Composition</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board shall elect the members of the Committee and appoint a Chair annually. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
specified in the Audit Policy and per SEC and NASDAQ guidelines, the Committee
shall be comprised of three or more directors, each of whom shall be independent
directors and free from any relationship that, in the opinion of the Board,
would interfere with the exercise of his or her independent judgment as a member
of the Committee. A director will not be considered independent if he or she
has: </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149; </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>been
employed by Guaranty Bancshares, Inc. (Company) or its affiliates in the current or past
three years;</FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
accepted any compensation from the Company or its affiliates in excess of
$60,000 during the previous fiscal year (except for Board service, retirement
plan benefits, or non-discretionary compensation);</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149; </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>an
immediate family member who is, or has been in the past three years, employed by the
Company or its affiliates as an executive officer;</FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
been a partner, controlling shareholder or an executive officer of any
for-profit business organization to which the Company made, or from which it
received, payments (other than those which arise solely from investments in the
Company&#146;s securities) that exceed five percent of the Company&#146;s or
business organization&#146;s consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years; or</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
been employed as an executive of another entity where any of the Company&#146;s
executives serve on that entity&#146;s compensation Committee.</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
members must be able to read and understand fundamental financial statements,
including a Company&#146;s balance sheet, income statement, and cash flow
statement. At least one director must have past employment experience in finance
or accounting, requisite professional certification in accounting, or other
comparable experience or background, including a current or past position as a
chief executive or financial officer or other senior officer with financial
oversight responsibilities. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
exceptional and limited circumstances, one non-independent director may serve on
the Committee, provided that the Board determines it to be in the best interest
of the Company and its shareholders, and the Board discloses the reasons for the
determination in the Company&#146;s next annual proxy statement. Current
employees or officers, or their immediate family members, however, are not able
to serve on the Committee under this exception. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compliance
with the requirements concerning the independence of Committee members and the
required employment experience of at least one member as detailed above is not
mandatory until June 14, 2001. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A049"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Meetings</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee shall meet at least four times annually, or more frequently as
circumstances dictate. The Committee may ask members of management or others to
attend meetings and provide pertinent information as necessary. As part of its
job to foster open communication, the Committee may meet periodically with
management, the internal auditors or the independent accountants in separate
executive sessions to discuss any matters that the Committee or any of these
groups believe should be discussed privately. </FONT></P>



<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-18- </FONT></P>

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</TD>
</TR>
</TABLE>






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<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE><BR>



<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A050"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Relationship
to Independent Accountants</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
independent accountant is ultimately accountable to the Board and the Committee,
who are representatives of the shareholders. The Board and the Committee have
the ultimate authority and responsibility to select, evaluate, and, where
appropriate, replace the independent accountant. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A051"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Relationship
to Internal Auditors</FONT></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Chief Auditor is directly accountable to the Board and the Committee, rather
than management. The Committee and the Chief Auditor will have unrestricted
access to each other. The Committee will participate in the appointment,
promotion, or dismissal of the Chief Auditor, and help determine his or her
qualifications and compensation. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<A NAME="A052"></A>
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Responsibilities
and Duties</FONT></H2>



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</TD>
</TR>
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<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Provide
an open avenue of communication between the internal auditors, the independent
accountant, and the Board.</FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Review
and update the Committee&#146;s charter annually.</FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Inquire of management, the Chief Auditor, and the independent accountant about
significant risks or exposures and assess the steps management has taken to
minimize such risk to the Company. The Committee is responsible for identifying
at least annually the risk areas of the institution&#146;s activities and
assessing the extent of external auditing involvement needed over each area. The
Committee is then responsible for determining what type of external auditing
program will best meet the Bank&#146;s needs.<SUP>1</SUP></FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Recommend to the Board the selection of the independent accountant, considering
independence and effectiveness and approve the fees and other compensation to be
paid to the independent accountant. Annually, the independent accountant shall
provide to the Committee a formal written statement delineating all
relationships between the accountant and the Company, consistent with
Independence Standards Board Standard 1. The Committee shall actively engage in
a dialogue with the accountant with respect to any disclosed relationships or
services that may impact the objectivity and independence of the accountant. The
Committee shall take, or recommend the Board take appropriate action to ensure
the independence of the outside accountant.</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Review, in consultation with the independent accountant and the Chief Auditor,
the audit scope and plan of the independent accountant and the internal audit
department. Consider the coordination of audit effort to assure completeness of
coverage, reduction of redundant efforts, and the effective use of audit
resources.</FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consider
and review with the independent accountant and the Chief Auditor:</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The adequacy of the Company&#146;s internal controls including computerized information system
controls and security. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Bullet 10 In 2" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Any related significant findings and recommendations of the independent accountant and
internal audit department together with management&#146;s responses thereto. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Review
with management and the independent accountant at the completion of the annual
examination:</FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Company&#146;s annual financial statements and related footnotes. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The independent accountant&#146;s audit of the financial statements and his or her report
thereon. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Bullet 10 In 2" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Any significant changes required in the independent accountant&#146;s audit plan. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Any serious difficulties or disputes with management encountered during the course of the
audit. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Bullet 10 In 2" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Other matters related to the conduct of the audit that are to be communicated to the
Committee under generally accepted auditing standards. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consider
and review with management and the chief auditor:</FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Significant audit findings during the year and management&#146;s responses thereto. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Any difficulties encountered in the course of their audits, including any restrictions on
the scope of their work or access to required information. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Any changes required in the planned scope of their audit plan. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD><HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) Interagency Policy Statement on
External Auditing Programs of Banks and Savings Associations, September, 1999 </FONT></P>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></TD></TR>


</TABLE>
<BR>

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<TD><!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-19- </FONT></P>

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</TD>
</TR>
</TABLE>



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<TD><HR SIZE=5 NOSHADE><BR>
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</TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Internal Auditing Department Charter. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=91%>
<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The Internal Audit Department&#146;s compliance with The Institute for Internal Auditors&#146;
(IIA) <I>Standards for the Professional Practice of Internal Auditing (Standards)</I>. These
standards address the independence, professional proficiency, scope of work, performance
of audit work, and management of internal audit.</FONT></FONT> </TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Review legal and regulatory matters that may have a material impact on the
financial statements, related Company compliance policies, and programs and
reports received from the regulators.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Report
Committee actions and recommendations to the Board.</FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Committee shall have the power to conduct or authorize investigations into any matters
within the Committee&#146;s scope of responsibilities.</FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Committee will perform such other functions as assigned by law, the Company&#146;s charter or
bylaws, or the Board of Directors.</FONT></TD>
</TR>
</TABLE>
<BR><BR><BR><BR><BR><BR><BR>




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<TD><P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>-20- </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>





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<HR SIZE=5 NOSHADE>



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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>C/O PROXY SERVICES<BR>
P.O. BOX 9142<BR>FARMINGDALE, NY 11735 </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>VOTE BY MAIL-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mark, sign and date your proxy card
and return it in the postage-paid envelope we've provided or return to Guaranty
Bancshares, Inc., c/o ADP, 51 Mercedes Way, Edgewood, NY 11717 </FONT></P>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TO VOTE MARK BLOCKS BELOW IN BLUE OR
BLACK INK AS FOLLOWS: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>GUARA 1 </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>KEEP THIS PORTION FOR YOUR RECORDS DETACH
AND RETURN THIS PORTION ONLY </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>THIS PROXY CARD IS
VALID ONLY WHEN SIGNED AND DATED. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This proxy is solicited on behalf of
the Board of Directors of the Company and will be voted FOR the following proposals
unless otherwise indicated. </FONT></P>



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</TD>
</TR>
</TABLE>
<BR>




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<TABLE WIDTH="600" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN=TOP>
<TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="LEFT" WIDTH="57%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For<BR>All</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Withhold<BR>All</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For All<BR>Except</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
</TR>


<TR VALIGN=BOTTOM>
<TD ALIGN="LEFT" VALIGN=TOP><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ELECTION OF DIRECTORS to serve until the 2004 Annual Meeting of Shareholders and until
their successors are duly elected and qualified.</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<BR>



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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Nominees:<BR>01) John A. Conroy, 02) Clifton A. Payne, and 03) D.R. Zachry, Jr.</FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To withhold authority to vote, mark
"For All Except" and write the nominee's number on the line below. </FONT></P>


<HR SIZE=1 NOSHADE WIDTH=100%>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vote on Proposal </FONT></P>


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<TABLE WIDTH="600" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN=TOP>
<TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="LEFT" WIDTH="57%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Against</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Abstain</FONT></TD>
<TD ALIGN="CENTER" WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
</TR>

<TR VALIGN=BOTTOM>
<TD ALIGN="LEFT" VALIGN=TOP><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RATIFICATION OF THE APPOINTMENT OF Fisk &amp; Robinson, P.C. as the Independent auditors of the books and accounts of the Company
for the year  ending December 31, 2001</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
NOTE:
To transact such other business as may properly come before the meeting or any
adjournment thereof.</FONT></TD>
</TR>
</TABLE>
<BR>




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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>YOUR VOTE IS IMPORTANT. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
ensure your representation at the Meeting, you are urged to complete, date, and sign the
enclosed proxy and return it in the accompanying envelope at your earliest convenience,
regardless of whether you plan to attend the Meeting. No additional postage is necessary
if the proxy is mailed in the United States. The proxy is revocable at any time before it
is voted at the Meeting. </FONT></P>





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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT><HR WIDTH=95% SIZE=1 NOSHADE> </TD>
<TD ALIGN=RIGHT WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT><HR WIDTH=95% SIZE=1 NOSHADE></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Signature [PLEASE SIGN WITHIN BOX]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date</FONT></TD>
<TD ALIGN=left WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature (Joint Owners)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date</FONT></TD>
</TR>
</TABLE>
<BR>





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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2"><B>GUARANTY BANCSHARES,
INC.</B></FONT></FONT> </P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2"><B>Annual Meeting of
Shareholders to be Held on Tuesday, April 17, 2001<BR>This Proxy is Solicited on Behalf of
the Board of Directors.</B> </FONT></FONT> </P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2001 Annual Meeting of Shareholders of Guaranty Bancshares, Inc. (the "Company") will be
held at 100 West Arkansas, Mount Pleasant, Texas, on Tuesday, April 17, 2001, beginning
at 2:00 p.m. (local time). The undersigned hereby acknowledges receipt of the related
Notice of Annual Meeting of Shareholders and Proxy Statement dated March 16, 2001
accompanying this proxy. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned hereby appoints Bill G. Jones and Arthur B. Scharlach, Jr. and each of them,
attorneys and agents, with full power of substitution, to vote as proxy all shares of
Common Stock, par value $1.00 per share, of the Company owned of record by the
undersigned and otherwise to act on behalf of the undersigned at the Annual Meeting of
Shareholders and any adjournment thereof in accordance with the directions set forth
herein and with descretionary authority with respect to such other matters, as may
properly come before such meeting or any adjournment thereof, including any matter
presented by a shareholder at such meeting for which advance notice was not received by
the Company in accordance with its Bylaws. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy is solicited by the Board of Directors and will be voted in accordance with the
undersigned's directions set forth herein. If no direction is made, this proxy will be
voted FOR the election of all nominees for director named herein to serve on the Board of
Directors until the 2004 Annual Meeting of Shareholders and until their successors are
duly elected and qualified and FOR the ratification of the appointment of Fisk &amp;Robinson,
P.C. as the independent auditors of the books and accounts of the Company for the year
ending December 31, 2001. </FONT></P>






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