AMERICAN NATIONAL BANCORP INC, DEF 14A, 1996-11-26

AMERICAN NATIONAL BANCORP INC
DEF 14A, 1996-11-26
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. ____)

Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12

American National Bancorp, Inc.

(Name of Registrant as Specified in its Charter)

Kenneth R. Lehman, Esq.
Luse Lehman Gorman Pomerenk & Schick
5335 Wisconsin Avenue, N.W.
Suite 400
Washington, D.C. 20015

(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-
6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 identifying value of transaction
computed pursuant
to Exchange Act Rule 0-11:
______________________________
4) Proposed maximum aggregate value of transaction:
______________________________

[ ] 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
offset 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 Number:
_____________________
3) Filing Party:
____________________
4) Date Filed:
____________________<PAGE>

October 18, 1996

Dear Stockholder:

We cordially invite you to attend the 1996 Annual Meeting of
Stockholders of American National Bancorp, Inc. (the "Company"). The
Annual Meeting will be held at the Company's main office at 211 North
Liberty Street, Baltimore, Maryland, at 4:00 p.m., local time on
November 21, 1996.

The enclosed Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted. During the meeting we will also
report on the operations of the Company and operations of American
National Savings Bank, F.S.B. (the "Bank"), the Company's wholly owned
savings bank subsidiary. Directors and officers of the Company, as
well as a representative of our independent auditors, will be present
to respond to any questions that stockholders may have.

The business to be conducted at the Annual Meeting includes the
election of three directors of the Company, the approval of the
Company's 1996 Stock Option Plan, the approval of the Company's 1996
Recognition and Retention Plan and the ratification of the appointment
of KPMG Peat Marwick LLP as auditors for the Company's fiscal year
ending July 31, 1997. The Board of Directors of the Company has
determined that the matters to be considered at the Annual Meeting are
in the best interest of the Company and its stockholders. For the
reasons set forth in the Proxy Statement, the Board of Directors
unanimously recommends a vote "FOR" each matter to be considered.

Also enclosed for your review is our 1996 Annual Report to
Stockholders, which contains detailed information concerning the
activities and operating performance of the Company and the Bank.

On behalf of the Board of Directors, we urge you to sign, date and
return the enclosed proxy card as soon as possible even if you
currently plan to attend the Annual Meeting. This will not prevent you
from voting in person, but will assure that your vote is counted if you
are unable to attend the Annual Meeting.

Sincerely,

A. Bruce Tucker
President and Chief Executive Officer
<PAGE>
AMERICAN NATIONAL BANCORP, INC.
211 North Liberty Street
Baltimore, Maryland 21201
(410) 752-0400

NOTICE OF
1996 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On November 21, 1996

Notice is hereby given that the 1996 Annual Meeting of American
National Bancorp, Inc. (the "Company") will be held at the Company's
main office at 211 North Liberty Street, Baltimore, Maryland, on
November 21, 1996, at 4:00 p.m., local time.

A Proxy Card and a Proxy Statement for the Meeting are enclosed.

The Meeting is for the purpose of considering and acting upon:

1. The election of three directors of the Company;

2. The approval of the American National Bancorp, Inc. 1996
Stock Option Plan;

3. The approval of the American National Bancorp, Inc. 1996
Recognition and Retention Plan;

4. The ratification of the appointment of KPMG Peat Marwick
LLP as auditors for the Company for the fiscal year ending July 31,
1997; and

such other matters as may properly come before the Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other
business to come before the Meeting.

Any action may be taken on the foregoing proposals at the Meeting
on the date specified above, or on any date or dates to which the
Meeting may be adjourned. Stockholders of record as of September 27,
1996, are the stockholders entitled to vote at the Meeting, and any
adjournments thereof.

EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING,
IS REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT
DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE
STOCKHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY
MAY BE REVOKED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN
REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE. ANY
STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER PROXY AND VOTE
PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU
ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU
WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE
PERSONALLY AT THE MEETING.

By Order of the Board of Directors

Betty J. Stull
Secretary
Baltimore, Maryland
October 18, 1996

IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM
AT THE MEETING. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED
STATES.

PROXY STATEMENT

AMERICAN NATIONAL BANCORP, INC.
211 North Liberty Street
Baltimore, Maryland 21201
(410) 752-0400

1996 ANNUAL MEETING OF STOCKHOLDERS
November 21, 1996

This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of American
National Bancorp, Inc. (the "Company" or "American National") to be
used at the Annual Meeting of Stockholders of American National (the
"Meeting"), which will be held at the Company's main office at 211
North Liberty Street, Baltimore, Maryland, on November 21, 1996, at
4:00 p.m., local time, and all adjournments of the Meeting. The
accompanying Notice of Annual Meeting of Stockholders and this Proxy
Statement are first being mailed to stockholders on or about
October 18, 1996.

REVOCATION OF PROXIES

Stockholders who execute proxies retain the right to revoke them
at any time. Unless so revoked, the shares represented by such proxies
will be voted at the Meeting and all adjournments thereof. Proxies may
be revoked by written notice to the Secretary of the Company at the
address of the Company set forth above, or the filing of a later proxy
prior to a vote being taken on a particular proposal at the Meeting.
A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited on behalf of the Board of Directors
of the Company will be voted in accordance with the directions given
therein. Where no instructions are indicated, proxies will be voted
"FOR" the proposals set forth in this Proxy Statement for consideration
at the Meeting.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The securities entitled to vote at the Meeting consist of the
common stock, $.01 par value per share, of the Company (the "Common
Stock"). Each share of the Common Stock entitles the record holder to
one vote on all matters. September 27, 1996, has been fixed by the
Board of Directors as the record date (the "Record Date") for
determining stockholders entitled to notice of and to vote at the
Meeting. As of the Record Date, the Company had 3,603,646 shares of
Common Stock issued and outstanding. The Common Stock was issued on
October 31, 1995 (the "Offering") in connection with the mutual-to-
stock conversion of American National Bankshares, M.H.C., the
Company's mutual holding company predecessor (the "Conversion"). In
the Conversion, 1.940 shares of Common Stock (the "Exchange Ratio")
were issued in exchange for each outstanding share of common stock of
American National Savings Bank, F.S.B. (the "Bank"). Information
herein regarding issuances of shares of the Bank's common stock has
been restated to give retroactive effect to such exchange pursuant to
the Exchange Ratio.

As provided in the Company's Certificate of Incorporation, record
holders of Common Stock who beneficially own in excess of 10% of the
outstanding shares of Common Stock (the "Limit") are not entitled to
vote any shares held in excess of the Limit. A person or entity is
deemed to own beneficially shares owned by an affiliate of, as well as
persons acting in concert with, such person or entity.

The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting
any shares held in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at
the Meeting. Abstentions are counted for purposes of determining a
quorum.

As to the election of directors, the proxy card being provided by
the Board of Directors enables a stockholder to vote FOR the election
of the nominees proposed by the Board, or to WITHHOLD AUTHORITY to vote
for one or more of the nominees being proposed. Under Delaware law and
the Company's Certificate of Incorporation and Bylaws, directors are
elected by a plurality of votes cast, without regard to broker non-
votes. As to the approvals of the Company's 1996 Stock Option Plan and
1996 Recognition and Retention Plan, and the ratification of the
appointment of KPMG Peat Marwick LLP as independent auditor of the
Company, a stockholder may vote FOR the items, AGAINST the items or
ABSTAIN from voting. The approval of these matters requires the
affirmative vote of a majority of the votes present at the Meeting and
entitled to be cast, without regard to broker non-votes. Proxies
marked ABSTAIN shall have the effect of a vote against the proposals.

Voting Securities and Certain Holders Thereof

Persons and groups owning in excess of five percent of the Common
Stock are required to file certain reports with the Securities and
Exchange Commission regarding such ownership pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"). The following table sets
forth, as of the Record Date, the shares of Common Stock beneficially
owned by all directors and executive officers as a group and by each
person who was the beneficial owner of more than five percent of the
Common Stock. This information is based solely upon information
supplied to the Company and the filings required pursuant to the
Exchange Act.

<TABLE>
<CAPTION>
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owners Ownership (1) Outstanding

<S> <C> <C>
John Hancock Mutual Life Insurance Company 411,070 11.4%
John Hancock Place
P.O. Box 111
Boston, Massachusetts 02117

Heine Securities Corporation 291,000 8.1%
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078

Brandes Investment Partners, Inc.
12750 High Bluff Drive 232,280 6.4%
San Diego, California 92130

All Directors and Executive Officers 253,473(2) 7.0%
as a Group (10 persons)
<FN>

(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the
beneficial owner for purposes of this table, of any shares of Common Stock if he has shared
voting or investment power with respect to such security, or has a right to acquire
beneficial ownership at any time within 60 days from the date as of which beneficial
ownership is being determined. As used herein, "voting power" is the power to vote or direct
the voting of shares and "investment power" is the power to dispose or direct the disposition
of shares. Includes all shares held directly as well as by spouses and minor children, in
trust and other indirect ownership, over which shares the named individuals effectively
exercise sole or shared voting and investment power.
(2) Includes 43,186 shares of Common Stock underlying options granted pursuant to the
American National Savings Bank, F.S.B. 1993 Stock Option Plan for Outside Directors, and
93,515 shares of Common Stock underlying options granted pursuant to the American National
Savings Bank, F.S.B. 1993 Incentive Stock Option Plan, all of which options are exercisable
within 60 days of the date as of which beneficial ownership is being determined. Also
includes 8,633 shares of Common Stock subject to restrictions under the American National
Savings Bank, F.S.B. 1993 Recognition and Retention Plan for Employees and 2,169 shares of
Common Stock subject to restrictions under the American National Savings Bank, F.S.B. 1993
Recognition and Retention Plan for Outside Directors, with respect to which shares the
recipients have voting or investment power.
</TABLE>

PROPOSAL I ELECTION OF DIRECTORS

The Company's Board of Directors is currently composed of seven
members. The Company's bylaws provide that approximately one-third of
the directors are to be elected annually. Directors of the Company are
generally elected to serve for a three year period or until their
respective successors shall have been elected and shall qualify. Three
directors will be elected at the Meeting to serve for a three-year
period and until their respective successors have been elected and
qualified. The Nominating Committee has nominated to serve as
directors Howard K. Thompson, Lenwood M. Ivey and Betty J. Stull, each
of whom is currently a member of the Board of Directors.

The table below sets forth certain information, as of the Record
Date, regarding the composition of the Company's Board of Directors,
including the terms of office of Board members. It is intended that
the proxies solicited on behalf of the Board of Directors (other than
proxies in which the vote is withheld as to one or more nominees) will
be voted at the Meeting for the election of the nominees identified
below. If any nominee is unable to serve, the shares represented by
all such proxies will be voted for the election of such substitute as
the Board of Directors may recommend. At this time, the Board of
Directors knows of no reason why any of the nominees might be unable to
serve, if elected. Except as indicated herein, there are no
arrangements or understandings between any nominee and any other person
pursuant to which such nominee was selected.

<TABLE>
<CAPTION>
Shares of
Age at Positions Common Stock
July 31 Held in the Director Current Term Beneficially Percent
Name (1) 1996 Company Since (2) to Expire Owned (3) Of Class
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES

Howard K. Thompson 83 Chairman of
the Board 1973 1996 34,051(4) *

Lenwood M. Ivey 63 Director and
Treasurer 1979 1996 12,319(5) *

Betty J. Stull 66 Director and
Corporate 1972 1996 12,894(6) *
Secretary

DIRECTORS CONTINUING IN OFFICE

David L. Pippenger 56 Director 1989 1997 19,610(7) *

Jimmie T. Noble 54 Director 1994 1997 2,388(8)

A. Bruce Tucker 59 President, 1981 1998 72,220(9) *
Chief
Executive
Officer
and Director

Joseph M. Solomon 46 Director,
Executive 1990 1998 38,014(10) *
Vice President
and Chief
Operating
Officer
<FN>
(*) Less than 1%.
(1) The mailing address for each person listed is 211 North Liberty
Street, Baltimore, Maryland 21201. Each of the persons listed is also
a director of American National Savings Bank, F.S.B.
(2) Reflects initial appointment to the Board of Directors of the
Bank.
(3) Includes shares of Common Stock subject to restrictions under
the American National Savings Bank, F.S.B. 1993 Recognition and
Retention Plan for Employees (the "1993 Employee Recognition Plan") and
the American National Savings Bank, F.S.B. 1993 Recognition and
Retention Plan for Outside Directors (the "1993 Directors Recognition
Plan"), with respect to which shares the recipients have voting or
investment power. Also includes shares subject to options granted
under the American National Savings Bank, F.S.B. 1993 Stock Option Plan
for Outside Directors (the "1993 Directors Option Plan") and any shares
subject to options granted under the American National Savings Bank,
F.S.B. 1993 Incentive Stock Option Plan (the "1993 Incentive Stock
Option Plan") that are exercisable within 60 days from the Record Date.
(4) Includes 17,054 shares subject to options granted pursuant to
the 1993 Directors Option Plan.
(5) Includes 7,445 shares subject to options under the 1993
Directors Option Plan and 609 shares of Common Stock subject to
restrictions under the 1993 Directors Recognition Plan.
(6) Includes 7,445 shares subject to options under the 1993
Directors Option Plan and 609 shares of Common Stock subject to
restrictions under the 1993 Directors Recognition Plan.
(7) Includes 11,048 shares subject to options under the 1993
Directors Option Plan and 903 shares of Common Stock subject to
restrictions under the 1993 Directors Recognition Plan.
(8) Includes 194 shares subject to options granted pursuant to the
1993 Directors Option Plan.
(9) Includes 33,860 shares subject to options under the 1993
Incentive Stock Option Plan and 3,136 shares of Common Stock subject to
restrictions under the 1993 Employee Recognition Plan.
(10) Includes 21,340 shares subject to options under the 1993
Incentive Stock Option Plan and 1,759 shares of Common Stock subject to
restriction under the 1993 Employee Recognition Plan.
</TABLE>

The business experience of each of the above directors for at
least the past five years is as follows:

Howard K. Thompson is Chairman of the Board of the Company and has
been Chairman of the Bank or Company since 1989. He has been a
director of the Bank or Company for 23 years, and was elected Chairman
in April 1989. Mr. Thompson, currently retired, is the former
President of Thompson Industries, Inc.

Lenwood M. Ivey is a special consultant to the Mayor's Office of
Baltimore City. He is also President of The Baltimore City Foundation,
a Board member of the Office of Enterprise Development, a member of the
Baltimore Urban League and NAACP, and a member of the Maryland Chapter
of the National Association of Community Development. Mr. Ivey is a
member of the Audit, Budget and Commercial Income Producing Loan
Committees.

Betty J. Stull is presently retired. She has been affiliated with
the Bank or Company since 1951, and is a member of the audit and
executive compensation committees.

David L. Pippenger is Senior Attorney for Amoco Corporation. He
is chairman of the executive compensation committee and a member of the
executive, audit and delinquent loan committees.

Jimmie T. Noble has been a partner in the local certified public
accounting firm of Sturgill and Associates since April 1994. From
September 1973 to March 1994, Mr. Noble was affiliated with Grant
Thornton, an international certified public accounting firm in which he
became a partner in August 1980. He is chairman of the audit and
budget committees, and a member of the executive compensation
committee.

A. Bruce Tucker is President and Chief Executive Officer of the
Company and has been President of the Bank since October 1981, and was
named Chief Executive Officer of the Bank in January 1985. He has been
an employee of the Bank or Company since 1966. He is a member of the
Neighborhood Housing Services of America, Housing Task Force on Housing
Opportunities, and a Director of Harbel Housing Partnership.

Joseph M. Solomon has been employed by the Bank or Company since
1972. He was elected Executive Vice President in 1985, appointed Chief
Operating Officer in 1990, and elected to the Board in 1990. He is a
Director and past Chairman of the Maryland League of Financial
Institutions, a Director of the Maryland Mortgage Bankers Association,
a Director of Baltimore Corporation for Housing Partnerships, and a
Director of the Maryland Chapter, Neighborhood Housing Services of
America.

Executive Officers Who Are Not Directors

The following table sets forth certain information as of July 31,
1996 regarding the executive officers of the Company who are not also
directors.

<TABLE>
<CAPTION>
Name Age Position with the Bank
<S> <C> <C>
Mark S. Barker 43 Senior Vice President

Howard I. Scaggs, III 51 Senior Vice President

James M. Uveges 46 Senior Vice President and
Chief Financial Officer
</TABLE>

The business experience of each of the above executive officers
for at least the past five years is as follows:

Mark S. Barker has been employed by the Bank or Company since
1974, and presently serves as Senior Vice President of the Savings
Division and Branch Operations. Mr. Barker serves as an officer or
director of various community and charitable organizations.

Howard I. Scaggs, III, has been employed by the Bank or Company
since 1965, and presently serves as Senior Vice President of the
Appraisal/Construction Division.

James M. Uveges has been employed by the Bank or Company since
March 1990, and presently serves as Senior Vice President/Chief
Financial Officer. Prior to joining the Bank, Mr. Uveges was Senior
Manager for over nine years at an international certified public
accounting firm. He is a Director of the United Way of Central
Maryland, and past President and member of the Central Maryland Chapter
of Maryland Association of CPAs.

Ownership Reports by Officers and Directors

The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act. The officers and directors of the Company and beneficial
owners of greater than 10% of the Common Stock ("10% beneficial
owners") are required to file reports on Forms 3, 4 and 5 with the SEC
disclosing beneficial ownership and changes in beneficial ownership of
the Common Stock. SEC rules require disclosure in the Company's Annual
Report on Form 10-K of the failure of an officer, director or 10%
beneficial owner of the Common Stock to file a Form 3, 4 or 5 on a
timely basis. Based on the Company's review of such ownership
reports, no officer, director or 10% beneficial owner of the Company
failed to file ownership reports on a timely basis for the fiscal year
ended July 31, 1996.

Meetings and Committees of the Board of Directors

The business of the Company's Board of Directors is conducted
through meetings and activities of the Board and its committees.
During the year ended July 31, 1996, the Board of Directors held twelve
regular meetings. During the year ended July 31, 1996, no director
attended fewer than 75 percent of the total meetings of the Board of
Directors and committees on which such director served.

The Executive Committee of the Board of Directors consists of
Howard K. Thompson, A. Bruce Tucker and David L. Pippenger, and meets
as necessary between meetings of the full Board of Directors. All
actions of the Executive Committee must be ratified by the full Board
of Directors. The Executive Committee met once during the fiscal year
ended July 31, 1996.

The Compliance/Audit Committee of the Company consists of all of
the members of the Board of Directors who are not also officers of the
Company. The Compliance/Audit Committee met three times during the
fiscal year ended July 31, 1996. The Compliance/Audit Committee meets
on a quarterly basis. The Company's Internal Auditor and General
Counsel also meet with and provide the Committee with reports and
findings regarding the Company's compliance policies and procedures,
departmental internal controls, and operating procedures.

The Nominating Committee consists of directors David L. Pippenger,
Chairman Jimmie T. Noble and A. Bruce Tucker, and meets as needed at
the request of the Chairman of the Board. The Nominating Committee met
once during the fiscal year ended July 31, 1996.

In addition to the committees described above, the Company has
established other committees whose members consist of directors and
officers of the Company. These committees include: the Asset/Liability
Pricing Committee; the Budget Committee; the Branch Operations
Committee; the Investment Committee; the Strategic Planning Committee;
the Commercial Income Producing Loan Committee; the Residential Loan
Committee; the Delinquent Loan Committee; the Pension Committee; the
Executive Compensation Committee; the Director Search Committee; and
the Community Reinvestment Committee.

Directors' Compensation

Cash Compensation. Members of the Boards of Directors of the
Company and Bank each received $8,400 during the fiscal year ended July
31, 1996, plus $200 each for each meeting attended. The Chairman of
the Board received an additional $16,600. Members of the Board
committees were paid $200 for each meeting attended during the fiscal
year ended July 31, 1996. The Company paid a total of $78,790 in
directors' and committee fees for the year ended July 31, 1996.
Officers who are also directors of the Company receive no additional
compensation or fees for serving as directors of the Company.

1993 Directors Option Plan. In 1993, the Board of Directors of
the Bank adopted the 1993 Stock Option Plan for Outside Directors (the
"1993 Directors Option Plan"), which was approved by the Bank's
stockholders at the 1993 Annual Meeting. Under the 1993 Directors
Option Plan, options to purchase 17,054, 7,445, 11,048 and 7,445 shares
of Common Stock (as adjusted) were granted to directors Thompson,
Ivey, Pippenger, and Stull, respectively. Additionally, on September
19, 1996, options to purchase 608, 271, 333, 300 and 234 shares were
awarded to directors Thompson, Ivey, Pippenger, Stull and Noble. The
exercise price of the options is equal to the fair market value of the
shares underlying such option on the date the option is granted, or
$5.15 per share (as adjusted) for options granted on the date of
completion of the Bank's initial stock offering, and $12.50 for options
granted on September 19, 1996. All options granted under the 1993
Directors Option Plan may be exercised from time to time in whole or in
part, and expire upon the earlier of 10 years following the date of
grant or three years following the date the optionee ceases to be a
director. As of July 31, 1996 no options awarded under the 1993
Directors Option Plan had been exercised. The duration and vesting
schedule of such options were not affected by the Conversion, but the
aggregate number of shares and exercise price were adjusted pursuant to
the Exchange Ratio.

1993 Directors Recognition Plan. In 1993, the Board of Directors
of the Bank established the 1993 Recognition and Retention Plan for
Outside Directors (the "1993 Directors Recognition Plan"), which was
approved by the Bank's stockholders at the 1993 Annual Meeting. Under
the 1993 Directors Recognition Plan, the Bank contributed funds to the
1993 Directors Recognition Plan to enable it to acquire 17,460 shares
of Common Stock (as adjusted). Awards are granted in the form of
Common Stock that are restricted by the terms of the 1993 Directors
Recognition Plan ("Restricted Stock"). Under the 1993 Directors
Recognition Plan, 5,573, 2,434, 3,612 and 2,434 shares of Restricted
Stock (as adjusted) were awarded to directors Thompson, Ivey,
Pippenger, and Stull, respectively. Restricted Stock is
nontransferable and nonassignable. Additionally, on September 19,
1996, 270, 121, 148, 133 and 104 shares of Common Stock were awarded to
directors Thompson, Ivey, Pippenger, Stull and Noble. Participants in
the 1993 Directors Recognition Plan become vested in the shares of
stock covered by an award, and all restrictions lapse, at a rate of 25%
per year commencing one year from the date of the award; provided,
however, that in the case of a Director age 70 or older, the award will
become fully vested at the end of 12 months of consecutive service
after the date of the award. Awards to non-employee directors become
fully vested upon a director's disability, death, or following a
termination of service in connection with a change in control of the
Bank or the Company. The holders of Restricted Stock have the right to
vote such shares during the restricted period. In the Conversion,
Restricted Stock was converted into restricted shares of Common Stock
of the Company pursuant to the Exchange Ratio.

Executive Compensation

The Company has not paid any compensation to its executive
officers since its formation. However, the Company does reimburse the
Bank for services performed on behalf of the Company by its officers.
The Company does not presently anticipate paying any compensation to
such persons until it becomes actively involved in the operations or
acquisition of businesses other than the Bank.

The following table sets forth for the fiscal years ended July 31,
1996, 1995, and 1994, certain information as to the total remuneration
paid by the Company to the Chief Executive Officer and Chief Operating
Officer of the Company as of July 31, 1996 ("Named Executive
Officers").

Annual Compensation
Long-Term
Compensation

Name and
principal
position
(1)

Yea
r
End
ed
7/3
1

Salar
y
(2)

Bonu
s

Other
Annual
Compen
sation

Awards

Payo
uts

All
Other
Compen
sation
(5)

Restr
icted
Stock
Award
s(3)
Opti
ons/
SARS
(#)
(4)

LTIP
Payo
uts

A. Bruce
Tucker

President
and Chief
Executive
Officer
199
6
199
5
199
4
$147,
903
140,8
60
140,2
08
$

64,670

36,86
0
$

$24,991
21,000
20,000

Joseph M.
Solomon

Executive
Vice
President
and Chief
Operating
Officer
199
6
199
5
199
4

$
107,9
07
103,7
57
103,6
18
$

36,260

21,34
0
$

$
6,065
5,530
5,369

(1) No other executive officer received salary and bonuses that in
the aggregate exceeded $100,000.
(2) Includes amounts deferred at the election of the Named
Executive Officers pursuant to the Bank's 401(k) Plan and amounts
awarded pursuant to the Bank's Deferred Compensation Plan.
(3) Includes all shares of restricted stock awarded on November 3,
1993, pursuant to the 1993 Employee Recognition Plan, which shares vest
in four annual equal increments commencing on November 3, 1994.
Dividends on such shares accrue and are paid to the recipient when the
shares vest. The value of such shares was determined by multiplying
the number of shares awarded by $10.00, the price at which the Bank's
common stock was sold in the Bank's initial stock offering on November
3, 1993, the date of such awards. The fair market value of Restricted
Stock of Mr. Tucker and Mr. Solomon on July 31, 1996, based on the
price of the last sale reported on the Nasdaq National Market on such
date, or $10.125 per share, was approximately $127,018 and $71,219,
respectively. The 1993 Employee Recognition Plan was approved by the
Bank's stockholders at the Bank's 1993 Annual Meeting of Stockholders.
(4) Reflects stock options awarded in the Bank's November 3, 1993
initial stock offering pursuant to the 1993 Incentive Stock Option
Plan. The options vest in four equal annual increments commencing on
November 3, 1994, and the exercise price of such options is $5.15 per
share, the assumed fair market value of the underlying common stock on
the date of grant (as adjusted).
(5) Includes payments made on behalf of the Named Executive Officer
pursuant to the Company's life insurance plan maintained for executive
officers. The Company also provides certain members of senior
management with the use of an automobile and other personal benefits
which have not been included in the table. The aggregate amount of
such other benefits did not exceed the lesser of $50,000 or 10% of each
named person's cash compensation.

Executive Compensation Committee Interlocks and Insider
Participation. During the fiscal year ended July 31, 1996, directors
David L. Pippenger, Chairperson Betty J. Stull and Jimmie T. Noble
served on the Executive Compensation Committee.

Report of the Compensation Committee on Executive Compensation.
The Executive Compensation Committee evaluates the performance of the
Chief Executive Officer and Chief Operating Officer, and reviews and
approves increases to base compensation as well as the level of bonus,
if any, to be awarded. The Executive Compensation Committee also
approves any perquisites payable to such officers. In addition, the
Executive Compensation Committee determines the budget for salaries for
other executive officers, and reviews the report of the Chief Executive
Officer regarding the allocation of compensation of such other
officers. In determining whether the base salary of the Chief
Executive Officer and Chief Operating Officer should be increased, the
budget for other executive officers and whether to approve the Chief
Executive Officer's allocation of such amounts, the Executive
Compensation Committee takes into account individual performance,
performance of the Company and information regarding compensation paid
to executives performing similar duties for financial institutions in
the Company's market area. The Executive Compensation Committee uses
a peer comparison employing at least two published compensation surveys
in determining the salary and benefits of the Chief Executive Officer
and Chief Operating Officer.

While the Executive Compensation Committee does not use strict
numerical formulas to determine changes in compensation for the Chief
Executive Officer and Chief Operating Officer, and while it weighs a
variety of different factors in its deliberations, it has emphasized
and will continue to emphasize earnings, profitability and return on
average assets as factors in setting the compensation of such officers.
Other nonquantitative factors considered by the Committee in fiscal
1996 included general management oversight of the Company, the quality
of communication with the Board of Directors, and the productivity of
employees. Finally, the Committee considered the standing of the
Company with customers and the community, as evidenced by the level of
customer/community complaints and compliments. While each of the
quantitative and nonquantitative factors described above was considered
by the Committee, such factors were not assigned a specific weight in
evaluating the performance of the Chief Executive Officer and Chief
Operating Officer. Rather, all factors were considered, and based upon
the effectiveness of such officers in addressing each of the factors,
and the range of compensation paid to officers of peer institutions,
the Committee approved an increase in the base salary of the Chief
Executive Officer of 5%.

The above report has been provided by the current members of the
Executive Compensation Committee: Directors Pippenger, Stull and
Noble.

Employment Agreements. The Bank has entered into employment
agreements with Messrs. Tucker, Solomon, Uveges and Barker.
Mr. Tucker's employment agreement provides for a term of up to three
years, and Messrs. Solomon, Uveges and Barker's employment agreements
provide for a term of up to two years. Commencing on the first
anniversary date and continuing each anniversary date thereafter, the
Board of Directors may extend each agreement for an additional year
such that the remaining terms shall be up to three years and two years,
respectively, unless written notice of nonrenewal is given by the Board
of Directors after conducting a performance evaluation. The agreements
provide that the base salary of the executive will be reviewed
annually. In addition to the base salary, the agreements provide that
the executive is to receive all benefits provided to permanent full
time employees of the Bank, including among other things, disability
pay, participation in stock benefit plans and other fringe benefits
applicable to executive personnel. The agreements permit the Bank to
terminate the executive's employment for cause at any time.
Termination for cause is defined in the employment agreements to mean
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 or final cease-and-desist
order, or material breach of the employment agreement. In the event
the Bank chooses to terminate the executive's employment for reasons
other than for cause, or upon the termination of the executive's
employment for reasons other than a change in control, as defined, or
in the event of the executive's resignation from the Bank upon (i)
failure to be reelected to his current office, (ii) a material change
in his functions, duties or responsibilities, (iii) relocation of his
principal place of employment, (iv) the liquidation or dissolution of
the Bank or the Company, or (v) a breach of the agreement by the Bank,
the executive, or in the event of death, his beneficiaries, would be
entitled to receive an amount equal to the greater of the remaining
payments due under the remaining term of the agreement or three times
the average base salary of Mr. Tucker, or two times the average base
salary of Messrs. Solomon, Uveges and Barker, including bonuses and
other cash compensation paid, and the amount of any benefits received
pursuant to any employee benefit plans maintained by the Bank. A
change in control is defined in the employment agreement generally to
include (i) a plan of reorganization, merger or sale of substantially
all of the assets of the Bank or the Company or similar transaction in
which the Bank or the Company is not the resulting entity; (ii) certain
changes in the Board of Directors of the Bank or the Company; (iii) a
change of control within the meaning of the Home Owners' Loan Act and
the rules and regulations thereunder; and (iv) an event that would be
required to be reported in response to Item 1(a) of the Current Report
on Form 8-K.

If termination, voluntary or involuntary, follows a change in
control of the Company or the Bank, as defined in the agreement, the
executive or, in the event of his death, his beneficiaries, would be
entitled to a payment equal to the greater of (i) the payments due
under the remaining term of the agreement or (ii) in the case of
Mr. Tucker 2.99 times his average annual compensation over the five
years preceding termination, and in the case of Messrs. Solomon, Uveges
and Barker, two times average annual compensation over the five years
preceding termination. The Bank would also continue the executive's
life, health, and disability coverage for the remaining unexpired term
of the agreement to the extent allowed by the plan or policies
maintained by the Bank from time to time.

Each employment agreement provides that for a period of one year
following termination, the executive agrees not to compete with the
Bank in any city, town or county in which the Bank maintains an office
or has filed an application to establish an office.

Pension Plan. The Company makes available to all full-time
employees who have attained the age of 21 and completed one year of
service with the Company, a defined benefit noncontributory pension
plan. The pension plan provides for monthly payments to or on behalf
of each covered employee upon the employee's retirement at age 65.
These payments are calculated in accordance with a formula based on the
employee's "average monthly compensation," which is defined as the
highest average of total compensation for the last five consecutive
calendar years of employment.

The following table illustrates annual pension benefits at age 65
under the most advantageous plan provisions available at various levels
of compensation and years of service.

Years of Benefit Service
Average Salary 5 10 15 20
25 30 35

$ 20,000 $ 1,100 $ 2,200 $ 3,300 $
4,400 $ 5,500 $ 6,600 $ 7,700
$ 30,000 1,650 3,300 4,950
6,600 8,250 9,900 11,550
$ 50,000 2,750 5,500 8,250
11,000 13,750 16,500 19,250
$ 75,000 4,125 8,250 12,375
16,500 20,625 24,750 28,875
$ 100,000 5,500 11,000 16,500
22,000 27,500 33,000 38,500
$ 125,000 6,875 13,750 20,625
27,500 34,375 41,250 48,125
$ 150,000 8,250 16,500 24,750
33,000 41,250 49,500 57,750

Under the Plan, the Company makes an annual contribution for the
benefit of eligible employees computed on an actuarial basis. Total
pension expenses for the year ended July 31, 1996, were $110,336.
Employee benefits under the plan do not vest until five years of
credited service. After five years, benefits under the plan are 100%
vested. As of July 31, 1996, Mr. Tucker and Mr. Solomon had 30 and 24
years of creditable service, respectively, under the pension plan.

1993 Stock Option Plan. The Board of Directors of the Bank
adopted the American National Savings Bank, F.S.B. 1993 Incentive Stock
Option Plan (the "1993 Incentive Stock Option Plan") in connection with
the Bank's initial stock offering. Senior officers and certain key
employees are eligible to participate in the 1993 Incentive Stock
Option Plan. The 1993 Incentive Stock Option Plan authorizes the grant
of the equivalent of 122,220 stock options (as adjusted). Pursuant to
the 1993 Incentive Stock Option Plan, grants may be made of (i) options
to purchase Common Stock intended to qualify as incentive stock options
under Section 422 of the Code, (ii) options that do not so qualify
("non-statutory options") and (iii) limited rights (described below)
that are exercisable only upon a change in control of the Bank or the
Company. The grant of awards under the 1993 Incentive Stock Option
Plan is determined by a committee of the Board of Directors consisting
of all non-employee Directors (the "Option Committee"). The Option
Committee presently consists of four directors, none of whom is
eligible to receive options under the 1993 Incentive Stock Option Plan.
Set forth below is information relating to options held by the Named
Executive Officers as of July 31, 1996. Also reported are the values
for "in-the-money" options which represent the positive spread between
the exercise price of any such existing options and $10.125, the last
sale price of the Common Stock as quoted on the Nasdaq National Market
as of July 31, 1996. No options were exercised by the Named Executive
Officers in fiscal 1996.

Number of Unexercised Options Value of In-the-
Money Options
Name at July 31, 1996
at July 31, 1996
Exercisable (#) Unexercisable (#)
Exercisable ($) Unexercisable ($)

A. Bruce Tucker 27,645 9,215 $
137,533 $ 45,845
Joseph M. Solomon 16,005 5,335 79,625
26,542

Transactions With Certain Related Persons. Federal law requires
that all loans or extensions of credit to executive officers and
directors must be made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public and must not involve
more than the normal risk of repayment or present other unfavorable
features. In addition, loans made to a director or executive officer
in excess of the greater of $25,000 or 5% of the Bank's capital and
surplus (up to a maximum of $500,000) must be approved in advance by a
majority of the disinterested members of the Board of Directors. The
Bank provides loans to its officers, directors, and employees to
purchase or refinance personal residences as well as consumer loans.
Loans made to officers, directors, and executive officers are made in
the ordinary course of business on the same terms and conditions as the
Bank would make to any other customer in the ordinary course of
business.

The Bank intends that all transactions between the Bank and its
executive officers, directors, holders of 10% or more of the shares of
any class of its common stock and affiliates thereof, will contain
terms no less favorable to the Bank than could have been obtained by it
in arm's-length negotiations with unaffiliated persons and will be
approved by a majority of independent outside directors of the Bank not
having any interest in the transaction. At July 31, 1996, the Bank had
loans with an aggregate balance of $36,824 outstanding to its executive
officers and directors. All such loans were made in the ordinary
course of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and did not involve more than the
normal risk of collectibility or present other unfavorable features.

Performance Graph

Set forth hereunder is a performance graph comparing (a) the total
return on the Common Stock for the period beginning with the last trade
on October 31, 1995, the first day the Common Stock traded on the
Nasdaq National Market, through July 31, 1996, (b) the cumulative total
return on stocks included in the Nasdaq Composite Index from the close
of business on October 31, 1995, though July 31, 1996, and (c) the
cumulative total return on stocks included in the Nasdaq Bank Index
from the close of business on October 31, 1995, though July 31, 1996.
There can be no assurance that the Company's stock performance will
continue in the future with the same or similar trend depicted in the
graph. The Company will not make or endorse any predictions as to
future stock performance.

<PAGE>
PROPOSAL II APPROVAL OF THE
AMERICAN NATIONAL BANCORP, INC.
1996 STOCK OPTION PLAN

The Board of Directors of the Company has adopted the American
National Bancorp, Inc. 1996 Stock Option Plan (the "Stock Option
Plan"), subject to stockholder approval of the Stock Option Plan at the
Meeting. The following discussion is qualified in its entirety by
reference to the Stock Option Plan, a copy of which is attached hereto
as Appendix A.

Certain directors, officers and employees of the Bank and the
Company will be eligible to participate in the Stock Option Plan. The
Stock Option Plan authorizes the grant of stock options and limited
rights to purchase 218,213 shares, or 10% of the number of shares of
Common Stock issued in the Offering. Pursuant to the Stock Option
Plan, grants may be made of (i) options to purchase Common Stock
intended to qualify as incentive stock options under Section 422 of the
Code, (ii) options that do not so qualify ("nonstatutory options") and
(iii) limited rights (described below) that are exercisable only upon
a change in control of the Bank or the Company. Nonemployee directors
are eligible to receive only nonstatutory options.

Upon approval of the Stock Option Plan, it is expected that the
Stock Benefits Committee, consisting of at least two non-employee
members of the Board of Directors of the Company or all members of the
Board of Directors of the Company, will grant options (with limited
rights in the case of options granted to employees) to purchase the
following number of shares to Named Executive Officers, executive
officers as a group, non-employee directors, and employees as a group.

Number of Shares
Name and to be Received Upon
Principal Position Exercise of Options (1)

A. Bruce Tucker, President 40,000
and Chief Executive Officer
Joseph M. Solomon, Executive Vice President 25,466
and Chief Operating Officer
All executive officers as a group (5 persons) 108,622
Howard K. Thompson, Chairman of the Board 21,636
and Director (2)
Lenwood M. Ivey, Director (2) 9,677
Betty J. Stull, Director (2) 11,868
David L. Pippenger, Director (2) 10,672
Jimmie T. Noble, Director (2) 8,340
All non-employee directors 62,191
as a group (5 persons) (2)
All employees, not including 24,000
executive officers, as a
group (7 persons)
_____________________________
(1) The value of the stock options is not determinable because
the exercise price will be equal to the fair market value of the
Company's Common Stock at the effective time of the award.
(2) All options granted to non-employee directors will be
nonstatutory stock options.

In granting options, the Stock Benefits Committee considers
factors such as salary, length of employment with the Company and the
Bank, and the employee's overall performance. All stock options will
be exercisable in five equal annual installments of 20% commencing with
the vesting of the first installment one year from the date of grant,
and succeeding installments on each anniversary of the date of grant;
provided, however, that all options will be 100% exercisable in the
event the optionee terminates his service due to normal retirement,
death or disability, or in the event of a change in control of the
Company or the Bank. Options must be exercised within 10 years from
the date of grant. Stock options may be exercised up to one year
following termination of service or such later period as determined by
the Stock Benefits Committee. The exercise price of the options will
be at least 100% of the fair market value of the underlying Common
Stock at the time of the grant. The last sale price of the Company's
Common Stock on the Record Date, as quoted on the Nasdaq National
Market was $12.50 per share. The exercise price may be paid in cash or
Common Stock. Common Stock issued in connection with the exercises of
options may be Treasury Shares, shares obtained from open-market
purchases or authorized but unissued shares. The issuance of
authorized but unissued shares of Common Stock or Treasury shares will
have a dilutive effect on the Common Stock holdings of existing
stockholders.

Incentive stock options will only be granted to employees of the
Bank and/or the Company. Nonemployee directors will be granted
nonstatutory stock options. No stock option granted in connection with
the Stock Option Plan will be eligible to be treated as an incentive
stock option if it is exercised more than three months after the date
on which the optionee ceases to perform services for the Bank or the
Company, except that in the event of death or disability, a stock
option may be eligible to be treated as an incentive stock option if it
is exercised within one year; provided, however, that if an optionee
ceases to perform services for the Bank or the Company due to normal
retirement or following a change in control (as defined in the Stock
Option Plan), any incentive stock options exercised more than three
months following the date the optionee ceases to perform services shall
be treated as a nonstatutory stock option as described above.

Upon the exercise of "limited rights" in the event of a change in
control, the optionee will be entitled to receive a lump sum cash
payment (or in certain cases, shares of Common Stock) equal to the
difference between the exercise price of the option and the fair market
value of the shares of Common Stock subject to the option on the date
of exercise of the right in lieu of purchasing the stock underlying the
option. In the event of death or disability, the Bank or the Company,
if requested by the optionee or beneficiary, may elect, in exchange for
the option, to pay the optionee, or beneficiary in the event of death,
the amount by which the fair market value of the Common Stock exceeds
the exercise price of the option on the date of the optionee's
termination of service for death or Disability.

The purpose of stockholder approval for the Stock Option Plan will
be to qualify the Stock Option Plan for the granting of incentive stock
options and to satisfy the listing requirements for the Common Stock on
the Nasdaq National Market.

The Board of Directors may amend, suspend or terminate the Stock
Option Plan except that such amendments may not impair awards
previously granted.

The exercise of options will have a dilutive effect on the
ownership interests of existing stockholders. Further, the exercise of
options may render more difficult or discourage, a merger, tender offer
or other takeover attempt even if such transaction would be beneficial
to stockholders generally, the assumption of control by a holder of a
large block of the Company's securities, a proxy contest or the removal
of incumbent management.

Federal Income Tax Consequences

Under present Federal tax laws, options granted and exercised
under the Stock Option Plan will result in the following tax
consequences:

1. The grant of an option will not by itself result in the
recognition of taxable income to the participant or entitle the Company
to a deduction at the time of such grant.

2. The exercise of an option which is an "Incentive Stock
Option" within the meaning of Section 422 of the Internal Revenue Code
generally will not, by itself, result in the recognition of taxable
income to the participant or entitle the Company to a deduction at the
time of such exercise. However, the difference between the exercise
price and the fair market value of the option shares on the date of
exercise is an item of tax preference which may, in certain situations,
trigger the alternative minimum tax. The alternative minimum tax is
incurred only when it exceeds the regular income tax. The participant
will recognize capital gain or loss upon resale of the shares received
upon such exercise, provided that such shares are held for at least one
year after the transfer of shares to the participant or two years after
the grant of the option, which is later. Generally, if the shares are
not held for that period, the participant will recognize ordinary
income upon disposition in an amount equal to the difference between
the exercise price and the fair market value on the date of exercise,
or, if less, the sale proceeds of the shares acquired pursuant to the
option.

3. The exercise of a nonstatutory stock option will result in
the recognition of ordinary income by the participant on the date of
exercise in an amount equal to the difference between the exercise
price and the fair market value on the date of exercise of the Common
Stock acquired pursuant to the option.

4. The Company will be allowed a tax deduction equal to the
amount of taxable ordinary income recognized by the participant at the
time the participant recognizes such ordinary income.

ALL PROXIES MUST BE SIGNED AND RETURNED TO THE COMPANY IN ORDER
FOR A STOCKHOLDER'S VOTE TO BE COUNTED. UNLESS MARKED TO THE CONTRARY,
THE SHARES REPRESENTED BY THE ENCLOSED, SIGNED PROXY WILL BE VOTED FOR
THE APPROVAL OF THE 1996 STOCK OPTION PLAN.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
1996 STOCK OPTION PLAN.

PROPOSAL III APPROVAL OF THE
AMERICAN NATIONAL BANCORP, INC.
1996 RECOGNITION AND RETENTION PLAN

Subject to stockholder approval at the Annual Meeting, the Bank
and the Company have established the 1996 Recognition and Retention
Plan (the "Recognition Plan") as a method of providing certain
employees and non-employee directors of the Bank or the Company with a
proprietary interest in the Company in a manner designed to encourage
such persons to remain with the Bank and the Company. The following
discussion is qualified in its entirety by reference to the Recognition
Plan, which is attached hereto as Appendix B.

The Bank or the Company intend to contribute sufficient funds for
the Recognition Plan to acquire authorized but unissued shares of
Common Stock of the Company or purchase Common Stock in the open market
in an aggregate amount of 87,285 shares of Common Stock, or 4% of the
shares issued in the Offering. In the event that the Recognition Plan
acquires shares of Common Stock from authorized but unissued shares or
treasury shares, existing stockholders will experience dilution of
their ownership interest. Shares of Common Stock restricted by the
terms of the Recognition Plan will be awarded in the following amounts
to Named Executive Officers, executive officers as a group, non-
employee directors, and employees as a group.

<PAGE>
Awards to Officers, Employees and Non-Employee Directors

Name and
Principal Position Dollar Value (1) Number of
Shares

A. Bruce Tucker, President $ 250,000 20,000
and Chief Executive Officer
Joseph M. Solomon, Executive 146,250 11,700
Vice President and Chief
Operating Officer
All executive officers as a group 665,625 53,250
(5 persons)
Howard K. Thompson, Chairman 108,175 8,654
of the Board and Director
Lenwood M. Ivey, Director 48,362 3,869
Betty J. Stull, Director 53,362 4,269
David L. Pippenger, Director 59,338 4,747
Jimmie T. Noble, Director 41,738 3,339
All non-employee directors 310,975 24,878
as a group (5 persons)
All employees, not including 43,750 3,500
executive officers, as a
group (7 persons)

_____________________________
(1) Based on the last sale price on the Record Date, as quoted
on the Nasdaq National Market, or $12.50 per share.

The Stock Benefits Committee, composed of the non-employee
directors of the Bank and the Company, will administer the Recognition
Plan, and make awards to officers and employees pursuant to the
Recognition Plan. However, awards to outside directors will be fixed
by the terms of the Recognition Plan. Awards of Common Stock that are
restricted by the Recognition Plan ("Restricted Stock") are
nontransferable and nonassignable. Participants in the Recognition
Plan will earn (become vested in) shares of Restricted Stock covered by
an award and all restrictions will lapse at a rate of 20% per year
commencing with the first lapse of restrictions on the first trading
day of 1998, and succeeding installments being earned on the first
trading day of the following year; provided, however, that the Stock
Benefits Committee may accelerate or extend the earnings rate on any
awards made to officers and employees after the effective date of the
Recognition Plan. Awards to executive officers and outside directors
become fully vested upon termination of employment or service due to
normal retirement, death or disability, or following a termination of
employment or service in connection with a change in control (as
defined therein) of the Bank or the Company. Upon termination of
employment or service for any other reason, unvested shares are
forfeited. When a participant's shares become vested in accordance
with the Recognition Plan, the participant will recognize income equal
to the fair market value of the Restricted Stock so vested at that
time, unless the participant has made an irrevocable election to be
taxed on the shares of Restricted Stock awarded to him in the year of
the award. The amount of income recognized by a participant will be a
deductible expense of the Company for Federal income tax purposes.
After Restricted Stock has been granted, but before the Restricted
Stock has vested, the recipient shall receive any cash dividends paid
with respect to such shares. Stock dividends declared by the Company
and paid on shares that have not been earned shall be subject to the
same restrictions as the Restricted Stock until such shares are earned.
Prior to vesting, recipients of awards under the Recognition Plans may
vote the shares of Restricted Stock allocated to them.

Restricted Stock awarded under the Recognition Plan will qualify
for certain exemptive treatment from the short-swing profit provisions
of Section 16(b) of the Exchange Act.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
RECOGNITION PLAN.

PROPOSAL IV RATIFICATION OF APPOINTMENT OF AUDITORS

The Board of Directors of the Company has approved the engagement
of KPMG Peat Marwick LLP to be the Company's auditors for the 1997
fiscal year, subject to the ratification of the engagement by the
Company's stockholders. At the Meeting, the stockholders will consider
and vote on the ratification of the engagement of KPMG Peat Marwick LLP
for the Company's fiscal year ending July 31, 1997. A representative
of KPMG Peat Marwick LLP is expected to attend the Meeting to respond
to appropriate questions and to make a statement if he so desires.

In order to ratify the selection of KPMG Peat Marwick LLP as the
auditors for the 1997 fiscal year, the proposal must receive at least
a majority of the votes cast, either in person or by proxy, in favor of
such ratification. The Board of Directors recommends a vote "FOR" the
ratification of KPMG Peat Marwick LLP as auditors for the 1997 fiscal
year.

STOCKHOLDER PROPOSALS

In order to be eligible for inclusion in the Company's proxy
materials for next year's Annual Meeting of Stockholders to be held in
November 1997, any stockholder proposal to take action at such meeting
must be received at the Company's executive office, 211 North Liberty
Street, Baltimore, Maryland, no later than June 20, 1997. Any such
proposals shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934.

OTHER MATTERS

The Board of Directors is not aware of any business to come before
the Meeting other than the matters described above in the Proxy
Statement. However, if any matters should properly come before the
Meeting, it is intended that holders of the proxies will act in
accordance with their best judgment.

MISCELLANEOUS

The cost of solicitation of proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy materials to the beneficial owners of Common Stock. The
Company has retained Regan & Associates, Inc. to assist in the
solicitation of proxies and to send proxy materials to brokerage houses
and other custodians, nominees and fiduciaries for transmittal to
beneficial holders of the Common Stock for a fee of $5,000, plus
expenses. In addition to solicitations by mail, directors, officers
and regular employees of the Company may solicit proxies personally or
by telegraph or telephone without additional compensation. The
Company's 1996 Annual Report to Stockholders has been mailed to all
stockholders of record as of September 27, 1996. Such Annual Report is
not to be treated as a part of the proxy solicitation material nor as
having been incorporated herein by reference.
<PAGE>
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED JULY 31, 1996, WILL BE FURNISHED WITHOUT
CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN
REQUEST TO BETTY J. STULL, CORPORATE SECRETARY, AMERICAN
NATIONAL BANCORP, INC., 211 NORTH LIBERTY STREET, BALTIMORE,
MARYLAND 21201.

BY ORDER OF THE BOARD OF DIRECTORS

Betty J. Stull
Secretary
Baltimore, Maryland
October 18, 1996

<PAGE>
AMERICAN NATIONAL BANCORP, INC.

ANNUAL MEETING OF STOCKHOLDERS
November 21, 1996

The undersigned hereby appoints the proxy committee, with full
powers of substitution, to act as attorneys and proxies for the
undersigned to vote all shares of capital stock of American National
Bancorp, Inc. (the "Company") which the undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting") to be held at the
Company's main office, 211 North Liberty Street, Baltimore, Maryland on
November 21, 1996 at 4:00 p.m. and at any and all adjournments and
postponements thereof.

1. The election as directors of all nominees listed below (except
as marked to the contrary):

FOR VOTE WITHHELD

INSTRUCTION: To withhold your vote for any individual
nominee, strike a line in that nominee's name below.

HOWARD K. THOMPSON (three year term) BETTY J. STULL (three
year term)

LENWOOD M. IVEY (three year term)

2. The approval of the American National Bancorp, Inc. 1996 Stock
Option Plan.

FOR AGAINST ABSTAIN

3. The approval of the American National Bancorp, Inc. 1996
Recognition and Retention Plan.

FOR AGAINST ABSTAIN

4. The ratification of the appointment of KPMG Peat Marwick
LLP as auditors for the Company for the fiscal year ending July 31,
1997.

FOR AGAINST ABSTAIN

In their discretion, the proxies are authorized to vote on any
other business that may properly come before the Meeting or any
adjournment or postponement thereof.

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSALS AND
EACH OF THE NOMINEES LISTED ABOVE. IF ANY OTHER BUSINESS IS
PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE MEETING.

The Board of Directors recommends a vote "FOR" the proposals
and the election of the nominees listed above.

(Continued and to be SIGNED on Reverse Side)

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

Should the undersigned be present and choose to vote at the
Meeting or at any adjournments or postponements thereof, and after
notification to the Secretary of the Company at the Meeting of the
stockholder's decision to terminate this proxy, then the power of such
attorneys or proxies shall be deemed terminated and of no further force
and effect. This proxy may also be revoked by filing a written notice
of revocation with the Secretary of the Company or by duly executing a
proxy bearing a later date.

The undersigned acknowledges receipt from the Company, prior to
the execution of this proxy, of notice of the Meeting, a Proxy
Statement and an Annual Report to Stockholders.

Dated: , 1996

Signature of Stockholder
Please sign exactly
as your name(s) appear(s) to the left. When signing as attorney,
executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.

PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE

APPENDIX A

AMERICAN NATIONAL BANCORP, INC.

1996 STOCK OPTION PLAN

1. Purpose

The purpose of the American National Bancorp, Inc. 1996 Stock
Option Plan (the "Plan") is to advance the interests of the Company and
its stockholders by providing Key Employees and Outside Directors of
the Company and its Affiliates, including American National Savings
Bank, F.S.B., upon whose judgment, initiative and efforts the
successful conduct of the business of the Company and its Affiliates
largely depends, with an additional incentive to perform in a superior
manner as well as to attract people of experience and ability.

2. Definitions

"Affiliate" means any "parent corporation" or "subsidiary
corporation" of the Company or the Bank, as such terms are defined in
Section 424(e) or 424(f), respectively, of the Code, or a successor to
a parent corporation or subsidiary corporation.

"Award" means an Award of Non-Statutory Stock Options, Incentive
Stock Options, and/or Limited Rights granted under the provisions of
the Plan.

"Bank" means American National Savings Bank, F.S.B., or a
successor corporation.

"Beneficiary" means the person or persons designated by a
Participant to receive any benefits payable under the Plan in the event
of such Participant's death. Such person or persons shall be
designated in writing on forms provided for this purpose by the
Committee and may be changed from time to time by similar written
notice to the Committee. In the absence of a written designation, the
Beneficiary shall be the Participant's surviving spouse, if any, or if
none, his estate.

"Board" or "Board of Directors" means the board of directors of
the Company or its Affiliate, as applicable.

"Cause" means personal dishonesty, willful misconduct, any breach
of fiduciary duty involving personal profit, intentional failure to
perform stated duties, or the willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or a
final cease-and-desist order, any of which results in a material loss
to the Company or an Affiliate.

"Change in Control" of the Bank or the Company means a change in
control of a nature that: (i) would be required to be reported in
response to Item 1(a) of the current report on Form 8-K, as in effect
on the date hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"); or (ii) results in a Change
in Control of the Bank or the Company within the meaning of the Home
Owners Loan Act, as amended ("HOLA"), and applicable rules and
regulations promulgated thereunder, as in effect at the time of the
Change in Control; or (iii) without limitation such a Change in Control
shall be deemed to have occurred at such time as (a) any "person" (as
the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of Company's
outstanding securities except for any securities purchased by the
Bank's employee stock ownership plan or trust; or (b) individuals who
constitute the Board on the date hereof (the "Incumbent Board") cease
for any reason to constitute at least a majority thereof, provided that
any person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for
election by the Company's stockholders was approved by the same
Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (b), considered as though he were a member of
the Incumbent Board; or (c) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the Bank
or the Company or similar transaction in which the Bank or Company is
not the surviving institution occurs; or (d) a proxy statement
soliciting proxies from stockholders of the Company, by someone other
than the current management of the Company, seeking stockholder
approval of a plan of reorganization, merger or consolidation of the
Company or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of securities then
subject to the Plan are to be exchanged for or converted into cash or
property or securities not issued by the Company; or (e) a tender offer
is made for 25% or more of the voting securities of the Company and the
shareholders owning beneficially or of record 25% or more of the
outstanding securities of the Company have tendered or offered to sell
their shares pursuant to such tender offer and such tendered shares
have been accepted by the tender offeror.

"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" means a Committee of the Board consisting of either
(i) at least two Non-Employee Directors of the Company, or (ii) the
entire Board of the Company.

"Common Stock" means shares of the common stock of the Company,
par value $.01 per share.

"Company" means American National Bancorp, Inc., or a successor
corporation.

"Continuous Service" means employment as a Key Employee and/or
service as an Outside Director without any interruption or termination
of such employment and/or service. Continuous Service shall also mean
a continuation as a member of the Board of Directors following a
cessation of employment as a Key Employee. In the case of a Key
Employee, employment shall not be considered interrupted in the case of
sick leave, military leave or any other leave of absence approved by
the Bank or in the case of transfers between payroll locations of the
Bank or between the Bank, its parent, its subsidiaries or its
successor.

"Conversion" means the October 31, 1995, conversion of American
National Bankshares, M.H.C. from the mutual to stock form of
organization.

"Date of Grant" means the actual date on which an Award is
granted by the Committee.

"Director" means a member of the Board.

"Disability" means the permanent and total inability by reason
of mental or physical infirmity, or both, of an employee to perform the
work customarily assigned to him, or of a Director to serve as such.
Additionally, in the case of an employee, a medical doctor selected or
approved by the Board must advise the Committee that it is either not
possible to determine when such Disability will terminate or that it
appears probable that such Disability will be permanent during the
remainder of said employee's lifetime.

"Effective Date" means the date of, or a date determined by the
Board of Directors following, approval of the Plan by the Company's
stockholders.

"Fair Market Value" means, when used in connection with the Common
Stock on a certain date, the reported closing price of the Common Stock
as reported by the Nasdaq stock market (as published by the Wall Street
Journal, if published) on such date, or if the Common Stock was not
traded on the day prior to such date, on the next preceding day on
which the Common Stock was traded; provided, however, that if the
Common Stock is not reported on the Nasdaq stock market, Fair Market
Value shall mean the average sale price of all shares of Common Stock
sold during the 30-day period immediately preceding the date on which
such stock option was granted, and if no shares of stock have been sold
within such 30-day period, the average sale price of the last three
sales of Common Stock sold during the 90-day period immediately
preceding the date on which such stock option was granted. In the
event Fair Market Value cannot be determined in the manner described
above, then Fair Market Value shall be determined by the Committee.
The Committee is authorized, but is not required, to obtain an
independent appraisal to determine the Fair Market Value of the Common
Stock.

"Incentive Stock Option" means an Option granted by the
Committee to a Participant, which Option is designated as an Incentive
Stock Option pursuant to Section 8.

"Key Employee" means any person who is currently employed by the
Company or an Affiliate who is chosen by the Committee to participate
in the Plan.

"Limited Right" means the right to receive an amount of cash
based upon the terms set forth in Section 9.

"Non-Statutory Stock Option" means an Option granted by the
Committee to (i) an Outside Director or (ii) to any other Participant
and such Option is either (A) not designated by the Committee as an
Incentive Stock Option, or (B) fails to satisfy the requirements of an
Incentive Stock Option as set forth in Section 422 of the Code and the
regulations thereunder.

"Non-Employee Director" means, for purposes of the Plan, a
Director who (a) is not employed by the Company or an Affiliate; (b)
does not receive compensation directly or indirectly as a consultant
(or in any other capacity than as a Director) greater than $60,000; (c)
does not have an interest in a transaction requiring disclosure under
Item 404(a) of Regulation S-K; or (d) is not engaged in a business
relationship for which disclosure would be required pursuant to Item
404(b) of Regulation S-K.

"Normal Retirement" means for a Key Employee, retirement at the
normal or early retirement date set forth in the Bank's Employee Stock
Ownership Plan, or any successor plan. Normal Retirement for an
Outside Director means a cessation of service on the Board of Directors
for any reason other than removal for Cause, after reaching 60 years of
age and maintaining at least 10 years of Continuous Service.

"Offering" means the October 31, 1995 subscription offering of
the Common Stock of the Company.

"Outside Director" means a Director of the Company or an
Affiliate who is not an employee of the Company or an Affiliate.

"Option" means an Award granted under Section 7 or Section 8.

"Participant" means a Key Employee or Outside Director of the
Company or its Affiliates who receives or has received an award under
the Plan.

"Termination for Cause" means the termination of employment or
termination of service on the Board caused by the individual's personal
dishonesty, willful misconduct, any breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, or the
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses), or a final cease-and-desist order, any
of which results in material loss to the Company or one of its
Affiliates.

3. Plan Administration Restrictions

The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such
rules and regulations as it deems necessary for the proper
administration of the Plan and to make whatever determinations and
interpretations in connection with the Plan it deems necessary or
advisable. All determinations and interpretations made by the
Committee shall be binding and conclusive on all Participants in the
Plan and on their legal representatives and beneficiaries.

All transactions involving a grant, award or other acquisition
from the Company shall:

(a) be approved by the Company's full Board or by the
Committee;

(b) be approved, or ratified, in compliance with Section 14 of
the Exchange Act, by either: the affirmative vote of the holders of a
majority of the securities present, or represented and entitled to vote
at a meeting duly held in accordance with the laws of the state in
which the Company is incorporated; or the written consent of the
holders of a majority of the securities of the issuer entitled to vote
provided that such ratification occurs no later than the date of the
next annual meeting of shareholders; or

(c) result in the acquisition of an Option or Limited Right
that is held by the Participant for a period of six months following
the date of such acquisition.

4. Types of Awards

Awards under the Plan may be granted in any one or a combination
of: (a) Incentive Stock Options; (b) Non-Statutory Stock Options; and
(c) Limited Rights.

5. Stock Subject to the Plan

Subject to adjustment as provided in Section 14, the maximum
number of shares reserved for issuance under the Plan is 218,213
shares. To the extent that Options or rights granted under the Plan are
exercised, the shares covered will be unavailable for future grants
under the Plan; to the extent that Options together with any related
rights granted under the Plan terminate, expire or are canceled without
having been exercised or, in the case of Limited Rights exercised for
cash, new Awards may be made with respect to these shares.

6. Eligibility

Key Employees of the Company and its Affiliates shall be eligible
to receive Incentive Stock Options, Non-Statutory Stock Options and/or
Limited Rights under the Plan. Outside Directors shall be eligible to
receive Non-Statutory Stock Options under the Plan.

7. Non-Statutory Stock Options

7.1 Grant of Non-Statutory Stock Options

(a) Grants to Outside Directors and Key Employees. The
Committee may, from time to time, grant Non-Statutory Stock Options to
eligible Key Employees and Outside Directors, and, upon such terms and
conditions as the Committee may determine, grant Non-Statutory Stock
Options in exchange for and upon surrender of previously granted Awards
under the Plan. Non-Statutory Stock Options granted under the Plan,
including Non-Statutory Stock Options granted in exchange for and upon
surrender of previously granted Awards, are subject to the terms and
conditions set forth in this Section 7. The maximum number of shares
subject to a Non-Statutory Option that may be awarded under the Plan to
any Key Employee shall be 100,000.

(b) Option Agreement. Each Option shall be evidenced by a
written option agreement between the Company and the Participant
specifying the number of shares of Common Stock that may be acquired
through its exercise and containing such other terms and conditions
that are not inconsistent with the terms of the Plan.

(c) Price. The purchase price per share of Common Stock
deliverable upon the exercise of each Non-Statutory Stock Option shall
be the Fair Market Value of the Common Stock of the Company on the date
the Option is granted. Shares may be purchased only upon full payment
of the purchase price. Payment of the purchase price may be made, in
whole or in part, through the surrender of shares of the Common Stock
of the Company at the Fair Market Value of such shares determined in
the manner described in Section 2.

(d) Manner of Exercise and Vesting. Unless the Committee
shall specifically state to the contrary at the time an Award is
granted, Non-Statutory Stock Options awarded to Key Employees and
Outside Directors shall vest at the rate of 20% of the initially
awarded amount per year commencing with the vesting of the first
installment one year from the date of grant, and succeeding
installments on each anniversary of the date of grant. A vested Option
may be exercised from time to time, in whole or in part, by delivering
a written notice of exercise to the President or Chief Executive
Officer of the Company, or his designee. Such notice shall be
irrevocable and must be accompanied by full payment of the purchase
price in cash or shares of Common Stock at the Fair Market Value of
such shares, determined on the exercise date in the manner described in
Section 2 hereof. If previously acquired shares of Common Stock are
tendered in payment of all or part of the exercise price, the value of
such shares shall be determined as of the date of such exercise.

(e) Terms of Options. The term during which each
Non-Statutory Stock Option may be exercised shall be determined by the
Committee, but in no event shall a Non-Statutory Stock Option be
exercisable in whole or in part more than 10 years and one day from the
Date of Grant. No Options shall be earned by a Participant unless the
Participant maintains Continuous Service until the vesting date of such
Option, except as set forth herein. The shares comprising each
installment may be purchased in whole or in part at any time after such
installment becomes purchasable. The Committee may, in its sole
discretion, accelerate the time at which any Non-Statutory Stock Option
may be exercised in whole or in part by Key Employees and/or Outside
Directors. Notwithstanding any other provision of this Plan, in the
event of a Change in Control of the Company or the Bank, all
Non-Statutory Stock Options that have been awarded shall become
immediately exercisable for three years following such Change in
Control.

(f) Termination of Employment or Service. Upon the
termination of a Key Employee's employment or upon termination of an
Outside Director's service for any reason other than, Normal
Retirement, death, Disability, Change in Control or Termination for
Cause, the Participant's Non-Statutory Stock Options shall be
exercisable only as to those shares that were immediately purchasable
on the date of termination and only for one year following termination.
In the event of Termination for Cause, all rights under a Participant's
Non-Statutory Stock Options shall expire upon termination. In the
event of the Normal Retirement, death or Disability of any Participant,
all Non-Statutory Stock Options held by the Participant, whether or not
exercisable at such time, shall be exercisable by the Participant or
his legal representative or beneficiaries for five years following the
date of his Normal Retirement, death or cessation of employment due to
Disability, provided that in no event shall the period extend beyond
the expiration of the Non-Statutory Stock Option term.

(g) Transferability. In the discretion of the Board, all or
any Non-Statutory Stock Option granted hereunder may be transferable by
the Participant once the Option has vested in the Participant,
provided, however, that the Board may limit the transferability of such
Option or Options to a designated class or classes of persons.
8. Incentive Stock Options

8.1 Grant of Incentive Stock Options

The Committee may, from time to time, grant Incentive Stock
Options to Key Employees. Incentive Stock Options granted pursuant to
the Plan shall be subject to the following terms and conditions:

(a) Option Agreement. Each Option shall be evidenced by a
written option agreement between the Company and the Key Employee
specifying the number of shares of Common Stock that may be acquired
through its exercise and containing such other terms and conditions
that are not inconsistent with the terms of the Plan.

(b) Price. Subject to Section 14 of the Plan and Section 422
of the Code, the purchase price per share of Common Stock deliverable
upon the exercise of each Incentive Stock Option shall be not less than
100% of the Fair Market Value of the Company's Common Stock on the date
the Incentive Stock Option is granted. However, if a Key Employee owns
stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or its Affiliates (or under
Section 424(d) of the Code is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock of
the Company or its Affiliates by reason of the ownership of such
classes of stock, directly or indirectly, by or for any brother,
sister, spouse, ancestor or lineal descendent of such Key Employee, or
by or for any corporation, partnership, estate or trust of which such
Key Employee is a shareholder, partner or Beneficiary), the purchase
price per share of Common Stock deliverable upon the exercise of each
Incentive Stock Option shall not be less than 110% of the Fair Market
Value of the Company's Common Stock on the date the Incentive Stock
Option is granted. Shares may be purchased only upon payment of the
full purchase price. Payment of the purchase price may be made, in
whole or in part, through the surrender of shares of the Common Stock
of the Company at the Fair Market Value of such shares, determined on
the exercise date, in the manner described in Section 2.

(c) Manner of Exercise. Unless the Committee shall
specifically state to the contrary at the time an Award is granted,
Incentive Stock Options awarded to Key Employees shall vest at the rate
of 20% of the initially awarded amount per year commencing with the
vesting of the first installment one year from the date of grant, and
succeeding installments on each anniversary of the date of grant.
Incentive Stock Options granted under the Plan shall vest in a
Participant at the rate or rates determined by the Committee. The
vested Options may be exercised from time to time, in whole or in part,
by delivering a written notice of exercise to the President or Chief
Executive Officer of the Company or his designee. Such notice is
irrevocable and must be accompanied by full payment of the purchase
price in cash or shares of Common Stock at the Fair Market Value of
such shares determined on the exercise date by the manner described in
Section 2.

(d) Amounts of Options. Incentive Stock Options may be
granted to any eligible Key Employee in such amounts as determined by
the Committee; provided that the amount granted is consistent with the
terms of Section 422 of the Code. Notwithstanding the above, the
maximum number of shares that may be subject to an Incentive Stock
Option awarded under the Plan to any Key Employee shall be 100,000. In
granting Incentive Stock Options, the Committee shall consider such
factors as it deems relevant, which factors may include, among others,
the position and responsibilities of the Key Employee, the length and
value of his or her service to the Bank, the Company, or the Affiliate,
the compensation paid to the Key Employee and the Committee's
evaluation of the performance of the Bank, the Company, or the
Affiliate, according to measurements that may include, among others,
key financial ratios, levels of classified assets, and independent
audit findings. In the case of an Option intended to qualify as an
Incentive Stock Option, the aggregate Fair Market Value (determined as
of the time the Option is granted) of the Common Stock with respect to
which Incentive Stock Options granted are exercisable for the first
time by the Participant during any calendar year (under all plans of
the Company and its Affiliates) shall not exceed $100,000. The
provisions of this Section 8.1(d) shall be construed and applied in
accordance with Section 422(d) of the Code and the regulations, if any,
promulgated thereunder.

(e) Terms of Options. The term during which each Incentive
Stock Option may be exercised shall be determined by the Committee, but
in no event shall an Incentive Stock Option be exercisable in whole or
in part more than 10 years from the Date of Grant. If any Key
Employee, at the time an Incentive Stock Option is granted to him, owns
stock representing more than 10% of the total combined voting power of
all classes of stock of the Company or its Affiliate (or, under Section
424(d) of the Code, is deemed to own stock representing more than 10%
of the total combined voting power of all classes of stock, by reason
of the ownership of such classes of stock, directly or indirectly, by
or for any brother, sister, spouse, ancestor or lineal descendent of
such Key Employee, or by or for any corporation, partnership, estate or
trust of which such Key Employee is a shareholder, partner or
Beneficiary), the Incentive Stock Option granted to him shall not be
exercisable after the expiration of five years from the Date of Grant.

The Committee shall determine the date on which each Incentive
Stock Option shall become exercisable and may provide that an Incentive
Stock Option shall become exercisable in installments. The shares
comprising each installment may be purchased in whole or in part at any
time after such installment becomes purchasable, provided that the
amount able to be first exercised in a given year is consistent with
the terms of Section 422 of the Code. To the extent required by
Section 422 of the Code, the aggregate Fair Market Value (determined at
the time the option is granted) of the Common Stock for which Incentive
Stock Options are exercisable for the first time by a Participant
during any calendar year (under all plans of the Company and its
Affiliates) shall not exceed $100,000.
The Committee may, in its sole discretion, accelerate the time at
which any Incentive Stock Option may be exercised in whole or in part,
provided that it is consistent with the terms of Section 422 of the
Code. Notwithstanding the above, in the event of a Change in Control
of the Company, all Incentive Stock Options that have been awarded
shall become immediately exercisable, unless the Fair Market Value of
the amount exercisable as a result of a Change in Control shall exceed
$100,000 (determined as of the Date of Grant). In such event, the
first $100,000 of Incentive Stock Options (determined as of the Date of
Grant) shall be exercisable as Incentive Stock Options and any excess
shall be exercisable as Non-Statutory Stock Options.

(f) Termination of Employment. Upon the termination of a
Key Employee's service for any reason other than Disability, Normal
Retirement, Change in Control, death or Termination for Cause, the Key
Employee's Incentive Stock Options shall be exercisable only as to
those shares that were immediately purchasable by such Key Employee at
the date of termination and only for a period of three months following
termination. In the event of Termination for Cause all rights under
the Incentive Stock Options shall expire upon termination.

Upon termination of a Key Employee's employment due to Normal
Retirement, death, Disability, or following a Change in Control, all
Incentive Stock Options held by such Key Employee, whether or not
exercisable at such time, shall be exercisable for a period of five
years following the date of his cessation of employment, provided
however, that any such Option shall not be eligible for treatment as an
Incentive Stock Option in the event such Option is exercised more than
three months following the date of his Normal Retirement or termination
of employment following a Change in Control; and provided further, that
no Option shall be eligible for treatment as an Incentive Stock Option
in the event such Option is exercised more than one year following
termination of employment due to Disability and provided further, in
order to obtain Incentive Stock Option treatment for Options exercised
by heirs or devisees of an Optionee, the Optionee's death must have
occurred while employed or within three (3) months of termination of
employment. In no event shall the exercise period extend beyond the
expiration of the Incentive Stock Option term.

(g) Transferability. No Incentive Stock Option granted under
the Plan is transferable except by will or the laws of descent and
distribution and is exercisable during his lifetime only by the Key
Employee to which it is granted.

(h) Compliance with Code. The options granted under this
Section 8 are intended to qualify as Incentive Stock Options within the
meaning of Section 422 of the Code, but the Company makes no warranty
as to the qualification of any Option as an Incentive Stock Option
within the meaning of Section 422 of the Code. If an Option granted
hereunder fails for whatever reason to comply with the provisions of
Section 422 of the Code, and such failure is not or cannot be cured,
such Option shall be a Non-Statutory Stock Option.

9. Limited Rights

9.1 Grant of Limited Rights

The Committee may grant a Limited Right simultaneously with the
grant of any Option to any Key Employee of the Bank, with respect to
all or some of the shares covered by such Option. Limited Rights
granted under the Plan are subject to the following terms and
conditions:

(a) Terms of Rights. In no event shall a Limited Right be
exercisable in whole or in part before the expiration of six months
from the date of grant of the Limited Right. A Limited Right may be
exercised only in the event of a Change in Control of the Company.

The Limited Right may be exercised only when the underlying Option
is eligible to be exercised, provided that the Fair Market Value of the
underlying shares on the day of exercise is greater than the exercise
price of the related Option.

Upon exercise of a Limited Right, the related Option shall cease
to be exercisable. Upon exercise or termination of an Option, any
related Limited Rights shall terminate. The Limited Rights may be for
no more than 100% of the difference between the exercise price and the
Fair Market Value of the Common Stock subject to the underlying Option.
The Limited Right is transferable only when the underlying Option is
transferable and under the same conditions.

(b) Payment. Upon exercise of a Limited Right, the holder
shall promptly receive from the Company an amount of cash equal to the
difference between the Fair Market Value on the Date of Grant of the
related Option and the Fair Market Value of the underlying shares on
the date the Limited Right is exercised, multiplied by the number of
shares with respect to which such Limited Right is being exercised. In
the event of a Change in Control in which pooling accounting treatment
is a condition to the transaction, the Limited Right shall be
exercisable solely for shares of stock of the Company, or in the event
of a merger transaction, for shares of the acquiring corporation or its
parent, as applicable. The number of shares to be received on the
exercise of such Limited Right shall be determined by dividing the
amount of cash that would have been available under the first sentence
above by the Fair Market Value at the time of exercise of the shares
underlying the Option subject to the Limited Right.

10. Surrender of Option

In the event of a Participant's termination of employment or
termination of service as a result of death, Disability or Normal
Retirement, the Participant (or his or her personal representative(s),
heir(s), or devisee(s)) may, in a form acceptable to the Committee make
application to surrender all or part of the Options held by such
Participant in exchange for a cash payment from the Company of an
amount equal to the difference between the Fair Market Value of the
Common Stock on the date of termination of employment or the date of
termination of service on the Board and the exercise price per share of
the Option. Whether the Company accepts such application or determines
to make payment, in whole or part, is within its absolute and sole
discretion, it being expressly understood that the Company is under no
obligation to any Participant whatsoever to make such payments. In the
event that the Company accepts such application and determines to make
payment, such payment shall be in lieu of the exercise of the
underlying Option and such Option shall cease to be exercisable.

No award under the Plan shall be transferable by the optionee
other than by will or the laws of descent and distribution and may only
be exercised during his or her lifetime by the Participant, or by a
guardian or legal representative of the Participant.

11. Rights of a Stockholder

A Participant shall have no rights as a stockholder with respect
to any shares covered by a Non-Statutory and/or Incentive Stock Option
until the date of issuance of a stock certificate for such shares.
Nothing in the Plan or in any Award granted confers on any person any
right to continue in the employ of the Company or its Affiliates or to
continue to perform services for the Company or its Affiliates or
interferes in any way with the right of the Company or its Affiliates
to terminate his services as an officer, director or employee at any
time.

12. Agreement with Participants

Each Award of Options, and/or Limited Rights will be evidenced by
a written agreement, executed by the Participant and the Company or its
Affiliates that describes the conditions for receiving the Awards
including the date of Award, the purchase price, applicable periods,
and any other terms and conditions as may be required by the Board or
applicable securities law.

13. Designation of Beneficiary

A Participant may, with the consent of the Committee, designate a
person or persons to receive, in the event of death, any stock option
or Limited Rights Award to which he would then be entitled. Such
designation will be made upon forms supplied by and delivered to the
Company and may be revoked in writing. If a Participant fails
effectively to designate a Beneficiary, then his estate will be deemed
to be the Beneficiary.

14. Dilution and Other Adjustments

In the event of any change in the outstanding shares of Common
Stock of the Company by reason of any stock dividend or split, pro rata
return of capital to all shareholders, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of
shares, or other similar corporate change, or other increase or
decrease in such shares without receipt or payment of consideration by
the Company, the Committee will make such adjustments to previously
granted Awards, to prevent dilution or enlargement of the rights of the
Participant, including any or all of the following:

(a) adjustments in the aggregate number or kind of shares of
Common Stock that may be awarded under the Plan;

(b) adjustments in the aggregate number or kind of shares of
Common Stock covered by Awards already made under the Plan; or

(c) adjustments in the purchase price of outstanding Incentive
and/or Non-Statutory Stock Options, or any Limited Rights attached to
such Options.

No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Award.
With respect to Incentive Stock Options, no such adjustment shall be
made if it would be deemed a "modification" of the Award under Section
424 of the Code.

15. Withholding

There may be deducted from each distribution of cash and/or Common
Stock under the Plan the amount of tax required by any governmental
authority to be withheld.

16. Amendment of the Plan

The Board may at any time, and from time to time, modify or amend
the Plan in any respect, or modify or amend an Award received by Key
Employees and/or Outside Directors; provided, however, that no such
termination, modification or amendment may affect the rights of a
Participant, without his consent, under an outstanding Award. Any
amendment or modification of the Plan or an outstanding Award under the
Plan, including but not limited to the acceleration of vesting of an
outstanding Award for reasons other than the death, Disability, Normal
Retirement, or a Change in Control, shall be approved by the Committee
or the full Board of the Company.

17. Effective Date of Plan

The Plan shall become effective upon the date of, or a date
determined by the Board of Directors following, approval of the Plan by
the Company's stockholders.

18. Termination of the Plan

The right to grant Awards under the Plan will terminate upon the
earlier of (i) 10 years after the Effective Date, or (ii) the date on
which the exercise of Options or related rights equaling the maximum
number of shares reserved under the Plan occurs, as set forth in
Section 5. The Board may suspend or terminate the Plan at any time,
provided that no such action will, without the consent of a
Participant, adversely affect his rights under a previously granted
Award.

19. Applicable Law

The Plan will be administered in accordance with the laws of the
State of Maryland.

<PAGE>
IN WITNESS WHEREOF, the Company has caused the Plan to be executed
by its duly authorized officers and the corporate seal to be affixed
and duly attested, as of the ____ day of ________, 1996.

Date Approved by Stockholders: __________

Effective Date: _____________

ATTEST: AMERICAN NATIONAL BANCORP, INC.

____________________________ _________________________________
Secretary President and Chief Executive
Officer

APPENDIX B

AMERICAN NATIONAL BANCORP, INC.

1996 RECOGNITION AND RETENTION PLAN

1. Establishment of the Plan

American National Bancorp, Inc. hereby establishes the Company
Recognition and Retention Plan (the "Plan") upon the terms and
conditions hereinafter stated in the Plan.

2. Purpose of the Plan

The purpose of the Plan is to advance the interests of the Company
and its stockholders by providing Key Employees and Outside Directors
of the Company and its Affiliates, including American National Savings
Bank, F.S.B. (the "Bank"), upon whose judgment, initiative and efforts
the successful conduct of the business of the Company and its
Affiliates largely depends, with compensation for their contributions
to the Company and its Affiliates and an additional incentive to
perform in a superior manner, as well as to attract people of
experience and ability.

3. Definitions

The following words and phrases when used in this Plan with an
initial capital letter, unless the context clearly indicates otherwise,
shall have the meanings set forth below. Wherever appropriate, the
masculine pronoun shall include the feminine pronoun and the singular
shall include the plural:

"Affiliate" means any "parent corporation" or "subsidiary
corporation" of the Company or the Bank, as such terms are defined in
Section 424(e) and (f), respectively, of the Code, or a successor to a
parent corporation or subsidiary corporation.

"Award" means the grant by the Committee of Restricted Stock, as
provided in the Plan.

"Bank" means American National Savings Bank, F.S.B., or a
successor corporation.

"Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under the Plan in the event
of such Recipient's death. Such person or persons shall be designated
in writing on forms provided for this purpose by the Committee and may
be changed from time to time by similar written notice to the
Committee. In the absence of a written designation, the Beneficiary
shall be the Recipient's surviving spouse, if any, or if none, his
estate.

"Board" or "Board of Directors" means the Board of Directors of
the Company or an Affiliate, as applicable. For purposes of Section 4
of the Plan, "Board" shall refer solely to the Board of the Company.

"Change in Control" of the Company means a change in control of a
nature that: (i) would be required to be reported in response to Item
1(a) of the current report on Form 8-K, as in effect on the date
hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"); or (ii) results in a Change in Control of
the Company within the meaning of the Home Owners Loan Act, as amended
("HOLA"), and applicable rules and regulations promulgated thereunder,
as in effect at the time of the Change in Control; or (iii) without
limitation such a Change in Control shall be deemed to have occurred at
such time as (a) any "person" (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 25% or more of the combined
voting power of the Company's outstanding securities except for any
securities purchased by the Bank's employee stock ownership plan or
trust; or (b) individuals who constitute the Board on the date hereof
(the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of
at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Company's stockholders
was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (b), considered
as though he were a member of the Incumbent Board; or (c) a plan of
reorganization, merger, consolidation, sale of all or substantially all
the assets of the Company or similar transaction in which the Company
is not the surviving institution occurs; or (d) a proxy statement
soliciting proxies from stockholders of the Company, by someone other
than the current management of the Company, seeking stockholder
approval of a plan of reorganization, merger or consolidation of the
Company or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of securities then
subject to the Plan are to be exchanged for or converted into cash or
property or securities not issued by the Company; or (e) a tender offer
is made for 25% or more of the voting securities of the Company and the
shareholders owning beneficially or of record 25% or more of the
outstanding securities of the Company have tendered or offered to sell
their shares pursuant to such tender offer and such tendered shares
have been accepted by the tender offeror.

"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" means a Committee of the Board consisting of either
(i) at least two Non-Employee Directors of the Company, or (ii) the
entire Board of the Company.

"Common Stock" means shares of the common stock of the Company,
par value $.01 per share.

"Company" means American National Bancorp, Inc., the stock holding
company of the Bank, or a successor corporation.

"Conversion" means the October 31, 1995, conversion of American
National Bankshares, M.H.C. from the mutual to stock form of
organization.

"Director" means a member of the Board.

"Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee to perform the
work customarily assigned to him, or of a Director to serve as such.
Additionally, in the case of an employee, a medical doctor selected or
approved by the Board must advise the Committee that it is either not
possible to determine when such Disability will terminate or that it
appears probable that such Disability will be permanent during the
remainder of such employee's lifetime.

"Effective Date" means the date of, or a date determined by the
Board of Directors following, approval of the Plan by the Company's
stockholders.

"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

"Key Employee" means any person who is currently employed by the
Company or an Affiliate who is chosen by the Committee to participate
in the Plan.

"Offering" means the October 31, 1995 subscription offering of the
Common Stock of the Company.

"Outside Director" means a Director of the Company or an Affiliate
who is not an employee of the Company or an Affiliate.

"Recipient" means a Key Employee or Outside Director of the
Company or its Affiliates who receives or has received an Award under
the Plan.

"Restricted Period" means the period of time selected by the
Committee for the purpose of determining when restrictions are in
effect under Section 6 with respect to Restricted Stock awarded under
the Plan.

"Restricted Stock" means shares of Common Stock that have been
contingently awarded to a Recipient by the Committee subject to the
restrictions referred to in Section 6, so long as such restrictions are
in effect.

4. Administration of the Plan.

4.01 Role of the Committee. The Plan shall be administered
and interpreted by the Committee, which shall have all of the powers
allocated to it in the Plan. The interpretation and construction by
the Committee of any provisions of the Plan or of any Award granted
hereunder shall be final and binding. The Committee shall act by vote
or written consent of a majority of its members. Subject to the
express provisions and limitations of the Plan, the Committee may adopt
such rules and procedures as it deems appropriate for the conduct of
its affairs. The Committee shall report its actions and decisions with
respect to the Plan to the Board at appropriate times, but in no event
less than one time per calendar year.

4.02 Role of the Board. The members of the Committee shall be
appointed or approved by, and will serve at the pleasure of, the Board.
The Board may in its discretion from time to time remove members from,
or add members to, the Committee. The Board shall have all of the
powers allocated to it in the Plan, may take any action under or with
respect to the Plan that the Committee is authorized to take, and may
reverse or override any action taken or decision made by the Committee
under or with respect to the Plan, provided, however, that except as
provided in Section 6.02, the Board may not revoke any Award except in
the event of revocation for Cause or with respect to unearned Awards in
the event the Recipient of an Award voluntarily terminates employment
with the Bank prior to Normal Retirement.

4.03 Plan Administration Restrictions. All transactions
involving a grant, award or other acquisitions from the Company shall:

(a) be approved by the Company's full Board or by the
Committee;

(b) be approved, or ratified, in compliance with Section 14 of
the Exchange Act, by either: the affirmative vote of the holders of a
majority of the shares present, or represented and entitled to vote at
a meeting duly held in accordance with the laws under which the Company
is incorporated; or the written consent of the holders of a majority of
the securities of the issuer entitled to vote provided that such
ratification occurs no later than the date of the next annual meeting
of shareholders; or

(c) result in the acquisition of common stock that is held by
the Recipient for a period of six months following the date of such
acquisition.

4.04 Limitation on Liability. No member of the Board or the
Committee shall be liable for any determination made in good faith with
respect to the Plan or any Awards granted under it. If a member of the
Board or the Committee is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of
anything done or not done by him in such capacity under or with respect
to the Plan, the Bank or the Company shall indemnify such member
against expense (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in the best
interests of the Bank and the Company and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct
was unlawful.

5. Eligibility; Awards

5.01 Eligibility. Key Employees and Outside Directors are
eligible to receive Awards.

5.02 Awards to Key Employees and Outside Directors. The
Committee may determine which of the Key Employees and Outside
Directors referenced in Section 5.01 will be granted Awards and the
number of shares covered by each Award; provided, however, that in no
event shall any Awards be made that will violate the Bank's Charter and
Bylaws, the Company's Articles of Incorporation and Bylaws, or any
applicable federal or state law or regulation. Shares of Restricted
Stock that are awarded by the Committee shall, on the date of the
Award, be registered in the name of the Recipient and transferred to
the Recipient, in accordance with the terms and conditions established
under the Plan. The aggregate number of shares that shall be issued
under the Plan is 87,285.

In the event Restricted Stock is forfeited for any reason, the
Committee, from time to time, may determine which of the Key Employees
and Outside Directors will be granted additional Awards to be awarded
from forfeited Restricted Stock.

In selecting those Key Employees and Outside Directors to whom
Awards will be granted and the amount of Restricted Stock covered by
such Awards, the Committee shall consider such factors as it deems
relevant, which factors may include, among others, the position and
responsibilities of the Key Employees and Outside Directors, the length
and value of their services to the Bank and its Affiliates, the
compensation paid to the Key Employees or fees paid to the Outside
Directors, and the Committee may request the written recommendation of
the Chief Executive Officer and other senior executive officers of the
Bank, the Company and its Affiliates or the recommendation of the full
Board. All allocations by the Committee shall be subject to review,
and approval or rejection, by the Board.

No Restricted Stock shall be earned unless the Recipient maintains
Continuous Service with the Bank or an Affiliate until the restrictions
lapse.

5.03 Manner of Award. As promptly as practicable after a
determination is made pursuant to Section 5.02 to grant an Award, the
Committee shall notify the Recipient in writing of the grant of the
Award, the number of shares of Restricted Stock covered by the Award,
and the terms upon which the Restricted Stock subject to the Award may
be earned. Upon notification of an Award of Restricted Stock, the
Recipient shall execute and return to the Company a restricted stock
agreement (the "Restricted Stock Agreement") setting forth the terms
and conditions under which the Recipient shall earn the Restricted
Stock, together with a stock power or stock powers endorsed in blank.
Thereafter, the Recipient's Restricted Stock and stock power shall be
deposited with an escrow agent specified by the Company who shall hold
such Restricted Stock under the terms and conditions set forth in the
Restricted Stock Agreement. Each certificate in respect of shares of
Restricted Stock Awarded under the Plan shall be registered in the name
of the Recipient.

5.04 Treatment of Forfeited Shares. In the event shares of
Restricted Stock are forfeited by a Recipient, such shares shall be
returned to the Company and shall be held and accounted for pursuant to
the terms of the Plan until such time as the Restricted Stock is re-
awarded to another Recipient, in accordance with the terms of the Plan
and the applicable state and federal laws, rules and regulations.

6. Terms and Conditions of Restricted Stock

The Committee shall have full and complete authority, subject to
the limitations of the Plan, to grant awards of Restricted Stock to Key
Employees and Outside Directors and, in addition to the terms and
conditions contained in Sections 6.01 through 6.08, to provide such
other terms and conditions (which need not be identical among
Recipients) in respect of such Awards, and the vesting thereof, as the
Committee shall determine.

6.01 General Rules. Unless the Committee shall specifically
state to the contrary at the time an Award is granted, Restricted Stock
shall be earned by a Recipient at the rate of 20% of the initially
awarded amount per year commencing with the first installment being
earned on the first trading day of 1998 and succeeding installments
being earned on the first trading day of the following year, provided
that such Recipient maintains Continuous Service; provided, however,
that no shares shall be earned for any year in which the Bank is not
meeting all of its fully phased-in capital requirements. Subject to
any such other terms and conditions as the Committee shall provide with
respect to Awards, shares of Restricted Stock may not be sold,
assigned, transferred (within the meaning of Code Section 83), pledged
or otherwise encumbered by the Recipient, except as hereinafter
provided, during the Restricted Period. The Committee shall have the
authority, in its discretion, to accelerate the time at which any or
all of the restrictions shall lapse with respect to a Restricted Stock
Award, or to remove any or all of such restrictions.

6.02 Continuous Service; Forfeiture. Except as provided in
Section 6.03, if a Recipient ceases to maintain Continuous Service for
any reason (other than death, Disability, Change in Control or Normal
Retirement), unless the Committee shall otherwise determine, all shares
of Restricted Stock theretofore awarded to such Recipient and which at
the time of such termination of Continuous Service are subject to the
restrictions imposed by Section 6.01 shall upon such termination of
Continuous Service be forfeited. Any stock dividends or declared but
unpaid cash dividends attributable to such shares of Restricted Stock
shall also be forfeited.

6.03 Exception for Termination Due to Death, Disability,
Normal Retirement or Following a Change in Control Notwithstanding the
general rule contained in Section 6.01, Restricted Stock awarded to a
Recipient whose employment with or service on the Board of the Bank or
an Affiliate terminates due to death, Disability, Normal Retirement or
following a Change in Control shall be deemed earned as of the
Recipient's last day of employment with the Company or an Affiliate,
or last day of service on the Board of the Company or an Affiliate;
provided that Restricted Stock awarded to a Key Employee who at any
time also serves as a Director, shall not be deemed earned until both
employment and service as a Director have been terminated.

6.04 Revocation for Cause. Notwithstanding anything
hereinafter to the contrary, the Board may by resolution immediately
revoke, rescind and terminate any Award, or portion thereof, previously
awarded under the Plan, to the extent Restricted Stock has not been
redelivered by the Escrow Agent to the Recipient, whether or not yet
earned, in the case of a Key Employee whose employment is terminated by
the Company or an Affiliate or an Outside Director whose service is
terminated by the Company or an Affiliate for Cause or who is
discovered after termination of employment or service on the Board to
have engaged in conduct that would have justified termination for
Cause.

6.05 Restricted Stock Legend. Each certificate in respect of
shares of Restricted Stock awarded under the Plan shall be registered
in the name of the Recipient and deposited by the Recipient, together
with a stock power endorsed in blank, with the Escrow Agent and shall
bear the following (or a similar) legend:

"The transferability of this certificate and the shares
of stock represented hereby are subject to the terms and conditions
(including forfeiture) contained in the American National Bancorp, Inc.
1996 Recognition and Retention Plan. Copies of such Plan are on file
in the offices of the Secretary of American National Bancorp, Inc., 211
N. Liberty Street, Baltimore, Maryland 21201-3978."

6.06 Payment of Dividends and Return of Capital. After an
Award has been granted but before such Award has been earned, the
Recipient shall receive any cash dividends paid with respect to such
shares, or shall share in any pro-rata return of capital to all
shareholders with respect to the Common Stock. Stock dividends
declared by the Company and paid on Awards that have not yet been
earned shall be subject to the same restrictions as the Restricted
Stock and the certificate(s) or other instruments representing or
evidencing such shares shall be legended in the manner provided in
Section 6.05 and shall be delivered to the Escrow Agent for
distribution to the Recipient when the Restricted Stock upon which such
dividends were paid are earned. Unless the Recipient has made an
election under Section 83(b) of the Code, cash dividends or other
amounts so paid on shares that have not yet been earned by the
Recipient shall be treated as compensation income to the Recipient when
paid. If dividends are paid with respect to shares of Restricted Stock
under the Plan that have been issued but not awarded, or that have been
forfeited and returned to the Company or to a trust established to hold
issued and unawarded or forfeited shares, the Committee can determine
to award such dividends to any Recipient or Recipients under the Plan,
to any other employee or director of the Company or the Bank, or can
return such dividends to the Company.

6.07 Voting of Restricted Shares. After an Award has been
granted, the Recipient as conditional owner of the Restricted Stock
shall have the right to vote such shares.

6.08 Delivery of Earned Shares. At the expiration of the
restrictions imposed by Section 6.01, the Escrow Agent shall redeliver
to the Recipient (or where the relevant provision of Section 6.02
applies in the case of a deceased Recipient, to his Beneficiary) the
certificate(s) and any remaining stock power deposited with it pursuant
to Section 5.03 and the shares represented by such certificate(s) shall
be free of the restrictions referred to Section 6.01.

7. Adjustments upon Changes in Capitalization

In the event of any change in the outstanding shares subsequent to
the Effective Date by reason of any reorganization, recapitalization,
stock split, stock dividend, combination or exchange of shares, merger,
consolidation or any change in the corporate structure or shares of the
Company, the maximum aggregate number and class of shares as to which
Awards may be granted under the Plan shall be appropriately adjusted by
the Committee, whose determination shall be conclusive. Any shares of
stock or other securities received, as a result of any of the
foregoing, by a Recipient with respect to Restricted Stock shall be
subject to the same restrictions and the certificate(s) or other
instruments representing or evidencing such shares or securities shall
be legended and deposited with the Escrow Agent in the manner provided
in Section 6.05.

8. Assignments and Transfers

No Award nor any right or interest of a Recipient under the Plan
in any instrument evidencing any Award under the Plan may be assigned,
encumbered or transferred (within the meaning of Code Section 83)
except, in the event of the death of a Recipient, by will or the laws
of descent and distribution until such Award is earned.

9. Key Employee Rights under the Plan

No Key Employee shall have a right to be selected as a Recipient
nor, having been so selected, to be selected again as a Recipient and
no Key Employee or other person shall have any claim or right to be
granted an Award under the Plan or under any other incentive or similar
plan of the Bank or any Affiliate. Neither the Plan nor any action
taken thereunder shall be construed as giving any Key Employee any
right to be retained in the employ of the Bank or any Affiliate.

10. Outside Director Rights under the Plan

Neither the Plan nor any action taken thereunder shall be
construed as giving any Outside Director any right to be retained in
the service of the Bank or any Affiliate.

11. Withholding Tax

Upon the termination of the Restricted Period with respect to any
shares of Restricted Stock (or at any such earlier time, if any, that
an election is made by the Recipient under Section 83(b) of the Code,
or any successor provision thereto, to include the value of such shares
in taxable income), the Bank or the Company shall have the right to
require the Recipient or other person receiving such shares to pay the
Bank or the Company the amount of any taxes that the Bank or the
Company is required to withhold with respect to such shares, or, in
lieu thereof, to retain or sell without notice, a sufficient number of
shares held by it to cover the amount required to be withheld. The
Bank or the Company shall have the right to deduct from all dividends
paid with respect to shares of Restricted Stock the amount of any taxes
which the Bank or the Company is required to withhold with respect to
such dividend payments.

12. Amendment or Termination

The Board of the Company may amend, suspend or terminate the Plan
or any portion thereof at any time, provided, however, that no such
amendment, suspension or termination shall impair the rights of any
Recipient, without his consent, in any Award theretofore made pursuant
to the Plan. Any amendment or modification of the Plan or an
outstanding Award under the Plan, including but not limited to the
acceleration of vesting of an outstanding Award for reasons other than
death, Disability, Normal Retirement or termination following a Change
in Control, shall be approved by the Committee, or the full Board of
the Company.

13. Governing Law

The Plan shall be governed by the laws of the State of Maryland.

14. Term of Plan

The Plan shall become effective on the date of, or a date
determined by the Board of Directors following, approval of the Plan by
the Company's stockholders. It shall continue in effect until the
earlier of (i) fifteen years from the Effective Date unless sooner
terminated under Section 12 hereof, or (ii) the date on which all
shares of Common Stock available for award hereunder, have vested in
the Recipients of such Awards.

IN WITNESS WHEREOF, the Company has caused the Plan to be executed
by its duly authorized officers and the corporate seal to be affixed
and duly attested, as of the ____ day of _________, 1996.

Date Approved by Shareholders: __________

Effective Date: __________

ATTEST: AMERICAN NATIONAL BANCORP, INC.

Secretary President and Chief Executive Officer