SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or rule 14a-12
AMERICAN NATIONAL BANKSHARES INC.
(Name of Registrant as Specified in Its Charter)
James R. Jefferson
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ___________________________________________
2) Form Schedule or Registration Statement No: _______________________
3) Filing Party: _____________________________________________________
4) Date Filed: _______________________________________________________
<PAGE>
AMERICAN NATIONAL BANKSHARES INC.
628 Main Street
Post Office Box 191
Danville, Virginia 24543
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held April 28, 1998
NOTICE is hereby given that the Annual Meeting of Shareholders of American
National Bankshares Inc. (the "Corporation") will be held as follows:
Place: The Wednesday Club
1002 Main Street
Danville, VA 24541
Date: April 28, 1998
Time: 11:30 o'clock a.m.
THE ANNUAL MEETING IS BEING HELD FOR THE FOLLOWING PURPOSES:
1. To elect four (4) directors of the Corporation to fill
the vacancies created by the expiration of the terms of
the Directors of Class II.
2. To elect one (1) director of the Corporation to Class III.
3. To transact any other business that may properly come
before the meeting or any adjournment thereof.
The record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting is the close of business on March 13, 1998.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.
ACCORDINGLY, PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. IF YOU DO
ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN
PERSON.
Sincerely,
Charles H. Majors, President
and Chief Executive Officer
Dated: March 25, 1998
<PAGE>
AMERICAN NATIONAL BANKSHARES INC.
628 Main Street
P. O. Box 191
Danville, Virginia 24543
PROXY STATEMENT
Annual Meeting of Shareholders
To be held April 28, 1998
INTRODUCTION
This Proxy Statement is furnished in conjunction with the solicitation by
the Board of Directors of American National Bankshares Inc. (the "Corporation")
of the accompanying proxy to be used at the Annual Meeting of Shareholders of
the Corporation and at any adjournments thereof. The meeting will be held on
Tuesday, April 28, 1998, 11:30 a.m. at The Wednesday Club, 1002 Main Street,
Danville, Virginia, for the purposes set forth below and in the Notice of Annual
Meeting of Shareholders. Shares represented by properly executed proxy, if such
proxies are received in time and not revoked, will be voted at the Annual
Meeting as set forth therein. Any shareholder may attend the Annual Meeting,
revoke the proxy and vote in person.
INFORMATION AS TO VOTING SECURITIES
The Board of Directors has set March 13, 1998 as the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting. Shareholders of record on that date will be entitled to vote on the
matters described herein. As of March 13, 1998, the Corporation had 1,460
shareholders of record. No one individual or entity owns directly and indirectly
more than 5% of the outstanding Corporation Common Stock except Ambro and
Company, the nominee name in which American National Bank and Trust Company (the
"Bank"), the corporation's banking subsidiary, registers securities it holds in
a fiduciary capacity, which held 598,123 shares (19.5995%) on March 13, 1998.
The number of shares of common stock, there being no other class of stock,
outstanding and entitled to vote at the Annual Shareholders' Meeting is
3,051,733. There are 598,123 shares held of record by Ambro and Company which
amount represents 19.5995% of the outstanding securities, and only 354,623 of
these shares may be voted by the existing co-fiduciaries. The remaining shares
may not be voted by the Bank but co-fiduciaries may be qualified for the sole
purpose of voting all or a portion of the shares at the Annual Meeting.
<PAGE>
CUMULATIVE VOTING
Shareholders of the Corporation shall not have cumulative voting rights.
VOTING OF PROXIES
If the enclosed proxy is properly executed, dated, returned and not
revoked, it will be voted in accordance with the specification made by the
shareholder. If a specification is not made, it will be voted "FOR" the
proposals set forth below and in the notice of Annual Meeting of Shareholders.
Ben J. Davenport, Jr., James A. Motley or Landon R. Wyatt, Jr., or any of them,
will act as proxies on behalf of the Board of Directors.
EXPENSES OF SOLICITATION
The Corporation will pay the cost of preparing, assembling and mailing this
Proxy Statement and the enclosed material. Proxies may also be solicited
personally or by telephone by the Corporation and the Bank's officers without
additional compensation.
PURPOSES OF THE ANNUAL MEETING
As set forth in the Notice of Annual Meeting of Shareholders, the Board of
Directors is seeking proxies in connection with the following proposals to be
set forth before the shareholders:
1. To elect four (4) directors of the Corporation to fill
the vacancies created by the expiration of the terms
of the Directors of Class II.
2. To elect one (1) director of the Corporation to Class III.
3. To transact any other business that may properly come
before the meeting or any adjournment thereof.
ELECTION OF DIRECTORS
Four Directors of Class II are to be elected at the Annual Meeting of
Shareholders to serve until the Annual Meeting in 2001 and until their
respective successors are duly elected and qualified. One Director of Class III
is to be elected at the Annual Meeting of Shareholders to serve until the Annual
Meeting in 1999 and until his respective successor is duly elected and
qualified. Management proposes that the four (4) nominees listed in this Proxy
Statement as Directors of Class II and the one (1) nominee listed in this Proxy
Statement as a Director of Class III be elected.
The nominees for whom the persons named as proxies intend to vote as
directors, unless otherwise indicated on the form of proxy, and certain
information with regard to their ownership of the common stock of the
Corporation and memberships on various committees of the Board of Directors of
the Corporation, are set forth below.
<PAGE>
NOMINEES
Directors of Class II to be elected for a term expiring in 2001
Amount of Common Stock
Director Owned Beneficially and
Name, Principal of Bank Nature of Ownership on Percent
Occupation and (Age) Since March 13, 1998 of Class
Fred A. Blair (51) 1992 1,854 - Direct (1) .0608
President, Blair 225 - Family .0074
Construction, Inc., Relationship (3)
Gretna, VA, commercial
building contractor
E. Budge Kent, Jr. (59) 1979 7,411 - Direct (1) .2428
Senior Vice President & 316 - Family .0104
Assistant Secretary of Relationship (4)
the Corporation and
Senior Vice President &
Trust Officer of the
Bank
Fred B. Leggett, Jr. (61) 1994 8,361 - Direct (1)(2) .2740
Retired Chairman and 3,192 - Family .1046
Chief Executive Officer, Relationship (4)
Leggett Stores, Danville,
VA, retail department
stores, since March,
1996; prior thereto,
Chairman and Chief
Executive Officer,
Leggett Stores,
Danville, VA, since
December, 1994; prior
thereto, Executive Vice
President, Leggett Stores
Claude B. Owen, Jr. (52) 1984 5,716 - Direct (1) .1873
Chairman & Chief 2,100 - Family .0688
Executive Officer of Relationship (4)
DIMON Incorporated,
Danville, VA, leaf
tobacco & flowers, since
May, 1995; prior
thereto,
Chairman, President &
Chief Executive Officer,
Dibrell Brothers, Inc.,
Danville, VA, leaf
tobacco & flowers,
since July, 1993;
prior thereto,
Chairman & Chief Executive
Officer, Dibrell Brothers,
Inc.
<PAGE>
Director of Class III to be elected for a term expiring in 1999
H. Dan Davis (60) 1996 43,600 - Direct (1) 1.4287
Senior Consultant to the 20,352 - Family .6669
Corporation and the Bank Relationship (4)
since January, 1998; prior
thereto,
Executive Vice President
of the Corporation and
Senior Vice President of
the Bank since March,
1996; prior thereto,
President and Chief
Executive Officer of
Mutual Savings Bank, F.S.B.
since January, 1995; prior
thereto, President and
Chief Operations Officer
of Mutual Savings Bank,
F.S.B.
DIRECTORS CONTINUING IN OFFICE
Directors of Class III to continue in office until 1999
Amount of Common Stock
Director Owned Beneficially and
Name, Principal of Bank Nature of Ownership on Percent
Occupation and (Age) Since March 13, 1998 of Class
Richard G. Barkhouser (67) 1980 82,412 - Direct (1) 2.7005
President, Barkhouser 7,260 - Family .2379
Motors, Inc., Danville, Relationship (4)
VA, automobile
dealership
B. Carrington Bidgood (73) 1975 32,436 - Direct (1) 1.0629
Retired Senior Vice 1,200 - Family .0393
President, Dibrell Relationship (4)
Brothers, Inc., Danville,
VA, leaf tobacco & flowers
Lester A. Hudson, Jr. (58) 1984 4,902 - Direct (1) .1606
Chairman, H & E Associates,
Greenville, SC, investments,
since June, 1995; prior
thereto
Vice Chairman, Wunda
Weve Carpets, Inc.,
Greenville, SC, carpet
manufacturer, since August, 1993;
prior thereto
Chairman, Wunda Weve
Carpets, Inc.,
Charles H. Majors (52) 1981 4,066 - Direct (1) .1332
President and Chief 1,062 - Family .0348
Executive Officer of Relationship (4)
the Corporation and
the Bank since
January, 1994;
prior thereto
President of the Corporation
and the Bank
<PAGE>
Directors of Class I to be elected for a term expiring in 2000
Amount of Common Stock
Director Owned Beneficially and
Name, Principal of Bank Nature of Ownership on Percent
Occupation and (Age) Since March 13, 1998 of Class
Willie G. Barker, Jr. (60) 1996 14,100 - Direct (1) .4620
Retired President of
Dibrell Brothers, Inc.,
Danville, VA, leaf
tobacco and flowers,
since June, 1993;
prior thereto,
Consultant to DIMON
Incorporated, Danville,
VA, leaf tobacco & flowers
since May, 1995; prior thereto,
Consultant to Dibrell
Brothers, Incorporated,
Danville, VA, leaf tobacco
& flowers since June, 1993;
prior thereto, President
and Chief Operating Officer
of Dibrell Brothers,
Incorporated
Ben J. Davenport, Jr. (55) 1992 4,056 - Direct (1)(2) .1330
Chairman, First
Piedmont Corporation,
Chatham, VA,
waste management
James A. Motley (69) 1975 7,510 - Direct (1)(2) .2461
Retired Chairman and Chief 5,242 - Family .1716
Executive Officer of Relationship (4)
the Corporation and the
Bank since January,
1994; prior thereto
Chairman and Chief
Executive Officer of
the Corporation and the
Bank
Landon R. Wyatt, Jr. (72) 1965 4,540 - Direct (1) .1486
President, Wyatt Buick 9,070 - Family .2968
Sales Co., Danville, VA, Relationship (4)
automobile dealership
All Executive officers and directors, 236,469 - Direct (1)(2) 7.7487
including nominees and directors 50,019 - Family 1.6390
named above (15 in group) Relationship (3)(4)
(1) Individual exercises sole voting and investment power over
shares held.
(2) Shared voting and investment power.
(3) Sole voting and investment power as custodian for minor children.
(4) Can exercise no voting or investment power.
All of the above nominees and directors have been engaged in the
occupations listed during the last five years.
There exists no family relationship between any director or nominee.
Mr. Owen is a director of DIMON Incorporated and Richfood Holdings Inc. Mr.
Hudson is a director of American Electric Power Company, Inc. Mr. Motley and Mr.
Davenport are directors of Intertape Polymer Group Inc. The stock of these
corporations is registered with the Securities and Exchange Commission.
<PAGE>
EXECUTIVE OFFICERS
Mr. Charles H. Majors and Mr. E. Budge Kent, Jr., together with the two
senior vice presidents listed below, are the executive officers of the
Corporation and the Bank.
Principal Occupation and
Name Age Business Experience
T. Allen Liles 45 Senior Vice President, Secretary, Treasurer
and Chief Financial Officer of the Corporation
and Senior Vice President, Cashier and Chief
Financial Officer of the Bank; Officer of the
Bank since 1997
Carl T. Yeatts 59 Senior Vice President of the Corporation and
Senior Vice President and Senior Loan Officer
of the Bank; Officer of the Bank since 1964
All executive officers serve one-year terms of office.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held 13 Board Meetings during the year 1997. These
meetings were either the Corporation Board Meetings and/or the Bank Board
Meetings. In addition to meeting as a group to review the Corporation and Bank's
business, certain members of the Board are appointed to serve on various
standing committees. Among those committees are the Audit and Compliance
Committee, Salary Committee and Directors' Nominating Committee. All incumbent
directors attended more than 75% of the aggregate of all meetings of the Board
of Directors and Committees on which they served.
Audit and Compliance Committee. The Audit and Compliance Committee, which
currently consists of Messrs. Barker, Blair, and Motley, reviews significant
audit, accounting, and compliance principles, policies and practices, meets with
the Corporation and Bank's independent auditors to discuss the results of their
annual audit and reviews the performance of the internal auditing and compliance
functions. The Audit and Compliance Committee held four meetings in 1997.
Salary Committee. The Salary Committee currently consists of Messrs.
Barkhouser, Bidgood, Hudson and Leggett. The Salary Committee makes
recommendations to the Board of Directors for officers' compensation and
promotions, directors' fees and related personnel matters. The Salary Committee
held four meetings in 1997.
Directors' Nominating Committee. The Committee's function is to search for
potential qualified directors, to review the qualifications of potential
directors as suggested by Directors, Management, Shareholders and others, and to
make recommendations to the entire Board for nominations of such individuals to
the shareholders. A shareholder may recommend nominees for director by writing
to the President of the Corporation and providing the proposed nominee's full
name, address, qualifications and other relevant biographical information.
Members of the present committee are Messrs. Barkhouser, Owen and Wyatt. The
Directors' Nominating Committee held one meeting in 1997.
<PAGE>
REPORT OF SALARY COMMITTEE ON EXECUTIVE COMPENSATION
The Salary Committee of the Board of Directors, which is composed of four
independent outside directors, is responsible for making recommendations to the
Board of Directors concerning compensation. The Salary Committee considers a
variety of factors and criteria in arriving at its recommendations for
compensation of executive officers.
In making its recommendations regarding compensation, the Committee
attempts to align the interests of the Bank's executive officers with those of
the shareholders. The Committee believes that increases in dividends and net
equity improve shareholder market value and, accordingly, compensation should be
structured to enhance the long-term profitability of the Bank.
Officer compensation generally consists of salary and participation in the
Bank's profit sharing plan. A description of the profit sharing plan is included
in Note (2) under Executive Compensation. Full-time employees received certain
incentive compensation in 1997 due to the attainment of certain earnings by the
Corporation. Certain officers may be eligible to receive incentive compensation
if certain earnings are attained in 1998. Certain key executive officers are
eligible to participate in the Executive Compensation Continuation Plan
described below under "Deferred Compensation Plan". H. Dan Davis is subject to
the employment agreement described below under "Employment Agreement". All
compensation is paid by the Bank and no officer receives an additional
compensation from the Corporation. In 1997, the Board of Directors and the
shareholders approved the stock option plan described below under note (3) of
"Executive Compensation".
In considering officer compensation (other than the Chief Executive
Officer), the Committee receives and considers recommendations from the Chief
Executive Officer. The Committee conducts an annual evaluation of the
performance and effectiveness of the Chief Executive Officer. The Chief
Executive Officer's compensation then is determined by the Committee after
consideration of the Bank's performance and the resulting benefit to the
shareholders.
Salary Committee,
Richard G. Barkhouser
B. Carrington Bidgood
Lester A. Hudson, Jr.
Fred B. Leggett, Jr.
OTHER INFORMATION
Comparative Company Performance
The following table compares American National Bankshares Inc.'s cumulative
total return to its shareholders with the returns of two indexes for the
five-year period ended December 31, 1997. The two indexes are the S & P 500
Total Return published by Standard & Poor's Corporation and the Independent
Community Bank Index, consisting of 23 independent banks located in the states
of Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia. The
Independent Community Bank Index is published by the Carson Medlin Company.
1992 1993 1994 1995 1996 1997
American National Bankshares Inc 100 113 122 118 101 134
Independent Bank Index 100 125 153 208 248 358
S & P 500 Index 100 110 111 153 189 251
<PAGE>
Executive Compensation
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
Name and Other Restricted Stock Long-Term All
Principal Bonus Annual Stock Options/ Incentive Other
Position Year Salary(1) (2) Compensation Awards SARs(3) Payouts Comp.(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles H. Majors 1997 153,855 23,538 N/A N/A 100 N/A 33,528
President & Chief 1996 144,071 14,882 N/A N/A N/A N/A 31,309
Executive Officer 1995 118,665 27,479 N/A N/A N/A N/A 28,780
H. Dan Davis 1997 116,478 4,400 N/A N/A 100 N/A 14,870
Executive Vice 1996 114,248 N/A N/A N/A N/A N/A 0
Pres. of the 1995 100,011 N/A N/A N/A N/A N/A 32,085
Corporation; Sr.
Vice President of
the Bank
(Retired December 31, 1997)
E. Budge Kent, Jr. 1997 97,292 13,640 N/A N/A 100 N/A 18,721
Sr. Vice President 1996 90,623 9,253 N/A N/A N/A N/A 16,975
& Asst. Secretary 1995 77,584 17,676 N/A N/A N/A N/A 15,757
of the Corporation;
Sr. Vice President
& Trust Officer of
the Bank
David Hyler 1997 94,510 13,172 N/A N/A 100 N/A 19,926
Sr. Vice Pres. 1996 87,173 8,819 N/A N/A N/A N/A 43,925
Secretary & 1995 73,675 16,722 N/A N/A N/A N/A 55,039
Treasurer of the
Corporation; Sr.
Vice President &
Chief Financial
Officer of the
Bank
(Retired December 31, 1997)
Carl T. Yeatts 1997 89,682 13,172 N/A N/A 100 N/A 18,721
Sr. Vice Pres. 1996 85,747 8,819 N/A N/A N/A N/A 16,975
of the 1995 72,786 16,722 N/A N/A N/A N/A 15,757
Corporation; Sr.
Vice President
& Sr. Loan Officer
of the Bank
</TABLE>
(1) Includes salary deferrals contributed by the employee to the 401(k) Plan,
fees to Mr. Davis as director of Mutual and compensation and fees for
service as officer and director of Mutual Service Corporation, and taxable
compensation for term life insurance over $50,000.
(2) Includes matching contributions to the 401(k) Plan made by the Bank. Also
includes accrued payments of profit-sharing (bonus) and incentive
compensation participations. In 1997, the profit-sharing (bonus) plan
provided that an amount equal to 6.50% of the Bank's net income (after
taxes, but before deducting profit sharing and its related tax effect),
less the Bank's 401(k) contributions, be paid to officers and employees who
are in the Bank's employ on December 31, 1997. Incentive compensation
represented payments to full- time employees based on the Corporation
attaining certain earnings increase. The total expense, paid or accrued,
for the profit sharing (bonus) plan and incentive compensation payments for
the year 1997 amounted to $483,553.
<PAGE>
(3) Pursuant to the Corporation's Stock Option Plan approved by the
shareholders at the 1997 annual meeting, on September 16, 1997, the
Corporation granted each full-time employee an option for 100 shares of
stock in the Corporation. The exercise price is $28 per share. The options
vest on September 16, 1998 and may be exercised through September 15, 2007,
subject to certain conditions. Utilizing the Black-Scholes valuation
method, a value of $9.43 per share was determined for the options.
(4) All Other Compensation includes amounts set aside or accrued by the Bank
for the Retirement Plan and Executive Compensation Continuation Plan. For
1995, it includes amounts set aside or accrued by Mutual Savings Bank,
F.S.B. for Mr. Davis' benefit under the Mutual Retirement Plan and the
Mutual Employee Stock Ownership Plan.
(5) The Bank provided life insurance and disability insurance benefits for all
full-time officers and employees and hospitalization insurance for such
individuals on a contributory basis and the aggregate of personal benefits
paid for by the Bank for all such individuals did not exceed $5,000 each in
1997.
(6) In 1997, each non-officer director received a monthly retainer fee of $500
and attendance fees of $200 for each regular Board meeting and $400 for
each Committee meeting attended. The aggregate total amount paid for the
year 1997 was $117,800. Non-officer directors are excluded from the Bank's
retirement plan and, therefore, do not qualify for pension benefits.
(7) Prior to the merger on March 14, 1996, Mr. Davis exercised options on
29,900 shares of Mutual Savings Bank, F.S.B. which had been granted to Mr.
Davis in 1987.
Retirement Plan. The Bank's retirement plan is a non-contributory defined
benefit pension plan which covers substantially all employees of the Bank who
are 21 years of age or older and who have had at least one year of service.
Advanced funding is accomplished by using the actuarial cost method known as the
collective aggregate cost method.
As of December 31, 1997, the normal retirement benefit formula was 1.3% per
year of service times compensation plus .65% per year of service times
compensation in excess of social security covered compensation. At normal
retirement, the monthly benefit is calculated based on any consecutive five-year
period which will produce the highest average rate of basic monthly
compensation. Bonuses are not included in the definition of compensation. Cash
benefits under the plan generally commence on retirement at age 65, death, or
termination of employment. Partial vesting of the retirement benefits under the
plan occurs after three years of service and full vesting occurs after seven
years of service with the Bank.
<PAGE>
The estimated annual benefits at retirement for the six executive officers
as of December 31, 1997 are as follows:
Estimated Annual Benefit
Name of Individual at Retirement
Charles H. Majors $ 46,425
President and Chief Executive Officer of the
Corporation and the Bank
H. Dan Davis 3,778*
Executive Vice President of the Corporation and
Senior Vice President of the Bank
(Retired December 31, 1997)
E. Budge Kent, Jr. 52,214
Senior Vice President and Asst. Secretary
of the Corporation and Senior Vice President
and Trust Officer of the Bank
Carl T. Yeatts 49,484
Senior Vice President of the Corporation
and Senior Vice President and Senior
Loan Officer of the Bank
Gilmer D. Jefferson 39,914*
Senior Vice President and Asst. Treasurer
of the Corporation and Senior Vice
President of the Bank
(Retired December 31, 1997)
David Hyler 37,738*
Senior Vice President and Secretary & Treasurer
of the Corporation and Senior Vice President
and Chief Financial Officer of the Bank
(Retired December 31, 1997) __________
$229,553
*Retired December 31, 1997 and these individuals elected to take their
share in a lump sum prior to December 31, 1997.
Deferred Compensation Plan. The Board of Directors of the Bank adopted the
Executive Compensation Continuation Plan, a non-contributory deferred
compensation plan, in 1982. Under the plan, certain key executives who, in the
opinion of the Directors, are making substantial contributions to the overall
growth and success of the Bank and who must be retained in order to expand and
continue satisfactory long term growth are eligible to receive benefits afforded
by the plan.
Under agreements with eligible key executives pursuant to this plan, if any
such executive dies or retires while employed by the Bank, such executive or his
designated beneficiary will receive annual payments commencing at death or
retirement and continuing for a period of 10 years. As of December 31, 1997,
Gilmer D. Jefferson and David Hyler are each entitled to a vested annual benefit
of $25,000 under the plan beginning in 1998. Charles H. Majors is entitled to an
annual benefit of $50,000 under the plan. E. Budge Kent, Jr. and Carl T. Yeatts
are entitled to an annual benefit of $25,000 each under the plan and the above
executive officers as a group (5) are entitled to annual benefits of $150,000
under the plan. A portion of the related costs of the plan are expected to be
recovered through life insurance policies purchased by the bank on the key
executives Premiums in the aggregate amount of $25,857 were paid in 1997.
<PAGE>
Employment Agreement. Pursuant to the terms of the Agreement and Plan of
Reorganization between the Corporation and Mutual Savings Bank, F.S.B., the
Corporation entered into an employment agreement with H. Dan Davis, effective
March 14, 1996, to serve as Executive Vice President of the Corporation, Senior
Vice President of the Bank and President and Chief Executive Officer of Mutual
Mortgage of the Piedmont, Inc. for a term of two years at an annual salary of
$110,000. During this two-year term, Mr. Davis has the right to elect to become
a senior consultant to the Corporation and the Bank with a monthly payment of
$5,500 for a period expiring March 14, 2003.
Mr. Davis made such election and retired as an officer, effective December
31, 1997. As a senior consultant, Mr. Davis is responsible for carrying out such
advisory or consulting duties and responsibilities as may be requested of him
from time to time by the Chief Executive Officer or the Board of Directors of
the Corporation. As a senior consultant, Mr. Davis also will be restricted as to
employment by other financial institutions in competition with the Corporation
or the Bank.
401(k) Plan. Effective July 1, 1995, the Bank adopted a 401(k) Plan which
covers substantially all full-time employees who are 21 years of age or older
and who have had at least one year of service. An employee may defer a portion
of his or her salary, not to exceed the lesser of 15% of compensation or $9,500.
The Bank will make a matching contribution in the amount of 50% of the first
6.0% of compensation so deferred.
Indebtedness of and Transactions with Management
Some of the directors and officers of the Corporation and the companies
with which they are associated were customers of, and had banking transactions
with, the Bank in the ordinary course of the Bank's business during 1997. All
loans and commitments to loan included in such transactions were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons and, in
the opinion of the management of the Bank, do not involve more than a normal
risk of collectibility or present other unfavorable features.
During the year 1997, the highest aggregate amount of outstanding loans,
direct and indirect, to the directors and officers was $15,037,076 or 32% of
equity capital and this peak amount occurred on May 31, 1997.
Independent Public Accountants
The Board of Directors of the Corporation, pursuant to the recommendation
of its Audit Committee, selected Arthur Andersen, LLP, independent public
accountants, to audit the financial statements of the Corporation and the Bank
for the year 1997. Arthur Andersen, LLP was first engaged by the Bank in 1978 as
its independent public accountant.
A representative of Arthur Andersen, LLP will be present at the
shareholders' meeting and this representative will have an opportunity to make a
statement if he so desires. He will be available to respond to appropriate
questions.
<PAGE>
Shareholder Proposals
Any shareholder proposal intended to be presented at next year's Annual
Meeting must be received at the principal office of the Corporation (Post Office
Box 191, Danville, Virginia 24543) for inclusion in the proxy statement for the
1999 annual meeting not later than January 2, 1999. The proposals should be
mailed to the Corporation by Certified Return Receipt Requested mail.
Other Business
The Board of Directors knows of no other matters which may properly be
brought before the Annual Meeting. However, if any other matters should properly
come before the Annual Meeting, it is the intention of the persons named in the
enclosed form of proxy to vote such proxy in accordance with their best judgment
on such matters.
Annual Report
The Annual Report for the year ended December 31, 1997 accompanies this
Proxy Statement.
A copy of the Corporation's Annual report to the Securities and Exchange
Commission on Form 10-K may be obtained without charge by any beneficial owner
of the Corporation's Common Stock upon written request to Charles H. Majors,
President and Chief Executive Officer, American National Bankshares Inc., P. O.
Box 191, Danville, Virginia 24543.
By Order of the Board of Directors
Charles H. Majors
President and Chief Executive Officer
March 25, 1998
<PAGE>
Appendix A
PROXY
This Proxy Is Solicited On Behalf Of The Board Of Directors
American National Bankshares Inc.
628 Main Street
Danville, Virginia 24541
ANNUAL MEETING OF SHAREHOLDERS
April 28, 1998, 11:30 A.M.
The undersigned hereby appoints BEN J. DAVENPORT, JR., JAMES A. MOTLEY OR
LANDON R. WYATT, JR., any of whom may act, as my attorney(s), with full power of
substitution, to vote all the Common Stock of the Corporation, standing in my
name on its books at the close of business on March 13, 1998, or any adjournment
thereof, with all the powers the undersigned would possess if personally
present, as follows:
1. ELECTION OF DIRECTORS OF CLASS II TO SERVE UNTIL THE 2001 ANNUAL MEETING
______ FOR all nominees listed below ______ WITHHOLD AUTHORITY FROM
(except as marked to the a vote for all nominees
contrary below) listed below
FRED A. BLAIR
E. BUDGE KENT, JR.
FRED B. LEGGETT, JR.
CLAUDE B. OWEN, JR.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE ABOVE LIST.)
2. ELECTION OF DIRECTOR OF CLASS III TO SERVE UNTIL THE 1999 ANNUAL MEETING
______ FOR the nominee listed below ______ WITHHOLD AUTHORITY FROM
a vote for the nominee
listed below
H. DAN DAVIS
3. Any other business which may properly be brought before the meeting or any
adjournment thereof.
The Common Stock represented by this Proxy will be voted as specified;
however, as to any matter where no choice is specified, the Proxy will be voted
for such matter.
If any other business is presented at said meeting, this Proxy shall be
voted in accordance with the recommendations of management. This proxy may be
revoked at any time before it is voted. The undersigned may attend the Annual
Meeting, revoke this Proxy and vote in person.
NAME IN WHICH STOCK HELD AND
NUMBER OF SHARES:
Date: ______________________________, 1998
______________________________
______________________________
______________________________
Signature of Shareholder(s)
When signing as attorney, executor, administrator, trustee or guardian,
please give full title. If more than one trustee, all should sign. Please sign
exactly as name appears on this Proxy.
STOCK REGISTERED IN JOINT NAMES REQUIRES BOTH SIGNATURES ON PROXY.
