<PAGE>



                                  EXHIBIT 10.1

              MOUNTAIN NATIONAL BANCSHARES, INC. STOCK OPTION PLAN


                  1.  ESTABLISHMENT AND PURPOSE OF THE PLAN. The purpose of this
Plan  is to  provide  a  flexible  means  of  compensation  and  motivation  for
outstanding  performance  by  employees  of the  Company  and its  Subsidiaries,
directors of the Company,  and  organizers  of the Company to further the growth
and profitability of the Company.

                  2. DEFINITIONS.

                     BOARD OR BOARD OF DIRECTORS.  The Board of Directors of the
                     Company.

                     COMMON STOCK.  The common stock of the Company, $1.00 par
                     value.

                     COMPANY.   Mountain  National  Bancshares,   Inc.,  a
                     Tennessee corporation

                     EMPLOYEE.  A full-time key employee of the Company or
                     a Subsidiary, including an officer who is such an employee.

                     FAIR  MARKET  VALUE.  The fair  market  value of the
                     shares of Common  Stock as of such date as determined in
                     good faith by the Board of Directors.

                     INCENTIVE  STOCK OPTION.  Any Option  intended to meet the
                     requirements of an incentive stock option as defined in
                     Section 422.

                     NON-QUALIFIED STOCK OPTION.  Any Option not intended to be
                     an Incentive Stock Option.

                     OPTION.  An option to purchase  Common Stock  granted
                     under the Plan, including both an Incentive Stock Option
                     and a Non-Qualified Stock Option.

                     PERSON. An individual, a partnership,  a corporation,
                     or any other private, governmental or other entity.

                     PLAN. The Mountain  National  Bancshares,  Inc. Stock
                     Option Plan herein set forth, as the same may from time to
                     time be amended.

                     RULE 16B-3.  Rule 16b-3 under the Securities Exchange Act
                     of 1934, as amended,  and any successor rule or regulation.

                     SECTION  422.  Section 422 of the  Internal  Revenue  Code
                     of 1986,  as amended,  or any successor statute.

<PAGE>

                     SUBSIDIARY.  Any  business  association  (including a
                     corporation or a partnership) in an unbroken  chain of such
                     associations  beginning with the Company if each of the
                     associations  (other  than the  last  association  in such
                     chain)  owns  equity interests  possessing 50% or more of
                     the combined voting power of all classes of equity
                     interests in one of the other associations in such chain.

                  3.  ELIGIBILITY.  A grant  under  this Plan may be made to any
Employee, any director of the Company, or any organizers as to whom the Board of
Directors  determines  that  making such grant is in the best  interests  of the
Company;  provided,  however, that (i) no grant may be made to a director of the
Company who serves on the Board of Directors  other than as provided  under Rule
16b-3,  and (ii) no grant of an  Incentive  Stock Option may be made to a person
other than an Employee.

                  4. PLAN ADMINISTRATION. This Plan shall be administered by the
Board of  Directors.  The Board of Directors  shall have full power to interpret
and administer this Plan and full authority to act in selecting the grantees and
in  determining  type and amount of grants,  the terms and conditions of grants,
and the terms of agreements  which will be entered into with grantees  governing
such  grants.  The Board of  Directors  shall  have the power to make  rules and
guidelines  for  carrying  out the Plan and to make  changes  in such  rules and
guidelines from time to time as it deems proper. Any interpretation by the Board
of  Directors  of the terms and  provisions  of the Plan and the  administration
thereof  and all  action  taken by the  Board of  Directors  shall be final  and
binding.

                  5.  SHARES  SUBJECT  TO THE PLAN.  Subject  to  adjustment  as
provided in Section 8, the total amount of shares of Common Stock  available for
grant  under  this Plan  shall be up to  250,000  shares of Common  Stock of the
Company less the number of shares of Common Stock  issuable upon the exercise of
stock  options  assumed by the  Company by virtue of the Plan of  Reorganization
dated March 28, 2002 between the Company and Mountain  National Bank.  Shares of
Common Stock issued  hereunder  may consist,  in whole or in part, of authorized
and unissued  shares,  treasury shares and shares acquired in the open market or
by private purchase by the Company. Any Common Stock which is purchased shall be
purchased  by the Company at prices no higher than the Fair Market Value of such
Common  Stock at the time of  purchase.  If for any  reason any shares of Common
Stock issued under any grant  hereunder  are  forfeited or canceled,  or a grant
otherwise terminates or is terminated for any reason without the issuance of any
shares, then all such shares, to the extent of any such forfeiture, cancellation
or termination, shall again be available for grant under this Plan.

                  6. TYPES OF GRANTS.

                  (a)      The Board of  Directors  may make such  grants  under
                           this Plan as in its discretion it deems  advisable to
                           effect  the  purpose of the Plan,  including  without
                           limitation  grants of  Incentive  Stock  Options  and
<PAGE>

                           Non-Qualified  Stock  Options.  Such  grants  may  be
                           issued  separately or in  combination,  or in tandem,
                           and additional  grants may be issued in  combination,
                           or in tandem,  with grants  previously  issued  under
                           this  Plan  or  otherwise.  As  used  in  this  Plan,
                           references  to  grants in tandem  shall  mean  grants
                           consisting  of more than one type of grant  where the
                           exercise  of one  element  of the grant  effects  the
                           cancellation  of one or more  other  elements  of the
                           grant.

                  (b)      The exercise  price of an Option or other grant shall
                           equal at least 100% of the Fair  Market  Value of the
                           shares of Common Stock on the date of such grant, and
                           be paid in cash or such  other  consideration  as the
                           Board of  Directors  may  determine  consistent  with
                           applicable law.

                  7. OPTIONS.

                  (a)      Each Option shall have such terms and  conditions  as
                           the Board of Directors  shall determine in accordance
                           with this Plan.  A grantee  shall have no rights of a
                           shareholder  with  respect  to any  shares  of Common
                           Stock  subject  to  an  Option  unless  and  until  a
                           certificate for such shares shall have been issued.

                  (b)      All the provisions of Section 422 and the regulations
                           thereunder  as in effect from time to time are hereby
                           incorporated  by  reference  herein  with  respect to
                           Incentive  Stock  Options  to the  extent  that their
                           inclusion in this Plan is necessary from time to time
                           to preserve  their status as incentive  stock options
                           for  purposes of Section 422.  Each  provision of the
                           Plan  and each  agreement  relating  to an  Incentive
                           Stock  Option  shall be construed so that it shall be
                           an  incentive  stock  option for  purposes of Section
                           422, and any  provisions  thereof  which cannot be so
                           construed shall be disregarded.

                  (c)      Notwithstanding any other provision herein contained,
                           no Employee  may receive an  Incentive  Stock  Option
                           under  the  Plan if such  Employee,  at the  time the
                           award is granted,  owns (as defined in Section 424(d)
                           of  the  Internal   Revenue  Code,  as  amended  (the
                           "Code")) stock  possessing more than 10% of the total
                           combined  voting power of all classes of stock of the
                           Company,  its  parent or any  subsidiary,  unless the
                           option  price for such  Incentive  Stock Option is at
                           least  110% of the fair  market  value of the  Common
                           Stock subject to such  Incentive  Stock Option on the
                           date of grant  and  such  Option  is not  exercisable
                           after the date five years  from the date such  Option
                           is granted.

                  (d)      The  aggregate  fair market  value  (determined  with
                           respect to each Incentive Stock Option as of the time
                           such  Incentive  Stock  Option  is  granted)  of  the
                           capital stock with respect to which  Incentive  Stock
                           Options  are  exercisable  for the  first  time by an
                           Employee during any calendar year (under this Plan or
                           any other  plan of the  Company  or the parent or any
                           subsidiary of the Company) shall not exceed $100,000.

                  (e)      No Option  shall  exceed  ten years in  duration.  No
                           Incentive  Stock Option shall be granted  pursuant to
                           this  Plan at any  time  beyond  ten  years  from the
                           earlier of the adoption  date of the Plan or the date
                           of shareholder approval of the Plan.



<PAGE>



         8.       ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.  In the event of a
                  reorganization, recapitalization, stock split, stock dividend,
                  issuance  of   securities   convertible   into  Common  Stock,
                  combination  of  shares,  merger,  consolidation  or any other
                  change in the  corporate  structure  of the Company  affecting
                  Common Stock, or a sale by the Company of all or substantially
                  all of its assets,  or any distribution to shareholders  other
                  than a normal cash  dividend,  or any assumption or conversion
                  of  outstanding  grants  as a result  of an  acquisition,  and
                  except as  otherwise  provided  in an  agreement  between  the
                  Recipient and the Company,  the Board of Directors  shall make
                  appropriate  adjustment  in the  number  and  kind  of  shares
                  authorized  by the Plan  and any  adjustments  in  outstanding
                  grants as it deems  appropriate to maintain  equivalent value;
                  provided, however, that adjustments to Incentive Stock Options
                  shall meet the  applicable  requirements  of  Section  422 and
                  Section 424 of the Code.

         9.       TERMINATION AND AMENDMENT.

                  (a)      This Plan shall be effective upon its adoption by the
                           Board of  Directors,  provided  that  approval by the
                           shareholders of the Company is obtained within the 12
                           months preceding or following such adoption. It shall
                           remain in full force and effect unless  terminated by
                           the Board of Directors, which shall have the power to
                           amend,  suspend,  terminate or reinstate this Plan at
                           any time,  provided that no amendment which increases
                           the number of Shares of Common  Stock  subject to the
                           Plan,   or   materially    adversely    affects   the
                           availability of Rule 16b-3 with respect to this Plan,
                           shall be made without shareholder approval.

                  (b)      Without limiting the generality of the foregoing, the
                           Board of Directors may (i) amend any  limitations  in
                           this  Plan if and when  they are no  longer  required
                           under Rule  16b-3 or  Section  422 and (ii) amend the
                           provisions  of this  Plan  to  assure  its  continued
                           compliance with Rule 16b-3 and Section 422.

         10.      NON-ASSIGNABILITY.  Unless otherwise specified in an agreement
                  between  an  organizer   and  the  Company,   grants  are  not
                  transferable  other  than by will or the laws of  descent  and
                  distribution.  A grant is  exercisable  during  the  grantee's
                  lifetime  only by the grantee or his or her  guardian or legal
                  representative.

         11.      EXERCISE BY ESTATE. Any provision of this Plan to the contrary
                  notwithstanding,  unless otherwise  determined by the Board of
                  Directors, the estate of any grantee shall have 12 months from
                  the  date  of such  grantee's  death  to  exercise  any  grant
                  hereunder, or such longer period as the Board of Directors may
                  determine.

         12.      GENERAL PROVISIONS.

                  (a)      Nothing  contained in this Plan, or in any grant made
                           pursuant to the Plan,  shall  confer upon any grantee
                           any  right  with  respect  to  terms,  conditions  or
                           continuance  of  employment  by  the  Company  or any
                           Subsidiary.

                  (b)      For  purposes of this Plan,  transfer  of  employment
                           between the Company and any of its Subsidiaries shall
                           not be deemed termination of employment.

                  (c)      Appropriate  provision  may be made by the  Board  of
                           Directors  for all taxes  required  to be withheld in
                           connection with any grant, the exercise thereof,  and
<PAGE>

                           the transfer of shares of Common Stock, in respect of
                           any  federal,  state,  local or  foreign  withholding
                           taxes.  In the case of  payment in the form of Common
                           Stock, the Company shall have the right to retain the
                           number of shares of Common  Stock  whose Fair  Market
                           Value equals the amount to be withheld.

                  (d)      If any day on or before which such action by the Plan
                           must be taken  falls on a  Saturday,  Sunday or legal
                           holiday,  such  action  may  be  taken  on  the  next
                           succeeding  day  which is not a  Saturday,  Sunday or
                           legal holiday.

                  (e)      This  Plan and all  determinations  made and  actions
                           taken  pursuant  thereto  shall  be  governed  by the
                           substantive  laws and  procedural  provisions  of the
                           State of Tennessee,  without  regard to principles of
                           conflicts  of  laws,  unless  otherwise  governed  by
                           federal law.

                  (f)      The Board of  Directors  may  amend  any  outstanding
                           grants to the extent it deems  appropriate,  provided
                           that the  grantee's  consent shall be required in the
                           case of amendments adverse to the grantee.

         13.      CHANGE OF CONTROL OF THE COMPANY.

                  (a)      Any   provision   of  this   Plan  to  the   contrary
                           notwithstanding,  in the event of a change in control
                           of the Company,  unless (i) otherwise directed by the
                           Board of Directors  by  resolution  adopted  prior to
                           such Change in Control or within ten days  thereafter
                           or (ii) otherwise  provided in the agreement  entered
                           into between the Company and a grant  recipient,  all
                           of the grants under this Plan shall become completely
                           vested and immediately exercisable.

                  (b)      For purposes of this Section 13,  "Change in Control"
                           of the Company  shall mean the  occurrence  of one or
                           more of the following:

                           (i)      acquisition in one or more  transactions  of
                                    25 percent  or more of the  Common  Stock by
                                    any Person, or by two or more Persons acting
                                    as a group,  other  than  directly  from the
                                    Company;

                           (ii)     acquisition in one or more  transactions  of
                                    at least 15 percent but less than 25 percent
                                    of the Common Stock by any Person, or by two
                                    or more Persons acting as a group (excluding
                                    officers and directors of the Company),  and
                                    the  adoption by the Board of Directors of a
                                    resolution   declaring   that  a  change  in
                                    control of the Company has occurred;

                           (iii)    a  merger,  consolidation,   reorganization,
                                    recapitalization   or  similar   transaction
                                    involving the securities of the Company upon
                                    the  consummation  of  which  more  than  50
                                    percent  in  voting   power  of  the  voting
                                    securities of the  surviving  corporation(s)
                                    is  held  by  Persons   other  than   former
                                    shareholders of the Company; or

                           (iv)     25 percent or more of the directors  elected
                                    by  shareholders of the Company to the Board
                                    of Directors are persons who were not listed
                                    as  nominees  in  the  Company's  then  most
<PAGE>

                                    recent    proxy    statement    (the    "New
                                    Directors"),   unless  a  majority   of  the
                                    members of the Board of Directors, excluding
                                    the New  Directors,  vote  that no change of
                                    control shall have occurred by virtue of the
                                    election of the New Directors.

                  (c)      If grants shall become  exercisable  pursuant to this
                           Section 13, the Company shall use its best efforts to
                           assist the  grantees in  exercise of their  grants in
                           such a manner as to avoid  liability  to the  Company
                           for profits  under  Section  16(b) of the  Securities
                           Exchange Act of 1934, as amended, as a result of such
                           exercise,   including  (not  by  way  of  limitation)
                           explanation   of  and   assistance   in  meeting  the
                           requirements of Paragraph (e) of Rule 16b-3.

         14.      UNDERCAPITALIZATION.  In the event the Company's capital falls
                  below minimum  regulatory  requirements,  as determined by the
                  Company's  primary state or federal  regulator,  the Company's
                  primary  federal  regulator  may direct the Company to require
                  any holder  granted  options  under this Plan to  exercise  or
                  forfeit their stock rights under those grants.