UNITED STATES ~~SECURITIES~~ ~~AND EXCHANGE COMMISSION~~

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT ~~Pursuant~~ ~~to Section 13 OR 15(d) of The Securities Exchange Act of 1934~~

~~Date~~Pursuant ofto ~~Report~~Section ~~(Date~~13 ofor ~~earliest event reported~~15(d): ~~November~~of ~~22,~~the ~~2011 (November 16, 2011)~~

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 5, 2012

MOUNTAIN NATIONAL BANCSHARES, INC.

(Exact name of registrant as specified in ~~its~~ charter)

Tennessee		0-49912		75-3036312
(State or other jurisdiction of incorporation)		(Commission File Number)		(~~IRS~~I.R.S. Employer Identification No.)

Registrant’s telephone number, including area code: (865) 428-7990

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

~~Item 1.01~~¨ ~~Entry~~Soliciting ~~into~~material apursuant ~~Material~~to ~~Definitive~~Rule ~~Agreement~~14a-12 under the Exchange Act (17 CFR 240. 14a-12)

On¨ ~~November 22,~~Pre-commencement ~~2011,~~communications ~~the~~pursuant Federal Reserve Bank of Atlanta (the “FRB”) announced that the FRB and Mountain National Bancshares, Inc. (the “Company”) entered into a Written Agreement (the “Agreement”), effective as of November 16, 2011. Among other things, the Company has agreed with the FRB that: (i) its board of directors shall take appropriate steps to ~~fully~~Rule ~~utilize the Company’s financial and managerial resources to serve as a source of strength to Mountain National Bank~~ 14d-2(~~the “Bank”~~b), ~~including,~~under ~~but not limited to, taking steps to ensure that~~ the ~~Bank~~Exchange ~~complies with~~Act ~~the Formal Agreement entered into with the Office of the Comptroller of the Currency~~ (~~the “OCC”)~~17 onCFR ~~June~~ 240.14d-2~~, 2009 and any other supervisory action taken by the OCC;~~ (iib) the Company shall not declare or pay any dividends without the prior written approval of the FRB and the Director of the Division of Banking Supervision and Regulation of the Board of Governors of the Federal Reserve System (the “Director”); (iii) the Company shall not directly or indirectly take dividends or any other form of payment representing a reduction in capital from the Bank without the prior written approval of the FRB; (iv) the Company and its nonbank subsidiaries shall not make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without the prior written approval of the FRB and the Director; (v) the Company and its nonbank subsidiaries shall not, directly or indirectly, incur, increase, or guarantee any debt without the prior written approval of the FRB; (vi) the Company shall not, directly or indirectly, purchase or redeem any shares of its stock without the prior written approval of the FRB; and (vii) within 60 days of this Agreement, the Company shall submit to the FRB an acceptable written plan to maintain sufficient capital at the Company on a consolidated basis. The Company is also required to comply with certain notice and approval requirements in connection with director and senior executive officer appointments and is subject to certain restrictions on indemnification and severance payments. In addition, the Company must submit quarterly progress reports to the FRB. The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which is attached as Exhibit 10.1 to this Form 8-K and is incorporated by reference herein.

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective March 5, 2012, Dwight B. Grizzell retired as President, Chief Executive Officer and Director of Mountain National Bank (the “Bank”), a wholly-owned subsidiary of Mountain National Bancshares, Inc., a Tennessee corporation (the “Company”), and as a Director of the Company. Mr. Grizzell will remain employed by the Bank until September 30, 2012, assisting with the Bank’s business development efforts and pursuit of strategic alternatives pursuant to the terms of a Transition Agreement (the “Agreement”), by and among the Company, the Bank and Mr. Grizzell, dated March 5, 2012. In consideration of the services that Mr. Grizzell has agreed to provide under the Agreement, Mr. Grizzell will be entitled to salary at a rate of $198,000 per year, payable in accordance with the customary payroll practices of the Bank, and will be allowed to participate in any benefits offered to other employees of the Bank on the same basis generally offered to other employees. The description of the Agreement is qualified in its entirety by reference to the copy of the Agreement filed herewith as Exhibit 10.1 and incorporated herein by reference.

In connection with Mr. Grizzell’s retirement, on March 5, 2012, James S. Friddell was appointed as interim Chief Executive Officer of the Bank and as a member of the Board of Directors of the Bank and Michael L. Brown was appointed as interim President of the Bank and as a member of the Board of Directors of the Bank, each effective March 5, 2012, pending regulatory non-objection.

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits

Exhibit
ExhibitNo.		Description
No.			Description
10.1		Transition Agreement, dated March 5, 2012, by and among Mountain National Bancshares, Inc., Mountain National Bank and Dwight B. Grizzell.
	10.1		Written agreement dated as of November 16, 2011 by and between the Company and the FRB.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MOUNTAIN NATIONAL BANCSHARES, INC. By: /s/ ~~Dwight~~Richard BA. ~~Grizzell~~Hubbs Name: ~~Dwight~~Richard BA. ~~Grizzell~~Hubbs Title: Senior Vice President and Chief ~~Executive~~Financial Officer

Date: ~~November 22~~March 6, ~~2011~~ 2012

EXHIBIT INDEX

Exhibit
ExhibitNo.		Description
No.			Description
10.1		Transition Agreement, dated March 5, 2012, by and among Mountain National Bancshares, Inc., Mountain National Bank and Dwight B. Grizzell.
	10.1		Written agreement dated as of November 16, 2011 by and between the Company and the FRB.

300 East Main Street, Sevierville, Tennessee

(Address of principal executive offices)

(Zip Code)

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