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                                  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.

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                     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
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                           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.

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         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
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                           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
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                                    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.<PAGE>

                                  EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

                  THIS  AGREEMENT is made  effective as of December 28, 2001, by
and between MOUNTAIN  NATIONAL BANK (the "Bank"),  Sevierville,  Tennessee;  and
Dwight B. Grizzell (the "Executive").

                  WHEREAS,  the Bank wishes to assure  itself of the services of
Executive for the period provided in this Agreement; and

                  WHEREAS,  the Executive is willing to serve in the  employment
of the Bank on a full-time basis for said period.

                  NOW,  THEREFORE,  in  consideration  of the  mutual  covenants
herein contained,  and upon the other terms and conditions hereinafter provided,
the parties hereby agree as follows:

1. POSITION AND RESPONSIBILITIES.

         During  the period of his  employment  hereunder,  Executive  agrees to
serve as President and Chief Executive Officer of the Bank.

2. TERMS AND DUTIES.

         (a) The term of this Agreement  shall be deemed to have commenced as of
the date first above written and shall continue for a period of thirty-six  (36)
full calendar  months  thereafter.  Upon the  expiration of this Agreement for a
period of twelve (12) months, the Executive agrees that he will not compete with
the Bank in any city or town in which the Bank operates a branch or main office.
For purposes of this  paragraph,  the term "compete" shall have the same meaning
as that more fully described in Paragraph 10, Non-Competition.

         (b) During the period of his employment  hereunder,  except for periods
of absence  occasioned  by  illness,  vacation  periods,  and leaves of absence,
Executive shall devote  substantially all his business time,  attention,  skill,
and  efforts  to the  faithful  performance  of his duties  hereunder  including
activities and services related to the organization, operation and management of
the Bank;  provided,  however,  that, from time to time, Executive may serve, or
continue to serve,  on the boards of directors of, and hold any other offices or
positions in, companies or  organizations,  which will not materially affect the
performance of Executive's duties pursuant to this Agreement.

3. COMPENSATION AND REIMBURSEMENT.

         (a) The  compensation  specified under this Agreement shall  constitute
the salary and benefits  paid for the duties  described in Sections 1 and 2. The
Bank shall pay  Executive as  compensation  a salary of One Hundred  Thirty-Five
Thousand Dollars ($135,000) per year ("Base Salary").  Such Base Salary shall be
payable in accordance with the customary  payroll  practices of the Bank. During
the period of this Agreement, Executive's Base Salary shall be reviewed at least
annually;  the first  such  review  will be made no later than one year from the
date of this Agreement.  Such review shall be conducted by Chairman of the Board
of the Bank and the Chairman of the Board may increase  Executive's Base Salary.
In addition to the Base Salary  provided in this  Section  3(a),  the Bank shall
provide to Executive at no additional  cost to Executive all such other benefits
as are provided to regular full-time employees of the Bank.

         (b) Executive will be entitled to  participate  in or receive  benefits
under any employee benefit plans  including,  but not limited to, stock options,
retirement plans,  supplemental retirement plans, pension plans,  profit-sharing
plans, health-and-accident plans, medical coverage or any other employee benefit
plan or  arrangement  made  available  by the Bank in the  future to its  senior
executives and key management  employees,  subject to, and on a basis consistent
with,  the  terms,  conditions  and  overall  administration  of such  plans and
arrangements.  Executive will be entitled to incentive  compensation and bonuses
as provided in any plan,  or pursuant to any  arrangement  of the Bank, in which
Executive is eligible to  participate.  Nothing paid to the Executive  under any
such plan or arrangement  will be deemed to be in lieu of other  compensation to
which the Executive is entitled under this  Agreement,  except as provided under
Section 5(e).

         (c)  Executive   will  be   reimbursed   for   reasonable   travel  and
entertainment expenses.

4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

         (a) Upon the occurrence of an Event of Termination  (as herein defined)
during the Executive's term of employment  under this Agreement,  the provisions
of  this  Section  shall  apply.  As  used  in  this  Agreement,  an  "Event  of
Termination"  shall mean and include any one or more of the  following:  (i) the
termination by the Bank of Executive's  full-time  employment  hereunder for any
reason  other  than a Change in Control  as  defined  in  Section  5(a)  hereof;
disability,  as defined in Section 6(a) hereof; death; retirement, as defined in
Section 7 hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
resignation  from the Bank's  employment,  upon (A), unless  consented to by the
Executive,   a   material   change   in   Executive's   function,   duties,   or
responsibilities, which change would cause Executive's position to become one of
lesser  responsibility,  importance,  or scope from the position and  attributes
thereof described in Sections 1 and 2, above, (any such material change shall be
deemed a continuing  breach of this Agreement);  (B) a relocation of Executive's
principal place of employment by more than fifty (50) miles from its location at
the effective date of this  Agreement,  or a material  reduction in the benefits
and  perquisites to Executive from those being provided as of the effective date
of this  Agreement;  (C) the  liquidation or dissolution of the Bank; or (D) any
breach of this Agreement by the Bank. Upon the occurrence of any event described
in clauses (A), (B), (C), or (D), above, Executive shall have the right to elect
to terminate his employment  under this  Agreement by resignation  upon not less
than sixty (60) days prior written  notice to the Bank given within a reasonable
period  of time not to  exceed,  except  in case of a  continuing  breach,  four
calendar months after the event giving rise to said right to elect.

         (b) Upon the occurrence of an Event of Termination,  the Bank shall pay
Executive,  or,  in the  event  of his  subsequent  death,  his  beneficiary  or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, a lump sum payment equal to twelve (12) months Base Salary.
<PAGE>
         (c) Upon the occurrence of an Event of Termination, the Bank will cause
to be continued  life,  medical,  dental and disability  coverage  substantially
identical  to the coverage  maintained  by the Bank for  Executive  prior to his
termination  for a period of twelve (12) months at the Bank's  expense.  A COBRA
notice  will issue upon the date of  termination.  Any  COBRA-mandated  coverage
extensions  beyond the first  twelve  (12)  months  will be at the option of the
Executive  and paid for by him as provided  by law unless he has  secured  other
coverage from another source extinguishing his coverage rights.

5. CHANGE IN CONTROL.

         (a) No benefit  shall be paid under this  Section 5 unless  there shall
have occurred a Change in Control of the Bank. For purposes of this Agreement, a
"Change in Control" of the Bank shall be deemed to occur if and when:

                  (i) there occurs an 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 Bank),  and the adoption by the Board of Directors
         of a  resolution  declaring  that a change in  control  of the Bank has
         occurred; or

                  (ii)  there  occurs a merger,  consolidation,  reorganization,
         recapitalization or similar transaction involving the securities of the
         Bank 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 Bank; or

                  (iii)  25  percent  or  more  of  the  directors   elected  by
         shareholders of the Bank to the Board of Directors are persons who were
         not listed as nominees in the Bank's then most recent  proxy  statement
         (the "New Directors").

         (b) If any of the events described in Section 5(a) hereof  constituting
a Change in Control have occurred or the Board of the Bank has determined that a
Change in Control has  occurred,  Executive  shall be  entitled to the  benefits
provided in  paragraphs  (c), (d) and (e) of this Section 5 upon his  subsequent
involuntary  termination  of  employment  at any  time  during  the term of this
Agreement (or voluntary  termination following a Change of Control following any
demotion,  loss of title,  office or  significant  authority,  reduction  in his
annual  compensation  or  benefits,  or  relocation  of his  principal  place of
employment  by more than 50 miles  from its  location  immediately  prior to the
Change in Control),  unless such termination is because of his death, retirement
as provided in Section 7, termination for Cause, or termination for Disability.

         (c)  Upon  the  occurrence  of a  Change  in  Control  followed  by the
Executive's  termination of employment,  the Bank shall pay Executive, or in the
event of his subsequent death, his beneficiary or beneficiaries,  or his estate,
as the case may be, as severance pay or liquidated damages, or both, a sum equal
to  one  (1)  time  the  Executive's   "base  amount,"  within  the  meaning  of
ss.280G(b)(3)  of the Internal Revenue Code of 1986 ("Code"),  as amended.  Such
payment shall be made in a lump sum paid within ten (10) days of the Executive's
Date of Termination.
<PAGE>
         (d)  Upon  the  occurrence  of a  Change  in  Control  followed  by the
Executive's termination of employment, the Bank will cause to be continued life,
medical,  dental and disability coverage substantially identical to the coverage
maintained  by the  Bank for  Executive  prior to his  severance.  In  addition,
Executive shall be entitled to receive the value of employer  contributions that
would have been made on the  Executive's  behalf over the remaining  term of the
agreement to any  tax-qualified  retirement plan sponsored by the Bank as of the
Date of Termination.  Such coverage and payments shall cease upon the expiration
of twelve (12) months.

         (e) Upon the  occurrence of a Change in Control the Executive  shall be
entitled to receive  benefits due him under,  or  contributed by the Bank on his
behalf,   pursuant  to  any  retirement,   incentive,   profit  sharing,  bonus,
performance, disability or other employee benefit plan maintained by the Bank on
the  Executive's  behalf to the extent that such benefits are not otherwise paid
to the Executive upon a Change in Control.

         (f) Notwithstanding the preceding  paragraphs of this Section 5, in the
event that the  aggregate  payments  or  benefits  to be made or afforded to the
Executive  under this  Section  would be deemed to include an "excess  parachute
payment"  under ss.280G of the Code,  such payments or benefits shall be payable
or provided to Executive in equal monthly  installments  over the minimum period
necessary to reduce the present  value of such payments or benefits to an amount
which is one  dollar  ($1.00)  less than three (3) times the  Executive's  "base
amount" under ss.280G(b)(3) of the Code.

         (g)  Upon  the  occurrence  of a  Change  in  Control  followed  by the
Executive's  termination  of employment,  the Executive  agrees that he will not
compete with the Bank or the  surviving  financial  institution  for a period of
twelve  (12)  months in any city or town in which the Bank  operates a branch or
main office.  For purposes of this paragraph,  the term "compete" shall have the
same meaning as more fully defined in Paragraph 10, Non-Competition.

6. TERMINATION FOR DISABILITY.

         1. If the Executive shall become disabled as defined in the Bank's then
current disability plan (or, if no such plan is then in effect, if the Executive
is permanently and totally  disabled  within the meaning of Section  22(e)(3) of
the Code as  determined by a physician  designated  by the Board),  the Bank may
terminate Executive's employment for "Disability."

         2. Upon the Executive's  termination of employment for Disability,  the
Bank will pay  Executive,  as  disability  pay,  a  bi-weekly  payment  equal to
two-thirds  (2/3) of Executive's  bi-weekly rate of Base Salary on the effective
date of such  termination.  These  disability  payments  shall  commence  on the
effective date of Executive's termination and will end on the earlier of (i) the
date  Executive  returns  to the  full-time  employment  of the Bank in the same
capacity as he was employed prior to his termination for Disability and pursuant
to an employment  agreement  between  Executive and the Bank;  (ii)  Executive's
full-time  employment by another employer;  (iii) Executive attaining the normal
expected  retirement  age  or  age  65 if  the  Executive  so  elects;  or  (iv)
Executive's  death.  The disability pay shall be reduced by the amount,  if any,
paid to the Executive under any plan of the Bank providing  disability  benefits
to the Executive.
<PAGE>
         3. The Bank  will  cause to be  continued  life,  medical,  dental  and
disability  coverage  substantially  identical to the coverage maintained by the
Bank for Executive prior to his  termination  for Disability.  This coverage and
payments shall cease upon the earlier of (i) the date  Executive  returns to the
full-time  employment of the Bank, in the same capacity as he was employed prior
to his  termination  for  Disability  and  pursuant to an  employment  agreement
between Executive and the Bank; (ii) Executive's full-time employment by another
employer;  (iii)  Executive's  attaining normal  retirement age or age 65 if the
Executive so elects; or (iv) the Executive's death.

         4.  Notwithstanding  the  foregoing,  there will be no reduction in the
compensation  otherwise  payable to  Executive  during any period  during  which
Executive is incapable of performing his duties hereunder by reason of temporary
disability.

         5. Executive  agrees that he will not compete with the Bank in any city
or town in which  the Bank  operates  a branch  or main  office  for a period of
twelve (12) months following his retirement from his employment by the Bank. For
purposes of this  paragraph,  the term "compete"  shall have the same meaning as
more fully defined in Paragraph 10, Non-Competition.

7. TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.

         Termination by the Bank of Executive based on  "Retirement"  shall mean
retirement  at  age  65  or  in  accordance  with  any  retirement   arrangement
established  with  Executive's  consent with respect to him. Upon termination of
Executive upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Bank and other plans to which Executive is a party.  Upon
the death of the Executive during the term of this Agreement, the Bank shall pay
to Executive's estate the compensation due to the Executive through the last day
of the calendar month in which his death occurred.

8. TERMINATION FOR CAUSE.

         For purposes of this Agreement,  "Termination  for Cause" shall include
termination  because  of  the  Executive's  personal  dishonesty,  incompetence,
willful  misconduct,   breach  of  fiduciary  duty  involving  personal  profit,
intentional  failure to perform  stated  duties,  willful  violation of any law,
rule,  or  regulation  which  negatively  impacts the Bank  (other than  traffic
violations or similar  offenses) or final  cease-and-desist  order,  or material
breach of any provision of this  Agreement.  For purposes of this  Section,  the
term "willful" is defined to include any act or omission which  demonstrates  an
intentional or reckless  disregard for the duties and  responsibilities  owed to
the  business  of the  employer by  Executive.  Notwithstanding  the  foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been  delivered to him a copy of a  resolution  duly adopted by
the affirmative vote of not less than  three-fourths of the members of the Board
at a meeting of the Board called and held for that purpose,  finding that in the
good  faith  opinion of the Board,  Executive  was guilty of conduct  justifying
termination  for Cause and specifying the reasons  thereof.  The Executive shall
not have the right to  receive  compensation  or other  benefits  for any period
after  termination  for Cause.  Any stock options granted to Executive under any
stock option plan or any unvested  awards  granted under any other stock benefit
plan of the Bank, or any subsidiary or affiliate thereof,  shall become null and
void  effective  upon  Executive's  receipt of Notice of  Termination  for Cause
<PAGE>

pursuant to Section 9 hereof,  and shall not be  exercisable by Executive at any
time  subsequent to such  Termination  for Cause. If he is terminated for Cause,
Executive  shall not compete with the Bank in any city or town in which the Bank
operates a branch or main  office for twelve  (12)  months  from the Date of the
Termination.  For purposes of this paragraph,  the term "compete" shall have the
same meaning as more fully defined in Paragraph 10, Non-Competition.

9.  NOTICE.

         (a) Any  purported  termination  by the Bank or by  Executive  shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this  Agreement,  a "Notice of  Termination"  shall mean a written  notice which
shall indicate the specific termination  provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances  claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

         2. "Date of  Termination"  shall mean (A) if Executive's  employment is
terminated  for  Disability,  thirty (30) days after a Notice of  Termination is
given (provided that he shall not have returned to the performance of his duties
on a  full-time  basis  during  such  thirty  (30) day  period);  and (B) if his
employment is terminated for any other reason,  the date specified in the Notice
of Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).

         3. If,  within  thirty  (30) days  after any Notice of  Termination  is
given,  the party receiving such Notice of Termination  notifies the other party
that a dispute exists concerning the termination,  except upon the occurrence of
a Change in Control and  voluntary  termination  by  Executive in which case the
Date of  Termination  shall be the date  specified  in the  Notice,  the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties by a binding arbitration award, or by
a final judgment, order or decree of a court of competent jurisdiction (the time
for appeal there from having  expired and no appeal having been  perfected)  and
provided  further that the Date of Termination  shall be extended by a notice of
dispute  only if such  notice is given in good faith and the party  giving  such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding the pendency of any such dispute,  the Bank will continue to pay
Executive  his full  compensation  in effect when the notice  giving rise to the
dispute was given (including,  but not limited to, Base Salary) and continue him
as a participant in all  compensation,  benefit and insurance  plans in which he
was  participating  when the notice of dispute  was given,  until the dispute is
finally  resolved in  accordance  with this  Agreement.  Amounts paid under this
Section are in addition to all other amounts due under this  Agreement and shall
not be offset against or reduce any other amounts due under this Agreement.

10. NON-COMPETITION.

         1. Upon any termination of Executive's employment hereunder pursuant to
an Event of Termination as provided in Section 4 hereof, Executive agrees not to
compete with the Bank for a period of  twenty-four  months (24)  following  such
termination  in any city or town in which  the Bank  operates  a branch  or main
office,  determined  as of the  effective  date of such  termination.  Executive
agrees that during such period and within Sevier  County,  Tennessee,  Executive
shall not work for or advise,  consult or  otherwise  serve  with,  directly  or
indirectly,  any entity whose business  materially competes with the depository,

<PAGE>

lending  or  other  business   activities  of  the  Bank.  The  parties  hereto,
recognizing  that  irreparable  injury will result to the Bank, its business and
property in the event of Executive's breach of this Subsection 10(a), agree that
in the event of any such  breach by  Executive,  the Bank will be  entitled,  in
addition  to any other  remedies  and damages  available,  to an  injunction  to
restrain  the  violation  hereof by  Executive,  Executive's  partners,  agents,
servants,  employers,  employees and all persons  acting for or with  Executive.
Executive  represents  and admits  that in the event of the  termination  of his
employment pursuant to Section 8 hereof, Executive's experience and capabilities
are such that  Executive can obtain  employment  in a business  engaged in other
lines and/or of a different  nature than the Bank, and that the enforcement of a
remedy  by  way  of  injunction  will  not  prevent  Executive  from  earning  a
livelihood.  Nothing  herein  will be  construed  as  prohibiting  the Bank from
pursuing any other remedies  available to the Bank for such breach or threatened
breach, including the recovery of damages from Executive.

11. SOURCE OF PAYMENTS.

         All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank.

12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

         This Agreement  contains the entire  understanding  between the parties
hereto and supersedes  any prior  employment  agreement  between the Bank or any
predecessor  of the Bank and  Executive,  except that this  Agreement  shall not
affect or operate to reduce any benefit or compensation inuring to the Executive
of  a  kind  elsewhere  provided.  No  provision  of  this  Agreement  shall  be
interpreted to mean that  Executive is subject to receiving  fewer benefits than
those available to him without reference to this Agreement.

13. NO ATTACHMENT; SUCCESSORS AND ASSIGNS.

         1. Except as required by law, no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

         2. This  Agreement  shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.

14. MODIFICATION AND WAIVER.

         1.  This  Agreement  may  not  be  modified  or  amended  except  by an
instrument in writing signed by the parties hereto.

         2. No term or condition of this Agreement  shall be deemed to have been
waived, nor shall there by any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as

<PAGE>

to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15. SEVERABILITY.

         If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

16. HEADINGS FOR REFERENCE ONLY.

         The headings of sections and paragraphs  herein are included solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

17. GOVERNING LAW.

         This Agreement shall be governed by the substantive laws and procedural
provisions  of the  State  of  Tennessee,  unless  otherwise  specified  herein;
provided,  however,  that in the event of a conflict  between  the terms of this
Agreement and any applicable federal or state law or regulation,  the provisions
of such law or regulation shall prevail.

18. PAYMENT OF LEGAL FEES.

         All reasonable legal fees paid or incurred by the Bank or the Executive
pursuant to any dispute or question of interpretation relating to this Agreement
shall  be  paid  or  reimbursed  by  the  prevailing  party  in  such  judgment,
arbitration or settlement.

19. INDEMNIFICATION.

         The  Bank  shall  provide  Executive  with  coverage  under a  standard
directors' and officers'  liability  insurance policy at its expense, or in lieu
thereof,  shall  indemnify  Executive  to the  fullest  extent  permitted  under
applicable Tennessee and federal law and the Articles of the Association against
all expenses and  liabilities  reasonably  incurred by him in connection with or
arising out of any  action,  suit or  proceeding  in which he may be involved by
reason of his having been a director  or officer of the Bank  (whether or not he
continues to be a director or officer at the time of incurring  such expenses or
liabilities),  such expenses and liabilities to include,  but not be limited to,
judgment,   court  costs  and  attorneys'   fees  and  the  cost  of  reasonable
settlements.
<PAGE>

20. SUCCESSOR TO THE BANK.

         The Bank shall  require any  successor or assignee,  whether  direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially   all  the  business  or  assets  of  the  Bank,   expressly   and
unconditionally to assume and agree to perform the Bank's obligations under this
Agreement,  in the same  manner  and to the same  extent  that the Bank would be
required to perform if no such succession or assignment had taken place.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their seal to be affixed  hereunto by a duly authorized  officer or
director,  and  Executive  has  signed  this  Agreement,  all on the 13th day of
December, 2001.

ATTEST:                                         MOUNTAIN NATIONAL BANK

    /S/ BEVERLY J. BROSCH                       BY:    /S/ CHARLIE R. JOHNSON
    ---------------------                           -------------------------
               [SEAL]                                     Chairman

WITNESS:

    /S/ BEVERLY J. BROSCH                       BY:    /S/ DWIGHT B. GRIZZELL
    ---------------------                           -------------------------
                                                          Executive

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