<PAGE>   1
                                                                    Exhibit 10.3

                          WESTERN RESERVE BANCORP, INC.
                             1998 STOCK OPTION PLAN

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1 DEFINITIONS: As used herein, the following terms shall have the
meaning set forth below, unless the context clearly requires otherwise:

     (a)  "Applicable Event" shall mean (i) the expiration of a tender offer or
          exchange offer (other than an offer by the Company) pursuant to which
          more than 30% of the Company's issued and outstanding stock has been
          purchased, or (ii) the approval by the shareholders of the Company of
          an agreement to merge or consolidate the Company with or into another
          entity where the Company is not the surviving entity, an agreement to
          sell or otherwise dispose of all or substantially all of the Company's
          assets (including a plan of liquidation), or the approval by the
          shareholders of the Company of an agreement to merge or consolidate
          the Company with or into another entity where the Company is the
          surviving entity, pursuant to which more than 25% of the Company's
          issued and outstanding stock has been transferred.

     (b)  "Bank" shall mean the Western Reserve Bank, and any subsidiary of
          Western Reserve Bank or Western Reserve Bancorp, Inc.

     (c)  "Committee" shall mean a Committee consisting of the members of the
          Board of Directors of the Company or Bank.

     (d)  "Company" shall mean Western Reserve Bancorp, Inc.

     (e)  "Director" shall mean a member of the Board of Directors of the
          Company and, or the Bank.

     (f)  "Effective Date" with respect to the Plan shall mean the date
          specified in Section 2.3 as the Effective Date.

     (g)  "Fair Market Value" with respect to a share of Stock shall mean the
          fair market value of the Stock, as determined by application of such
          reasonable valuation methods as the Committee shall adopt or apply.
          The Committee's determination of Fair Market Value shall be conclusive
          and binding on the Company and the Optionee.



                                       1
<PAGE>   2



     (h)  "Option" shall mean an option to purchase Stock granted pursuant to
          the provisions of the Plan. Options granted under the Plan shall be
          Non-qualified Stock Options meaning that they will not be designated
          as an Incentive Stock Option meeting the requirements of Section 422
          of the Internal Revenue Code of 1986, as amended.

     (i)  "Optionee" shall mean a person to whom an Option has been granted.

     (j)  "Plan" shall mean the Western Reserve Bancorp, Inc. 1998 Stock Option
          Plan, the terms of which are set forth herein.

     (k)  "Plan Year" shall mean the twelve-month period beginning on the
          Effective Date, and each twelve-month period thereafter beginning on
          the anniversary date of the Effective Date.

     (l)  "Stock" shall mean the Common Stock of the Company or, in the event
          that the outstanding shares of Stock are changed into or exchanged for
          shares of a different stock or securities of the Company or some other
          entity, such other stock or securities.

     (m)  "Stock Option Agreement" shall mean the agreement between the Company
          and the Optionee under which the Optionee may purchase Stock pursuant
          to the terms of the Plan.

                                   ARTICLE II
                                    THE PLAN

SECTION 2.1 NAME. This plan shall be known as the "Western Reserve Bancorp, Inc.
1998 Stock Option Plan."

SECTION 2.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Company and its shareholders by affording to officers and employees of the
Company and the Bank an opportunity to acquire or increase their proprietary
interest in the Company by the grant to such persons of Options under the terms
set forth herein. By encouraging such persons to become owners of the Company,
the Company seeks to attract, motivate, reward and retain those highly competent
individuals upon whose judgment, initiative, leadership and efforts the success
of the Company depends.

SECTION 2.3 EFFECTIVE DATE AND TERM. The Plan was approved by the Board of
Directors of the Company on October 22, 1998, and shall be effective on November
1, 1998. The Plan shall terminate upon the tenth anniversary of the Effective
Date.


                                       2
<PAGE>   3


                                   ARTICLE III
                                 ADMINISTRATION

SECTION 3.1 ADMINISTRATION.

   (a)  The Plan shall be administered by the Committee. Subject to the express
        provisions of the Plan, the Committee shall have sole discretion and
        authority to determine from time to time the individuals to whom Options
        may be granted, the number of shares of Stock to be subject to each
        Option, the period during which such Option may be exercised and the
        price at which such Option may be exercised.

   (b)  Meetings of the Committee shall be held at such times and places as
        shall be determined from time to time by the Committee. A majority of
        the members of the Committee shall constitute a quorum for the
        transaction of business and the vote of a majority of those members
        present at any meeting shall decide any question brought before the
        meeting. In addition, the Committee may take any action otherwise proper
        under the Plan by the affirmative vote, taken without a meeting, of a
        majority of the members.

   (c)  No member of the Committee shall be liable for any act or omission of
        any other member of the Committee or for any act of omission on his own
        part, including, but not limited to, the exercise of any power or
        discretion given to him under the Plan, except those resulting from his
        own gross negligence or willful misconduct. All questions of
        interpretations and application with respect to the Plan or Options
        granted thereunder shall be subject to the determination, which shall be
        final and binding, of a majority of the whole Committee.

SECTION 3.2 COMPANY ASSISTANCE. The Company and the Bank shall supply full and
timely information to the Committee on all matters relating to eligible
employees, their employment, death, retirement, disability or other termination
of employment and such other pertinent facts as the Committee may require. The
Company and the Bank shall furnish the Committee with such clerical and other
assistance as is necessary in the performance of its duties.

                                   ARTICLE IV
                                   ELIGIBILITY

Officers of the Company and the Bank and such other employees as the Board of
Directors may from time to time designate shall be eligible to participate in
the Plan. The Committee may grant Options to any eligible individual subject to
the provisions of Section 5.1.



                                       3
<PAGE>   4


                                    ARTICLE V
                         SHARES OF STOCK SUBJECT TO PLAN

SECTION 5.1 GRANT OF OPTIONS AND LIMITATIONS.

   (a)  INITIAL PLAN YEAR. For the initial Plan Year, the Committee, subject to
        and conditioned upon receipt of ratification by the Board of Directors,
        shall grant Options according to the following schedule:

        1.   Edward J. McKeon shall receive Options for Thirty Two Thousand and
             Sixty Two (32,062) shares of Stock which shall be granted pursuant
             to the terms and conditions of the Employment Agreement by and
             between Mr. McKeon and the Company dated August 25, 1997, as
             modified by a Stock Option Grant Agreement and Second Addendum to
             Employment Agreement substantially in the form attached hereto as
             Exhibit A;

        2.   Such other individuals, as are designated by the Committee shall be
             eligible to receive Options for the number of shares of Stock
             determined by the Committee.

   (b)  SUBSEQUENT YEARS. In any subsequent Plan Year, the Committee may grant
        Options, subject to and conditioned upon receipt of ratification by the
        Board of Directors, to such other individuals as are designated by the
        Committee to receive Options for the number of shares of Stock
        determined by the Committee.

   (c)  STOCK AVAILABLE FOR OPTIONS. Subject to adjustment pursuant to the
        provisions of Section 8.5 hereof, the aggregate number of shares with
        respect to which Options may be granted during the term of the Plan
        shall not exceed Fifty Thousand (50,000) shares of Company Stock. Shares
        with respect to which Options may be granted may be either authorized
        and unissued shares or shares issued and thereafter acquired by the
        Company. No person shall receive Options for more than Thirty Two
        Thousand and Sixty Two Shares (32,062) shares in any one year, except
        for adjustments pursuant to the provisions set forth in Section 8.5
        hereof.

SECTION 5.2 OPTIONS UNDER THE PLAN. Shares of Stock with respect to which an
Option granted hereunder shall have been exercised shall not again be available
for grant hereunder. If Options granted hereunder shall expire, terminate or be
canceled for any reason without being wholly exercised, new Options may be
granted hereunder covering the number of shares to which such Option expiration,
termination or cancellation relates.

                                   ARTICLE VI
                                     OPTIONS

SECTION 6.1 OPTION GRANT AND AGREEMENT. Each Option granted hereunder shall be
evidenced by minutes of a meeting or the written consent of at least a majority
of the 

                                       4
<PAGE>   5

members of the Committee and by a written Stock Option Grant Agreement dated as
of the date of grant and executed by the Company and the Optionee. The Stock
Option Grant Agreement shall set forth such terms and conditions as may be
determined by the Committee consistent with the Plan.

SECTION 6.2 OPTION PRICE. The exercise price of the Stock subject to each Option
shall not be less than the Fair Market Value of the Stock on the date the Option
is granted.

SECTION 6.3 OPTION GRANT AND EXERCISE PERIODS. No Option may be granted after
the tenth anniversary of the Effective Date. The period for exercise of each
Option shall be determined by the Committee, but in no instance shall such
period extend beyond the tenth anniversary of the date of grant of the Option.

SECTION 6.4 OPTION EXERCISE.

     (a)  The Company shall not be required to sell or issue shares under any
          Option if the issuance of such shares shall constitute or result in a
          violation by the Optionee or the Company of any provisions of any law,
          statute or regulation of any governmental authority. Specifically, in
          connection with the Securities Act of 1933, (the "Act"), upon exercise
          of any Option, the Company shall not be required to issue such shares
          unless the Committee has received evidence satisfactory to it to the
          effect that registration under the Act and applicable state securities
          laws is not required, unless the offer and sale of securities under
          the Plan is registered or qualified under the Act and applicable state
          laws. Any determination in this connection by the Committee shall be
          final, binding and conclusive. If shares are issued under any Option
          without registrations under the Act of applicable state securities
          laws, the Optionee may be required to accept the shares subject to
          such restrictions on transferability as may in the reasonable judgment
          of the Committee be required to comply with exemptions from
          registrations under such laws. The Company may, but shall in no event
          be obligated to, register any securities covered hereby pursuant to
          the Act or applicable state securities laws. The Company shall not be
          obligated to take any other affirmative action in order to cause the
          exercise of an Option or the issuance of shares pursuant thereto to
          comply with any law or regulation of any governmental authority.

     (b)  Subject to Section 6.4(c) and such terms and conditions as may be
          determined by the Committee in its sole discretion upon the grant of
          an Option, an Option may be exercised in whole or in part and from
          time to time by delivering to the Company at its principal office
          written notice of intent to exercise the Option with respect to a
          specified number of shares.

     (c)  Except as otherwise set forth in a Stock Option Grant Agreement, an
          Option granted pursuant to this Plan shall be subject to the following
          vesting schedule: (i) 25% after one year from the date of grant; (ii)
          50% after two years from the date of grant; and (iii) 100% after three
          years from the date of grant.


                                       5
<PAGE>   6

     (d)  Payment for the shares to be acquired pursuant to exercise of the
          Option shall be made by delivering to the Company at its principal
          office a check payable to the order of the Company, in the amount of
          the Option price for the number of shares of Stock with respect to
          which the Option is then being exercised.

SECTION 6.5 RIGHTS AS SHAREHOLDER. An Optionee shall have no rights as a
Shareholder with respect to any share subject to such Option prior to the
exercise of the Option and the purchase of such shares.

SECTION 6.6 LIMITED RIGHTS. Within the earlier of (i) the occurrence of an
Applicable Event, or (ii) 30 days following the date on which the Company
obtains knowledge of and notifies an Optionee of an Applicable Event, an
Optionee shall have the right (without regard to the limitation on the exercise
of Options set forth in Section 6.4(c) of the Plan and similar limitations
in the Stock Option Grant Agreement) to exercise Options then held.

                                   ARTICLE VII
                 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN

The Plan shall expire with respect to the granting of Stock Options ten years
following the Effective Date. The Board of Directors of the Company may at any
time and from time to time and in any respect amend, modify or terminate the
Plan in its sole discretion.

                                  ARTICLE VIII
                                  MISCELLANEOUS

SECTION 8.1 TRANSFERABILITY During the Grantee's Lifetime, any Option may be
exercised only by the Grantee or any guardian or legal representative of the
Grantee, and the Option shall not be transferable except (i) in case of the
death of the Grantee, by will or the laws of descent and distribution; (ii) as
specifically permitted by and solely to the extent permitted in the Stock Option
Grant Agreement, or (iii) to an immediate family member, a partnership
consisting solely of immediate family members or trusts for the benefit of
immediate family members.

SECTION 8.2 DESIGNATION OF BENEFICIARY A participant may file a written
designation of a beneficiary who is to receive any stock and/or cash. Such
designation of beneficiary may be changed by the participant at any time by
written notice to the Treasurer of the Company. Upon the death of a participant
and upon receipt by the Company of proof of identity and existence at the
participant's death of a beneficiary validly designated by him under the Plan,
the Company shall deliver such stock and/or cash to such beneficiary. In the
event of the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant's death,
the Company shall deliver such stock and/or cash to the executor or
administrator of the estate of the participant, or if no such executor or
administrator has been appointed 


                                       6
<PAGE>   7

(to the knowledge of the Company), the Company, in its discretion, may deliver
such stock and/or cash to the spouse or to any one or more dependents of the
participant as the Company may designate. No beneficiary shall, prior to the
death of the participant by whom he has been designated, acquire any interest in
the stock or cash credited to the participant under the Plan.

SECTION 8.3 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH.

     (a)  If an Optionee's status as an Officer or as an employee of the Company
          or the Bank terminates for any reason, other than the death,
          disability or termination of service after attainment of age 65,
          before the date of expiration of Stock Options held by such Optionee,
          such Nonqualified Stock Options shall become null and void on the 90th
          day following the date of such termination. The date of such
          termination shall be the date the Optionee ceases to be a Director or
          an employee of the Company or the Bank.

     (b)  If an Optionee dies before the expiration of Stock Options held by the
          Optionee, such Stock Options shall terminate on the earlier of (i) the
          date of expiration of the Stock Options or (ii) one year following the
          date of the Optionee's death. The executor or administrator or
          personal representative of the estate of a deceased Optionee, or the
          person or persons to whom a Stock Option granted hereunder shall have
          been validly transferred by the executor or the administrator or the
          personal representative of the Optionee's estate, shall have the right
          to exercise the Optionee's Stock Option. To the extent that such Stock
          Options would otherwise by exercisable under the terms of the Plan and
          the Optionee's Stock Option Grant Agreement, such exercise may occur
          at any time prior to the termination date specified in this paragraph.

     (c)  If an Optionee separates from service after attainment of age 65
          before the expiration of Stock Options held by the Optionee, such
          Stock Options shall terminate on the earlier of (i) the date of
          expiration of the Stock Options or (ii) three years following the date
          of the Optionee's termination of service.

     (d)  If an Optionee becomes totally disabled before the expiration of Stock
          Options held by the Optionee, such Stock Options shall terminate on
          the earlier of (i) the date of expiration of the Stock Options or (ii)
          one year following the date of the Optionee's termination of service
          due to disability.

     (e)  With respect to any option granted pursuant to this Plan to an
          employee of the Company or the Bank, in the event that such employee
          shall be terminated "for cause", then all Options granted to such
          employee shall be null an void as of 12:01 a.m. of the date of
          termination of employment.

          For purposes of this Plan, termination "for cause" shall be defined to
          include, but shall not be limited to, termination resulting from acts
          of the employee which constitute embezzlement, theft or similar
          defalcation of the Company and/or Bank 


                                       7
<PAGE>   8

          or for a violation of FIRREA, FIDICIA, the Bank Secrecy Act, the Money
          Laundering Control Act or Rule 10B-5 under the Securities and Exchange
          Act of 1934 and any amendments thereof promulgated hereafter.

SECTION 8.4 ACCELERATION OF EXERCISE OR LOSS OF OPTION. Notwithstanding any
other provisions of this Plan or any Stock Option Grant Agreements entered into
pursuant to the Plan, an Optionee may be required to exercise or forfeit any
Option issued under the Plan in the event that the Company's or the Bank's
capital falls below minimum requirements and the Company or the Bank is required
by its primary federal or state banking regulator to demand that the Optionee
exercise or waive such Options. Upon receipt by the Company or the Bank of any
demand for an Optionee to exercise or waive such Options, the Company shall send
written notice of such demand to the Optionee within ten (10) days of receipt of
such notice from its or the Bank's primary federal or state regulator, as the
case may be. The Optionee shall have ninety (90) days after receipt of written
notice from the Company to exercise such Options. To the extent that the Options
have not been exercised by the end of such ninety (90) day period, such rights
shall be deemed forfeited.

SECTION 8.5 ANTIDILUTION. The provisions of subsections (a) and (b) shall apply
in the event that the outstanding shares of Stock of the Company are changed
into or exchanged for a different number or kind of shares or other securities
of the Company or another entity by reason of any merger, consolidation,
reorganization, recapitalization, reclassification, combination, stock split or
stock dividend.

   (a)  The aggregate number and kind of shares subject to Options which may be
        granted hereunder shall be adjusted appropriately.

   (b)  Where dissolution or liquidation of the Company or any merger or
        combination in which the Company is not a surviving company is involved,
        each outstanding Option granted hereunder shall, subject to Section 6.6,
        terminate.

The Foregoing adjustments and the manner of application of the foregoing
provisions shall be determined solely by the Committee and any such adjustment
may provide for the elimination of fractional share interests.

SECTION 8.6 APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of Stock pursuant to Options shall be used for general corporate purposes.

SECTION 8.7 TENURE. Nothing in the Plan or in any Option granted hereunder or in
any Stock Option Grant Agreement relating thereto shall confer upon any officer
or employee, the right to continue in such position with the Company or the
Bank.

SECTION 8.8 OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect
any other stock option or incentive or other compensation plans in effect for
the Company or the Bank, nor shall the Plan preclude the Company or the Bank
from establishing any 


                                       8
<PAGE>   9

other forms of incentive or other compensation for officers or employees of the
Company or the Bank.

SECTION 8.9 NO OBLIGATION TO EXERCISE OPTIONS. The granting of an Option shall
impose no obligation upon the Optionee to exercise such Option.

SECTION 8.10 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the
successors and assigns of the Company.

SECTION 8.11 SINGULAR, PLURAL GENDER. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include
feminine.

SECTION 8.12 HEADINGS, ETC., NO PART OF PLAN. Headings of Articles and Sections
hereof are inserted for convenience of reference; they constitute no part of the
plan.

SECTION 8.13 GOVERNING LAW. Except as otherwise required by law, the validity,
construction and administration of this Plan shall be determined under the Laws
of the State of Ohio.

Approved this 22nd day of October, 1998.

WESTERN RESERVE BANCORP, INC.

By:/s/ P.M. Jones
   --------------------------------------------------
     P.M. Jones, Chairman of the Board of Directors


                                       9