APPALACHIAN BANCSHARES INC
EXHIBIT 10.2, FORM OF STOCK OPTION AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>abiexh102063003.txt
<DESCRIPTION>EXHIBIT 10.2, FORM OF STOCK OPTION AGREEMENT
<TEXT>
                                                                    EXHIBIT 10.2

                          APPALACHIAN BANCSHARES, INC.
                             STOCK OPTION AGREEMENT
                                    under the
                          APPALACHIAN BANCSHARES, INC.
                             2003 STOCK OPTION PLAN



     THIS STOCK OPTION AGREEMENT  ("Option  Agreement") is made and entered into
as of the ____ day of _________,  2003, by and between  Appalachian  Bancshares,
Inc.  (the  "Company")  and  __________________("Participant"),  an  employee [a
director] of the Company [of Appalachian Community Bank, an Affiliate].

                              W I T N E S S E T H:
                             - - - - - - - - - - - -

     WHEREAS,  the Board of  Directors  of the Company has adopted  that certain
Appalachian  Bancshares,  Inc.  2003 Stock Option Plan (the  "Plan"),  a copy of
which is  attached  hereto as Exhibit A and  incorporated  herein by  reference.
Pursuant  to the  terms  of the  Plan,  the  Board  of  Directors  has  selected
Participant  to  participate  in the Plan and  desires  to grant to  Participant
certain stock  options to purchase  shares of the  Company's  authorized  common
stock ("Stock"), subject to the terms and conditions set forth herein; and

     WHEREAS,  Participant  desires  to  participate  in the Plan and to receive
stock options  thereunder,  upon the terms of, and in accordance  with, the Plan
and this Option Agreement;

     NOW,  THEREFORE,  in consideration  of the mutual promises,  agreements and
covenants  contained  herein,  and other good and  valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

                         1. INCORPORATION OF PROVISIONS

     This Option Agreement is subject to, and is to be construed in all respects
in a manner which is consistent  with,  the terms of the Plan, the provisions of
which hereby are  incorporated by reference into this Option  Agreement.  To the
extent that any terms contained  herein are contrary to, or  inconsistent  with,
the terms of the Plan, the terms of the Plan shall govern.  Unless  specifically
provided  otherwise,  all defined terms used in this Option Agreement shall have
the same meaning as in the Plan.

                               2. GRANT OF OPTION

     Subject to the  further  terms and  conditions  of this  Option  Agreement,
Participant hereby is granted [a non-incentive stock option] [an incentive stock
option] to  purchase  _______  shares

                                       1
<PAGE>

of  Stock,  effective  as of the ___ day of  __________,  2003  (the  "Effective
Date"). This stock option is intended to be [a non-ISO] [an ISO.]

                            3. MARKET VALUE OF STOCK

     The  Board of  Directors  has  determined,  in good  faith  and in its best
judgment,  that the  Market  Value per share of Stock,  as of the date the stock
option is granted pursuant to this Option Agreement, is $______.

                                4. OPTION PRICE

     The Board of Directors has determined that the price of each share of Stock
purchased  under this Option  Agreement  shall be $_____,  the Market  Value per
share of Stock.

                            5. EXPIRATION OF OPTIONS

     The option to acquire Stock pursuant to this Option  Agreement shall expire
(to the extent not previously  fully  exercised)  upon the first to occur of the
following:

     (a)  _____________,  2013 (the tenth  anniversary  of the Effective  Date),
          unless  an  ISO  is  granted  to a  holder  of at  least  10%  of  the
          outstanding common stock of the Company, in which case,  ____________,
          2008 (the fifth anniversary of the Effective Date);

     (b)  The  date  which  is  three  months  following  the  date  upon  which
          Participant  ceases  Continuous  Service  with  the  Company,  or  any
          Affiliate,  other  than as a result  of a  Change  in  Control  of the
          Company,  or  Participant's  death,  Permanent  and Total  Disability,
          Retirement, or termination for Cause;

     (c)  The date upon which  Participant  ceases  Continuous  Service with the
          Company,  or any Affiliate,  other than as a result of termination for
          Cause,  with  respect to any portion of this option  which is not then
          exercisable on the date  Participant  ceases his  employment  with the
          Company;

     (d)  The date which is 60 days  following  the date upon which  Participant
          ceases to be employed by the Company, or any Affiliate, by reason of a
          Change in Control of the Company;

     (e)  The date  which is the  second  anniversary  of the  date  upon  which
          Participant ceases to be employed by the Company, or any Affiliate, by
          reason of Participant's death;

     (f)  The date  which  is the  first  anniversary  of the  date  upon  which
          Participant ceases to be employed by the Company, or any Affiliate, by
          reason of Participant's Permanent and Total Disability;

                                       2
<PAGE>

     (g)  The date which is six months following the date upon which Participant
          ceases to be employed by the Company,  or any Affiliate,  by reason of
          Participant's Retirement; or

     (h)  The date upon which Participant  ceases to be employed by the Company,
          or any Affiliate, by reason of Participant's termination for Cause.

                             6. EXERCISE OF OPTION

     Unless options hereunder shall earlier lapse or expire, pursuant to Section
5 hereof,  the option to acquire the  aggregate  number of  _________  shares of
Stock,  under this Option  Agreement,  first may be exercised on the dates,  and
with respect to the  aggregate  number of shares of Stock subject to this Option
Agreement, as follows:

          (a)  On _______________, _____ shares (20%);

          (b)  On _______________, _____ shares (20%);

          (c)  On _______________, _____ shares (20%);

          (d)  On _______________, _____ shares (20%); and

          (e)  On _______________, _____ shares (20%).


     To the extent  such  options  become  exercisable  in  accordance  with the
foregoing, Participant may exercise the stock option granted hereunder, in whole
or in  part,  from  time to  time.  The  option  exercise  price  may be paid by
Participant  either  in cash or by  surrender  of other  shares  of Stock of the
Company  held by  Participant.  Participant  shall be given  credit  against the
option  exercise  price  hereunder,  for such shares  surrendered,  equal to the
Market Value on the day preceding the exercise of the option.

                             7. MANNER OF EXERCISE

     The stock option  granted  hereunder may be exercised by written  notice to
the  Company,  specifying  the  number of shares to be  purchased  and signed by
Participant or such other person who may be entitled to acquire stock under this
Option  Agreement.  If  any  such  notice  is  signed  by a  person  other  than
Participant,   such  person  shall  also  provide  such  other  information  and
documentation,  as the  Committee  reasonably  may require,  to assure that such
person is entitled to acquire  Stock under the terms of the Plan and this Option
Agreement.

                                       3

<PAGE>

                       8. RESTRICTIONS ON TRANSFERABILITY

     The  stock  option  granted   hereunder   shall  not  be   transferable  by
Participant,  otherwise than by will or by the laws of descent and distribution,
or pursuant to the terms of a "qualified  domestic  relations  order" within the
meaning of Section 414(p) of the Code and the regulations and rulings thereunder
("QDRO").  Unless transferred pursuant to the terms of a QDRO, such stock option
shall be exercisable during Participant's lifetime only by Participant.

             9. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK

     No portion of the stock option  granted  hereunder  shall be exercisable at
any time during  which  there is not on file with the  Securities  and  Exchange
Commission  an effective  registration  statement  covering the option shares on
Form S-8, or similar form promulgated by the Securities and Exchange Commission.

     Nothing  contained  in this  section  shall be  construed  to obligate  the
Company  to,  or to grant any right to the  holder of the stock  option  granted
hereunder to, cause the Company to file any registration  statement;  or, if any
such registration statement is filed, to prepare any additional  prospectus,  to
file  any  amendments  to  the  registration  statement,  or  to  continue  said
registration statement in effect.

     If, at any time  during  which the stock  option is  otherwise  exercisable
according  to its terms,  there is no effective  registration  statement on file
with the Securities and Exchange  Commission covering the shares then acquirable
hereunder, the Committee may, in its sole discretion, permit the stock option to
be exercised  by the holder,  upon its  satisfaction  that the offer and sale of
such option shares to the option holder is exempt in fact from the  registration
requirements  of  the  Securities  Act of  1933,  as  amended,  and  such  state
securities laws as shall be applicable, and may condition such exercise upon its
receipt of such  representations,  factual  assurances  and legal opinions as it
shall deem  necessary to determine  and  document the  availability  of any such
exemption and may further  condition such exercise upon such undertakings by the
holder hereof or such restriction upon the  transferability  of the shares to be
acquired  hereunder as it shall  determine to be  necessary  to  effectuate  and
protect the claim to any such exemption.

                    10. REORGANIZATION AND RECAPITALIZATION

     In the event that dividends are payable in shares of Stock, or in the event
that there are splits,  subdivisions  or  combinations  of shares of Stock,  the
number  of shares  of Stock  available  under  the Plan  shall be  increased  or
decreased  proportionately,  as the  case  may be,  and  the  number  of  shares
deliverable upon the exercise thereafter of any option theretofore granted shall
be increased or decreased proportionately, as the case may be, without change in
the aggregate purchase price.

                                       4
<PAGE>

     In case the Company is merged or consolidated with another  corporation and
the Company is not the surviving  corporation,  or in case the property or stock
of the Company is acquired by another  corporation,  or in case of a separation,
reorganization,  recapitalization or liquidation of the Company, all outstanding
Awards shall be surrendered.  With respect to each such  surrendered  Award, the
Committee shall determine, subject to the vesting requirements of Sections 5 and
6 of this Option  Agreement and Section 8(a) of the Plan,  whether the holder of
the surrendered Award shall receive:

     (i)  for each share of Stock  then  subject to an  outstanding  award,  the
          number and kind of Shares  into which each  outstanding  Share  (other
          than Shares held by dissenting  stockholders) is changed or exchanged,
          together with an appropriate adjustment to the Exercise Price; or

     (ii) a cash payment (from the Company or the successor corporation),  in an
          amount equal to the Market Value of the shares of Stock subject to the
          Award on the date of the  Transaction,  less the Exercise Price of the
          Award.

     Any  adjustment  made  hereunder  shall be made in such a manner  as not to
constitute a modification, within the meaning of Section 424(h) of the Code.


                       [signatures on the following page]

                                       5
<PAGE>

     IN WITNESS  WHEREOF,  the Committee has caused this Option  Agreement to be
executed  by a duly  authorized  officer of the  Company,  and  Participant  has
executed this Option Agreement as of the ____ day of _____________, 2003.


                                                  APPALACHIAN BANCSHARES, INC.



                                               By:______________________________
                                                  Name:  Tracy R. Newton
                                                  Title: Chief Executive Officer

ATTEST:


--------------------------------
Secretary or Assistant Secretary


                                              "PARTICIPANT"



                                               By:______________________________
                                                  Name:



                                       6

<PAGE>

                                    EXHIBIT A

               APPALACHIAN BANCSHARES, INC. 2003 STOCK OPTION PLAN


</TEXT>
</DOCUMENT>
