AMERICAN NATIONAL BANKSHARES INC.

628 Main Street, Danville, Virginia 24541

Notice of Annual Meeting

Annual Meeting of Shareholders

May ~~17, 2016~~15, 2018

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AMERICAN NATIONAL BANKSHARES INC.

628 Main Street,

Danville, Virginia 24541

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be held May ~~17, 2016~~15, 2018

Notice is hereby given that the Annual Meeting of Shareholders of American National Bankshares Inc. (the “Company”) will be held as follows:

Place: The Wednesday Club

1002 Main Street

Danville, Virginia 24541

Date: May ~~17, 2016~~15, 2018 at 9:00 a.m.

The Annual Meeting is being held for the following purposes:


1.	To elect ~~five~~four Class III directors of the Company to serve three-year terms expiring at the ~~2019~~2021 Annual Meeting.


2.	To elect one Class III director of the Company to serve a ~~one-year~~two-year term expiring at the ~~2017~~2020 Annual Meeting.


3.	To ratify the appointment of Yount, Hyde & Barbour P.C., independent registered public accounting firm, as auditors of the Company for the year ending December 31, ~~2016.~~2018.


4.	To hold an advisory vote on executive compensation of the Company’s named executive officers as disclosed in the accompanying proxy statement.


5.	To approve the American National Bankshares Inc. 2018 Equity Compensation Plan.


6.	To transact any other business that may properly come before the meeting or any adjournment thereof.

Only shareholders of record at the close of business on April ~~1, 2016~~2, 2018 are entitled to notice of and to vote at the Annual Meeting.

It is important that your shares are represented at the meeting. Accordingly, please sign, date, and mail the enclosed proxy in the enclosed postage-paid envelope, whether or not you plan to attend. If you do attend the Annual Meeting, you may revoke your proxy and vote your shares in person.

By Order of the Board of Directors,

William W. Traynham

Secretary

April 6, 2018

~~April 7, 2016~~

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AMERICAN NATIONAL BANKSHARES INC.

_______________

PROXY STATEMENT

_______________

ANNUAL MEETING OF SHAREHOLDERS

MAY ~~17, 2016~~15, 2018

INTRODUCTION

This proxy statement is furnished in conjunction with the solicitation by the Board of Directors (the “Board”) of American National Bankshares Inc. (the “Company”) of the accompanying proxy to be used at the Annual Meeting of Shareholders of the Company (the “Annual Meeting”) and at any adjournment thereof. The meeting will be held on Tuesday, May ~~17, 2016,~~15, 2018, 9:00 a.m., at The Wednesday Club, 1002 Main Street, Danville, Virginia 24541, for the purposes set forth below and in the Notice of Annual Meeting of Shareholders. The date of this proxy statement is April ~~7, 2016~~6, 2018 and the approximate mailing date of this proxy statement and the enclosed proxy is April 12, ~~2016.~~2018.

Voting Rights of Shareholders

Only shareholders of record at the close of business on April ~~1, 2016,~~2, 2018, are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. As of the close of business on April ~~1, 2016,~~2, 2018, there were ~~8,612,658~~8,675,029 shares of the Company’s common stock outstanding, of which ~~8,431,539~~8,497,868 shares were entitled to vote at the Annual Meeting. For the reasons explained below, the number of shares entitled to vote is less than the number of shares of the Company’s common stock outstanding on such date. The Company has no other class of stock outstanding. Each share of common stock entitles the record holder thereof to one vote upon each matter to be voted upon at the Annual Meeting.

A majority of the votes entitled to be cast, represented in person or by proxy, will constitute a quorum for the transaction of business. Shares for which the holder has elected to abstain or to withhold the proxy’s authority to vote on a matter will count toward a quorum but will not be included in determining the number of votes cast with respect to such matter.

Shares held by brokers or banks in street name (“broker shares”) that are voted on any matter are included in the quorum. Broker shares that are not voted on any matter will not be included in determining whether a quorum is present.

Ambro and Company, the nominee name that the Company’s banking subsidiary, American National Bank and Trust Company (the “Bank”), uses to register the securities it holds in a fiduciary capacity for customers, held ~~181,119~~177,161 shares of the Company’s common stock as sole fiduciary (with no qualifying co-fiduciary having been appointed) as of April ~~1, 2016,~~2, 2018, which constituted ~~2.10%~~2.04% of the issued and outstanding shares of the Company’s common stock on that date. Under Virginia law, such shares cannot be voted at the Annual Meeting and are not deemed to be outstanding and entitled to vote for purposes of determining a quorum.

Voting of Broker Shares

If a beneficial owner of broker shares does not provide the broker or other nominee that holds the shares with specific voting instructions, then under applicable rules, such organization may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the broker or other nominee that holds such shares does not receive instructions from the beneficial owner on how to vote shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on this matter with respect to the shares. This is generally referred to as a “broker non-vote.”

The ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm for ~~2016~~2018 (Proposal Three) is a matter considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with Proposal Three. The election of directors (Proposals One and Two) ~~and~~, the advisory vote on the Company’s executive compensation (Proposal Four), and the approval of the 2018 Equity Compensation Plan (Proposal Five) are matters considered non-routine under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore broker non-votes may exist in connection with Proposals One, Two, Four, and ~~Four.~~Five.

Revocation and Voting of Proxies

Execution of a proxy will not affect a shareholder’s right to attend the Annual Meeting and to vote in person. Any shareholder who has executed and returned a proxy may revoke it by attending the Annual Meeting and requesting to vote in person. A shareholder may also revoke his or her proxy at any time before it is exercised by filing a written notice with the Company or by submitting a proxy bearing a later date. Proxies will extend to, and will be voted at, any adjourned session of the Annual Meeting.

Solicitation of Proxies

The cost of solicitation of proxies will be borne by the Company. Solicitation is being made by mail, and if necessary, may be made in person, by telephone or Internet or special letter by officers and employees of the Company or the Bank, acting on a part-time basis and for no additional compensation.

PROPOSALS ONE AND TWO – ELECTION OF DIRECTORS

The Company’s Board of Directors currently consists of 14 persons. Pursuant to the Company’s Articles of Incorporation, the Board is to be divided into three classes (I, II and III), with each class as nearly equal in number as possible. The term of office for current Class III directors will expire at the Annual Meeting. Nominees to serve as Class III directors and one nominee to serve as a Class III director are set forth below. All of the nominees currently serve as directors of the Company. Continuing members of the Board of Directors also are set forth below.

Mrs. ~~Ronda M. Penn~~Tammy Moss Finley was appointed to the Board effective ~~July 21, 2015.~~September 19, 2017. She is being nominated as a Class IIIII director and is subject to election by the shareholders at the Annual Meeting in accordance with Virginia law. The term of office for current Class IIIII directors will expire at the ~~2016~~2020 Annual Meeting, and if elected, Mrs. ~~Penn~~Finley will serve in such class for a ~~three-year~~two-year term expiring at the ~~2019 Annual Meeting.~~

~~Mr. Claude B. Owen, Jr. has served as a director since 1984 and is currently a Class II director with a term expiring at the Annual Meeting. Heis being nominated as a Class III director to divide the classes of directors as nearly equal in number as possible in accordance with the Company’s Articles of~~

~~Incorporation. The term of office for current Class III directors will expire at the 2017 Annual Meeting, and, if elected, Mr. Owen will serve in such class for a one-year term expiring at the 2017~~2020 Annual Meeting.

The persons named in the accompanying proxy will vote for the election of the nominees named below unless authority is withheld. If for any reason the persons named as nominees below should become unavailable to serve, an event that management does not anticipate, proxies will be voted for such other persons as the Board of Directors may designate.

The Board of Directors recommends the nominees, as set forth below, for election. The Board of Directors recommends that shareholders vote FOR these nominees. The election of each nominee requires the affirmative vote of a plurality of the shares of the Company’s common stock cast in the election of directors.

The names of the nominees for election and the other continuing members of the Board of Directors, their principal occupations and qualifications to serve as directors, their ages as of

December 31, ~~2015,~~2017, and certain other information with respect to such persons are as follows:

Name

Principal Occupation

Age
Director
Since
Nominees for election as Class II directors to continue in office until 2019 (Proposal One)
Fred A. Blair
President of Blair Construction, Inc. (general contractor), Gretna, VA.

Mr. Blair brings experience as a small business owner, including his knowledge of and experience in commercial construction and development in the Company’s market areas.
69 1992

Frank C. Crist, Jr., D.D.S.
President of Brady & Crist Dentists, Inc.
Lynchburg, VA.

Dr. Crist brings knowledge about the Lynchburg market area where he has built a successful dental practice, as well as investments in other businesses and real estate properties in the area. He also brings his prior experience as a director and, ultimately, Chairman of the board of directors of a community bank.

70 2006

Name

Principal Occupation

Age
Director
Since

Jeffrey V. Haley
President and Chief Executive Officer of the Company and the Bank since January 2013. President of the Company and President and Chief Executive Officer of the Bank from January 2012 to January 2013. Executive Vice President of the Company and President of the Bank from June 2010 to January 2012. President of Trust and Financial Services and Executive Vice President of the Bank from July 2008 to June 2010.

Mr. Jeffrey Haley brings expertise based on more than 18 years in community banking and 15 years in the retail industry. His varied operational and management responsibilities during his banking tenure enable him to contribute a uniquely relevant perspective to the Board’s deliberations.
55 2012

John H. Love
President and Chief Executive Officer, W.E. Love & Associates, Inc. (insurance brokerage), Burlington, NC, since December 2011. President and Chief Operating Officer, W.E. Love & Associates, Inc., Burlington, NC from 1989 to December 2011.

A former director of MidCarolina Financial Corporation, Mr. Love brings an expert perspective on risk management, mitigation and governmental regulation based on his experience as President of a large commercial insurance brokerage firm.
56 2011

Ronda M. Penn
Chief Financial Officer, Plexus Capital LLC (small business investments), Raleigh, NC since September 2012. Partner, Dixon Hughes Goodman LLP (public accounting), Greensboro, NC, from 2006 to September 2012.

Ms. Penn brings significant financial, accounting, internal control, investment and management expertise as a Chief Financial Officer, Certified Public Accountant and former partner with a national accounting firm. Her background helps her fill the role of financial expert on the Company's Audit Committee.

53 2015

Name

Principal Occupation

Age
Director
Since
Nominee for election as Class III director to continue in office until 2017 (Proposal Two)
Claude B. Owen, Jr.
Retired Chairman and Chief Executive Officer of DIMON Incorporated (leaf tobacco dealer), Danville, VA.

Mr. Owen brings broad experience in the management and oversight of public companies, including past service as Chairman and Chief Executive Officer of a publicly traded leaf tobacco dealer and as Chairman of a publicly traded grocery wholesaler. He also has significant experience in finance, strategic planning and corporate governance, which provides the Board with a substantial resource.
70 1984
Directors of Class I to continue in office until 2018
Michael P. Haley
Retired Adviser to Fenway Partners, LLC (private equity investments), New York, NY. Retired Managing Director, Fenway Resources since June 2015. Adviser to Fenway Partners, LLC from April 2006 and Managing Director of its affiliate, Fenway Resources from March 2008, respectively, to June 2015.

Mr. Michael Haley brings high level financial expertise as a former Chief Executive Officer of a publicly traded manufacturing company and as a former adviser to a private equity firm. He also brings experience in operations and risk management and public company corporate governance. His background helps him fill the role of financial expert on the Company’s Audit Committee.
65 2002

Charles S. Harris
Executive Vice President, Averett University, Danville, VA.

Mr. Harris brings significant operational and financial management experience, including as the Director of Athletics for several universities of various sizes, both public and private. He brings diversity and a different perspective from his work with college students, the future customers for the Bank.
64 2008

Name

Principal Occupation

Age
Director
Since

Franklin W. Maddux, M.D. FACP
Chief Medical Officer and Executive Vice President for Clinical and Scientific Affairs, Fresenius Medical Care North America (healthcare services), Waltham, MA, since December 2011. Senior Vice President and Chief Medical Information Officer, Fresenius Medical Care North America, from November 2009 to December 2011. Chairman, Gamewood Technology Group, Inc. (information technology service), Danville, VA.

Dr. Maddux has significant and varied experience as a practicing physician, the chief executive of a medical clinic, the founder of an internet service provider, health information technology company and senior executive of a large publicly traded corporation. He brings an entrepreneurial perspective, as well as risk management and strategic planning experience.
58 2002

F.D. Hornaday, III
President and Chief Executive Officer, Knit Wear Fabrics, Inc. (circular knit manufacturer), Burlington, NC.

A former director and vice chairman of MidCarolina Financial Corporation, which merged with the Company in July 2011.
Mr. Hornaday brings his multifaceted experience as President of a textile company, adding to the Board’s understanding of the challenges and opportunities facing manufacturing. In addition, his board service in the health industry and his former board service in the trust industry bring value to the Board.
65 2011
Directors of Class III to continue in office until 2017
Ben J. Davenport, Jr.
Chairman, First Piedmont Corporation (waste management), Chatham, VA. Chairman, Davenport Energy Inc. (petroleum distribution), Chatham, VA.

Mr. Davenport brings his broad experience and perspective as an entrepreneur, owning and operating several highly successful businesses within the Company’s market area. Having chaired the board of a major state university and the state chamber of commerce, he also brings strong experience in public policy.

73 1992

Name

Principal Occupation

Age
Director
Since

Charles H. Majors
Chairman of the Board of Directors of the Company and the Bank since January 2015. Executive Chairman of the Company and the Bank from January 2013 to January 2015. Chairman and Chief Executive Officer of the Company and Chairman of the Bank from January 2012 to January 2013. President and Chief Executive Officer of the Company and Chairman and Chief Executive Officer of the Bank from June 2010 to January 2012. President and Chief Executive Officer of the Company and the Bank from 1994 to June 2010.

Mr. Majors brings his long tenure and experience as the Chief Executive Officer of the Company. His prior experience as a practicing corporate attorney provides significant expertise in risk management, regulatory, and legal issues.
70 1981

Dan M. Pleasant
Chief Operating Officer, The Dewberry Companies, Inc. (engineering, architectural and consulting), Fairfax, VA.

Mr. Pleasant brings significant experience as a professional engineer working in the Company’s market areas in Virginia and North Carolina. In addition, he is the Chief Operating Officer of a large national architectural, engineering and consulting firm. He is a past chairman of the Danville Utility Commission and is currently a board member of the Virginia Economic Development Partnership.
65 2011

Joel R. Shepherd
President, Virginia Home Furnishings, Inc. (furniture retailer) and 220 Self Storage, Inc. (self-storage provider), Rocky Mount, VA.

A former chairman of MainStreet BankShares, Inc. and Franklin Community Bank, N.A.,
Mr. Shepherd brings substantial entrepreneurial, construction, finance and management skills gained through his various enterprises. He also brings banking and investment experience. He was Vice President and Portfolio Manager in the Funds Management Division of Dominion Bankshares, Inc. (acquired by First Union Corporation) from 1986 to 1993.
52 2015



Name	Principal Occupation	Age	Director Since
Nominees for election as Class I directors to continue in office until 2021 (Proposal One)
Michael P. Haley	Retired Adviser, Fenway Partners, LLC (private equity investments), New York, NY. Retired Managing Director, Fenway Resources since June 2015. Adviser to Fenway Partners, LLC from April 2006 and Managing Director of its affiliate, Fenway Resources from March 2008, respectively, to June 2015. Mr. Michael Haley brings high level financial expertise as a former Chief Executive Officer of a publicly traded manufacturing company and as a former adviser to a private equity firm. He also brings experience in operations and risk management and public company corporate governance. His background helps him fill the role of financial expert on the Company’s Audit Committee.	67	2002

Charles S. Harris	Executive Vice President, Averett University, Danville, VA. Mr. Harris brings significant operational and financial management experience, including as the Director of Athletics for several universities of various sizes, both public and private. He brings diversity and a different perspective from his work with college students, the future customers for the Bank.	66	2008



Name	Principal Occupation	Age	Director Since
Franklin W. Maddux, M.D. FACP	Chief Medical Officer and Executive Vice President, Clinical and Scientific Affairs, Fresenius Medical Care North America (healthcare services), Waltham, MA. Chairman, Gamewood Technology Group, Inc. (information technology service), Danville, VA. Dr. Maddux has significant and varied experience as a practicing physician, the chief executive of a medical clinic, the founder of an internet service provider and health information technology company and a senior executive of a large publicly traded corporation. He brings an entrepreneurial perspective, as well as risk management and strategic planning experience.	60	2002

F. D. Hornaday, III	President and Chief Executive Officer, Knit Wear Fabrics, Inc. (circular knit manufacturer), Burlington, NC. A former director and vice chairman of MidCarolina Financial Corporation, Mr. Hornaday brings his multifaceted experience as President of a textile company, adding to the Board’s understanding of the challenges and opportunities facing manufacturing. In addition, his board service in the health industry and his former board service in the trust industry bring value to the Board.	67	2011



Name	Principal Occupation	Age	Director Since
Nominee for election as Class III director to continue in office until 2020 (Proposal Two)
Tammy Moss Finley	Executive Vice President, General Counsel and Corporate Secretary, Advance Auto Parts, Inc. (automotive aftermarket parts), Roanoke, VA since May 2016. Executive Vice President, Human Resources, General Counsel and Corporate Secretary, Advance Auto Parts, Inc. from January 2015 to May 2016. Senior Vice President, Human Resources, Advance Auto Parts, Inc. from March 2013 to January 2015. Vice President, Employment Counsel and Government Affairs, Advance Auto Parts, Inc. from March 2010 to March 2013. Mrs. Finley brings significant legal, human resource, risk management, and public company corporate governance expertise from her multiple leadership roles at Advance Auto Parts. In addition, her close ties to the communities we serve will benefit the entire organization.	51	2017

Directors of Class II to continue in office until 2019
Fred A. Blair	Chief Executive Officer, Blair Construction, Inc. (general contractor), Gretna, VA since May 2016. President, Blair Construction, Inc., Gretna, VA from May 1980 to May 2016. Mr. Blair brings experience as a small business owner, including his knowledge of and experience in commercial construction and development in the Company’s market areas.	71	1992

Frank C. Crist, Jr., D.D.S.	President, Brady & Crist Dentists, Inc., Lynchburg, VA. Dr. Crist brings knowledge about the Lynchburg market area where he has built a successful dental practice, as well as investments in other businesses and real estate properties in the area. He also brings his prior experience as a director and, ultimately, Chairman of the board of directors of a community bank.	72	2006



Name	Principal Occupation	Age	Director Since
Jeffrey V. Haley	President and Chief Executive Officer of the Company and the Bank since January 2013. President of the Company and President and Chief Executive Officer of the Bank from January 2012 to January 2013. Executive Vice President of the Company and President of the Bank from June 2010 to January 2012. President of Trust and Financial Services and Executive Vice President of the Bank from July 2008 to June 2010. Mr. Jeffrey Haley brings expertise based on more than 20 years in community banking and 16 years in the retail industry. His varied operational and management responsibilities during his banking tenure enable him to contribute a uniquely relevant perspective to the Board’s deliberations.	57	2012

John H. Love	President and Chief Executive Officer, W.E. Love & Associates, Inc. (insurance brokerage), Burlington, NC. A former director of MidCarolina Financial Corporation, Mr. Love brings an expert perspective on risk management, mitigation and governmental regulation based on his experience as President of a large commercial insurance brokerage firm.	58	2011

Ronda M. Penn	Chief Financial Officer, Plexus Capital LLC (small business investments), Raleigh, NC since September 2012. Partner, Dixon Hughes Goodman LLP (public accounting), Greensboro, NC from 2006 to September 2012. Mrs. Penn brings significant financial, accounting, internal control, investment and management expertise as a Chief Financial Officer, Certified Public Accountant and former partner with a national accounting firm. Her background helps her fill the role of financial expert on the Company's Audit Committee.	55	2015



Name	Principal Occupation	Age	Director Since
Directors of Class III to continue in office until 2020
Charles H. Majors	Chairman of the Board of Directors of the Company and the Bank since January 2015. Executive Chairman of the Company and the Bank from January 2013 to January 2015. Chairman and Chief Executive Officer of the Company and Chairman of the Bank from January 2012 to January 2013. President and Chief Executive Officer of the Company and Chairman and Chief Executive Officer of the Bank from June 2010 to January 2012. President and Chief Executive Officer of the Company and the Bank from 1994 to June 2010. Mr. Majors brings his long tenure and experience as the Chief Executive Officer of the Company. His prior experience as a practicing corporate attorney provides significant expertise in risk management, regulatory, and legal issues.	72	1981

Claude B. Owen, Jr.	Retired Chairman and Chief Executive Officer of DIMON Incorporated (leaf tobacco dealer), Danville, VA. Mr. Owen brings broad experience in the management and oversight of public companies, including past service as Chairman and Chief Executive Officer of a publicly traded leaf tobacco dealer and as Chairman of a publicly traded grocery wholesaler. He also has significant experience in finance, strategic planning and corporate governance, which provides the Board with a substantial resource.	72	1984

Dan M. Pleasant	Chief Operating Officer, The Dewberry Companies, Inc. (engineering, architectural and consulting), Fairfax, VA. Mr. Pleasant brings significant experience as a professional engineer working in the Company’s market areas in Virginia and North Carolina. In addition, he is the Chief Operating Officer of a large national architectural, engineering and consulting firm. He is a past chairman of the Danville Utility Commission and is currently a board member of the Virginia Economic Development Partnership.	67	2011



Name	Principal Occupation	Age	Director Since
Joel R. Shepherd	President, Virginia Home Furnishings, Inc. (furniture retailer) and 220 Self Storage, Inc. (self-storage provider), Rocky Mount, VA. A former chairman of MainStreet BankShares, Inc. and Franklin Community Bank, N.A., Mr. Shepherd brings substantial entrepreneurial, construction, finance and management skills gained through his various enterprises. He also brings banking and investment experience. He was Vice President and Portfolio Manager in the Funds Management Division of Dominion Bankshares, Inc. (acquired by First Union Corporation, now part of Wells Fargo & Company) from 1986 to 1993.	54	2015

Executive Officers

Information on the Company’s ~~four~~ executive officers as of December 31, 2017 who are not directors is disclosed in Part I, Item 1, of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2017, which was mailed with this proxy statement.

Board Independence

The Company’s Board of Directors has determined that, except for Mr. Majors and Mr. Jeffrey Haley, each director is independent within the director independence standard of the ~~NASDAQ~~Nasdaq Stock Market LLC (“~~NASDAQ”~~Nasdaq”), as currently in effect, and within the Company’s director independence standards, as established and monitored by the Company’s Corporate Governance and Nominating Committee.

Michael P. Haley is not related to Jeffrey V. Haley, President and Chief Executive Officer of the Company and the Bank. In order to avoid any confusion, Michael P. Haley will be referred to as Michael Haley and Jeffrey V. Haley will be referred to as Jeffrey Haley in this proxy statement.

Board Members Serving on Other Publicly Traded Company Boards of Directors

Michael Haley has been a director of Stanley Furniture Company, Inc. since 2003, LifePoint Health, Inc. since 2005, and Ply Gem Holdings, Inc. since 2006.

Board of Directors and Committees

Directors are expected to devote sufficient time, energy, and attention to ensure diligent performance of their duties, including attendance at board, committee, and shareholder meetings. The Board of Directors of the Company met 10 times during ~~2015.~~2017. The non-management directors held eight executive sessions during 2017, exclusive of the Chief Executive Officer and any other management. The Chairman of the Board presides at such sessions. In accordance with the Company’s Corporate Governance Guidelines, the independent directors, exclusive of the Chairman of the Board and Chief Executive Officer, also held 10quarterly executive sessions during ~~2015.~~2017. The Chairman of the Corporate Governance and Nominating Committee presides at such sessions. The Board of Directors of the Bank, which consists of all members of the Company’s Board, met 11 times during ~~2015.~~2017.

All incumbent directors and director nominees attended at least ~~75%~~86% of the aggregate total number of meetings of the ~~boards~~Company's Boards of ~~directors~~Directors and committees on which they served in ~~2015. Thirteen~~2017. All directors attended the ~~2015~~2017 Annual Meeting of Shareholders.

The Boards of Directors of the Company and the Bank have established various committees, including the Audit Committee, the Capital Management Committee, the Corporate Governance and Nominating Committee, the Human Resources and Compensation Committee, and the Risk and Compliance Committee. Membership and other information on these committees are detailed below.

The Audit Committee met four times in ~~2015.~~2017. This Committee currently consists of Mrs. Penn and Messrs. Blair, ~~Maddux,~~Michael Haley, Harris, and ~~Michael Haley.~~Maddux. Dr. Maddux serves as the Chairman. The Committee reviews significant audit, accounting and financial reporting principles, policies and practices; is directly responsible for engaging and monitoring the independent auditors of the Company; and provides oversight of the financial reporting and internal auditing functions. A more detailed description of the functions of this Committee is contained under the heading “Report of the Audit Committee.” All of the members of this Committee are considered independent within the meaning of Securities and Exchange Commission (“SEC”) regulations, the listing standards of ~~NASDAQ,~~Nasdaq, and the Company’s Corporate

Governance Guidelines. Mr. Michael Haley and Mrs. Penn, members of the Committee, are qualified as audit committee financial experts within the meaning of SEC regulations and the Board has determined that each has accounting and related financial management expertise within the meaning of the listing standards of ~~NASDAQ.~~Nasdaq.

The Capital Management Committee met ~~five~~four times in ~~2015.~~2017. This Committee currently consists of Messrs. Michael Haley, Owen, Pleasant, and Shepherd. Mr. Pleasant serves as the Chairman. This Committee assists the Board in the following areas: market, interest rate, liquidity and investment risk; capital management; ~~review of trends affecting the loan portfolio; oversight of the loan review function and credit policy; review of the adequacy of the allowance of loan losses;~~ and dividend and securities related matters.

The Corporate Governance and Nominating Committee met ~~three~~four times in ~~2015.~~2017. This Committee currently consists of Messrs. Crist, Hornaday, Maddux, Owen, and ~~Owen.~~Shepherd. Mr. Owen serves as the Chairman. The Committee is responsible for developing and implementing policies and

practices relating to corporate governance, including reviewing and monitoring implementation of the Company’s Corporate Governance Guidelines. In addition, the Committee develops and reviews background information on candidates for the Board and makes recommendations to the Board regarding such candidates. The Committee also supervises the Board’s annual review of director independence, oversees the Board’s performance self-evaluation and makes recommendations to the Board of Directors regarding director compensation. All the members of this Committee are considered independent within the meaning of SEC regulations, the listing standards of ~~NASDAQ,~~Nasdaq, and the Company’s Corporate Governance Guidelines.

The Human Resources and Compensation Committee met ~~three~~four times in ~~2015.~~2017. The Committee currently consists of Mrs. Penn and Messrs. ~~Davenport,~~ Michael Haley, Love, and Pleasant. Mr. Michael Haley serves as the Chairman. This Committee is responsible for establishing and approving the compensation of executive officers of the Company, except for the compensation of the Chief Executive Officer. The compensation of the Chief Executive Officer is reviewed, discussed, and approved by the independent members of the Board of Directors, upon recommendation of the Committee. The Committee also makes recommendations to the Board of Directors regarding promotions and related personnel matters. The Committee oversees succession planning for the Chief Executive Officer and makes recommendations to the Board of Directors regarding succession. The Committee also reviews and approves the travel related expenses of the Chief Executive Officer. Reference is made to the “Compensation Discussion and Analysis” section of this proxy statement for further information on the duties and responsibilities of this Committee. No member of the Human Resources and Compensation Committee is a current officer or employee of the Company. All members of this Committee are considered independent within the meaning of SEC regulations, the standards of ~~NASDAQ,~~Nasdaq, and the Company’s Corporate Governance Guidelines.

The Risk and Compliance Committee met four times in ~~2015.~~2017. This Committee currently consists of Messrs. Blair, Crist, Harris, and Love. Mr. Harris serves as the Chairman. The Committee reviews all aspects of regulatory compliance and significant operational risk and security related matters. These risks include, but are not limited to, credit, information security, fraud, physical security, insurance, and vendor management. The Committee also provides oversight for the Board in the following areas: review of trends affecting the loan portfolio; oversight of the loan review function and credit policy; and review of the adequacy of the allowance for loan losses. This Committee also is focused on the development and evolution of enterprise risk management oversight.

The charters of the Board Committees are available on the Company’s website, www.amnb.com. For access to the charters, select the “Investors” icon, then select “Governance Documents.”

Compensation Committee Interlocks and Insider Participation

No member of the Human Resources and Compensation Committee or executive officer of the Company has a relationship that would constitute an interlocking relationship with executive officers or directors of another entity.

Director Nominations Process

The Company’s Board of Directors has adopted, as a component of its Corporate Governance Guidelines, a process related to director nominations (the “Nominations Process”). The purpose of the Nominations Process is to describe the manner by which candidates for possible inclusion in the Company’s recommended slate of director nominees are selected. The Nominations Process is administered by the Corporate Governance and Nominating Committee of the Board.

The Committee considers candidates for Board membership suggested by its members, other Board members, management, and shareholders. A shareholder who wishes to recommend a prospective nominee for the Board may, at any time, notify the Company’s Chairman, President or any member of the Committee in writing with supporting material the shareholder considers appropriate. The Committee will consider the shareholder’s recommendation and will decide whether to recommend to the Board the nomination of any person recommended by a shareholder pursuant to the provisions of the Company’s bylaws relating to shareholder proposals, as described in the “Shareholder Communications and Proposals” section of this proxy statement.

Once the Committee has identified a candidate, it makes an initial determination whether to conduct a full evaluation of the candidate based on information accompanying the recommendation and the Committee members’ knowledge of the candidate, which may be supplemented by inquiries to the person making such recommendation or to others. The preliminary determination is based primarily on the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the candidate can satisfy the evaluation factors established in the Corporate Governance Guidelines. The Committee may seek additional information about the candidate’s background and experience. The Committee then evaluates the candidate against the criteria in the Company’s Corporate Governance Guidelines, including, but not limited to, independence, availability for time commitment, skills such as an understanding of the financial services industry, general business knowledge and experience, all in the context of an assessment of the perceived needs of the Board at that point in time. The Committee does not have a formal policy with respect to diversity on the Board. However, it considers diversity as a prerequisite for adequately representing the interests of the various stakeholders in the Company – shareholders, customers, and employees. The Committee seeks diversity in overall board composition. In the Committee’s nominee considerations, diversity is a much broader concept than just the traditional racial and gender dimensions, as it also includes education, geography, business and professional experience and expertise, and civic involvement and responsibility, especially within the Company’s market area. In connection with this evaluation process, the Committee determines whether to interview the candidate, and if warranted, one or more members of the Committee will conduct such interview. After completing the evaluation, the Committee makes a recommendation to the Board of Directors as to the persons who should be nominated by the Board, and the Board determines the nominees after considering the recommendation of the Committee.

Corporate Governance and Risk Oversight Practices

In a financial institution, the role of the Board is critical to the success or failure of the enterprise. The Board of Directors is led by the Company’s Chairman, Mr. Majors. The Chairman of the Corporate

Governance and Nominating Committee, Mr. Owen, functions as the lead independent director. He chairs the Board in the absence of the Chairman and the Chief Executive Officer or when the Board’s independent directors meet in executive session. Mr. Owen is a retired Chairman and Chief Executive Officer of a publicly traded tobacco company and a former non-executive board chairman of another public company, and his background and experience prepare him well for this role. Meetings of the independent directors are held ~~numerous times throughout the year.~~at least quarterly.

This structure has evolved incrementally over ~~the past~~more than 20 years, during the respective tenures of

Mr. Majors and Mr. Jeffrey Haley as Chief Executive Officer. In the opinion of the Board, it has served the interests of the shareholders, customers, employees and regulators well, as vouched by the Company’s consistently strong asset quality, earnings, and total return to shareholders.

The Board of Directors of a financial institution is the strategic linchpin in the risk oversight process. Financial institutions deal with credit risk, liquidity risk, interest rate risk, investment risk, operational risk, reputation risk, and regulatory risk in the day to day conduct of banking business. In order to better manage the risk oversight process, over the past few years the Board has evolved and enhanced its supervision oversight process.

As part of that evolution, there are three standing Board committees whose focus is specifically risk management and oversight: the Audit Committee, the Capital Management Committee, and the Risk and Compliance Committee. The Audit Committee is primarily concerned with financial reporting and internal control related risks. The Capital Management Committee is primarily concerned with ~~credit risk,~~ market risk, interest rate risk, liquidity risk, ~~and~~ investment risk, and capital management. The Risk and Compliance Committee is primarily concerned with developing an enterprise wide risk management strategy. Its focus is mainly operational, credit, and regulatory compliance risk. The Board’s Committee efforts are supplemented and supported by the ~~Enterprise~~Executive Risk ~~Management~~ Committee, which is comprised of members of senior management and the Chairman of the Board.

In the opinion of the Board, this structure provides for a constantly evolving and improving approach to risk management and oversight.

Board Tenure Policy

The Board of the Company has a long-standing policy for the Company and the Bank with respect to the tenure of directors. In summary, it provides for the following:

No director will allow himself to be nominated for reelection to the Board of the Company after reaching the age of 72;

No director will allow himself to be nominated for reelection to the Board of the Bank, unless at the time of such reelection he was eligible to serve as a director of the Company;

Any director who retires or resigns from or severs his current employment, or relocates outside the market area of the Bank, will tender his resignation. The Board may accept the resignation, delay acceptance, or decline to accept it;

No inside director will continue to serve as a director after his retirement, resignation or other severance of employment status. However, the Board may waive this requirement if it is deemed in the best interests of the Company or the Bank;

No director will be eligible for reelection if he is absent from all meetings for the 12-month period preceding the Annual Meeting of Shareholders at which such election would be held; and

Any former director may be elected as a Director Emeritus for a one year term, but may not serve more than three years or be elected after reaching age 75. A Director Emeritus will be entitled to attend and participate in Board meetings, but will not be eligible to vote and ~~his~~their presence will not be considered in the determination of a quorum.

A reference in this proxy statement to one gender, masculine or feminine, includes the other; and the singular includes the plural and vice versa unless the context otherwise requires.

SECURITY OWNERSHIP

The table below includes information on all shareholders of the Company known to management to beneficially own 5% or more of the Company’s common stock.

Name and Address of

Shares of Common Stock Beneficially Owned

Investment Power (1)

Voting Power (1)

Percent of Class

Shares of Common Stock Beneficially Owned

Investment Power (1)

Voting Power (1)

Percent of Class

Beneficial Owner

(#) (1)

Shared

Sole

None

Shared

Sole

None

(%)

(#) (1)

Shared

Sole

None

Shared

Sole

None

(%)

BlackRock, Inc.

545,474

—

545,474

—

524,641

—

592,606

—

592,606

—

584,324

—

6.9%

55 East 52nd Street

New York, New York 10022 (2)

New York, New York 10055 (2)

____________________

~~Dr. Maddux, 300 shares; Mr. Majors,~~ 4,454 shares; Mr. Owen, 4,200 shares; and Mr. ~~Shepherd,~~

~~100~~Shepherd,100 shares.

Respectfully submitted,

Michael P. Haley, Chairman

~~Ben J. Davenport, Jr.~~

The Company’s Executive Compensation Philosophy

The Human Resources and Compensation Committee of the Board of Directors ("Committee") is responsible for establishing and approving the compensation of the executive officers of the Company, except for the compensation of the Chief Executive Officer, which is approved by the independent members of the Board of Directors. The Committee considers a variety of factors and criteria in arriving at its decisions and recommendations for compensation. The Committee’s objective is to attract and retain a superb leadership team with market-competitive compensation and to align the team member’s interests with those of the Company, its customers and its shareholders. Accordingly, a significant portion of the Company’s executive officers’ compensation is directly and materially linked to operating performance. In particular, cash ~~bonuses~~incentive payments and ~~incentive payments~~restricted stock awards are heavily dependent on meeting or exceeding Company financial performance goals as well as objective and subjective criteria related to the executive officer’s area of responsibility.

Role of Compensation Consultant



~~Institution Name~~	~~Ticker~~	~~City~~	~~State~~
~~BNC Bancor~~p	~~BNCN~~	H~~igh Point~~	NC
First ~~Bancorp~~	~~FBNC~~	~~Southern~~ P~~ines~~	NC
F~~irst Commun~~i~~ty Bancshares.~~ I~~nc.~~	F~~CBC~~	Bluefield	VA
~~Stoc~~k ~~Yards Ba~~n~~corp, Inc~~.	~~SYBT~~	Loui~~sville~~	KY
~~NewB~~r~~idge~~ B~~ancorp~~	~~NBBC~~	~~Greensboro~~	NC
~~Bank of Kentucky Financ~~ial Corp~~oration~~	~~BKYF~~	C~~restview~~ H~~ills~~	KY
Far~~mers Capital Bank Corporation~~	FFKT	F~~rankfor~~t	KY
~~Summ~~i~~t Financ~~ial ~~Group,~~ I~~nc.~~	~~SMMF~~	~~Moorefie~~ld	WV
~~C&F~~ F~~inanc~~i~~al Corpo~~r~~ation~~	C~~FFI~~	~~Wes~~t ~~Point~~	VA
~~Middleburg~~ ~~Financia~~l~~Corporation~~	~~MBRG~~	Middl~~ebu~~rg	VA
~~National Banks~~h~~ares,~~ ~~Inc.~~	~~NKSH~~	~~Blac~~k~~sburg~~	VA
~~Premier Financia~~l Ban~~corp,~~ ~~Inc.~~	~~PFB~~I	~~Huntington~~	WV
C~~ommunity~~ Ban~~kers~~ T~~rust Corporation~~	E~~SXB~~	~~Ric~~hmond	VA
Sh~~ore Bancs~~h~~ares, Inc~~.	SHBI	~~Easton~~	MD
~~Peop~~l~~es Banco~~rp of Nor~~th Caro~~lina, Inc.	PEBK	N~~ewton~~	NC
~~Eastern~~ Virgi~~nia Ba~~nkshar~~es, Inc.~~	~~EVBS~~	~~Tappaha~~nn~~ock~~	VA
~~Monarch~~ Finan~~cial~~ H~~oldings,~~ ~~Inc.~~	~~MNRK~~	~~Chesapeake~~	VA
O1~~d Po~~int F~~inanci~~al Corpor~~ati~~on	~~OPOF~~	~~Ham~~p~~ton~~	VA
Vall~~ey F~~in~~ancial Corporatio~~n	~~VYFC~~	~~Roanoke~~	VA



Institution Name	Ticker	State
Stock Yards Bancorp, Inc.	SYBT	KY
Atlantic Capital Bancshares, Inc.	ACBI	GA
HomeTrust Bancshares Inc.	HTBI	NC
First Community Bancshares, Inc.	FCBC	VA
WashingtonFirst Bankshares, Inc.	WFBI	VA
Summit Financial Group, Inc.	SMMF	WV
Old Line Bancshares, Inc.	OLBK	MD
Carolina Financial Corporation	CARO	SC
Farmers Capital Bank Corporation	FFKT	KY
Premier Financial Bancorp, Inc.	PFBI	WV
C&F Financial Corporation	CFFI	VA
Access National Corporation	ANCX	VA
Southern First Bancshares, Inc.	SFST	SC
The Community Financial Corporation	TCFC	MD
First United Corporation	FUNC	MD
Entegra Financial Corp.	ENFC	NC
Community Bankers Trust Corporation	ESXB	VA
National Bankshares, Inc.	NKSH	VA

~~During 2015, the Company did not engage PM&P for any services.~~

Performance Compensation and Bonus Program

~~In addition, beginning~~

Stock Compensation ~~Plans~~Plan

Nonvested restricted stock for the year ended December 31, ~~2015~~2017 is summarized in the following table.

Weighted Average Grant

401(k) Employee Savings Plan

Executive officers participate in the Company’s benefit plans on the same terms as other employees. These plans include medical, dental, life, and disability insurance. The Company provides life insurance coverage equal to four times the employee’s salary for all eligible employees. Coverage in excess of $50,000 is subject to taxation paid by the employee based on Internal Revenue Service guidelines.

Executive Employment Agreements and Change in Control Arrangements

Potential Payments upon Termination or Change in Control

If a change in control had occurred on December 31, ~~2015,~~2017, and the named executive officers were terminated on that same date, the compensation and benefits that would be payable to each of the named executive officers under the terms of their employment agreements are identified in the following table. This hypothetical scenario would require payment of ~~salary and~~each officer’s “Final Compensation” as determined under his employment agreement, accrued bonus, and coverage under the Company’s healthcare plan through December 31, ~~2017.~~2019. Stock awards represent the market value of restricted shares of stock that have not vested as of December 31, ~~2015.~~2017. As Messrs. Dobbins and Hamadi were not employed by the Company on December 31, 2017, no information is provided.

Dabney T.P. Gilliam, Jr. (1)

Tax and Accounting Considerations

Security Ownership Guidelines and Hedging of Securities

Compensation Recovery Policy

Summary Compensation Table



Name and Principal Position	Year	Salary ($)	Bonus ($) (1)	Stock Awards ($) (2)	Non-Equity Incen-tive Plan Com-pen-sation ($) (3)	Change in Pension Value and Non-Qualified Deferred Compen-sation Earnings ($) (4)	All Other Com-pen-sation ($) (5)	Total ($)

Jeffrey V. Haley	2017	488,227	73,500	104,183	117,000	50,475	27,038	860,423
President and Chief	2016	438,269	66,000	83,341	112,500	18,411	26,461	744,983
Executive Officer of	2015	390,000	58,500	53,345	75,000	730	23,881	601,456
the Company and
the Bank

H. Gregg Strader	2017	338,462	34,000	49,394	59,160	—	17,551	498,566
Executive Vice President	2016	298,269	30,000	37,302	56,250	—	15,872	437,693
and Chief Banking Officer	2015	250,000	25,000	25,012	30,000	—	12,852	342,864
of the Company and
the Bank

William W. Traynham	2017	273,539	27,500	41,408	47,850	—	25,097	415,393
Executive Vice President	2016	236,758	23,700	39,930	44,437	—	24,519	369,344
and Chief Financial	2015	230,000	23,000	37,510	29,000	—	20,956	340,466
Officer of the Company
and the Bank

Edward C. Martin (6)	2017	225,000	—	8,335	26,100	—	18,024	277,459
Executive Vice President	2016	—	—	—	—	—	—	—
and Chief Credit Officer	2015	—	—	—	—	—	—	—
of the Bank

R. Helm Dobbins (7)	2017	62,615	—	78,664	—	13,901	8,603	163,783
Executive Vice President	2016	205,792	20,600	33,341	38,625	13,202	22,364	333,924
and Chief Credit Officer	2015	200,000	20,000	28,341	25,000	4,122	14,671	292,134
of the Company and
the Bank

Ramsey K. Hamadi (8)	2017	258,923	—	—	—	—	19,162	278,085
Executive Vice President	2016	89,231	8,923	—	16,730	—	7,938	122,822
of the Company;	2015	—	—	—	—	—	—	—
Executive Vice President
and Chief Administrative
Officer of the Bank

Name and Principal Position of the Company and the Bank Year
Salary
($)
Bonus ($) (1) Stock Awards ($) (2) Non-Equity Incentive Plan Compen-sation ($) (3)
Change in
Pension
Value and
Non-Qualified
Deferred
Compen-sation
Earnings
($) (4)

All Other
Compen-sation
($) (5)

Total
($)

Jeffrey V. Haley 2015 390,000
—
53,345
75,000
730
82,381
601,456
President and 2014 338,923
100,000
56,677
—
28,546
29,849
553,995
Chief Executive Officer 2013 300,000
50,000
40,008
—
(8,704 ) 35,851
417,155

H. Gregg Strader (6) 2015 250,000
—
25,012
30,000
—
37,852
342,864
Executive Vice President and 2014 —
—
—
—
—
—
—
Chief Banking Officer 2013 —
—
—
—
—
—
—

William W. Traynham 2015 230,000
—
37,510
29,000
—
43,956
340,466
Executive Vice President and 2014 211,232
22,500
43,345
—
—
23,454
300,531
Chief Financial Officer 2013 192,500
15,000
30,009
—
—
22,363
259,872

R. Helm Dobbins (6) 2015 200,000
—
28,341
25,000
4,122
34,672
292,135
Executive Vice President and 2014 —
—
—
—
—
—
—
Chief Credit Officer 2013 —
—
—
—
—
—
—

Dabney T.P. Gilliam, Jr. (6) (7) 2015 190,000
—
28,341
23,000
3,533
34,873
279,747
Executive Vice President and 2014 —
—
—
—
—
—
—
Chief Administrative Officer 2013 —
—
—
—
—
—
—

Other Compensation Table

Allocation to Nonqualified Deferred Compen-sation Plan

Company Contribution to 401(k) Plan

Company Contribution to Profit Sharing Plan

Company Contribution to 401(k) Plan

Grants of Plan-Based Awards in ~~2015~~2017

All Other Stock Awards: Number of Shares of Stock

Grant Date Fair Value of Stock and Option Awards

All Other Stock Awards: Number of Shares of Stock

Grant Date Fair Value of Stock and Option Awards

_____________________

Outstanding Equity Awards at Fiscal Year-End

Option Exercises and Stock Vested

The following table reflects stock options exercised and shares acquired upon the vesting of restricted stock awards in ~~2015~~2017 by the named executive officers and the value realized on exercise and vesting. There were no stock options exercised in 2017.

Acquired on Exercise

_______________________

The following table reflects the actuarial present value of the named executive officers’ accumulated benefits under the Company’s former pension plan and the number of years of service earned and credited under the plan as of December 31, 2009, which was the final year of the plan.

____________________

Nonqualified Deferred Compensation



Name	Executive Contributions in 2017 ($) (1)	Registrant Contributions in 2017 ($) (2)	Aggregate Earnings/ (Losses) in 2017 ($)	Aggregate Withdrawals/ Distributions ($)	Aggregate Balance as of December 31, 2017 ($)

Jeffrey V. Haley	—	73,500	23,090	—	229,186
H. Gregg Strader	—	34,000	9,504	—	101,964
William W. Traynham	22,219	27,500	12,530	—	160,679
Edward C. Martin (3)	—	—	—	—	—
R. Helm Dobbins (4)	—	—	1,381	63,159	—
Ramsey K. Hamadi (5)	23,900	—	2,765	9,856	25,732

Name
Executive Contributions
in 2015
($)

Registrant Contributions
in 2015
($) (1)

Aggregate Earnings/
(Losses)
in 2015
($)

Aggregate Withdrawals/
Distributions
($)

Aggregate Balance as of December 31,
2015
($)

Jeffrey V. Haley —
58,500
—
—
58,500
H. Gregg Strader —
25,000
—
—
25,000
William W. Traynham 14,500
23,000
(467 ) —
37,033
R. Helm Dobbins —
20,000
(345 ) —
19,655
Dabney T.P. Gilliam, Jr. —
19,000
—
—
19,000

______________________

Director Compensation

The following table reflects the director compensation earned or paid during ~~2015.~~2017.

Fees Earned or Paid in Cash

____________________

Deferred Compensation for Current Chairman and Former Chief Executive Officer

In the ordinary course of its business, the Bank makes loans to, accepts deposits from, and provides other banking services to, certain directors and executive officers of the Company, their associates, and members of their immediate families. Loans are made on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable loans with persons not affiliated with the Bank, and do not involve more than the normal risk of collectability or present other unfavorable features. Such loans are processed through the Bank’s normal credit approval procedures, but ultimate approval authority rests with the Board of Directors of the Bank. Rates paid on deposits and fees charged for other banking services and other terms of these transactions, are also the same as those prevailing at the time for comparable transactions with persons not affiliated with the Bank. The Bank expects to continue to enter into transactions in the ordinary course of business on similar terms with the directors, officers, principal shareholders, their associates, and members of their immediate families. Loans outstanding to such persons at December 31, ~~2015~~2017 and ~~2014~~2016 totaled ~~$16,338,000~~$14,221,000 and ~~$15,532,000,~~$22,078,000, respectively. None of such loans have been on non-accrual status, 90 days or more past due, or restructured at any time.

From time to time the Company may also enter into other types of business transactions or arrangements for services with the Company’s directors, officers, principal shareholders or their associates. These types of transactions or services might include, among others, purchases of equipment or provision of legal services. The Company will only enter into such arrangements if it is determined that the prices or rates offered are comparable to those available to the Company from unaffiliated third parties. Management approves such transactions on a case by case basis. The Company does not have written policies or procedures with respect to such approvals. As of December 31, ~~2015,~~2017, the Company has no such reportable transactions.

Fees to Independent Registered Public Accounting Firm for Fiscal Years ~~2015~~2017 and ~~2014~~2016

Yount, Hyde and Barbour, P.C. audited the consolidated financial statements included in the Company’s Annual Reports on Form 10-K for the years ended December 31, ~~2015~~2017 and ~~2014;~~2016; reviewed the Company’s quarterly reports on Form 10-Q during the years ended December 31, ~~2015~~2017 and ~~2014;~~2016; and audited management’s assessment of internal control over financial reporting as of December 31, ~~2015~~2017 and ~~2014.~~2016. The following table presents aggregate fees paid or to be paid by the Company and the Bank for professional services rendered by Yount, Hyde and Barbour, P.C. for the years ended December 31, ~~2015~~2017 and ~~2014.~~2016.

PROPOSAL THREE – RATIFICATION OF SELECTION OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors recommends that you vote FOR the ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, ~~2016.~~2018. Proxies solicited by the Board will be voted in favor thereof unless a shareholder has indicated otherwise on the proxy.

In accordance with SEC regulations, the Company is providing shareholders with an advisory (non-binding) vote on the compensation programs for the named executive officers (sometimes referred to as “say on pay”). At the Company’s 2017 Annual Meeting, shareholders voted in favor of having an advisory (non-binding) vote on executive compensation every year. Accordingly, shareholders ~~may vote on~~are being asked to approve the following resolution at the Annual Meeting:

“Resolved, that the shareholders approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the Compensation Discussion and Analysis section, the accompanying compensation tables, and the related narrative disclosure in this proxy statement.”

As described under the “Compensation Discussion and Analysis” section of this proxy statement, the Company’s compensation programs are designed to treat employees fairly and to pay compensation at a level commensurate with the market, given individual and Company factors and performance. A core objective is to attract and retain a superb leadership team with market-competitive compensation and to align the team member’s interests with those of the Company, its customers and its shareholders. Accordingly, a significant portion of the Company’s executive officers’ compensation is directly and materially linked to operating performance. The Company believes that its compensation program, with its balance of short-term and long-term incentives and share ownership guidelines, rewards sustained performance that is aligned with long-term shareholder interests. Shareholders are encouraged to read the Compensation Discussion and Analysis section and related disclosures.

The Board of Directors unanimously recommends that shareholders vote FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in the Compensation Discussion and Analysis section, the accompanying compensation tables, and the related narrative disclosure in this proxy statement.

PROPOSAL FIVE – APPROVAL OF THE AMERICAN NATIONAL BANKSHARES INC. 2018 EQUITY COMPENSATION PLAN

The Board of Directors has adopted, subject to approval by the Company’s shareholders, the American National Bankshares Inc. 2018 Equity Compensation Plan (the “2018 Plan”). The 2018 Plan is designed to promote the interests of American National Bankshares Inc. and its shareholders by strengthening the Company’s ability to attract, motivate and retain employees, directors and consultants upon whose judgment, initiative and efforts the financial success and growth of the business of American National Bankshares Inc. largely depend.

If approved by shareholders, a total of 675,000 shares of common stock will be reserved for issuance under the 2018 Plan. The Company is asking shareholders to approve the 2018 Plan because the stock incentive plan approved by shareholders in 2008 (the “2008 Plan”) terminated on February 18, 2018. Outstanding awards under the 2008 Plan will be administered in accordance with their terms under such plan.

The material terms of the 2018 Plan are summarized below. Because this is a summary, it may not contain all the information that shareholders may consider important. In order to aid understanding of the plan, the full text of the 2018 Plan, as proposed for adoption and approval by shareholders, is provided as Appendix A to this proxy statement.

The following is a summary of the key provisions of the 2018 Plan, including important features that enable the Company to maintain sound governance practices in granting awards.

Award Types: The following types of awards will be available for issuance under the 2018 Plan:

•nonstatutory and incentive stock options;

•restricted stock and other stock awards;

•restricted stock units; and

•stock appreciation rights.

Eligible Participants: All employees, directors and consultants of the Company and our subsidiaries.

Shares Reserved under the 2018 Plan: A total of 675,000 shares of the Company’s common stock are reserved for issuance under the 2018 Plan. The number of shares available for issuance under the 2018 Plan is subject to adjustment to reflect stock splits, stock dividends and similar events.

Shares Reserved under the 2018 Plan as a Percentage of Outstanding Common Stock as of December 31, 2017: 7.8%

•No Liberal Share Recycling: Under the 2018 Plan, shares of the Company’s common stock used to pay the exercise price of a stock option or to satisfy tax withholding obligations in connection with an award will not be added back (recycled) to the aggregate plan limit.

•No Dividends or Similar Distributions on Unvested Awards or Options: The 2018 Plan prohibits the payment of dividends or similar distributions on awards, whether subject to time-based or performance-based vesting, unless and until the vesting requirements have been met.

•No Discounted Stock Options: The 2018 Plan prohibits the grant of stock options with an exercise price less than the fair market value of the Company’s common stock on the grant date.

•Protective Provisions: The 2018 Plan provides for the possible forfeiture of outstanding awards upon a participant’s termination for cause and adds provisions subjecting all awards under the plan to the terms of any recoupment or clawback required by law or government regulation (or similar policy in effect at the Company).

•Term of the Plan: No awards may be granted under the 2018 Plan after February 19, 2028, the termination date of the plan.

Equity Plan Information

The following table provides information relating to the outstanding equity awards, which consists of only stock options and restricted stock awards, at year-end for the past three years and the number of full-value awards, which consists of only restricted stock awards, granted during this three-year period.



For the Year Ended December 31,	2017		2016		2015

Stock option awards granted	—		—		—
Full value awards granted:
Restricted stock awards	14,453		29,025		19,155
Other stock awards	—		—		—
Basic weighted average shares	8,641,717		8,611,507		8,680,502
Stock option awards outstanding	50,985		58,411		67,871
Weighted average exercise price	$	24.09	$	24.37	$	24.47
Weighted average term (in years)	0.79		1.75		2.61
Full value awards outstanding:
Restricted stock awards	46,501		50,822		41,563
Other stock awards	—		—		—
Common shares outstanding	8,650,574		8,618,051		8,622,007

The purpose of the 2018 Plan is to further the long-term stability and financial success of the Company by attracting and retaining personnel, including employees, directors and consultants, through the use of stock and stock-based incentives and other rights that promote and recognize the financial success and growth of the Company. The Company believes that ownership of Company’s common stock will stimulate the efforts of those persons upon whose judgment, interest and efforts the Company depends for the successful conduct of its business, and will further the alignment of those persons’ interests with the interests of the Company’s shareholders.

Shares Available for Issuance

Subject to approval by shareholders, the aggregate number of shares reserved for issuance under the 2018 Plan is 675,000. Of this total, all 675,000 shares may be issued pursuant to the exercise of incentive stock options. If any award granted under the 2018 Plan is canceled, forfeited or expires for any reason other than as a result of exercise, vesting or settlement, the shares associated with such award will be available for future awards under the 2018 Plan. In contrast, any shares withheld by the Company, delivered by a participant, or otherwise used to pay an option exercise price or withholding taxes associated with an award will not be available for future awards under the 2018 Plan. Further, in the event shares are withheld or delivered by a participant in connection with an option exercise, the number of shares available for future awards will be reduced by the gross number of shares to which the exercise relates, rather than the net number of new shares issued upon exercise.

With certain limitations, the 675,000 share limit (including for incentive stock options), the terms of outstanding awards and the individual annual award limits (described below) will be adjusted by the Compensation Committee (as defined below) in an equitable and proportionate manner to prevent dilution or enlargement of benefits or potential benefits intended to be made available under the 2018 Plan in the event of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, spin-off of a subsidiary, or other relevant change in capitalization.

To date, no awards have been granted under the 2018 Plan.

Annual Limit on Awards

The maximum number of shares with respect to which awards may be granted in any calendar year to any individual other than a non-employee director will be 25,000 shares. Non-employee directors may only receive awards for a maximum number of 10,000 shares of common stock in any calendar year.

The 2018 Plan will be administered by the Human Resources and Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors, a committee which is composed entirely of independent directors. The Compensation Committee will have the power to select award recipients and grant awards on terms the Compensation Committee considers appropriate. In addition, the Compensation Committee will have the authority to interpret the 2018 Plan, to adopt, amend or waive rules and regulations for the 2018 Plan’s administration, and to make all other determinations for administration of the 2018 Plan. The Compensation Committee may delegate all or part of its authority to one or more officers of the Company with respect to awards to individuals not subject to the reporting and other provisions of Section 16 of the Securities Exchange Act of 1934. Note: define term earlier in proxy.

Any employee or director of, or consultant to, the Company or an affiliate (as defined below) of the Company who, in the judgment of the Compensation Committee, has contributed or can be expected to contribute to the profits or growth of the Company is eligible to become a participant. For this purpose, an affiliate is a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company. The Bank is considered an affiliate of the Company. As of March 31, 2018, the Company and its affiliates employed approximately 353 individuals (of which 175 were officers) and as of such date, there were 13 non-employee directors of the Company and its affiliates.

Stock Options. Stock options granted under the 2018 Plan may be incentive stock options (which meet the requirements of Section 422 of the Internal Revenue Code of 1986 (the “Code”) and options that do not qualify as incentive stock options (“nonstatutory stock options”). A stock option entitles a recipient to purchase shares of common stock at a specified exercise price. The Compensation Committee will fix the exercise price at the time the stock option is granted, provided the exercise price

cannot be less than 100% of the fair market value of a share of the Company’s common stock on the date of grant (or, in the case of an incentive stock option granted to a 10% shareholder of the Company, 110% of the shares’ fair market value on the date of grant). On March 29, 2018, the closing price of the common stock was $37.60 per share. The exercise price may be paid (i) in cash, (ii) by delivery of previously acquired shares with an aggregate fair market value equal to the exercise price for the number of option shares being acquired, (iii) through a “net share exercise” whereby the Company withholds and retains sufficient shares issuable in connection with the stock option to cover the exercise price (other than for incentive stock options), (iv) through a “cashless exercise” procedure that enables a participant the opportunity to sell immediately some of the shares underlying the exercised portion of the stock option to generate sufficient cash to pay the exercise price, (v) or through a combination of the foregoing.

Stock options may be exercised at such times and subject to such conditions as may be prescribed by the Compensation Committee, including the requirement that they will not be exercisable after 10 years from the date of grant (or five years in the case of an incentive stock option granted to a 10% shareholder of the Company).

Restricted Stock Awards. The 2018 Plan permits the grant of restricted stock awards that are subject to forfeiture until the restrictions established by the Compensation Committee lapse and the restricted shares vest. A restricted stock award is an award of common stock that may be subject to restrictions on transferability and other restrictions as the Compensation Committee determines in sole discretion on the date of grant. The restrictions may lapse over a specified period of time based on continued employment or service and/or the achievement of certain performance objectives. Unless a restricted stock award agreement provides otherwise, and except as provided in the next sentence, a participant who receives a restricted stock award will have all the rights of a shareholder as to those shares, including the right to vote. No dividends on shares of restricted stock will be paid to a participant unless and until those shares vest, at which time the accrued dividends (and, if and as determined by the Compensation Committee, interest on any accrued cash dividends) will be delivered.

Restricted Stock Unit Awards. The Compensation Committee may also award restricted stock units (“RSU”) under the 2018 Plan. An RSU is an award stated with reference to a number of shares of common stock. The Compensation Committee may place such restrictions on the vesting and settlement of RSUs as the Compensation Committee deems appropriate, including restrictions relating to continued employment or service and/or achievement of certain performance objectives. The RSU may entitle the recipient to receive, upon satisfaction of the vesting conditions set forth in the RSU agreement, cash, shares of common stock or a combination of cash and shares of common stock. Holders of RSUs have no right to vote the shares represented by the units, but may be credited with cash and stock dividends paid by the Company in respect of its common stock. Any such dividends will be paid to the participant, in the form of cash or common stock with an equivalent value, if at all, on vesting and settlement of the related RSU. Subject to any exceptions authorized by the Compensation Committee, RSUs will be forfeited if the restrictions on vesting, whether time-based or performance-based, established with respect to such awards are not satisfied.

Stock Appreciation Rights. The 2018 Plan authorizes the Compensation Committee to grant stock appreciation rights (“SARs”) that entitle a participant upon exercise to receive cash, shares of common

stock or a combination thereof. The amount that a participant will receive upon exercise of the SAR will equal the excess of the fair market value of a share of common stock on the date of exercise over the SAR’s exercise price, multiplied by the number of shares for which the SAR is exercised. The exercise price of a SAR may not be less than the fair market value on the date of grant. SARs will become exercisable in accordance with the terms prescribed by the Compensation Committee. SARs may be granted in tandem with an option or independently from an option grant. The exercise of SARs granted in tandem with options will terminate those options, and the exercise of the related options will cancel the tandem SARs. The term of a SAR cannot exceed 10 years from the date of grant or five years in the case of a SAR granted in tandem with an incentive stock option awards to a 10% shareholder of the Company.

Stock Awards. The Compensation Committee may grant a stock award that is fully vested and freely transferable as of the date the award is granted, subject to restrictions under applicable federal or state securities laws. A stock award may be, but is not required to be, granted in settlement of a performance-conditioned award or upon achievement of performance objectives.

Restrictions on Transfer

In general, awards granted under the 2018 Plan may not be assigned, transferred, pledged or otherwise encumbered by a participant, other than by will or the laws of descent and distribution. The plan permits the award of nonstatutory stock options that are transferable to immediate family members (or certain related trusts or entities), in accordance with applicable securities laws.

Change in Control Provisions

In the event of a “change in control” (as defined in the 2018 Plan), the Compensation Committee may, at the time an award is made or thereafter, take such action as it deems appropriate, in its sole discretion and without the consent of a participant, which may include, without limitation, the following actions: (i) cause any outstanding award to be assumed, or new rights substituted therefor, by the acquiring or surviving corporation in such change in control; (ii) if an award is not assumed or substituted, provide for the purchase, settlement or cancellation of any award by the Company for an amount of cash equal to the amount that could have been obtained upon the exercise of such award or realization of such participant’s rights had such award been currently exercisable or payable; or (iii) adjust outstanding awards as the Compensation Committee deems appropriate to retain the economic value of the award. Unless otherwise provided by the Compensation Committee, upon a change in control an award will be vested, earned or become exercisable to the extent provided in the applicable award agreement.

Amendment and Termination

If not sooner terminated by the Board of Directors of the Company, the 2018 Plan shall terminate on February 19, 2028. The Board of Directors may amend or terminate the 2018 Plan at any time, provided that no such amendment will be made without shareholder approval if required by the Code, pursuant to the rules under Section 16 of the Exchange Act, by any national securities exchange or system on which the common stock is then listed or reported, by any regulatory body having jurisdiction with

respect thereto, or under any other applicable laws, rules or regulations. Awards outstanding on the date of any such termination or amendment shall remain valid in accordance with their terms.

Summary of Federal Income Tax Consequences

The following is a general summary of the federal income tax consequences under the 2018 Plan. This summary does not address all matters that may be relevant to a particular participant based on his or her specific circumstances.

Nonstatutory Stock Options. The grant of a nonstatutory stock option will not result in taxable income to a participant. The participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares acquired over the exercise price for those shares, and the Company will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.

Incentive Stock Options. The grant of an incentive stock option will not result in taxable income to a participant. The exercise of an incentive stock option will not result in taxable income to the participant provided that the participant was, without a break in service, an employee of the Company or a subsidiary (as defined for purposes of the relevant tax rules) during the period beginning on the date of the grant of the option and ending on the date three months prior to the date of exercise. This employment period is one year prior to the date of exercise if the participant is “disabled” (as defined in the Code). The heirs of a participant are not subject to this tax rule. The difference between the fair market value of the shares on the exercise date over the exercise is taken into account for alternative minimum tax purposes.

If the participant does not sell or otherwise dispose of the stock within two years from the date of the grant or within one year after exercise, then, upon disposition of such shares, any amount realized in excess of the exercise price will be taxed to the participant as capital gain, and the Company will not be entitled to any deduction for federal income tax purposes.

If the foregoing holding period requirements are not met, the participant will generally realize ordinary income, and the Company will be allowed a corresponding deduction, at the time of the disposition of the shares, in an amount equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the exercise price, or (ii) the excess, if any, of the amount realized upon disposition of the shares over the exercise price. If the amount realized exceeds the value of the shares on the date of exercise, any additional amount will be capital gain. If the amount realized is less than the exercise price, the participant will recognize no income, and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of the shares.

Special rules apply if a participant pays the exercise price for either type of option using shares previously owned by the participant.

Restricted Stock Awards. A participant who has been granted a restricted stock award will not realize taxable income at the time of grant, and the Company will not be entitled to a deduction at that

time, assuming that the restrictions constitute a “substantial risk of forfeiture” for federal income tax purposes. Upon the vesting of shares subject to an award, the holder will realize ordinary income in an amount equal to the then fair market value of those shares, and the Company will be entitled to a corresponding deduction. A participant may make a Section 83(b) election under the Code to be taxed as compensation income based on the fair market value at time of grant, in which case the Company will be entitled to a corresponding deduction at that time. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting.

Stock Awards. Upon the grant of a stock award, a participant generally will realize ordinary income equal to the then fair market value of those shares, and the Company will be entitled to a corresponding deduction.

Restricted Stock Units. A participant who has been granted restricted stock units will not realize taxable income at the time of grant. Upon receipt of common stock or cash in the future pursuant to such an award, the participant will realize ordinary income equal to the then fair market value of those shares, and/or the amount of any cash received, and the Company will receive a corresponding deduction.

Stock Appreciation Rights. The grant of an SAR will not result in taxable income to a participant. Upon exercise, the amount of cash or the fair market value of shares received will be taxable to the participant as ordinary income, and the Company will be allowed a corresponding deduction. Gains or losses realized by the participant upon disposition of any such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.

Benefits to Executive Officers and Directors

No new plan benefits table for the 2018 Plan is included in this document. Participation in the 2018 Plan is made at the Compensation Committee’s discretion and is based on the performance of the Company. Accordingly, future awards under the plan are not determinable at this time. See “Compensation Discussion and Analysis” on page 28 for detailed information on awards to certain executive officers under the 2008 Plan during the most recent fiscal year.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table summarizes information, as of December 31, 2017, relating to the Company’s equity compensation plans.



Plan category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c)

Equity compensation plans approved by shareholders	50,985	$	24.09	95,498

Equity compensation plans not approved by shareholders	—	—		—

Total	50,985	$	24.09	95,498

Shareholder Vote Required

The 2018 Plan will be approved by shareholders if the votes cast in favor of the proposal exceed the votes opposing it.

The Board of Directors recommends a vote “FOR” the proposal to approve the American National Bankshares Inc. 2018 Equity Compensation Plan.

AMERICAN NATIONAL BANKSHARES INC.

2018 EQUITY COMPENSATION PLAN

1.Purpose; Eligibility.

(a)General Purpose. The purpose of the American National Bankshares Inc. 2018 Equity Compensation Plan is to further the long-term stability and financial success of the Company by attracting and retaining personnel, including employees, directors and Consultants, through the use of stock and stock-based incentives. The Company believes that ownership of Company Stock will stimulate the efforts of those persons upon whose judgment, interest and efforts the Company and its Affiliates depend for the successful conduct of their businesses and will further the alignment of those persons’ interests with the interests of the Company’s shareholders.

(b) Eligible Award Recipients. Any employee, director or Consultant of the Company or an Affiliate who, in the judgment of the Committee, has contributed or can be expected to contribute to the profits or growth of the Company or the Affiliate is eligible to become a Participant. The Committee shall have the power and complete discretion, as provided in Section 16, to select eligible Participants and to determine for each Participant the terms, conditions and nature of an Award and the number of shares to be allocated as part of the Award; provided, however, that any Award made to a member of the Committee must be approved by the Board.

(c) Available Awards. Awards of Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights and Stock Awards may be granted under the Plan. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options.

(d) Date of Adoption. The Plan was adopted by the Board of Directors of the Company on February 20, 2018, subject to the approval of the Plan by the Company’s shareholders.

2. Certain Definitions. The following terms have the meanings indicated:

(a)Act. The Securities Exchange Act of 1934, as amended.

(b)Affiliate. A corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company.

(c)Applicable Withholding Taxes. The aggregate amount of federal, state and local income and payroll taxes that the Company or an Affiliate is required to withhold (not in excess of the maximum applicable statutory withholding rate) in connection with any exercise of an Option or the award, lapse of restrictions or payment with respect to any Award.

(d)Award. The award of an Option, Restricted Stock, Restricted Stock Unit, Stock Appreciation Right or Stock Award under the Plan.

(e)Award Agreement. Any agreement, contract, certificate or other written instrument or document (which may be in electronic form) evidencing the terms and conditions of an

Award granted under the Plan. Each Award Agreement shall be subject to the terms and conditions of the Plan.

(f)Board. The Board of Directors of the Company.

(g)Cause. With respect to any employee or Consultant: (1) if the employee or Consultant is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a definition of Cause, the definition contained therein; or (2) if no such agreement exists, or if such agreement does not define Cause, the definition of Cause contained in the Award Agreement.

In all other cases, Cause shall mean:

(i) Continual or deliberate neglect by the Participant in the performance of his material duties and responsibilities as established from time to time by the Company, or the Participant’s repeated failure or refusal to follow reasonable instructions or policies of the Company after being advised in writing of such failure or refusal and being given a reasonable opportunity and period (as determined by the Company) to remedy such failure or refusal;

(ii) Conviction of, indictment for (or its procedural equivalent), entering of a guilty plea or plea of no contest with respect to a felony, a crime of moral turpitude or any other crime with respect to which imprisonment is a possible punishment, or the commission of an act of embezzlement or fraud against the Company;

(iii) Violation in any material respect of any code or standard of conduct generally applicable to employees of the Company;

(iv) Dishonesty of the Participant with respect to the Company, or breach of a fiduciary duty owed to the Company; or

(v) The engaging by the Participant in conduct that is reasonably likely to result, in the good faith judgment of the Company, in material injury to the Company, monetarily, reputationally or otherwise.

The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause. Notwithstanding the foregoing, with respect to any director, a determination that the director has engaged in conduct that is covered by the definition of Cause shall be made by a majority of the disinterested Board members.

(h) Change in Control. A Change in Control shall be deemed to have occurred if any one of the conditions in paragraphs (i) - (iv) have been satisfied at any time after the Award is granted:

(i) The acquisition by any Person (as defined below) of beneficial ownership of 30% or more of the then outstanding shares of Company Stock;

(ii) Individuals who constitute the Board on the date this Plan is adopted (the “Incumbent Board”) cease to constitute a majority of the Board, provided that any director whose

nomination was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board, but excluding any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company;

(iii) Consummation by the Company of a reorganization, merger, share exchange or consolidation (a “Reorganization”), provided that a Reorganization will not constitute a Change in Control if, upon consummation of the Reorganization, each of the following conditions is satisfied:

(1) more than 50% of the then outstanding shares of common stock of the corporation resulting from the Reorganization is beneficially owned by all or substantially all of the former shareholders of the Company in substantially the same proportions as their ownership existed in the Company immediately prior to the Reorganization; and

(2) at least a majority of the members of the board of directors of the corporation resulting from the Reorganization were members of the Incumbent Board at the time of the execution of the initial agreement providing for the Reorganization; or

(iv) The sale, transfer or assignment of all or substantially all of the assets of the Company and its Affiliates to a third party.

For purposes of this Section 2(h), “Person” means any individual, entity or group (within the meaning of Section 13(d)(3) of the Act), other than any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, and “beneficial ownership” has the meaning given the term in Rule 13d-3 under the Act.

(i)Code. The Internal Revenue Code of 1986, as amended. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.

(j)Committee. The Committee appointed by the Board of Directors to administer the Plan pursuant to Section 16 of the Plan, or if no such Committee has been appointed, the Board.

(k)Company. American National Bankshares Inc., a Virginia corporation.

(l)Company Stock. Common stock of the Company. If the par value of the Company Stock is changed, or in the event of a change in the capital structure of the Company (as provided in Section 13) the shares resulting from such a change shall be deemed to be Company Stock within the meaning of the Plan.

(m)Consultant. A person or entity rendering consulting or advisory services to the Company or an Affiliate who is not an “employee” for purposes of employment tax withholding under the Code.

(n)Date of Grant. The effective date of an Award granted by the Committee.

(o)Disability or Disabled. As to an Incentive Stock Option, a Disability within the meaning of Section 22(e)(3) of the Code. As to all other Awards, the Committee shall determine whether a Disability exists and such determination shall be conclusive.

(p)Fair Market Value.

(i) If the Company Stock is listed on any established stock exchange or quoted on any established stock market system (including the OTC Bulletin Board), Fair Market Value shall be the closing price for the Common Stock on the Date of Grant (or if no sales were reported the closing price on the immediately preceding date on which the Company Stock was traded) as reported by such exchange or stock market system or such other source as the Committee deems reliable; provided, however, the Committee may elect to use the average closing price over a designated number of consecutive days to determine the Fair Market Value if the daily volume of trading in the Company Stock is not, in the sole discretion of the Committee, sufficient to be a reliable indicator of Fair Market Value.

(ii) If the Company Stock is not publicly traded, the Fair Market Value shall be determined by the Committee in good faith using any reasonable application of a reasonable method and such determination shall be conclusive and binding on all persons, provided that the Fair Market Value of Company Stock subject to an Incentive Stock Option shall be determined in good faith within the meaning of Treasury Regulation §1.422-2(e)(2).

(iii) Fair Market Value shall be determined as of the Date of Grant specified in the Award.

(iv) The Committee reserves the right to specify in the Award agreement the appropriate method for determining Fair Market Value for purposes of recognizing any gain or deductions for tax purposes in a manner consistent with the Code in connection with the exercise or vesting of an Award.

(q)Good Reason. If the Participant is a party to an employment agreement with the Company or its Affiliates and such agreement provides for a definition of Good Reason, the definition contained in the agreement. If no such agreement exists or if such agreement does not define Good Reason, the definition of Good Reason contained in the Award Agreement. In all other cases, Good Reason shall mean the occurrence of one or more of the following without the Participant’s express written consent, which circumstances are not remedied by the Company within thirty (30) days of its receipt of a written notice from the Participant describing the applicable circumstances (which notice must be provided by the Participant within ninety (90) days of the Participant’s knowledge of the applicable circumstances: (i) any material, adverse change in the Participant’s duties, responsibilities, authority, title, status or reporting structure; (ii) a material reduction in the Participant’s base salary or bonus opportunity unless any such base salary or bonus opportunity reduction is proportionate to reductions in base salaries or bonus opportunities of other similarly situated officers of the Company; or (iii) a geographical relocation of the Participant’s principal office location by more than thirty-five (35) miles).

(r)Incentive Stock Option. An Option intended to meet the requirements of, and qualify for favorable federal income tax treatment under, Section 422 of the Code.

(s)Nonstatutory Stock Option. An Option that does not meet the requirements of Section 422 of the Code, or that is otherwise not intended to be an Incentive Stock Option and is so designated.

(t)Option. A right to purchase Company Stock granted under the Plan, at a price determined in accordance with the Plan.

(u)Participant. Any individual who is granted an Award under the Plan.

(v) Performance Award. An Award for which exercise, full enjoyment or receipt thereof by the Participant is contingent on satisfaction or achievement of a performance objective. The terms and conditions of each Performance Award, including the performance objective and performance period, shall be set forth in the applicable Award Agreement with the Participant or in a subplan of the Plan which is incorporated by reference into the Award Agreement.

(w)Plan. The American National Bankshares Inc. 2018 Equity Compensation Plan.

(x)Restricted Stock. Company Stock awarded upon the terms and subject to the restrictions set forth in Section 6.

(y)Restricted Stock Unit. An Award, designated as a Restricted Stock Unit under the Plan, that represents the right to receive Company Stock and/or cash in lieu thereof upon the terms and subject to the restrictions set forth in Section 7 and which, unless otherwise expressly provided, is valued by reference to the Fair Market Value of a share of Company Stock.

(z) Rule 16b-3. Rule 16b-3 promulgated under the Act, including any corresponding subsequent rule or any amendments to Rule 16b-3 enacted after the effective date of the Plan.

(aa) Stock Appreciation Right or SAR. An Award granted under Section 8 to receive, upon exercise, an amount payable in cash or shares equal to the number of shares subject to the SAR that is being exercised, multiplied by the excess of (a) the Fair Market Value of a share of Company Stock on the date the SAR is exercised, over (b) the exercise price specified in the SAR.

(bb) Stock Award. Company Stock awarded upon the terms and subject to the restrictions set forth in Section 9.

(cc) 10% Shareholder. A person who owns, directly or indirectly and within the meaning of Section 422 or 424 of the Code, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary of the Company. Indirect ownership of stock shall be determined in accordance with Section 424(d) of the Code.

3. Shares Subject to the Plan.

(a)Subject to adjustment as provided in Section 13 of the Plan, a total of 675,000 shares of Company Stock shall be available for the grant of Awards under the Plan. Subject to adjustment as provided in Section 13, no more than an aggregate of 675,000 shares of Company Stock may be issued pursuant to the exercise of Incentive Stock Options granted under the Plan (including shares issued pursuant to the exercise of Incentive Stock Options that are the subject to disqualifying dispositions within in the meaning of Sections 421 and 422 of the Code).

(b)Any shares of Company Stock subject to an Award that is canceled, forfeited or expires prior to exercise, vesting or settlement, either in full or in part, shall again become available for issuance under the Plan; provided that shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are tendered or withheld in payment of an Option exercise price or to satisfy any tax withholding obligation.

(c)The maximum number of shares of Company Stock with respect to which Awards may be granted in any calendar year to any Participant during such calendar year shall not exceed 25,000 shares in the aggregate. If an Award is to be settled in cash, the number of shares of Company Stock on which the Award is based shall count toward the individual share limit set forth in this Section 3(c).


Restricted Stock	Shares	Weighted Average Grant Date Value	Shares	Weighted Average Grant Date Value
Nonvested at January 1, 2015	41,562	$21.39
Nonvested at January 1, 2017			50,822	$23.21
Granted	19,155	$21.81	14,453	$34.74
Vested	(15,536)	$19.51	(18,774)	$24.49
Forfeited	(3,618)	$22.89	-	-
Nonvested at December 31, 2015	41,563	$22.15
Nonvested at December 31, 2017			46,501	$26.28


Name	Salary ($)	Bonus ($)	COBRA Premium ($)	Stock Awards ($)	Final Compen-sation ($) (1)	Accrued Bonus ($)	COBRA Premium ($)	Stock Awards ($)

Jeffrey V. Haley	1,166,100	175,000	16,200	160,000	2,034,695	190,500	16,200	429,500
H. Gregg Strader	500,000	60,000	10,800	30,000	866,320	93,160	10,800	307,285
William W. Traynham	460,000	51,500	10,800	112,500	700,700	75,350	10,800	172,037
R. Helm Dobbins	400,000	45,000	10,800	20,000
Dabney T.P. Gilliam, Jr. (1)	380,000	43,000	10,800	20,000
Edward C. Martin					502,200	26,100	10,800	26,100


Name	Grant Date	All Other Stock Awards: Number of Shares of Stock (#) (1)	Grant Date Fair Value of Stock and Option Awards ($)	Grant Date	All Other Stock Awards: Number of Shares of Stock (#) (1)	Grant Date Fair Value of Stock and Option Awards ($)

Jeffrey V. Haley	1/20/2015	2,313	50,000	1/17/2017	3,243	112,500
H. Gregg Strader	1/20/2015	1,388	30,000	1/17/2017	1,622	56,250
William W. Traynham	1/20/2015	1,041	22,500	1/17/2017	1,281	44,437
Edward C. Martin				-	-	-
R. Helm Dobbins	1/20/2015	926	20,000	1/17/2017	1,114	38,625
Dabney T.P. Gilliam, Jr.	1/20/2015	926	20,000
Ramsey K. Hamadi				1/17/2017	483	16,730


	Option Awards		Stock Awards		Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($) (1)	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($) (2)	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($) (1)

Jeffrey V. Haley ~~(3)~~	3,000	16,110	2,932	69,254	2,932	69,254
H. Gregg Strader	—	—	—	—	—	—
William W. Traynham ~~(4)~~	2,000	14,920	2,443	57,704	2,443	57,704
R. Helm Dobbins	—	—	1,710	40,390
Dabney T.P. Gilliam, Jr.	—	—	1,710	40,390
Edward C. Martin					302	12,639
R. Helm Dobbins (2)					5,461	200,605
Ramsey K. Hamadi					—	—


Name	Fees Earned or Paid in Cash ($)	Stock Awards ($) (1) (2) (3) (4)	Total ($)	Fees Earned or Paid in Cash ($)	Stock Awards ($) (1) (2) (3)	Total ($)
Fred A. Blair	—	33,000	33,000	—	41,200	41,200
Frank C. Crist, Jr., D.D.S.	—	31,500	31,500	—	40,300	40,300
Ben J. Davenport, Jr.	—	26,250	26,250	—	36,700	36,700
Jeffrey V. Haley	—	—	—
Tammy M. Finley				—	11,650	11,650
Jeffrey V. Haley (4)				—	—	—
Michael P. Haley	—	34,500	34,500	—	47,800	47,800
Charles S. Harris	10,800	18,750	29,550	14,600	25,000	39,600
F.D. Hornaday, III	—	30,750	30,750	—	42,100	42,100
Lester A. Hudson, Jr., Ph.D. (5)	—	10,000	10,000
John H. Love	15,600	12,000	27,600	18,800	16,000	34,800
Franklin W. Maddux, M.D.	—	32,500	32,500	—	43,300	43,300
Charles H. Majors	150,000	—	150,000	157,500	—	157,500
Claude B. Owen, Jr.	—	35,250	35,250	—	49,600	49,600
Ronda M. Penn	—	12,313	12,313	—	41,200	41,200
Dan M. Pleasant	—	31,500	31,500	—	45,100	45,100
Joel R. Shepherd	—	27,000	27,000	—	43,000	43,000
Robert A. Ward (6)	—	29,250	29,250
Total	176,400	364,563	540,963	190,900	482,950	673,850


(2)	Other than percent of class, this information is based solely upon information as of December 31, ~~2015~~2017 contained in a Schedule 13G/A filed by BlackRock, Inc. with the Securities and Exchange Commission on January ~~25, 2016~~29, 2018 relating to the beneficial ownership of the Company’s common stock by BlackRock, Inc. and entities affiliated with BlackRock, Inc.


Name of Beneficial Owner	Shares of Common Stock Beneficially Owned (#) (1)			Percent of Class (%)	Shares of Common Stock Beneficially Owned (#) (1)			Percent of Class (%)

Fred A. Blair	17,082	(2)		*	20,669	(2)		*
Frank C. Crist, Jr., D.D.S.	107,919	(2)		1.25	111,141	(2)		1.28
Ben J. Davenport, Jr.	49,494			*
R. Helm Dobbins	19,087	(3)		*	13,103	(3)		*
Tammy Moss Finley					1,172			*
Jeffrey V. Haley	45,082	(2)	(3)	*	52,932	(2)	(4)	*
Michael P. Haley	5,925	(2)		*	22,846	(5)		*
Ramsey K. Hamadi					17,609	(3)		*
Charles S. Harris	5,187			*	7,183			*
F. D. Hornaday, III	25,727	(2)		*	27,190	(2)		*
John H. Love	19,053			*	20,380			*
Franklin W. Maddux, M.D. FACP	14,215	(2)		*	17,516	(2)		*
Charles H. Majors	62,140	(2)		*	62,140	(2)		*
Edward C. Martin					1,601	(4)		*
Claude B. Owen, Jr.	25,895	(2)		*	29,637	(2)		*
Ronda M. Penn	1,065			*	3,729			*
Dan M. Pleasant	6,661			*	24,890	(5)		*
Joel R. Shepherd	63,234	(2)		*	70,197	(2)	(5)	*
H. Gregg Strader	10,297	(3)		*	15,960	(4)		*
William W. Traynham	21,492	(3)		*	24,811	(4)		*
All directors and executive officers as a group (17)	499,555	(4)		5.80
All current directors and executive officers as a group (17)					513,994	(6)		5.91


(2)	Includes shares held by affiliated companies, close relatives, minor children, and shares held jointly with spouses or as custodians or trustees, as follows: Mr. Blair, ~~261~~218 shares; Dr. Crist, ~~997~~1,054 shares; Mr. Jeffrey Haley, ~~863 shares; Mr. Michael Haley, 1,590~~914 shares; Mr. Hornaday, 2,072 shares; Dr. Maddux, 300 shares; Mr. Majors,


(3)	Mr. Dobbins retired from the Company on March 30, 2017 and Mr. Hamadi resigned from the Company on October 19, 2017. They are no longer executive officers of the Company. Accordingly, their shares are not included in the aggregate amount of shares beneficially owned by the current executive officers and directors as a group. Their holdings are as of the last day of their employment.


~~(4)~~(5)	Includes stock awards held under a nonqualified deferred compensation plan for directors, as follows: Mr. Michael Haley, 8,328 shares; Mr. Pleasant, 7,538 shares; and Mr. Shepherd, 2,761 shares. These shares cannot be voted at the Annual Meeting.


(6)	None of the individuals named in the table have pledged their shares as collateral.


(1)	~~(1) Mr. Gilliam retired from~~See “Executive Employment Agreements and Change in Control Arrangements” beginning on page 24 for the ~~Company on March 31, 2016.~~components included in “Final Compensation.”


(2)	Amounts shown represent the aggregate full grant date fair value of each award calculated in accordance with FASB ASC Topic 718. The assumptions made in the calculation of these amounts are contained in Note 1312 to the Company’s audited financial statements for the year ended December 31, ~~2015,~~2017, included in the Company’s ~~2015~~2017 Annual Report on Form


(3)	Represents cash award for individual and Company performance under the incentive program based upon achievement of specific goals approved by the Board. Achievement of specific goals and amounts of cash awards are determined by the Human Resources and Compensation Committee and submitted to the Board for approval.


(5)	Details of other compensation for each of the executive officers appear in the All Other Compensation table shown below.


(6)	~~Messrs. Strader, Dobbins and Gilliam were~~Mr. Martin was appointed an executive ~~officers~~officer of the ~~Company~~Bank on ~~January 1, 2015.~~March 30, 2017.


(7)	Mr. ~~Gilliam~~Dobbins retired from the Company on March ~~31, 2016.~~30, 2017 at which time all of his unvested stock awards vested.


(8)	Mr. Hamadi joined the Company on August 1, 2016 and resigned from the Company on October 19, 2017.


(1)	~~Amounts represent Company allocations to the executive officers’ nonqualified deferred compensation plan.~~


~~(2)~~	~~Includes a profit sharing distribution of 2.5% and 3.0% of their earned income in 2014 and 2013, respectively.~~


~~(3)~~	Other benefits include company paid insurance premiums for all named executive officers. ~~In 2013, it also includes the use of an automobile with tax gross-ups for commuting expense for the Chief Executive Officer.~~


(1)	Restricted stock granted under the 2008 Stock Incentive Plan. The restricted stock awards vest 36 months after the date of issue. Restricted stock has no express performance criteria other than continued employment (with limited exceptions for termination of employment due to death, disability, retirement, reduction-in-force and change in control).


(1)	The value realized on exercise is the difference between the option exercise price and the closing price of the Company’s common stock on the date of exercise multiplied by the number of options exercised.


~~(2)~~	The value realized on vesting is based on the closing price of the Company’s common stock on the date of vesting multiplied by the number of shares acquired.


~~(3)~~(2)	Mr. ~~Jeffrey Haley exercised options~~Dobbins retired from the Company on ~~February 25, 2015 for 3,000~~March 30, 2017 at which time all of his unvested shares ~~originally granted on December 16, 2008 with an exercise price of $17.00. The closing price of the Company’s common stock at the date of exercise was $22.37.~~vested.


~~(4)~~	Mr. Traynham exercised options on August 6, 2015 for 2,000 shares originally granted on April 21, 2009 with an exercise price of $16.00. The closing price of the Company’s common stock at the date of exercise was $23.46.


Name	Plan Name	Number of Years Credited Service (#)	Present Value of Accumulated Benefit ($)	Plan Name	Number of Years Credited Service (#)	Present Value of Accumulated Benefit ($)
Jeffrey V. Haley	Pension	13	230,174	Pension	13	299,060
H. Gregg Strader (1)	Pension	—	—	Pension	—	—
William W. Traynham (1)	Pension	—	—	Pension	—	—
Edward C. Martin (1)				Pension	—	—
R. Helm Dobbins	Pension	7	184,849	Pension	7	211,952
Dabney T.P. Gilliam, Jr.	Pension	9	175,376
Ramsey K. Hamadi (1)				Pension	—	—


(1)	~~Mr. Strader~~Messrs. Martin and Hamadi joined the Company in 2016, Mr. Strader in 2013 and Mr. Traynham in 2009. The pension plan was closed to new participants before the officers became eligible for any credited service or accumulated benefit under the plan.



Name	Executive Contributions in 2015 ($)	Registrant Contributions in 2015 ($) (1)	Aggregate Earnings/ (Losses) in 2015 ($)		Aggregate Withdrawals/ Distributions ($)	Aggregate Balance as of December 31, 2015 ($)

Jeffrey V. Haley	—	58,500	—		—	58,500
H. Gregg Strader	—	25,000	—		—	25,000
William W. Traynham	14,500	23,000	(467	)	—	37,033
R. Helm Dobbins	—	20,000	(345	)	—	19,655
Dabney T.P. Gilliam, Jr.	—	19,000	—		—	19,000


(1)	The amounts included in the “Executive Contributions” column represent voluntary deferrals of bonus amounts that are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 28.


(2)	The amounts in this column reflect the Company’s contributions to the nonqualified deferred compensation plan. The compensation was earned in ~~2015,~~2017, credited to the participant’s account on January ~~22, 2016~~25, 2018 and is included in the ~~“All Other Compensation”~~“Bonus” column of the Summary Compensation Table on page ~~22.~~28.


(3)	Mr. Martin was appointed an executive officer of the Bank on March 30, 2017.


(5)	Mr. Hamadi resigned from the Company on October 19, 2017.


(3)	Messrs. Michael Haley, Hudson, Pleasant and Shepherd have elected to defer stock awards under a nonqualified deferred compensation plan. Shares reserved in 2015: Mr. Michael Haley, 1,483 shares; Dr. Hudson, 447 shares; Mr. Pleasant, 1,354 shares; and Mr. Shepherd, 1,155.


~~(4)~~	In accordance with SEC rules, the amounts in the column for stock awards reflect the grant date fair market value of the stock awards. Assumptions made in the calculation of these amounts are contained in Note 1312 to the Company’s audited financial statements for the year ended December 31, ~~2015,~~2017, included in the Company’s ~~2015~~2017 Annual Report on Form 10-K.