EXHIBIT 10.1

                          SMOKY MOUNTAIN BANCORP, INC.

                           INCENTIVE STOCK OPTION PLAN

 SMOKY  MOUNTAIN  BANCORP,  INC.,  a Tennessee  bank holding  corporation,  with
 principal offices at 625 Market Street,  Knoxville,  Knox County, Tennessee, is
 establishing a STOCK OPTION PLAN as follows:

                                    ARTICLE I

                                PLAN INTRODUCTION

      1.1 Name.  This Plan shall be known as the "Smoky Mountain  Bancorp,  Inc.
Incentive Stock Option Plan."

      1.2. Purpose.  The purpose of the Smoky Mountain Bancorp,  Inc.  Incentive
Stock  Option Plan is to secure for the  Corporation  and its  shareholders  the
benefits which flow from providing selected directors,  officers,  and other key
employees of Smoky Mountain  and/or  BankFirst,  Smoky  Mountain's  wholly owned
subsidiary  (herein  collectively  referred  to  as  "directors,  officers,  key
employees  and/or  employees")  with the  incentive  inherent  in  common  stock
ownership. By so encouraging and enabling such employees to become owners of the
Corporation's  shares,  the Corporation seeks to motivate,  retain,  and attract
those highly competent individuals upon whose judgment,  initiative,  leadership
and continued efforts the success of the Corporation in large measure depends.

      1.3. Form of Plan.  With of a view of providing  these  employees  with an
attractive  incentive for continued faithful service with the Corporation and/or
BankFirst,  its wholly  owned  subsidiary,  the  Corporation  intends  the stock
options  granted  hereunder to qualify as  incentive  stock  options  within the
meaning of Code Section 422A of the  Internal  Revenue Code of 1986,  as amended
(the "Code"),  such that the exercise of the options will not be a taxable event
for the  employee  until  such time  that he or she  actuallry  disposes  of the
shares.

      1.4.  Effective Date. The effective date of the Plan is December 31, 1996,
the date of its  approval by the  Executive  Committee  of the Board,  provided,
however,  if the Plan is not approved by the  shareholders of the Corporation at
the  next  Shareholders  Meeting,  or if  the  Plan  is  not  approved  by  such
shareholders  before December 31, 1997, the Plan shall terminate and any options
granted  thereunder  shall  be void  and have no  force  or  effect,  except  as
expressly provided otherwise herein.

      1.5.  Definitions.  As used herein the  following  terms have the meanings
hereinafter set forth unless the context clearly indicates to the contrary:

            (a)  "Board"  shall mean the Board of  Directors  of Smoky  Mountain
      Bancorp, Inc.

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            (b) "Committee"  shall mean the Executive  Committee of the Board of
      Directors.

            (c) "Corporation" shall mean Smoky Mountain Bancorp, Inc.

            (d) "Fair  Market  Value"  shall mean the fair  market  value of the
      stock established by the Board of Directors quarterly immediately prior to
      the grant of any option hereunder.

            (e) "Grantee"  shall mean an employee of the  Corporation to whom an
      Award has been granted hereunder.

            (f) "Optionee" shall mean a director, officer, or other key employee
      to whom an Option has been granted hereunder.

            (g) "Plan" shall mean the Smoky  Mountain  Bancorp,  Inc.  Incentive
      Stock Option Plan, the terms of which are set forth herein.

            (h) "Stock" shall mean the Common Stock of Smoky  Mountain  Bancorp,
      Inc. or, in the event that such outstanding  shares of stock are hereafter
      changed into or exchanged for shares of a different stock or securities of
      the Corporation or some other corporation or company,  such other stock or
      securities.

            (i) "Stock Option  Agreement"  shall mean the agreement  between the
      Corporation  and the Optionee  under which the Optionee may purchase Stock
      hereunder.

                                   ARTICLE II

                 PLAN PARTICIPATION. ADMINISTRATION. TERMINATION

      2.1.  Eligibility and Plan Participation.  Any director,  officer or other
key employee of the  Corporation  shall be eligible to  participate in the Plan.
The Committee may grant Options to any eligible  participant in accordance  with
such  determinations  as the Committee from time to time in its sole  discretion
shall make.

      (a) Options  Discretionary.  The  granting of options  hereunder  shall be
entirely  discretionary  with the  Committee  and  nothing  in the Plan shall be
deemed to give any director,  officer,  or other key employee of the Corporation
any right to participate in the Plan or to receive options.

      2.2. Plan Administration.  The Plan shall be administered by the Committee
in accordance with the following provisions:


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            (a)  Duties  and  Powers  of  Committee.   Subject  to  the  express
      provisions  of the Plan,  the  Committee  shall have sole  discretion  and
      authority to determine  from among the directors  and the Chief  Executive
      Officer of the Corporation those to whom and the time or times at which an
      Option may be granted  hereunder,  and the number of shares of Stock to be
      subject to each Option. The President and Chief Executive Officer shall in
      accordance  with the  authorization  of the Committee have sole discretion
      and authority to determine from among the officers and key employees those
      to whom and the time or times at which an Option may be granted hereunder,
      and the number of shares of Stock to be subject to each Option. Subject to
      the express provisions of the Plan, the Committee shall also have complete
      authority to interpret the Plan, to  prescribe,  amend,  and rescind rules
      and regulations relating to it, to determine the details and provisions of
      each  Stock  Option  Agreement,  and  to  make  all  other  determinations
      necessary or advisable in the administration of the Plan.

            (b) Majority  Rule. A majority of the  disinterested  members of the
      Committee  shall  constitute a quorum,  and any action taken by a majority
      present at a meeting  at which a quorum is  present  or any  action  taken
      without a meeting  evidenced  by a writing  executed  by a majority of the
      disinterested  members of the whole Committee shall  constitute the action
      of the Committee.

            (c) Corporation  Assistance.  The Corporation  shall supply full and
      timely  information to the Committee on all matters relating to employees,
      their employment,  death,  retirement,  disability or other termination of
      employment,  and such other  pertinent facts as the Committee may require.
      The  Corporation  shall furnish the Committee with such clerical and other
      assistance as is necessary in the performance of its duties.

                                   ARTICLE III

                               STOCK OPTION SHARES

      3.1. Stock Limitations.  Subject to adjustment  pursuant to the provisions
of Section  3.4  hereof,  the number of shares of Stock  which may be issued and
sold hereunder  shall not exceed 500,000  shares.  Such shares may be authorized
and unissued shares or shares issued and thereafter acquired by the Corporation.

      3.2. Options Granted Under the Plan. Shares of Stock with respect to which
an Option granted hereunder have been exercised shall not again be available for
Option hereunder. If Options granted hereunder shall terminate or expire for any
reason  without  being wholly  exercised,  new Options may be granted  hereunder
covering the number of shares to which such Option termination relates.

      3.3.  Antidilution.  In the  event  that the  outstanding  shares of Stock
hereafter are changed into or exchanged for a different number or kind of shares
or other  securities of the  Corporation or of another  corporation by reason of
merger, consolidation, other reorganization, recapitalization, reclassification,
combination of shares, stock split-up, or stock dividend:


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

            (b) Rights under outstanding  Options granted hereunder,  both as to
      the number of  subject  shares and the  Option  price,  shall be  adjusted
      accordingly.

            (c) Where  dissolution  or  liquidation  of the  Corporation  or any
      merger  or  combination  in  which  the  Corporation  is  not a  surviving
      corporation is involved,  each outstanding  Option granted hereunder shall
      terminate,  but the  Optionee  shall be fully  vested  and shall  have the
      right,  immediately  prior to such  dissolution,  liquidation,  merger, or
      combination, to exercise his/her Option in whole or in part.

            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.

      3.4.  Termination,  Amendment and  Modification  of the Plan. The Board of
Directors may at any time suspend,  discontinue,  or terminate the Plan, and may
at any time and from time to time and in any  respect  amend or modify  the Plan
and make rules for its administration; provided, however, that no such action of
the  Board  without  approval  of  the  majority  of  the  shareholders  of  the
Corporation may:

            (a) Increase the total number of shares of Stock subject to the Plan
      except as contemplated in Section 3.4 hereof;

            (b) Withdraw the administration of the Plan from the Committee,  
and

provided further,  that no termination,  amendment,  or modification of the Plan
shall in any manner (1) affect  any Option  theretofore  granted  under the Plan
without the consent of the  Optionee or permitted  transferee  of the Option' or
(2) prevent Options issued under the Plan from being  "incentive  stock options"
as defined in Section 422A of the Code.

                                   ARTICLE IV

                                  STOCK OPTIONS

      4.1. Stock Option Grants and  Agreements.  Each Option  granted  hereunder
shall be  evidenced  by  minutes  of a meeting  or the  written  consent  of the
Committee, and by a written Stock Option Agreement dated as of the date of grant
and executed by the Corporation and the Optionee. The Stock Option Agreement may
be in such form as shall be approved by the Board of Directors.


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      (a) Additional  Terms.  Such Stock Option Agreement and any Option granted
thereunder shall contain such other and additional  terms, not inconsistent with
the terms of this Plan, which are deemed necessary and desirable by the Board of
Directors, the Committee, or by legal counsel to the Corporation, and such other
terms shall  include those which,  together  with the terms of this Plan,  shall
constitute  such option as an  "incentive  stock  option"  within the meaning of
Section 422A of Code.

      4.2. Option Price. The per share Option price of the Stock subject to each
Option shall be the Fair Market Value per share.

      4.3.  Option  Vesting.  No portion of the Option may be  exercised  unless
vested in accordance with the provisions of the Stock Option  Agreement and this
Plan. Options shall vest at an annual rate of twenty percent (20%), allowing the
exercise of the stock options in accordance with the following schedule:

 Date of Grant of Option                                 Vesting Schedule
 ------------------------                                ----------------
 One (1) Year from Option Date                                  20%
 Two (2) Years from Option Date                                 40%
 Three (3) Years from Option Date                               60%
 Four (4) Years from Option Date                                80%
 Five (5) Years from Option Date                               100%

 "Vesting" as used in the Stock Option Agreement and this Plan shall act to give
 the Optionee  those rights  determined  by the  Committee  and no others.  Both
 unvested and vested portions of Options shall be subject to early  termination.
 All Optionees  shall become fully vested upon the dissolution or liquidation of
 the Corporation, or any merger or combination in which the Corporation is not a
 surviving  corporation.  All  Optionees  shall  become  fully  vested  upon the
 Corporation making a public offering of its stock.

      4.4. Option Period.  Each Option granted  hereunder must be granted within
ten years from the effective date of the Plan.

      4.5.  Natural  Termination  and Expiration of Options.  The period for the
exercise of each Option shall be determined by the Committee, but in no instance
shall such period exceed ten years from the date of grant of the Option.

      4.6. Early  Termination and Expiration of Options;  Effect Thereof Each of
the following shall be a "Terminating  Event", the occurrence of which shall act
to  terminate  the  Option  prior to its  natural  expiration  to the extent not
previously exercised:


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            (a)  Additional  Terms.  Such Stock Option  Agreement and any Option
      granted  thereunder  shall contain such other and  additional  terms,  not
      inconsistent  with the terms of this Plan,  which are deemed necessary and
      desirable by the Board of Directors, the Committee, or by legal coursel to
      the Corporation,  and such other terms shall include those which, together
      with the terms of this Plan,  shad constitute such option as an "incentive
      stock option" within the meaning of Section 422A of Code.

      4.2. Option Price. The per share Option price of the Stock subject to each
Option shall be the Fair Market Value per share.

      4.3.  Option  Vesting.  No portion of the Option may be  exercised  unless
vested in accordance with the provisions of the Stock Option  Agreement and this
Plan. Options shall vest at an annual rate of twenty percent (20%), allowing the
exercise of the stock options in accordance with the following schedule:

 Date of Grant of Option                             Vesting Schedule
 -----------------------                             ----------------
 One (1) Year from Option Date                              20%
 Two (2) Years from Option Date                             40%
 Three (3) Years from Option Date                           60%
 Four (4) Years from Option Date                            80%
 Five (5) Years from Option Date                           100%

 "Vesting" as used in the Stock Option Agreement and this Plan shall act to give
 the Optionee  those rights  determined  by the  Committee  and no others.  Both
 untested and vested  portions of Options shad be subject to early  termination.
 All Optionees  shall become fully vested upon the dissolution or liquidation of
 the Corporation, or any merger or combination in which the Corporation is not a
 surviving corporation.

      4.4. Option Period.  Each Option granted  hereunder must be granted within
ten years from the effective date of the Plan.

      4.5.  Natural  Termination  and Expiration of Options.  The period for the
exercise of each Option shall be determined by the Committee, but in no instance
shall such period exceed ten years from the date of grant of the Option.

      4.6. Early Termination and Expiration of Options;  Effect Thereof. Each of
the following shall be a "Terminating  Event", the occurrence of which shall act
to  terminate  the  Option  prior to its  natural  expiration  to the extent not
previously exercised:


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            (i)  Termination  of  Employment.  The  termination of employment or
      directorship of the Optionee for cause, the date of termination  being the
      date the optionee is notified of the termination.

            (ii) Reduction of Position. The reduction of the Optionee's position
      for any  reason  whatsoever,  the date of  termination  being the date the
      Optionee is notified of the reduction. The Option shall not be affected by
      any change in duties or position as long as the  Optionee  continues to be
      an Optionee of the Corporation at the same or higher position as that held
      on the Grant Date.

 Upon the occurrence of a Terminating  Event, the unvested portion of the Option
 shall expire on the date of termination set forth above. To the extent that the
 Optionee  shall have been  otherwise  entitled to do so, the vested portion may
 continue to be exercised by the Optionee  (or,  should the Optionee be decease,
 by the legatee or legatees of the Optionee under such  Optionee's  Last Will or
 by  such  Optionee's  personal   representative  or  distributees),   during  a
 Transitory  Period to be determined by the Committee but in no event later than
 three (3) months  after the date of  termination  set forth  above.  No further
 vesting shall occur during the  Transitory  Period,  and the Option shall fully
 expire at the conclusion of the Transitory Period.

      4.7. Effect of Option Termination and Expiration.  Once any Option granted
hereunder  has  terminated or expired,  such Option shall be deemed  irrevocably
expired.  Regardless  of any efforts by the  Optionee to cure the event  causing
such  termination  and/or  expiration,  such  Option may not be  revived  unless
specifically  reinstated  in  writing  by an  officer  of the  Corporation  duly
authorized by disinterested members of the Board of Directors.

      4.8. Option Exercise. Options may be exercised in whole at any time, or in
part from time to time with respect to whole shares only, to the extent that the
Option has vested,  and within the period  permitted  for the exercise  thereof.
Further, except as otherwise provided herein, the Option may not be exercised at
any time unless the  Optionee  shall have been in the  continuous  employ of the
Corporation  from the date the Option is granted to the date of  exercising  the
Option.

      (a) Method of Option  Exercise.  Any Option granted  pursuant to this Plan
shall contain provisions established by the Board of Directors setting forth the
manner of exercise of such Option.  Notwithstanding the foregoing, Options shall
be exercised by  providing  (1) written  notice of intent to exercise the Option
with respect to a specified number of shares delivered to the Corporation at its
principal  office  in  Knoxville,  Tennessee,  and  (2)  payment  in full to the
Corporation  at said office of the amount of the Option  price for the number of
shares of Stock with respect to which the Option is then being  exercised,  such
payment  to be in cash or  certified  funds  made  payable  to the  order of the
Corporation.


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      4.9.  Nontransferability  of Option.  No Option shall be transferred by an
Optionee otherwise than by Will or the laws of descent and distribution.  During
the lifetime of an Optionee the Option  shall be exercised  only by him/her.  No
tranfer  of an  Option by the  Optionee  by Will or by the laws of  descent  and
distribution  shall be effective to bind the Corporation  unless the Corporation
shall have been furnished with written notice thereof and an authenticated  copy
of the will and/or such other  evidence as the Committee  may deem  necessary to
establish the validity of the transfer and the  acceptance by the  transferee or
transferees of the terms and conditions of such Option.

      4. 10.  Rights as  Shareholder.  An Optionee or a transferee  of an Option
shall have no rights as a shareholder with respect to any shares subject to such
Option  prior to  purchase  of such  shares by valid  exercise of such Option as
provided  herein  and a  stock  certificate  is  issued  and  delivered  by  the
Corporation therefor.

      4.11. Stock Certificates; Refunds. The Corporation shall issue and deliver
the  certificate or  certificates  for shares of Stock  purchased upon the valid
exercise of any Option granted  hereunder or any portion  thereof within fifteen
(15)  business days of the exercise of the Option and payment  therefor.  In the
event the Option or a portion  thereof is not validly  exercised or is otherwise
not available in accordance with the terms of this Plan, the  Corporation  shall
refund the purchase  price for that portion of the Option not validly  exercised
or otherwise not available  within fifteen (15) business days of the exercise of
the Option and payment  therefor.  No refund of the purchase  price will be made
for a validly exercised Option after share certificates issue.

                                    ARTICLE V

                                  MISCELLANEOUS

      5.1 . Employment  and  Directorship.  Nothing in the Plan or in any Option
granted hereunder or in any Stock Option Agreement relating thereto shall confer
upon any employee the right to continue in the employ of the Corporation, or the
director the right to serve on the Board of Directors.

      5.2. Tax  Obligations  of Optionee.  If for any reason the exercise of any
portion of any Option  granted  hereunder  shall be  determined  to be a taxable
event, the Optionee shall be solely responsible for all employment related taxes
that may be incurred thereby.

      5.3. Stock for Investment.  The Stock Option  Agreement shall provide that
the  Optionee  shall upon each  exercise of a part or all of the Option  granted
represent  and  warrant,  or be deemed to represent  and  warrant,  that his/her
purchase of stock  pursuant to such Option is for  investment  only. At any time
the Board of  Directors  may waive the  requirement  of such a provision  in any
Stock  Option  Agreement  entered  into  under  any  stock  option  plan  of the
Corporation.

      5.4.  Other  Securities  Law  Restrictions.  The Board of Directors  shall
include Securities Law-related provisions in any Stock Option Agreement that, in
its discretion, is necessary to protect the interests of the Corporation.


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      5.5. 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 Corporation,  nor shall the Plan preclude the Corporation from  establishing
any  other  forms  of  incentive  or other  compensation  for  employees  of the
Corporation.

      5.6.   Obligation   to  Sell  Subject  to   Governmental   Approval.   The
Corporation's  obligation to sell and deliver stock under the Plan in accordance
with the terms of this Agreement is at all times subject to all approvals of any
governmental   authorities   required  in  connection  with  the  authorization,
issuance, sale or delivery of the stock.

      5.7.  Plan Binding on  Successors.  The Plan shall inure to the benefit of
and be binding  upon the  successors  and assigns of the  Corporation.  The Plan
shall  inure  to the  benefit  of and be  binding  upon  the  respective  heirs,
successors, administrators, and representatives as permitted herein.

      5.8  Headings.  The  headings  of each of the  provisions  hereof  are for
convenience and reference only and are not substantive.  They are not be used in
the  interpretation  hereof or to modify any of the terms or  provisions of this
Plan.

      5.9. Singular, Plural; Gender. Whenever used herein, nouns in the singular
shall  include the plural and the  masculine  pronoun shall include the feminine
gender, and vice versa.

      5.10.  Shareholder  Approval.  The Plan will be  submitted  to the  Common
shareholders of the Corporation at the next annual meeting of shareholders,  for
approval by the holders of a majority of the outstanding  shares of Common Stock
of the Corporation.  If the Plan is not approved by the holders of a majority of
the outstanding shares of Common Stock of the Corporation by December 3 I, 1997,
then the Plan shall terminate and any Options  granted  hereunder shall be void,
forfeited and of no further force or effect.


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