THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

SWS Group, Inc. (SWS)

10/12/2005 Proxy Information

Mr. Buchholz served SWS as Chief Executive Officer from December 2001 until August 2002 and from 1984 until July 1994; President from 1984 until August 1991; and Chairman of Southwest Securities, Inc., a principal subsidiary of SWS, from August 1993 to May 1996.

We have not engaged in any transactions with our directors or executive officers, except as follows: On November 7, 2003, FSB Financial, Ltd., an indirect subsidiary of the company, borrowed $5 million, in the form of an unsecured note, from CN 2003 Partners, a partnership. William D. Felder, our President and the President and Chief Executive Officer of Southwest Securities, Inc., had an interest in an entity that is one of the partners in CN 2003 Partners. The note was repaid on June 8, 2005.

During the 2005 fiscal year and as of the present date, Frederick H. Benners, Jr., the brother of William D. Felder, our President and the President and Chief Executive Officer of Southwest Securities, was employed by us as the manager of equity trading and execution operations which includes floor operations on multiple exchanges, OTC agency trading, market making, proprietary trading and portfolio trading. Mr. Benners also served as President and Chief Executive Officer of May Financial Corp., a wholly owned subsidiary of the Company. Mr. Benners was paid an aggregate salary, commission and bonus of $3,490,000 for his services during the 2005 fiscal year primarily composed of performance based commission and bonus. As of September 22, 2005, Mr. Benners owned 8,659 shares of our common stock. We are of the opinion that Mr. Benners’ employment is in the best interest of the Company.

10/6/2004 Proxy Information

On September 24, 2003, R. Jan LeCroy received a home equity loan in the principal amount of $100,000 from Southwest Securities Bank (the “Bank”), an indirect wholly owned subsidiary of the company. The loan bears interest at the rate of 6.25% and matures on October 1, 2018. Because the loan (i) was made in the ordinary course of business, (ii) was made on terms that are no more favorable than those offered by the Bank to the general public for such extensions of credit, and (iii) did not involve more than the normal risk of collectability or present other unfavorable features, the Board has determined that Mr. LeCroy’s relationship with the Bank is not material, and therefore, does not impair his independence.

On July 3, 2003, an individual received a loan in the principal amount of $90,733 from the Bank, with which the individual purchased an equity interest in Presidio Financial Partners, LLC. Brodie L. Cobb is the founder and Managing Director of Presidio Financial Partners, LLC. The loan, which bears interest at the rate of 5.50% and matures on February 28, 2005, was guaranteed by Presidio Financial Partners, LLC. Because the loan (i) was made in the ordinary course of business, (ii) was made on terms that are no more favorable than those offered by the Bank to the general public for such extensions of credit, and (iii) did not involve more than the normal risk of collectability or present other unfavorable features, the Board has determined that Presidio Financial Partners, LLC’s relationship with the Bank is not material, and therefore, does not impair Mr. Cobb’s independence.

10/9/2003 Proxy Information

Mr. Buchholz is a founder of SWS Group, Inc. where he has served as Chairman since August 1991. Previously, he served SWS as Chief Executive Officer from December 2001 until August 2002 and from 1984 until July 1994; President from 1984 until August 1991; and Chairman of Southwest Securities, Inc., a principal subsidiary, from August 1993 to May 1996. Mr. Buchholz has been associated with Southwest Securities in various executive capacities since its inception in 1972.