The Annual Meeting is being held for the following purposes:

Only shareholders of record at the close of business on April 3, 20172, 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.

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 16, 2017,15, 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 6, 20172018 and the approximate mailing date of this proxy statement and the enclosed proxy is April 10, 2017.12, 2018.

Only shareholders of record at the close of business on April 3, 2017,2, 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 3, 2017,2, 2018, there were 8,638,7448,675,029 shares of the Company’s common stock outstanding, of which 8,464,6008,497,868 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 174,144177,161 shares of the Company’s common stock as sole fiduciary (with no qualifying co-fiduciary having been appointed) as of April 3, 2017,2, 2018, which constituted 2.02%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.

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.”

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.

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.

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 IIII directors will expire at the Annual Meeting. Nominees to serve as Class I directors and one nominee to serve as a Class III directorsdirector 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.

Ben J. Davenport, Jr. will retire fromMrs. Tammy Moss Finley was appointed to the Board of Directors pursuanteffective September 19, 2017. She is being nominated as a Class III director and is subject to election by the Company’s retirement policy for directors. His retirement will be effectiveshareholders at the 2017 Annual Meeting. Upon his retirement, Mr. Davenport will be eligible to be a Director Emeritus, and the BoardMeeting in accordance with Virginia law. The term of Directors, upon recommendation from its Corporate Governance and Nominating Committee, intends to appoint him as suchoffice for the period May 16, 2017 until May 15, 2018. Mr. Davenport, age 74, is Chairman of First Piedmont Corporation (waste management), Chatham, Virginia and Chairman of Davenport Energy Inc. (petroleum distribution), Chatham, Virginia.

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 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

Information on the Company’s four executive officers as of December 31, 20162017 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, 2016,2017, which was mailed with this proxy statement.

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 NASDAQNasdaq 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.

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.

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 1210 times during 2016.2017. The non-management directors held 11eight executive sessions during 2016,2017, 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 quarterly executive sessions during 2016.2017. 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 1211 times during 2016.2017.

All incumbent directors and director nominees attended at least 94%86% of the aggregate total number of meetings of the boardsCompany's Boards of directorsDirectors and committees on which they served in 2016. Twelve2017. All directors attended the 20162017 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 Corporate Governance and Nominating Committee met twofour times in 2016.2017. This Committee currently consists of Messrs. Crist, Hornaday, Maddux, Owen, and Shepherd. Mr. Owen serves as the Chairman. The Committee is responsible for developing and implementing policies and

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.”

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.

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.

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 at least quarterly.

This structure has evolved incrementally over the past 21more than 20 years, during the respective tenures of

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 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 EnterpriseExecutive 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.

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.

The Human Resources and Compensation Committee of the Board of Directors has reviewed and discussed with the Board and management the Company’s Compensation Discussion and Analysis. Based upon this review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s definitive proxy statement on Schedule 14A for the Annual Meeting, portions of which are incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016,2017, as filed with the Securities and Exchange Commission.

The purpose of the Company’s compensation philosophy is to treat employees fairly and to pay compensation at a level commensurate with the market, given individual and Company factors and performance. The Company’s compensation programs, levels, practices, and policies are consistent with

During 2017, the Committee again retained the services of PM&P to provide consulting services in connection with conducting a competitive compensation review with respect to executive management. Management was not involved in the decision to use an outside consultant or the selection of PM&P in 2014 or 2017.

During 2017, PM&P reported directly to the Committee. In 2017, the Corporate Governance and Nominating Committee and did notalso engaged PM&P to provide any other services to the Company.a peer comparison of director compensation. The Committee has analyzed whether the work of PM&P has raised any conflicts of interest, taking into consideration the following factors, among others: (i) the provision of other services to the Company by PM&P (none);&P; (ii) the amount of fees from the Company paid to PM&P as a percentage of PM&P’s total revenues; (iii) PM&P’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of PM&P or the individual compensation advisors employed by PM&P with an executive officer of the Company; (v) any business or personal relationship of the individual compensation advisors with any member of the Committee; and (vi) any stock of the Company owned by PM&P or the individual compensation advisors employed by PM&P. The Committee has determined, based on its analysis of the above factors, among others, that the work of PM&P and the individual compensation advisors employed by PM&P as compensation consultants or advisors to the Company has not created any conflicts of interest.

The base salary of each executive officer named in the Summary Compensation Table (the “named executive officers”) is designed to be competitive with that of the Company’s peer banks and bank holding companies. In establishing the base salaries for the named executive officers in 2016,2017, the Committee and Board relied upon an evaluation of each officer’s level of responsibility and performance. The Committee and the independent members of the Board of Directors also took into account the information described above that was provided by PM&P, including the peer group data. In establishing the base salary for the executive officers other than the Chief Executive Officer, the Committee also received and took into account the individual compensation recommendations of the Chief Executive Officer. In executive session, the independent directors collectively evaluated the performance of the Chief Executive Officer, especially as his performance inured to the benefit of the shareholders. The Chairman of the Committee met with the Chief Executive Officer to review the results of the evaluation after the Committee discussion. The 20162017 salary of the Chief Executive Officer was ultimately reviewed, discussed, and approved by the independent members of the Board of Directors in executive session, upon recommendation of the Committee.

    

For 2016, and based on the information described above that was provided by PM&P,2017, the Board of Directors and the Committee established anauthorized compensation and incentive programamounts for executive officers.officers based on achieving certain financial and non-financial goals. Pursuant to the terms of the incentive program, the Company’s executive officers had the opportunity to earn incentive payments for 20162017 performance, with the targeted payout for the Chief Executive Officer set at an amount up to $150,000$180,000 and the targeted payout for the other named executive officers set at an amount equal to 30% of their respective base salaries. For the Chief Executive Officer, the targeted incentive payment was entirely based on achievement of growth goals inbased on core earnings per share (“EPS”). For the other named executive officers, 50% of the targeted incentive payment was based on achievement of certain position specific objective goals and the other 50% was based on the achievement of certain growth goals inbased on core EPS. Incentive payments are made in a combination of cash and restricted stock grants, with the percentage mix established by the Committee in its sole discretion. For 2016 performance, the named executive officers received 50% of the payments in cash and 50% of the payments in restricted stock grants.

The financial target was growth ina certain level of core net income (defined as net income, per generally accepted accounting principles, less the impact of fair value and merger related adjustments) on an earnings per shareEPS basis. For the Chief Executive Officer, the targeted growth was an increase in core EPS of 7.6%,was $1.94, which would result in a $150,000$180,000 incentive payment. The minimum threshold was a 3% increase$1.90 in core EPS, which would result in a $108,000$36,000 payment. The maximum threshold was a 10% increase$2.00 in core EPS, which would result in a $225,000$270,000 payment. For 2016,2017, the Company achieved sufficientCompany's core EPS growthof $1.97 resulted in an incentive payment to result in the maximum incentive payment. Accordingly, Mr. Jeffrey Haley received $112,500of $117,000 with

For each of the named executive officers other than the Chief Executive Officer who were employed by the Company at December 31, 2017, the targeted growth was an increase in core EPS of 7.6%, which$1.94 would result in a 100% incentive payment. The minimum threshold was a 3% increase$1.90 in core EPS, which would result in a 20% payment. The maximum threshold was a 10% increase$2.00 in core EPS, which would result in a 150%125% payment. For 2016,2017, the Company achieved sufficient$1.97 in core EPS growth to result in the maximum incentive payments to such other named executive officers.EPS. Accordingly, with respect to the cash component of the incentive program, Mr. Strader received $56,250,$59,160, Mr. Traynham received $44,437, Mr. Dobbins received $38,625$47,850, and Mr. HamadiMartin received $16,730;$26,100; and with respect to the stock component of the incentive program, Mr. Strader received 1,6224,025 shares of common stock (grant date market value of $56,250)$159,160), Mr. Traynham received 1,2811,210 shares of common stock (grant date market value of $44,437)$47,850), and Mr. DobbinsMartin received 1,114660 shares of common stock (grant date market value of $38,625)$26,100). In 2017 and Mr. Hamadi received 483 shares of common stock (grant date market value of $16,730). For 2017, the incentive program methodology will remain the same for such officers, but with different targets and thresholds (except for Mr. Dobbins, who retired fromStrader only, the Company on March 30, 2017). Commencinginstituted certain asset growth goals that were achieved and resulted in additional restricted shares being granted to Mr. Strader. Also in 2017, the cash payment and restricted stock grants under the incentive program will bebecame subject to maintenance of certain asset quality criteria.criteria, which were achieved. For 2018, the incentive program methodology will remain the same for these officers, but with different targets and thresholds. Mr. Dobbins, who retired from the Company on March 30, 2017, and Mr. Hamadi, who

Beginning in 2015, all of the Company’s named executive officers became eligible to participate in a voluntary, nonqualified deferred compensation plan pursuant to which the officers may defer any portion of their annual cash incentive payments. The eligible executive officers for 2017 were Messrs. Jeffrey Haley, Strader and Traynham. In addition, the Company may make discretionary cash bonus contributions to the deferred compensation plan. Such contributions, if any, are made on an annual basis after the Human Resources and Compensation Committee assesses the performance of each of the named executive officers and the Company during the most recently completed fiscal year. The goal of the Committee is to award such discretionary bonus payments commensurate with the officer’s performance during such year. The discretionary cash bonus contributions are indicated under the “Bonus” column of the Summary Compensation Table on page 27.28. See also “Nonqualified Deferred Compensation” on page 3233 for more information on the plan.

In the opinion of the Committee and the Board of Directors, the Company’s compensation practices do not encourage excessive or inappropriate risk taking and are not reasonably likely to have a material adverse effect on the Company, but rather will have a positive effect on the Company.

TheFrom February 2008 to February 2018, the Company maintainsmaintained the 2008 Stock Incentive Plan (“2008 Plan”), which iswas designed to attract and retain qualified key personnel, provide employees with a proprietary interest in the Company as an incentive to contribute to the success of the Company, and reward employees for outstanding

The 2008 Plan iswas administered by a Committee of the Board of Directors of the Company comprised of the independent directors. Under the 2008 Plan, the Committee determinesdetermined which employees will bewere granted restricted stock awards and options, whether such options will bewere incentive or non-statutory options, the number of shares subject to each option, whether such options maywould be exercised by delivering other shares of common stock, and when such options becomebecame exercisable. In general, the per share exercise price of an incentive stock option mustwas required to be at least equal to the fair market value of a share of common stock on the date the option iswas granted. Restricted stock is granted under terms and conditions established by the Committee.

Stock options become vested and exercisable in the manner specified by the Committee. Each stock option or portion thereof shall beis exercisable at any time on or after it vests and is exercisable until ten

The Company from time-to-time grantsgranted shares of restricted stock under the 2008 Plan to key employees and non-employee directors.  The Company believes the awards help align the interests of these employees and directors with the interests of the shareholders of the Company by providing economic value directly related to increases in the value of the Company’s common stock.  The value of the stock awarded iswas based on the fair market value of the Company’s common stock at the time of the grant, which iswas the closing price of the stock on the NASDAQNasdaq Global Select Market on the grant day.date.  The Company recognizes expense, equal to the total value of such awards, proportionately over the vesting period of the stock grants.

The current grants of restricted stock do not have performance conditions that must be satisfied in order for the shares to be earned and vest 36 months after the award date. On January 17, 2017,16, 2018, the Company awarded an aggregate of 14,14217,890 shares of restricted stock to the named executive officers and 1423 other senior officers of the Bank. Commencing in 2017, granting of restricted stock to the named executive officers will be subject to maintenance of certain asset quality criteria. In addition, beginning in 2017, the Company has instituted asset growth goals that must be achieved prior to the granting and vesting of certain awards of restricted stock to Mr. Strader.

As of December 31, 2016, there was $568,000 of2017, total unrecognized compensation cost related to nonvested restricted stock granted under the 2008 Plan.Plan amounted to $538,000.  This cost is expected to be recognized over the next 12 to 36 months.

    

Through December 31, 2009, the Company’s retirement plan was a non-contributory defined benefit pension plan that covered all full-time employees of the Company who were 21 years of age or older and who had at least one year of service. Advanced funding of the plan was accomplished by using the actuarial cost method known as the “collective aggregate cost method”.

The plan was closed to new participants at December 31, 2009. On that date, the Company converted the plan to a cash balance plan. Participant balances at that date reflected the net present value of the plan’s then existing obligation to the participants. Beginning January 1, 2010, participants earn income each year based on the ten year U.S. Treasury note yield established at December 31 of the prior year, subject to certain adjustments.

The Company sponsors a 401(k) Employee Savings Plan in which all full-time employees (age 21 and older) are eligible to participate. The Company matches 100% of employee contributions on the first 3% of earned compensation and 50% of employee contributions of the second 3% of earned compensation. Perquisites received by executive officers are not included as earned compensation under this plan. The Company’s contributions are not subject to a vesting schedule.

Due to the geographic size of the Company’s market area, in 20162017 the Company provided the Chief Executive Officer with an automobile, and reimbursed him for the cost of fuel and maintenance for the vehicles other than the estimated amount of personal use of the vehicles. In 2017,2018, such arrangement

    

The Company recognizes that, as a publicly held financial services company, it is imperative that it maintain stability and continuity in its executive management positions. The Company also understands that the possibility of a change in control of the Company exists. In order to protect the interests of the shareholders and the Company, to promote continuity in the event of a change in control and to minimize uncertainty among executive management, the Company and its executive officers have entered into employment agreements that contain severance arrangements in connection with a change in control of the Company. All named executive officers currently have operative employment agreements except Mr. Dobbins, whose agreement terminated on March 30, 2017 due to his retirement.retirement, and Mr. Hamadi, whose agreement terminated on October 19, 2017 due to his resignation.

On March 2, 2015, the Company entered into separate employment agreements with all of the named executive officers exceptMessrs. Jeffrey Haley, Strader and Traynham. Mr. Hamadi, whoMartin entered into his agreement on August 1,September 21, 2016 which was his hire date. Each agreement has an initial three year term that, other than with respect to Mr. Martin, extended through December 31, 2017, Mr. Martin's agreement provides for an initial three year term that extends through December 31, 2017 other than Mr. Hamadi, whose initial three year term extends through July 31, 2019.

Effective January 1, 2016, Mr. Jeffrey Haley’sHaley's agreement renews automatically on a daily basis, so that the term of employment always has at least two years to run. Effective January 1, 2017, the four other named executive officers’ agreements other thanfor Messrs. Strader and Traynham began to renew automatically on a daily basis so that the term of employment always has at least one year to run. Effective January 1, 2019, Mr. Hamadi, beganMartin's agreement will begin to renew automatically on a daily basis so that the terms of employment always have at least one year to run. On August 1, 2018, Mr. Hamadi’s agreement will renew automatically on a daily basis so that the term of employment always has at least one year to run. Each agreement will automatically terminate on the first day of the month immediately following the month in which the officer turns 70.

The Company may give each of the named executive officers, other than Mr. Jeffrey Haley, notice of nonrenewal of such officer’s agreement at any time, and the agreement will terminate one year thereafter, but not before completion of the initial three year term. In the case of Mr. Jeffrey Haley, notice of nonrenewal may be given at any time and his agreement will terminate two years thereafter.

The agreements provide that each officer’s base salary will be reviewed annually, and that the officers will be entitled to participate in such short-term and/or long-term cash and equity incentive plans as the Company may determine.

If the Company terminates the officer’s employment for any reason other than for “Cause” or if the officer terminates his employment for “Good Reason” (each as defined in the agreement), the Company will, subject to the officer’s execution and non-revocation of a general release of claims, make a lump sum payment in an amount equal to the product of (x) the officer’s “Final Monthly Compensation” (defined in the agreement as the sum of the officer’s base salary in effect at the date of termination and the annual bonus paid or payable for the most recently completed year, divided by twelve) times (y) the number of months remaining between the date of termination and the expiration of the current employment term. The Company will also make a lump sum payment in an amount equal to the product of (x) the amount of the monthly group insurance premiums contributed by the Company for the officer’s health, dental and vision insurance coverage (exclusive of the amounts paid by the officer for such coverage) (the “COBRA Premium”) times (y) the number of months remaining between the date of termination and the expiration of the current employment term. Upon termination of employment, each officer will be subject to certain noncompetition and nonsolicitation restrictions for one year.

The employment agreements include a double-trigger severance structure in the event of a change in control. If a change in control of the Company occurs and the officer’s employment is terminated without Cause or for Good Reason within 24 months following the change in control, the following severance benefits will be paid: (i) the amount of any incentive or bonus compensation earned which has not been paid; (ii) a pro-rated bonus based on the prior year’s cash bonus amount; (iii) a lump sum

Pursuant to the 2008 Plan, the Stock Grant and Option Committee administering the plan may provide Changechange in Controlcontrol acceleration parameters under which all, or a portion, of the restricted stock will vest upon the occurrence of a Changechange in Control.control.

Each agreement provides that the severance payments and benefits to which the officer may be entitled in connection with a change in control will be reduced to the amount that does not trigger the golden parachute excise tax under Section 4999 of the Internal Revenue Code of 1986. No reduction, however, will be made and the officer will be responsible for all excise and other taxes if his after-tax position with no cutback exceeds his after-tax position with a cutback by at least 5%.

The Company’s practice is to expense salary, bonus and incentive compensation, and benefit costs as they are incurred for tax and accounting purposes. Salary, bonus and incentive compensation, and some benefit payments are taxable to the recipient as ordinary income. The tax and accounting treatment of the various elements of compensation is not a major factor in the Company’s decision making with respect to executive compensation. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the Committee has not adopted a policy requiring all compensation to be deductible. The Company did not have any nondeductible compensation in 2016.2017.

Stock ownership guidance is in effect for executive officers of the Company. The Chief Executive Officer is expected to maintain stock ownership equal to at least three times his current base salary. The Executive Vice Presidents are expected to maintain stock ownership equal to at least two times their current base salary. No formal deadline has been set for compliance with the above guidelines. However, the executive officers are increasing their equity ownership in the Company as quickly as practical.

The Committee has adopted a policy which requires that any grants of restricted stock to executive officers be held by the grantee until fully vested, so long as he or she has achieved the overall

The following table reflects total compensation paid to or earned by all of the individuals who served as executive officers of the Company’s Chief Executive Officer and Chief Financial OfficerCompany during the year ended December 31, 2016, and each of the three next most highly compensated executive officers of the Company during 2016.2017.

In accordance with SEC rules, the amounts in the columns 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, 2016,2017, included in the Company’s 20162017 Annual Report on Form 10-K.

The following table provides information on the restricted stock awards granted to the named executive officers during the year ended December 31, 2016.2017. The amounts in the column for the grant date fair value of the 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, 2016,2017, included in the Company’s 20162017 Annual Report on Form 10-K. There were no stock options granted in 2016.2017.

The following table reflects the outstanding stock awards as of December 31, 20162017 for the named executive officers. All restricted stock awards were granted at fair market value at the grant date and vest after 36 months. There were no stock options outstanding as of December 31, 2016.2017.

    

The named executive officers are entitled to participate in the American National Bank & Trust Company Deferred Compensation Plan. Pursuant to the Deferred Compensation Plan, eligible employees can defer up to 100% of base salary or annual cash bonus or both, on an annual basis. Deferral elections are made by eligible executives in December of each year for amounts to be earned in the following year. The plan is administered through the Virginia Bankers Association.

The Company has the option to make a discretionary cash bonus contribution to the account of each named executive officer on an annual basis. Such contribution, if any, is made after the Human Resources and Compensation Committee assesses the performance of the officer and the Company with respect to the most recently completed fiscal year. The Company made discretionary contributions of $149,223$135,000 in the aggregate to the plan accounts of the named executive officers in early 2017,2018, related to the Company’s operational performance and financial results for 2016.2017.

Amounts deferred under the plan are payable beginning on the first day of the calendar quarter following a distributable event. A distributable event includes termination of employment or normal retirement. Distributions can be received either as a lump-sum payment or in monthly or annual installments over a period of not more than 20 years.

The following table provides certain information on nonqualified deferred compensation contributions by the Company and the named executive officers, as well as earnings or losses on such compensation, with respect to the named executive officers during 2016.2017.