-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 QnXiO6enWKJQNKcuXe9nvoIfu7ATx6A/AyoIW2yoCI56D1wrvg75iBE7Jb2M9YWs
 H0/kxRs4l9OlGVhqedQJGg==

<SEC-DOCUMENT>0000891554-02-001289.txt : 20020415
<SEC-HEADER>0000891554-02-001289.hdr.sgml : 20020415
ACCESSION NUMBER:		0000891554-02-001289
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20020416
FILED AS OF DATE:		20020315

FILER:

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

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24235
		FILM NUMBER:		02576934

	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>d50017_def14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
<HTML>
<HEAD>
     <!-- Created by HTML Ease (HTML Ease Pro 1.0 (0.9md)) -->
     <!-- Project:        X:\JOBS\02-50017\a50017.hep                                      -->
     <!-- Control Number: d50017                                                           -->
     <!-- Rev Number:     1.0                                                              -->
     <!-- Client Name:    Guaranty Bancshares, Inc.                                        -->
     <!-- Project Name:   DEF 14A                                                          -->
     <!-- Firm Name:      Guaranty Bancshares, Inc.                                        -->
     <TITLE>DEF 14A</TITLE>
</HEAD>
<BODY>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES,
INC. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>100 West Arkansas
Mount Pleasant, Texas 75455</B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>NOTICE OF 2002
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, APRIL 16, 2002</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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
2002 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
16, 2002, beginning at 2:00 p.m. (local time), for the following purposes:   </FONT></P>


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

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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> </FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
elect two directors of Class III to serve on the Board of Directors of the Company until
the Company&#146;s 2003 Annual Meeting of Shareholders and until their successors are
duly elected and qualified; and to elect four directors of Class II to serve on the Board
of Directors until the Company&#146;s 2005 Annual Meeting of Shareholders and until their
successors are duly elected and qualified;  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
consider and act upon a proposal to ratify the appointment of McGladrey &amp; Pullen, LLP as
the independent auditors of the books and accounts of the Company for the year ending
December 31, 2002; and  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD ALIGN=LEFT 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=88%><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>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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;The
close of business on March 6, 2002 has been fixed as the record date for the
determination 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 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 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>

<!-- MARKER FORMAT-SHEET="Page Width End" -->
</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>
<IMG SRC="g50017_auth.gif" width="139" height="31">
<BR>Arthur B. Scharlach, Jr.<BR>President  </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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>Mount Pleasant, Texas<BR>March 15, 2002  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<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>


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


<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 1; page: 1" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>


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

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>March 15, 2002 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY
STATEMENT<BR>FOR<BR>2002 ANNUAL
MEETING OF SHAREHOLDERS<BR>TO BE HELD ON TUESDAY,
APRIL 16, 2002 </font></H1>




<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<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
Board of Directors of Guaranty Bancshares, Inc. (the &#147;Company&#148;) for use at the 2002
Annual Meeting of Shareholders of the Company to be held at 100 West Arkansas, Mount
Pleasant, Texas, on Tuesday, April 16, 2002, 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 Notice of 2002 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 15, 2002.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<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 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>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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 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="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 2 -   </FONT></P>

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 2; page: 2" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>


<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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, 2001, accompanies but does not constitute part of this Proxy
Statement.   </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<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 6, 2002 (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 3,004,428 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 III and Class II 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 in 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" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ELECTION OF
DIRECTORS</font> </H1>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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. It is proposed at this Meeting
that three additional directors be appointed to the Board of Directors increasing the
total number of directors to eleven. 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
except for this years Class III nominees who, if elected will serve the unexpired portion
of the term of office of current Class III directors. The term of office of the current
Class II directors expires at the Meeting. The terms of the current Class III and Class I
directors expire at the annual meeting of shareholders in 2003 and 2004, respectively.
The two Class III nominees, if elected at the Meeting, will serve until the annual
meeting of shareholders in 2003. The four Class&nbsp;II nominees, if elected at the Meeting,
will serve until the annual meeting of shareholders in 2005.   </FONT></P>

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

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 3; page: 3" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<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 Tyson T. Abston and Bill Priefert for the election as
Class III directors at the Meeting and Jonice Crane, C.A. Hinton, Sr., Arthur B.
Scharlach, Jr., and Gene Watson for election as Class II directors at the Meeting. Ms.
Crane and Messrs. Hinton and Scharlach are currently serving as Class II directors.
Messrs. Abston, Priefert, and Watson are nominated as new 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 III and Class II 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>

<!-- 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">Name </font></TH>
     <TH ALIGN="LEFT" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Age </font></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Positions with Company and <BR>Guaranty Bank (the &#147;Bank&#148;)</font> </TH></TR>
<TR>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD></TR>
<TR VALIGN="TOP">
     <TD WIDTH="44%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Tyson T. Abston  </FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">36  </FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="46%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Director, Executive Vice President<BR>of the Bank   </FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <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">75  </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;<BR>Director of the Bank   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <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">78  </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;<BR>Director of the Bank   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Bill Priefert  </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">53  </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>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <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">62  </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<BR>Company; Director, President and
          <BR>Chief Executive Officer of the Bank   </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Gene Watson  </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  </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>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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;<I>Tyson
T. Abston.</I>Mr. Abston joined the Bank as Senior Vice President in 1997 after serving 5
years as Executive Vice President of a Northeast Texas bank. He became President of the
Texarkana location in 1997 and then in 1999 transferred to Mount Pleasant and was elected
as Executive Vice President. Also in 1999, Mr.&nbsp;Abston was elected to the Board of
Directors of the Bank.  </FONT></P>

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

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 4; page: 4" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>


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

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>C.A.
Hinton</I>, Sr. 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></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Bill
Priefert</I>. Mr. Priefert has served as a Director of the Bank since 1983. Mr. Priefert
has been President of Priefert Manufacturing, Inc. in Mount Pleasant, Texas for more than
the past five years.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Arthur
B. Scharlach, Jr</I>. Mr. Scharlach is President and director of the Company and
President, Chief Executive Officer and 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.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gene
Watson</I>. Mr. Watson has served as a Director of the Bank since 1999. He had been the
Chairman and a director since 1981 of First American Financial Corporation which was
acquired by the Company in September 1999. Mr. Watson retired from Watson Company
Realtors in Sulphur Springs, Texas in 1999.  </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 <I>FOR</I>THE ELECTION OF EACH OF THE NOMINEES FOR
ELECTION TO THE BOARD OF DIRECTORS.</B> </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 5 -   </FONT></P>

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 5; page: 5" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<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 current
Class I and Class III directors, whose terms of office do not expire at the Meeting, and
certain officers of the Company (other than Mr. Arthur B. Scharlach, Jr.):   </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 ALIGN="LEFT" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name </font></TH>
     <TH ALIGN="LEFT" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Positions </font></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Age </font></TH></TR>
<TR>
     <TD ALIGN="LEFT" COLSPAN="2"><HR NOSHADE COLOR="Black" SIZE="1" WIDTH="10%"> </TD>
     <TD ALIGN="LEFT" COLSPAN="2">   <HR NOSHADE COLOR="Black" SIZE="1" WIDTH="15%"> </TD>
     <TD COLSPAN="2" ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD>
     <TD> </TD></TR>
<TR VALIGN="top">
     <TD WIDTH="48%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">John Conroy   </FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="42%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Class I Director of the Company;<BR>Director of the Bank  </FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">84  </FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <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<BR>Director and Chief Executive Officer<BR>of the Company; Chairman of the<BR>Board of the Bank   </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">72  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <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;<BR>Director of the Bank   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">66  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>
<TR VALIGN="TOP">
     <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">Class I Director and Sr. Vice President<BR>and Chief Financial Officer of the Company;Director, Executive Vice President and Chief<BR>Financial Officer of the Bank   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">44  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <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="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>
     <TD ALIGN="RIGHT" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">78  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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
Conroy</I>.&nbsp;&nbsp;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"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bill
G. Jones.</I>&nbsp;&nbsp;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>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Weldon
Miller</I>.&nbsp;&nbsp;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>

<!-- 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>.&nbsp;&nbsp;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 / Secretary and Chief Financial Officer 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>.&nbsp;&nbsp;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 10" -->
<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>

<!-- MARKER FORMAT-SHEET="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 6 -   </FONT></P>

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 6; page: 6" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>


<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Operation of the Board
of Directors </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 of the Company held 12 meetings during 2001. 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 did not attend any of such meetings.   </FONT></P>

<!-- 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 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 2001, the
Audit Committee held 12 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 2001, the Compensation Committee held four
meetings. The Compensation Committee is comprised of Messrs. Hinton (Chairman) and Miller
and Ms. Crane, each of whom is an outside director.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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 2001, 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>

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

<!-- MARKER FORMAT-SHEET="Para 10" -->
<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 current members of the Board of Directors of the Company and
Messrs. Abston and Priefert. 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>

<!-- MARKER FORMAT-SHEET="Page Number Center" -->
<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>




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 7; page: 7" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>


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

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

<!-- 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">Name and Principal Position  </font></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Salary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font> </TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Bonus&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">All Other <BR>Compensation  </font></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></font> </TH></TR>
<TR>
     <TD ALIGN="RIGHT" WIDTH="60%"><HR NOSHADE COLOR="Black" SIZE="1"></TD><TD WIDTH="3%"></TD>
     <TD ALIGN="RIGHT" WIDTH="3%"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD WIDTH="3%"> </TD>
     <TD ALIGN="RIGHT" WIDTH="7%"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD WIDTH="3%"> </TD>
     <TD ALIGN="RIGHT" WIDTH="7%"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD WIDTH="3%"> </TD>
     <TD ALIGN="RIGHT" WIDTH="7%"><HR NOSHADE COLOR="Black" SIZE="1"> </TD>
     <TD ALIGN="RIGHT" WIDTH="3%"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD WIDTH="2%"> </TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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 WIDTH="3%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2001  </FONT></TD>
        <TD 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">$&nbsp;&nbsp;51,000  </FONT></TD>
        <TD 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">$13,640  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;40,190  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(1  </FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)  </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="RIGHT"><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">50,400  </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">14,482  </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">39,219  </FONT></TD>
        </TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;     </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">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>
        </TR>
<TR>
     <TD><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">2001  </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">243,130  </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">56,254  </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">123,574  </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">)  </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="RIGHT"><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>
        </TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;     </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">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>
        </TR>
<TR>
     <TD><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">2001  </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">114,200  </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">37,376  </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">15,724  </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">)  </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 Chief Financial Officer  </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">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>
        </TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;     </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">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>
        </TR>
<TR>
     <TD><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">2001  </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">97,111  </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">25,988  </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">12,368  </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">)  </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="RIGHT"><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>
        </TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;     </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">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>
        </TR>
<TR>
     <TD><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="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2001  </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">100,174  </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">32,910  </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">13,638  </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">)  </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="RIGHT"><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>
        </TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;     </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">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>
        </TR>
<TR>
     <TD><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">2001  </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">115,733  </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">31,180  </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">15,656  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(6  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)  </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="RIGHT"><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>
        </TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;     </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">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>
        </TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Footnote Rule" -->
<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>


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


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consists
of contributions by the Company to the 401(k) Plan of $4,864, $3,893, and $4,830 in 2001,
2000 and 1999, respectively, and the payment of $35,326, $35,326 and $35,326 in 2001,
2000 and 1999 respectively in connection with a supplemental retirement plan.  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consists
of contributions by the Company to the 401(k) Plan of $12,750, $10,200 and $12,000 in
2001, 2000 and 1999, respectively, and the accrual of $110,824, $99,809 and $89,809 in
2001, 2000 and 1999, respectively, in connection with a salary continuation plan.  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consists
of contributions by the Company to the 401(k) Plan of $11,156, $9,022 and $11,313 in
2001, 2000 and 1999, respectively, and the accrual of $4,568, $4,436, and $4,184 in 2001,
2000 and 1999, respectively, in connection with an incentive retirement plan.  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consists
of contributions by the Company to the 401(k) Plan of $8,928, $6,793 and $7,603 in 2001,
2000 and 1999, respectively, and the accrual of $3,440, $2,648 and $2,336 in 2001, 2000
and 1999, respectively, in connection with an incentive retirement plan.  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consists
of contributions by the Company to the 401(k) Plan of $9,821, $7,223 and $7,481 in 2001,
2000, and 1999, respectively, and the accrual of $3,817, $3,528 and $3,120, in 2001, 2000
and 1999, respectively, in connection with an incentive retirement plan.  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consists
of contributions by the Company to the 401(k) Plan of $11,038, $7,185 and $10,423 in
2001, 2000 and 1999, respectively, and the accrual of $4,618, $4,330 and $4,027 in 2001,
2000 and 1999, respectively, in connection with an incentive retirement plan.  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 8 -   </FONT></P>

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 8; page: 8" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>




<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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. For the
year ended December 31, 2001, there were no new options issued under the 1998 Plan.
Certain officers have previously received stock options as indicated on page 12.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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, 2001, the bonus pool is funded with 10%
of after-tax income based upon the Bank achieving a return on equity of 10.0%. The bonus
pool increases to a maximum of 14.5% of after-tax income if the Bank achieves a return on
equity of 15.0% or greater. The Bank&#146;s actual return on equity for the year ended
December 31, 2001 is 12.0%. 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 and the Bank&#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 $463,000,
$266,000, and $419,000 for the year ended December 31, 2001, 2000 and 1999, respectively.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" -->
<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>





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 9; page: 9" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>



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

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employee
Stock Ownership Plan</I>.&nbsp;&nbsp;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 five persons, three 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, 2001, the book value of 401(k)
Plan assets was approximately $5.8 million, with an approximate market value of $8.4
million. Contributions to the 401(k) Plan charged to expenses are as follows: </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="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Years Ended December 31, </font> <HR WIDTH=100% 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">2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1999&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD ><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="56%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">401(k) plan expense  </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">$390,000  </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">$280,000  </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">$294,000  </FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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>Supplemental
Retirement Plan</I>.&nbsp;&nbsp;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 Summary Compensation Table on page 8. 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> </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="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Years Ended December 31, </font> <HR WIDTH=100% SIZE=1 NOSHADE></TH>
     <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"> </font></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">2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1999&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="56%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Supplemental retirement plan expense  </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">$13,000  </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">$15,000  </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">$17,000  </FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"></TD><TD></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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>Executive
Incentive Retirement Plan</I>.&nbsp;&nbsp;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 Summary Compensation Table on page 8 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 minimum
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> </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="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Years Ended December 31,</font><HR WIDTH=100% 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">2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>  </TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1999&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ><HR NOSHADE COLOR="Black" SIZE="1"></TD><TD>&nbsp; </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="56%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Executive incentive retirement plan expense  </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">$35,000  </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">$29,000  </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">$23,000  </FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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>Salary
Continuation Plan</I>.&nbsp;&nbsp;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>

<!-- 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">Years Ended December 31, </font> <HR WIDTH=100% 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">2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  </font></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">1999&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </TH></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD ><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="56%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Salary continuation plan expense  </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">$111,000  </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">$100,000  </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">$90,000  </FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="2"> </TD><TD> </TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


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

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 10; page: 10" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<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 executive officers of the Company and
the Bank during 2001.   </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 executive officer compensation program and describes the
basis on which the 2001 compensation determinations are made by the Compensation
Committee with respect to the executive officers of the Company and the Bank.   </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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 executive 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 selected 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.
In setting the goals and measuring an executive&#146;s performance against those goals, the
Company considers the performance of its competitors and general economic and market
conditions. None of the factors included in the Company&#146;s strategic and business goals
are assigned a specific weight. Instead, the Compensation Committee recognizes that the
relative importance of these factors may change in order to adapt the Company&#146;s
operations to specific business challenges and to reflect changing economic and
marketplace conditions.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<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 the named
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, 2001, the maximum funding occurred if the Bank&#146;s return on equity
was 15% or greater. The bonus pool is allocated among all employees, including the named
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" -->
<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="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 12 -   </FONT></P>

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





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 11; page: 11" -->

<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<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,
2001, there were no new options granted. The following non-qualified stock options
vesting 20% per year for five years and expiring in eight years have been previously
granted by the Board of Directors:   </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, 2001 </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=100% 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=100% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TH ALIGN="center" WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name  </FONT></Th>    <TD WIDTH="3%"></TD>
     <TH ALIGN="center" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Number<BR>of Shares<BR>Underlying<BR>Options  </FONT></Th><TD WIDTH="2%">&nbsp; </TD>
     <TH ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">% of<BR>Total<BR>Options<BR>Granted to<BR>Employees<BR>in Year  </FONT></Th><TD WIDTH="2%">&nbsp;</TD>
     <TH ALIGN="center" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Exercise<BR>Price  </FONT></Th><TD WIDTH="3%">&nbsp;</TD>
     <TH ALIGN="center" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Expiration<BR>Date  </FONT></Th><TD WIDTH="3%">&nbsp; </TD>
     <TH ALIGN="center" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">5%<BR>Appreciation<BR>$ Gain  </FONT></Th><TD WIDTH="3%">&nbsp; </TD>
     <TH ALIGN="center" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">10%<BR>Appreciation<BR>$ Gain  </FONT></Th><TD WIDTH="2%">&nbsp; </TD></TR>
<TR>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ALIGN="CENTER"><HR NOSHADE COLOR="Black" SIZE="1"></TD><TD>&nbsp;</TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD>&nbsp; </TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Arthur B. Scharlach, Jr.  </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">20,000  </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">&nbsp;&nbsp;&nbsp;&nbsp;0%  </FONT></TD>
        <TD 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">$9.30  </FONT></TD>
        <TD 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">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>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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>
     <TD COLSPAN="2"></TD>
     <TD COLSPAN="2"></TD>
     <TD COLSPAN="2"></TD>
     <TD COLSPAN="2"></TD>
     <TD COLSPAN="2"></TD>
     <TD COLSPAN="2"></TD>
     <TD COLSPAN="2"></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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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">79,766  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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">53,177  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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">53,177  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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">53,177  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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">53,177  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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">53,177  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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">53,177  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </TD>
     <TD COLSPAN="2"> </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="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">9.30  </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">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">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">21,271  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
</TABLE>

<BR>
<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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>(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>

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

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





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 12; page: 12" -->

<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>




<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table shows aggregate exercises of options to purchase Company common stock at
December 31, 2001 by each of the named Executive Officers and other senior officers of
the Company and the Bank:   </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Aggregated
Options Exercised for the Year Ended December 31, 2001 and<BR>Year End
Option Values as of December 31, 2001 </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="2" WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> </font></TH>
     <TH COLSPAN="2" WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> </font></TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Number of <BR>Options at Year end </font><HR WIDTH=100% SIZE=1 NOSHADE></TH>
     <TH>&nbsp;</TH>
     <TH COLSPAN="4"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Value of In-The-Money <BR>Options at Year End (1) </font><HR WIDTH=100% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name </font></TH><TH>&nbsp;</TH>
     <TH WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Number of<BR>Shares<BR>Acquired on<BR>Exercise </font></TH><TH>&nbsp;</TH>
     <TH WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Dollar<BR>Value<BR>Realized </font></TH><TH>&nbsp;</TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Exercisable </font></TH><TH>&nbsp;</TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Unexercisable </font></TH><TH>&nbsp;</TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Exercisable </font></TH><TH>&nbsp;</TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Unexercisable </font></TH><TH>&nbsp;</TH></TR>
<TR>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"></TD><TD></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="CENTER" WIDTH="9%"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD ALIGN="RIGHT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="26%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Arthur B. Scharlach,Jr  </FONT></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" SIZE="2">0  </FONT></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" SIZE="2">0  </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">4,000  </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">16,000  </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">$52,000  </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">$208,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">8,000  </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">26,000  </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">104,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">8,000  </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">26,000  </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">104,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">8,000  </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">26,000  </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">104,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">1,500  </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">6,000  </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">19,500  </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">78,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">1,000  </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">4,000  </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">13,000  </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">52,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">1,000  </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">4,000  </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">13,000  </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">52,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">1,000  </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">4,000  </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">13,000  </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">52,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">1,000  </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">4,000  </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">13,000  </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">52,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">1,000  </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">4,000  </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">13,000  </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">52,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">1,000  </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">4,000  </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">13,000  </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">52,000  </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="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER" WIDTH="9%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0  </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">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">1,600  </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">5,200  </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">20,800  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<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>(1) The value of the
unexercised Company options are based on the difference between the exercise
price and the average of the high and low market prices of the Company common
stock on December 31, 2001 of $13.00.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>2001
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 2001 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 2001, 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 1999 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 2001 is within the same range as
other executive officers holding comparable positions at peer group banks, based on the
published 1999 market data for those banks.   </FONT></P>

<!-- 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="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 13 -   </FONT></P>

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 13; page: 13" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>



<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Annual
Incentive Compensation</I>.&nbsp;&nbsp;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, 2001, bonuses are earned on the
basis of the following factors: (i) Company 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 on page 8 as indicated
in the bonus column.  </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>Actual
Compensation</I>.&nbsp;&nbsp;Upon recommendation by the Compensation Committee, the Board of Directors
of the Company set Mr. Jones&#146; salary for 2001 at $51,000 and the Board of Directors of
both the Company and the Bank set Mr. Scharlach&#146;s salary for 2001 at $243,130. 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 Bank&#146;s
return on equity. From the Bonus Plan 2001, Mr. Jones earned a bonus of $13,640 resulting
in approximately 27% of his 2001 compensation being dependent on the success of the
Company, and Mr. Scharlach earned a bonus of $56,254 resulting in approximately 23% of
his 2001 compensation being dependent on the success of the Company. The amount
contributed by the Company to the 401(k) Plan in fiscal year 2001 for the benefit of Mr.
Jones was $4,864 and for the benefit of Mr. Scharlach was $12,750. Mr. Jones also
received a payment of $35,326 in 2001 pursuant to a supplemental retirement plan. During
2001, the Company accrued approximately $110,824 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></FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" -->
</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>The Compensation Committee<BR><BR>
<BR><BR>
C. A. Hinton, Sr., Chairman<BR>Weldon Miller<BR>Jonice Crane  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<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 2001, 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, 2001, all of such loans aggregated $2.2
million which was approximately 6.1% 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="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 14 -   </FONT></P>

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 14; page: 14" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<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 <BR>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
8 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>

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


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name </font></TH><TH>&nbsp;</TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Number of Shares </font> </TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Percentage Beneficially<BR>Owned  </font></TH></TR>
<TR>
     <TD ALIGN="LEFT"><HR NOSHADE COLOR="Black" SIZE="1"> </TD><TD> </TD>
     <TD COLSPAN="2" ALIGN="CENTER"><HR NOSHADE WIDTH="85" COLOR="Black" SIZE="1"> </TD>
     <TD COLSPAN="3" ALIGN="CENTER"><HR NOSHADE COLOR="Black" SIZE="1"> </TD></TR>

<TR VALIGN="BOTTOM">
     <TD WIDTH="40%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">John A. Conroy  </FONT></TD>
     <TD WIDTH="18%" 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="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4  </FONT></TD>
        <TD WIDTH="9%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.24%  </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" SIZE="2">(1)  </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">.25%  </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">417,573  </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">.90%  </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" SIZE="2">(2)  </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">.98%  </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">24,217  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)  </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">351,767  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(4)  </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">.71%  </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">8,202  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(5)  </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" SIZE="2">(6)  </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">31,733  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(7)  </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">.06%  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Bill Priefert  </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">46,613  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(8)  </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">.55%  </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">28,608  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(9)  </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">148,491  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(10)  </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">.94%  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Gene Watson  </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">49,280  </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  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.64%  </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" SIZE="2">(11)  </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">1,398,530  </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">46  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.55%  </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></TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<!-- MARKER FORMAT-SHEET="Footnote Rule" -->
<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>

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

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicates
ownership, which does not exceed 1.0%.   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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 19,545 shares held of record by the
Company&#146;s 401(k) Plan, over which Mr. Lee has investment control.   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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 16,573 shares held of record by the Company&#146;s 401(k) Plan,
over which Mr. Jones has investment control   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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 5,267 shares held of record by
the Company&#146;s 401(k) Plan, over which Mr. Abston has investment control.   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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
26,046 shares held of record by the Company&#146;s 401(k) Plan, over which Mr. Payne has
investment control.   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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
36,666 shares held of record by Priefert Retirement Trust of which Mr. Priefert is the
trustee.   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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
28,552 shares held of record by the Company&#146;s 401(k) Plan, over which Mr. Rhea has
investment control.   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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
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 63,959 shares held of record by the Company&#146;s 401(k)
Plan, over which Mr. Scharlach has investment control.   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>Includes
2,884 shares held of record by the D. R. Zachry IRA.   </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 15; page: 15" -->

<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>




<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<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, 2001, 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 assumed. The Performance Graph
assumes $100 invested on May 2l, 1998 in the Company&#146;s Common Stock, the  S&amp;P 500 Total
Return Index and the Southwest Bank Index. The historical stock price performance for the
Company&#146;s stock shown on the graph below is not necessarily indicative of future stock
performance.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2"><B>Composite of Cumulative
Total Return* <BR>Guaranty Bancshares, Inc., the S&amp;P 500 Total Return Index <BR>and the Southwest
Bank Index</B>    </font></FONT></P>

<IMG SRC="g50017_chart.gif">


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


<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=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>  </FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Assumes
$100 invested on May 21, 1998 and that all dividends were reinvested.   </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 16 -   </FONT></P>

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 16; page: 16" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<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, 2001, all Section 16(a) reporting
requirements applicable to the Company&#146;s officers, directors and greater than 10%
shareholders were complied with. 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="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>General </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 has appointed McGladrey &amp; Pullen, LLP as the independent auditors of
the books and accounts of the Company for the year ending December 31, 2002. The Board of
Directors had appointed (which appointment was adopted by the shareholders of the
Company) Fisk &amp; Robinson, P.C. as the independent auditors of the books and accounts of
the Company for the year ending December 31, 2001. However, the partners and employees of
Fisk &amp; Robinson, P.C. merged with McGladrey &amp; Pullen, LLP on October 5, 2001.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Change in and
Disagreements With Accountants and Financial Disclosure </font></H2>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
October 19, 2001, the Company filed with the Securities and Exchange Commission a Form
8-K to report the change of name of the independent accounting firm and the appointment
of McGladrey &amp; Pullen, LLP as the independent auditors of the books and accounts of the
Company for the year ending December 31, 2001. The decision to engage McGladrey &amp; Pullen,
LLP was approved by the board of directors 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;As
reported in Form 8-K filed by the Company on October 19, 2001, the auditor&#146;s report from
Fisk &amp; Robinson, P.C. for the Company&#146;s fiscal year ended December 31, 2000 (years prior
to 2000 were audited by other auditors) did not contain an adverse opinion or a
disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope,
or accounting principles. Fisk &amp; Robinson, P.C. in a letter to the Securities and Exchange
Commission agreed with the Company in such declaration.   </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 McGladrey &amp; Pullen, LLP. 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 McGladrey &amp; Pullen, LLP will not be present at the Meeting.   </FONT></P>

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

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit
fees</I>. The aggregate fees paid to McGladrey &amp; Pullen, LLP for professional services
rendered for the audit of the Company&#146;s annual financial statements for the year ending
December 31, 2001, and for the reviews of the financial statements included in the
Company&#146;s quarterly reports on Form 10-Q for the year 2001, were $27,015.    </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>Financial
Information System Design and Implementation Fees</I>. The Company did not engage McGladrey &amp; Pullen,
LLP for any professional services related to financial information system design and
implementation during the year ending December 31, 2001.    </font></FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>- 17 -   </FONT></P>

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 17; page: 17" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>


<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>All
Other Fees</I>. The aggregate fees paid to McGladrey &amp; Pullen, LLP for services rendered to
the Company, other than the services described above under &#147;Audit Fees&#148; for the year
ending December 31, 2001 were $12,550. These fees relate to the preparation of the
Company&#146;s federal and state income tax returns. The Audit Committee has considered and
determined that the tax return preparation services provided by McGladrey &amp; Pullen, LLP is
compatible with maintaining their independence as the independent auditors 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;<B>THE
BOARD OF DIRECTORS RECOMMENDS A VOTE <I>FOR</I> THE PROPOSAL TO RATIFY SUCH APPOINTMENT.</B>   </font> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<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 2003 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 l5, 2002. 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 2003 Annual
Meeting of Shareholders must deliver the proposal to the Secretary of the Company not
later than the close of business on February 15, 2003.   </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 60th 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" -->
<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;The
following Report of the Audit Committee is provided in accordance with the rules and
regulations of the Securities and Exchange Commission. Pursuant to such rules and
regulations, this report shall not be deemed &#147;soliciting materials,&#148; filed with the
Securities and Exchange Commission, subject to Regulation 14A or 14C of the Securities
and Exchange Commission or subject to the liabilities of section 18 of the Securities
Exchange Act of 1934, as amended.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2001, the Committee met 12 times.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
partners and employees of Fisk &amp; Robinson, P.C. (the independent auditors of the books and
accounts of the Company for the year ending December 31, 2001) merged with McGladrey &amp; Pullen,
LLP on October 5, 2001. On October 19, 2001, the Company filed with the Securities and
Exchange Commission a Form 8-K to report the change of name of the independent accounting
firm and the appointment of McGladrey &amp; Pullen, LLP as the independent auditors of the
books and accounts of the Company for the year ending December 31, 2001. The decision to
engage McGladrey &amp; Pullen, LLP was approved by the board of directors 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;In
discharging its responsibility for oversight of the audit process, the Audit Committee
obtained from the independent auditors, McGladrey &amp; Pullen, LLP 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 (including the tax return preparation services provided by the independent
auditors to the Company) that might impact the auditors&#146; objectivity and independence and
satisfied itself as to the auditors&#146; independence.   </FONT></P>

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

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 18; page: 18" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>
<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;   </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, 2001.   </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, 2001, 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, 2001, for filing with the Securities Exchange Commission.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" -->
</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>The Audit Committee<BR><BR>
<BR>Weldon Miller, Chairman<BR>Jonice Crane<BR>
John Conroy  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<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>

<!-- MARKER FORMAT-SHEET="Page Width End" -->
</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><IMG SRC="g50017_auth.gif"><BR>
Arthur B. Scharlach, Jr.<BR>President  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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

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




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 2; page: 2" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>


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

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
<TABLE WIDTH="600" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN=TOP>
<TD WIDTH="5%"><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>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>GUARANTY BANCSHARES, INC.
     <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100 WEST ARKANSAS
     <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MOUNT PLEASANT, TEXAS 75455</I></B>  </FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"> </TD>
<TD WIDTH="45%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>VOTE BY MAIL -</B><BR>
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></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Reg Cover Table 3 Col 8 Bold" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=BOTTOM>
<TD ALIGN=LEFT WIDTH=33%><FONT FACE="Times New Roman, Times, Serif" SIZE=1>TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:  </FONT></TD>
<TD ALIGN=CENTER WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=1>GUARA1  </FONT></TD>
<TD ALIGN=RIGHT WIDTH=47%><FONT FACE="Times New Roman, Times, Serif" SIZE=1> KEEP THIS PORTION FOR YOUR RECORDS   </FONT></TD>
</TR>
<tr>
<td colspan=3><hr size=4> </TD>
</tr>
<tr>
<td>&nbsp; </TD>
<td>&nbsp; </TD>
<td align=right><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DETACH
AND RETURN THIS PORTION ONLY    </FONT></TD></tr>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>





<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS PROXY CARD IS
VALID ONLY WHEN SIGNED AND DATED. </font></H1>


<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>GUARANTY BANCSHARES, INC. </font></H2>

<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>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: </B>   </FONT></P>

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


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600" border="0">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="4" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp; </font></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">For <BR>All </font></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Withhold <BR>All </font></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">For All <BR>Except </font></TH></TR>
<TR> <TD WIDTH="3%">&nbsp;</TD> </TR>

<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>&nbsp;  </FONT></TD>
     <TD WIDTH="62%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">ELECTION OF DIRECTORS<BR>
       To serve as directors of Class III until the 2003 Annual Meeting of
Shareholders and until their successors are duly elected and qualified   </FONT></TD>
     <TD WIDTH="2%" 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">[_]  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">[_]   </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">[_]  </FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;   </FONT></TD></TR>

<TR VALIGN="TOP">
     <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
     <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
     <TD WIDTH="62%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Nominees:</B><BR>
          01) Tyson T. Abston, 02) Bill Priefert<BR><BR>
          To serve as directors of Class II until the 2005 Annual Meeting
          of Shareholders and until their successors are duly elected
          and qualified<BR><BR>
     <B>Nominees:</B><BR>
     03) Jonice Crane, 04) C. A. Hinton, Sr., 05) Arthur B. Scharlach, Jr.,
     and 06) Gene Watson  </FONT></TD>
     <TD WIDTH="2%" 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">&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;   </FONT></TD></TR>

</TABLE>

<BR>

<!-- MARKER FORMAT-SHEET="Page Width Start" -->
<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>To withhold authority to vote, mark &#147;For All
Except&#148; <BR>and write the nominee&#146;s number on the line below.<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;  </FONT></P>

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


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600" border="0">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="4" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Vote On Proposals</B> </font></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">For </font></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Against </font></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Abstain </font></TH></TR>
<TR VALIGN=BOTTOM>
     <TD ALIGN="RIGHT" WIDTH="3%">&nbsp;</TD></TR>

<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>&nbsp;  </FONT></TD>
     <TD WIDTH="62%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">RATIFICATION OF THE APPOINTMENT OF McGladrey &amp; Pullen, LLP as the independent auditors of the books and accounts
of the Company for the year ending December 31, 2002    </FONT></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" SIZE="2">&nbsp;[_]  </FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;[_]   </FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;[_]  </FONT></TD>
     </TR>

<TR VALIGN=BOTTOM>
     <TD ALIGN=RIGHT>&nbsp; </TD></TR>

<TR VALIGN="TOP">
     <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;   </FONT></TD>
     <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;   </FONT></TD>
     <TD WIDTH="62%" ALIGN="LEFT"><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>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     </TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Page Width Start" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<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"><FONT 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> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
     Signature [PLEASE SIGN WITHIN BOX]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date  </FONT></P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
      Signature (Joint Owners) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date  </FONT></P>

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





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 1; page: 1" -->
<!-- MARKER FORMAT-SHEET="Page Width Begin Rule" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><HR SIZE=5 NOSHADE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major 10" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES,
INC. </font></H1>



<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2"><B>Annual Meeting of
Shareholders to be Held on Tuesday, April 16, 2002 <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
2002 Annual Meeting of Shareholders of Guaranty Bancshares, Inc. (the &#147;Company&#148;)
will be held at 100 West Arkansas, Mount Pleasant, Texas, on Tuesday, April 16, 2002,
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 15, 2002
accompanying this proxy.   </FONT></P>



<!-- MARKER FORMAT-SHEET="Para 10" -->
<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,
proxies for the undersigned, 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 discretionary 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>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<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 <B>FOR</B> the election of all nominees for director named herein to serve on the
Board of Directors until the 2003 and 2005 Annual Meeting of Shareholders, as designated
on the proxy, and until their successors are duly elected and qualified, and <B>FOR</B> the
ratification of the appointment of McGladrey &amp; Pullen, LLP as the independent auditors
of the books and accounts of the Company for the year ending December 31, 2002.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Center 10" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2"><B>IMPORTANT&#151;This
Proxy must be signed and dated on the reverse side. <BR>(Continued and to be voted on reverse
side.)</B>    </FONT></font></P>



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






</BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>g50017_auth.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 g50017_auth.gif
M1TE&.#EABP`?`*(``/___\S,S)F9F69F9C,S,P```````````"'Y!`$```8`
M+`````"+`!\```/_"+K<_C#*2:N].--Q@OY@*([30'@'J:YLNZ2*(+AT;4L$
ML0S>[?^LP&'`@`&/R(RP84PZGP]!$W#00:]7P:EAQ7J1TM[K)_U^RTR?M&N&
MHA<!MDLH!Q(.4ZQ0K,A%EB!2>1!\(G=X;7L-/!$<@Q5X1!M5(T)X=5A-=P`S
M43F8$P$<H`U2C"*.CQ2%*II;#*(F>+.T.0,"K`JSDA*C)(Z\&@>=+&]4?'&T
MM#(R.<H#T`JBLQ12Q"&"I!-K+GAB'2]5'G0`FQ>'JCN()'>OP@37*M%]X#%&
MIKKQ$=;KC9>_WCXXTM?J&YM^PQ3,HW`'6L)]D4A8(E@MXAQX+[Y1HU*D_T(8
M*MK0D=!2;T<N!Y%.CD!H94T*2T54QO##@0^>3J8H28@S8:.T?[UFR13Q\!"`
M9,>HZ.2D#:0'/PO,`1CUQA$?HQ!2V4QA#<+-?C5@6$J!B``1$U)+/C`'2%<]
M#KCJB8P:<(<ZGX(L\>JJU*&/+7N&&4D!U0I8)O7(Y7-+!-&_A]G*I7"D@]P2
MDD/N=$H5=QC<'V1U^,KWL`\5@C7I?I,\V.<0MQT.-12W;E2M2)=@M'MZ0A0Z
MC!@H3N5`:.D+$P[NV`RF=.NU'&.5O9[%QI3BCTKK9J\RHT<R6M!PE2K]`&CY
M!Y\;!(B71WR1:W"Y7XH<F9!7\DK=.5@O(%45LQ3M"+>2#^;E8L)0;22HX((,
&-LA"`@`[
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>4
<FILENAME>g50017_chart.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 g50017_chart.gif
M1TE&.#EA`@*1`:(``/___P``F0``9@```/X!`@```````````"'Y!`04`/\`
M+``````"`I$!``/_"+K<_C#*2:N]..O-N_]@*(YD:9YHJJYLZ[YP+,]T;=]X
MKN]\[__`H'!(+!J/R*1RR6PZGZ>!=$JM6J_8K';+[7J_X+!X3"Z;S^BT>LUN
MN[\F*G1.K]OO*3EH@._[_X"!#7P=4H*'B(F*1(8:A(N0D9*3+8\6EI29FIN<
M%)@3GYVBHZ2*H1"GI:JKK%"I#*^MLK.T0+$`M[6ZN[PNM[F]P<+#A:#$Q\C)
M'*_`RL[/P<S0T]3(TM78V;77VMW>H]S?XN.1X16IF%,2ZH.-Y._P(>:@I^ZX
M"_7XL/KQ_?X8\R+P"360G\&#]Q(B_,>PH8*`#PA]DHAPXJ"'%QUJ;`A1_Z`#
MBACW9>27;J-)?QU1C7Q4<F3(EB=CCDL9461(A3<KYL393H_,G\-H?M2YTZ)(
MF,:`*NTE=.65HD./NERWM*JNIC:C\C1*<JI'JV!;85UXD*7*G&8OA5VK:NS.
MK+CLX60'2VY2MG@YN172+*_?/WN#]/U+V$Y@6X43FZ(Z9[#BQTL._W`,N;*1
MO1/E6D%EE^XYRZ`-,[X$T]*OLF3/AE[M9&Q!U*F)(AW-NG82K"!KOM7ZTJMJ
MV\"+8.:,S^?4W+MU!U_.E_;GGED)9IS]E7E=ZSB&__;:DGKQ-^##BQ]/OKSY
M\^C#S]"^?6%WW\JQ/[0KWY=S3_??OH=;O;[_&O_L;075<0/B]]^!Z^5'FSNF
MI9;63<U0]A=]$7F&X!X*]C=?9DA9&%=?$N)EG$`C7NB!9#Z$*"*%)K*`8@\J
MLL5BBRN\R$.,-.:H(7Q*X%A?B3KRR%,3/F)719`9#GG7=Q_-Z*&'22(II5H[
MKE.:3?F@%1MOD,TX98U1[M.@0=3MMR5_A0'I2Y&6X9:<0F5.)R2::7J9AYK_
M!7A=@;+->69>=M88J'5Z?@@75[W1R>67C#[7WI(K<2>GHNE5:NFEF&:JZ:;B
M)5AEDL@-:>:;?C::P:"@%2H5?Z,J&9^I'QQI9)@NM8IH0MZ]*B.;+T!I6X`,
M8JG:F*[J"A:>L,)0Z)/_FM7%(4`3HIIL'K0*%^T=R$Y8+2/3"NIKFML.P6NW
M\MFXP[CD$AIN<^FFNZQGFU7X[`7H4O.M*=*:Y%:S6MY%;(1*R4I)MD"Y-E>D
MSH4*3+W0Y-MN)=6&.FG"?*[[L(FJDJ2FK51>?"[#SF0,)YH<.^IQ#O<R)#(Z
M7"I,(J<PQRSSS#37C(:GCRHX3\D&GJR#PS.M*]U]/$/Z#]`^V_?ICK<V7?'2
MY!`L#-+/Z)FEJP^.W+'*5,N2<C?`QKMAK9U)"S)39V<B=3;F_IRT<&G/TC;*
M;_<8-RES9U<W$@*#;3%B[ZR-S=<A_SU9X(3OK3?4NHYX+[,@1IVXXC?L>R69
M_\,*NS7E1-X-B<'$)NK>Q*0JROD1DV\3,:DN$RB@R:?;W75;0C,6YZI_EAX[
M(YXOQOBBF+-*>K&E[L[<RD0=^O1W-C?O_//01T\>SL;JK+SKN0*OC.!6S3YP
M[2U+BKONY$>3>E5]J_Z[^-=?GWWQQM_F?3G@.VA_O\3#'_^O]7]HG(6F*5OD
M]G>AO%6.@(B8'V`,ER($"B)]G3"@#7H7".ZMYGR)D""`K(%!!])M?=8BA@4]
MZ#80<HN$/^K?H2`X-NC0"X624""1PD4??HWF7R^$X>=D&)EMO49,<RH:`W7(
MA!&*!H2M"]UV6M<S(F:0@@TT87("Z"LA2G$31G3B!_]S]JG0#:TKI@LC.#K(
M*!X*1H5;<MKKY"6]-KKQC7",(_6TUT6B#6]A6M2+&:/(Q9SM[(Z;R^,%T8@_
M_0`2=H(,3<8NIQ4<!C*1;2*DJ&QH*!<^$I)8A"*UKGC&4F2Q;BR\S1!OY$DR
M4LZ4YQIE*L>X1TS.47_L<F6J5%E"6=*BE2A89).8(4!HV?*6N(P##0G"2(1!
M*(>_%`LJE>5#41U,>./+7^Z2F<G+K.YU2E3C^\18P652<Y5]K%XVP[=&H^$K
MF-^,@2Z3UR=N2A,PWOQE/$6PSJ=9D7EQS*<^]\G/]+S2G?>SYR&;^,!/IK.3
MX=3>.+%7/$U6;IX'!6?UZLC_S@%M<YH1+9@DBZFY8UXRH^:303V9%)U>(I,.
MH01I+M'91X=&`0\&5:DU.0DXF<J(EENT:5@T2`.7G@BB.NT13A<G/Y\&]8!7
MG!<^ZV'2CQXU)I8SIC2SEC5S/E4FH&M?+.XY40#%]*K8NN9"3Q--/*8(J&!]
M`K"FL[&!6C6M&UGK^+XHNO(9%:ZW[%^NM,FC?OKUKX`-+!G^B=%"8HV<%RU?
M'%B*U\;H%3Y\=>==&RN6QY85L0VE+%952-6`.A*1\OBJ9F.(1LB13:F@#2UC
M1]L'GA*6M?UPK4AA&]>A(M41HJ7MSU*ZR83.=`.YU:U(MS!;FAY.N#&450`$
M$(#B__J654V5URY]B5R4/J4"RV6N`)S;U29)M:K!\VAJ>5M=KW8!N]IM+G?I
M.)2QLJ^N[RQ6<,M+@NMB(+O+5>]Z,_M,,([NLJFE;T_%5H+\,G>"EO6O(0%,
M4`'WZKPF,+!^>YI@^$9VFFAU\#D(?`+\;I>HW>6-%;GJ/\&:^,0HAIZ$[<O,
MI+KOO;AJ*!<T3"\6S\#`!ZYEB&OE5HL6S\`ESO!1X5`#"<.HPC&&IH+C.X#T
MTA@@'+:!AR>L8_:^JK-3A$U\[^%DTI#WFUA(@I&/^USW1'<N9TY*?KT\8UL2
MN0A31NB.0]AEW$8YCUIHPICE;&74+0#(>,T"%.(L+MLB^/_/VE6!C=^69SKL
MN=#&Y:,"$KW2-OOLRTIX-*3+O&D%`+H2=WYR`SPLRDB3=*F<06V#/[U;(?ME
MOD/0=`@YK1PEUKJC#09`G;/3:$(MN@^$+C6M79<_$L-GUQ\+<VV4?0A9^]G4
MK;KR\B:Z9G'!6B/,1D2P>PAMME:QQTM#=F0P?9)KPUG<0NWV7*5=SB2Q6G:"
MMN6V9VAJ.%VMG;$)@X%3S.]^^UL**W[#:[?\LL,R5+(4H+1AO*"-7T=BWFJU
M[;U]C/`)O+NU#N<@N;6-[HBK>\D7MBMZEQO!4.,MXY-PMBM&B66#]Q=@%>CX
M(M[,RLG^@-1^,)=I2ZKJMSI`Y@/_0WF05(Y20V_P`M4.TL8W`?&PUENB"4\Z
MVI8^F7C/@NA'''9-+7!Q8%I:,+VF1=-;:W0*9Z#K4S?W8EW=;*##M.P#CX#"
MO2%TH."8R@]4Y<Y3/=V3(GWN;&/X"-1.":POL-XMO]IG<SWR#R/.Y#6&/"_&
MGO>/6QBS%=^`V[D&I&PGP_`5'.*(P:WU!6P^MF&H!NA#;_DD_Q?D3AWYL3S_
M#)RK3?3@-C9`(7#Z\J[^$#9B"1/Q_28W[/O?R$_^>*9LLX'C2!W#ISB&0X!V
MW_<^@Q(7*(-]C@'`TY?RDWC1Z+>/T^K3]O>?8[F6%8]K[M_7^^<7P/73__2]
MHR7-MIW__U/13]JG5QD$^F=3X*<7<+=?("!UFL5_W^-_.24"`9A1"KB`I2=I
M(V!^.F5[><6`($8"%JA2$:@).J<9H61_C!<"#RA+=\<4ZF=8MQ9>)4A].794
M'TB`K0=>!S=]*7""@C2`E56#NJ-[A;4!'2AO.AA!*VAOWT9^&A@!0PA)/"@W
M>F</MH9-_+4"\/=+,^A)1\@R-UA\E7)\RA>&@L5\*.9\)P)9F(>#+,!<))=,
M6;@*XH>&7<AD+]"$*/2&<(A[2@B$BF6"")A'&%@U6]A^+FB#$\@!5ZA#>-B#
MA]A"SG):?1=[$9:('O2$05&`ZB0#1?@VBPB%2WAH,;")'F.)Q_\@6YEX8S'H
M0/C5AG2'B2VFB7^X.ZN8BG[SB4>'BJPHB_(7`+'8<%'8<X]H20'6`G;8+K.(
M=]\0?.N7.2[H?E;8BR=SC"BAA[`WAV8E9;3H,])X--1X>=8HB6L(C>2RC2HS
MB-I7C2]8AY0(*^3($;_8/L1'ASE0C#K2C@ZAC.*U8.BX2S2C76+XC^!QC``I
M!F98#'M(>G-&C.M8C[LHCN7H@^U&A9F7`VSH>%]BCU#5C:ZGC]Z8CC)`C]B!
MD9N%>,O8@OGHC*'HD/XADC\1@JI&19$XC#6PD"'9D-FX%*;XBCP`DJO!DCCI
MBKT"!*)8&#Z)/D"I-#\PE'E1E-USE!#_$P0J"1I,>2Q.Z2)"H)16,94[595@
M(@0\R19:N1;B)S:A1H(HB8VY:!EA>5,:.(7?A5$V%W4W290VB8R/D3=N&8_7
M&&MSZ1=K^6HXE9=Z"8X4&955\9?:PH!41"%\2'`W\)4:@9B$T38=PFZ)Y9B/
M29,Q(9G@XG];E89>J$_I-9#Z))"D&3,%&2M&TYAQV7UI:7=UF2>T])G?*),W
MIYG^P)F5H7/D]&(3>020V0VZ&4GU9Y)OJ5BMF0$5>1+#.4O%*5T\%Y,>"95]
M"0_-J4A<J6A-@)7$<)V#9(MFQP3!B0S>R1HY&91.,)["4)[+EIV]M9V&J0SL
MR3_@&7=&@)O'_S"?P#&6??,X^%>?,:">LJ"?P8&7A)B/AIB0?/F:\AF;Y&*@
MY]B19TD$W,D)!*HNB@F/TB=R=8"?`^J@#S,W"^6;:C@'`JH)%YI"GDEL@VF;
M25"ABY"B_D&9++JA\M5OHWF:8V":.LIOJ7F&&BJ1)5H')\IQ%6F7'D.C0<J:
M?A"?F2"C&*-WO=FBT[D$,$JDZ76E.<*;C<2,)^F>ZLB@#Y>E$E:=C":ET%D6
M_]F("VJ1B5"F<*JE2'*>2.D''BJ>9)JGG?B@8/I2@%"D.Q"G@FJF^T.G3PD(
M<NH"@RJHKF2H5BD(B3J)BTJF8-:GPM1V8CJ/>KJI2"I/[^@L5;2F"O_Z!$ZJ
M`I,:IT^%C_U5'8LWH4\0J1!PJGG:6'%XH"3*H1R7J168IYQ*J*FJD7_"I(H`
MJ``@JWL*4G$(+VVEA&RJ!'<Z:KT*IZ)&/"H2+"PHI+CZIOAIK+`J4[4:4%3*
MCP.9HU<0I[W:H^@*1S_J"')XJ_(("5W&K:4ZK=0*I.!JHWL9H]&:I?2JFA!Y
M._MHJ9K*J/TZ>.;XI0@*EYG0K:+FDM()D\)8I05[B0!ZBA-;#8[:E1=K+P);
M7QN+L1UKL!\[#1FKG2/;,)\:C'P7L:YZLI[8B(GGI5KCHBY[%1H9?=CZKC5K
M#<`:H1NILSLK0K@'+S"&L\T:M%@D>@\"L!+_&K)(ZUC_6K33%F3I6K56ZV_K
M>BJYAY!]]K1><[,^:[2CZK5X`[81*:QD&PT'.[/'N67)F;;"-K;264EJ"HP5
M"[>`4++OB;?J<[0;R+<O*[=D!K@9Z+>W1;B!V[6SAKA?BW@"4Y:BJKB,"X)'
MZ"<Q2YB3>WLDV5UHF[EYV'K!RK6PY+GT=XC]N:P!>[>DZW&FBVMT];/YNKJB
M8$`3E[/H<+6XF[ME:(!!:%4A![2E&WZ:*[P6*[A^!)K`.W.4*X']IY.2:YE2
M&Y&&RVW,2S_5>ZC&F[!9AC\P1[S7J[S?J['9ZXBG=G]V.[WI%K[8I[Y[.[JR
MNY6J^[ZQY;3RR['Q_UN_@4._^"N(][N_XJ"W_LLV^AO`/-N_!.R+!GS`@S/`
M"CPU]$M@PE=#C12YXKLAI<&8$WR^)@NJ3E&[$3RWC\K!6(+!'0S"%>P_)=PX
MY0M0`#Q1N9$947&YPR55K@?#$].J+L)1+^Q=-VRK*T7#.]P.,5R2:P+$7]H9
M1]R]XRNR0QP=MCNUU#*BR%$2)7.9\K"J6C-.5>R^P(7%::'%AV3%JBG%AO5#
M$FK&/F=S7-BE3RR])LL-=)5$HNNQ];H;8[+%NV>0<!P?<LRLE[K'(H:O2P8J
M*.,X[<$S"1K"QCD?T-M1F@3(>U*;8HPAK,K#DLS%RW!#ENRNMT+((#:%K_\[
M?&P78%Y$POLXRDM3RA/7Q[UKKX&\PBTZR?[*QRI;FRS,P/!%%EY4',WHO+8:
MQR/<RXI,P[KLQ(P,(12TQK7[<G-<`LK\**W:R5#SMKGL<EMA"&([S%JV*-F$
MS5#LIZ^LPA7AS4R2S+^QQD3<M"=\K1Q95=+<4L?USECLQ]KLQLZ4;]]\J36J
M9/*%OOF1/8CBSOE,Q_O\>FQ[S\.HQJ(;S0,-SJ_'M`)MS[G$S17%S/3LT/H(
MT>&JS5RAT3[KR425S2<IP^L5T#88T1;MO"9=S`6"PQ6\TG:</"Z]P>U\TC*=
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M;=VKA7'$,=W4?=['S-WQ_^W,F.W9\)1J`Q%`/1'>U@;#]+W>RMW>,,68=`'?
M^#3?^UW?!*VUE6VJ^RJOO=K<0KS@%(["&L??`=[=P^W?9U4V0AS?`C[BY-V^
M3G7<*R#A*CZKYIW;^\W<(6Y=7P>J8:??O+SASBW@G6/@/#[>/L[!'.Z?+6[A
MZ/3=M!(W$9[DITKA.G[;,=X8$":N5D</Y(WCYZWC112J/6[C!9?=Y#PH].WE
M)3[1K(W?.<??0X[FY;T]T4VW\$W@>5OB[`#F1%[G-'W:HQWG`X[=\LW@:-/<
M!X[@6%[=>Z[>O'3=B-[G]EWFJ-U-@<[D-ISA$.OFC^OA,/(_T&?A+Q/!G+[.
M"61-LZ[-OB`MUZ'^?[%'5J5..^SJ?I:>ZKYLFZCNZN#`Z.'4ZK*.O9CKU[=.
M2G@^ZKN>M+V>(;;^ZR9.4S7DV,B>[,JN!J3ARL1>UK'BU,]>!]>V[-9^[=AN
 .!M.^[=S>[=Z>+@D``#L_
`
end

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
