-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P+NaWfnt3TkD3rFXWdS4xpH5KbAxkmDVeDh81gpqml+KxT1Bbf4TWegfD9E0bJqF heC8rw9cuYtZn+Bk4SexMw== 0000916641-97-000857.txt : 19970821 0000916641-97-000857.hdr.sgml : 19970821 ACCESSION NUMBER: 0000916641-97-000857 CONFORMED SUBMISSION TYPE: S-3D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19970820 EFFECTIVENESS DATE: 19970820 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN NATIONAL BANKSHARES INC CENTRAL INDEX KEY: 0000741516 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 541284688 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3D SEC ACT: 1933 Act SEC FILE NUMBER: 333-34013 FILM NUMBER: 97667094 BUSINESS ADDRESS: STREET 1: 628 MAIN ST CITY: DANVILLE STATE: VA ZIP: 24541 BUSINESS PHONE: 8047925111 MAIL ADDRESS: STREET 1: 628 MAIN STREET CITY: DANVILLE STATE: VA ZIP: 24541 S-3D 1 DIVIDEND REINVESTMENT PLAN As filed with the Securities and Exchange Commission on August 20, 1997 Registration No. 333-_____ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 FOR DIVIDEND REINVESTMENT PLAN (FULL TITLE OF PLAN) AMERICAN NATIONAL BANKSHARES INC. (Exact name of registrant as specified in its charter) ----------------------- VIRGINIA 52-1284688 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P.O. Box 191 628 Main Street Danville, Virginia, 24543-0191 (804) 792-5111 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ------------------------------ Charles H. Majors, Esq. President and Chief Executive Officer American National Bankshares Inc. P.O. Box 191 628 Main Street Danville, Virginia 24543-0191 (804) 792-5111 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: Kenneth J. Alcott, Esq. Hunton & Williams Riverfront Plaza, East Tower 951 East Byrd Street Richmond, Virginia 23219-4074 (804) 788-8200 Approximate date of commencement of proposed sale to the public: As soon as possible after the effective date of this Registration Statement. ----------------------- If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.[X] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.[ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.[ ] _____________ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.[ ] _____________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.[ ] CALCULATION OF REGISTRATION FEE
==================================================================================================================================== Proposed Maximum Proposed Maximum Title of Each Class of Aggregate Amount Offering Price Per Aggregate Offering Amount of Securities to be Registered(1) to be Registered(1) Share(2) Price(2) Registration Fee - ------------------------------------------------------------------------------------------------------------------------------------ Shares of Common Stock, $1.00 par value 200,000 $28.00 $5,600,000 $1,697 ====================================================================================================================================
(1) Plus such additional number of shares as may be required in the event of a stock dividend, reverse stock split, split-up, recapitalization or other similar event. (2) Estimated solely for the purpose of computing the registration fee. This amount was calculated in accordance with Rule 457 and based on the average of the high and low sale prices of the Common Stock as reported on the OTC Bulletin Board on August 18, 1997. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROSPECTUS AMERICAN NATIONAL BANKSHARES INC. 628 Main Street Post Office Box 191 Danville, Virginia 24543-0191 (804) 792-5111 DIVIDEND REINVESTMENT PLAN This Prospectus relates to 200,000 shares of the $1.00 par value common stock (the "Common Stock") of American National Bankshares Inc. (the "Company") to be issued under the Company's Dividend Reinvestment Plan (the "Plan"), which was adopted by the Board of Directors of the Company on August 19, 1997. The Plan provides shareholders of the Company with a simple and convenient method of investing cash dividends and voluntary cash contributions in additional shares of Common Stock at a cost which may represent a savings over that available in normal market purchases. -------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -------------------- The date of this Prospectus is August 20, 1997 --------- (INSIDE FRONT COVER OF PROSPECTUS) AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports and other information can be inspected and copied at the public reference facilities of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's public reference facilities in the Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048 and the Midwest Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can also be obtained by writing to the Securities and Exchange Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Additionally, the Commission maintains an internet web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants like the Company that file electronically with the Commission. The Company has filed with the Commission in Washington, D.C., a registration statement on Form S-3 (together with all amendments thereto, the "Registration Statement") under the Securities Act of 1933, as amended, with respect to the securities covered by this Prospectus. This Prospectus does not contain all of the information set forth in the Registration Statement, certain items of which are contained in exhibits to the Registration Statement as permitted by the rules and regulations of the Commission. For further information, reference is made to the Registration Statement including the exhibits filed or incorporated as a part hereof. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST OF ANY PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, A COPY OF ANY AND ALL INFORMATION WHICH HAS BEEN INCORPORATED BY REFERENCE HEREIN. SUCH REQUESTS SHOULD BE DIRECTED TO AMERICAN NATIONAL BANKSHARES INC., 628 MAIN STREET, P.O. BOX 191, DANVILLE, VIRGINIA 24543-0191, ATTENTION: PRESIDENT AND CHIEF EXECUTIVE OFFICER, TELEPHONE NUMBER (804) 792-5111. [Rest of Page Intentionally Left Blank] (OUTSIDE BACK COVER OF PROSPECTUS) TABLE OF CONTENTS Page AVAILABLE INFORMATION....................................................... 2 DESCRIPTION OF THE COMPANY DIVIDEND REINVESTMENT PLAN....................... 1 Purpose............................................................ 1 Advantages......................................................... 1 Administration ................................................... 1 Participation .................................................... 1 Voluntary Cash Contributions ..................................... 2 Purchases ........................................................ 2 Dividends ........................................................ 3 Costs ............................................................ 3 Reports to Participants .......................................... 3 Certificates for Shares .......................................... 4 Voting Rights...................................................... 4 Stock Dividends; Stock Splits; Rights Offerings .................. 4 Withdrawal from Plan ............................................. 4 Amendment and Termination of Plan ................................ 5 Federal Income Tax Consequences.................................... 5 Inquiries Concerning the Plan .................................... 6 Interpretation of the Plan ....................................... 6 Responsibility of the Company and the Plan Agent ................. 7 USE OF PROCEEDS............................................................. 7 MATERIAL CHANGES............................................................ 7 DESCRIPTION OF THE COMPANY'S CAPITAL STOCK.................................. 7 INDEMNIFICATION............................................................. 8 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................. 8 LEGAL MATTERS............................................................... 8 EXPERTS..................................................................... 9 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERING MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS FURNISHED OR THE DATE HEREOF. DESCRIPTION OF THE COMPANY DIVIDEND REINVESTMENT PLAN The following is a question and answer statement explaining the provisions of the Plan. A copy of the Plan may be obtained from: American National Bankshares Inc. (the "Company"), 628 Main Street, P.O. Box 191, Danville, Virginia 24543-0191, Attention: President and Chief Executive Officer. In the event of any conflict between the answers to these questions and the Plan, the more detailed provisions of the Plan will control. Purpose 1. What is the purpose of the Plan? The purpose of the Plan is to provide the shareholders of the Company with a simple and convenient method of investing cash dividends and voluntary cash contributions in additional shares of the $1.00 par value common stock of the Company (the "Common Stock") at a cost representing a savings over that available in normal market purchases. Advantages 2. What are the advantages of the Plan? The Plan is advantageous to the shareholders by permitting them to acquire additional shares of the Common Stock automatically at no or reduced brokerage commission costs. In addition, shareholders electing to participate in the Plan ("Participants") may increase the amount of their investment by making voluntary cash contributions in amounts not less than $200 nor more than $3,500 during any single dividend period. Under the Plan, recordkeeping is simplified by the issuance, after each investment, of a detailed statement of each Participant's account, including the cost basis of the whole and fractional shares purchased. Administration 3. Who administers the Plan? The Plan is administered by the Company (the "Plan Agent"). Purchase of the Common Stock pursuant to the Plan may be delegated to an independent purchasing agent (the "Purchasing Agent"). Participation 4. Who is eligible to participate in the Plan? All holders of record of the Common Stock are eligible to participate in the Plan. A beneficial owner of Common Stock whose shares are registered in a name other than his own must become a shareholder of record by having all or a part of such shares transferred into his own name, or arrange for the holder of record of such shares to enroll in the Plan, in order to participate in the Plan. 5. How does an eligible shareholder enroll in the Plan? Any eligible shareholder may enroll in the Plan by completing and signing the Participant Card accompanying this Prospectus and returning it to the Plan Agent. Additional Participant Cards may be obtained at any time by written or oral request to the Plan Agent. 1 6. When may an eligible shareholder enroll in the Plan? An eligible shareholder may enroll in the Plan at any time. If the shareholder's Participant Card requesting reinvestment of dividends is received by the Plan Agent on or before the record date established for a particular dividend (the "Record Date"), reinvestment will commence with that dividend. If a Participant Card is received from a shareholder after the Record Date established for a particular dividend, the reinvestment of dividends will begin with the dividend following the next Record Date, if the shareholder is still a holder of record. 7. May a shareholder enroll as to some, but not all, shares held of record by him? Yes, a shareholder may enroll in the Plan as to some, but not all, shares of Common Stock owned of record by that shareholder. Voluntary Cash Contributions 8. How may voluntary cash contributions to the Plan be made? Each Participant may make optional cash contributions to the Plan of not less than $200 and not more than $3,500 during any single dividend period. The same amount need not be invested in each period. Participants are under no obligation to make any voluntary cash contributions. A voluntary cash payment may be made by forwarding a check or money order, payable to the Plan Agent, with a completed Participant Card when enrolling, or thereafter, accompanied by the transmittal form for mailing voluntary cash contributions that will be included with each statement of account furnished to Participants pursuant to the Plan. Employees of the Company and American National Bank and Trust Company (the "Bank") may make voluntary cash contributions by completing a Payroll Deduction Authorization Form and returning it to the Plan Agent. 9. How will voluntary cash contributions be used? The Plan Agent will apply each voluntary cash contribution received from a Participant before a Record Date to the purchase of Common Stock for the account of that Participant on the next date that a dividend is actually paid by the Company (the "Investment Date"). A voluntary cash contribution will not be deemed to have been made by a Participant or received by the Plan Agent until the funds so contributed are actually collected. Interest will not be paid on voluntary cash contributions. For this reason, it is to the Participant's benefit to mail payments so that they are received by the Plan Agent immediately prior to the next Record Date. 10. May voluntary cash contributions be returned to a Participant? Yes. Voluntary cash contributions will be returned to a Participant upon written request to the Plan Agent, provided that the request is received not later than 48 hours prior to the next scheduled Record Date. Purchases 11. What is the source of the Common Stock purchased under the Plan? The Purchasing Agent will purchase Common Stock on the open market. The Plan Agent will not exercise any direct or indirect control over the prices or timing of purchases made by the Purchasing Agent. 2 12. How will the price of shares purchased under the Plan be determined? The price of shares purchased on the open market will be the average cost (excluding brokerage commissions) to the Purchasing Agent of such purchases. 13. How many shares will be purchased by the Purchasing Agent for the Participants in the Plan? The number of shares to be purchased for a Participant by the Purchasing Agent will depend on the amount of the Participant's dividend and voluntary cash payment, if any, and the price of the shares. Each Participant's account will be credited with the number of whole and fractional shares equal to the amount to be invested divided by the applicable purchase price. Fractional shares shall be calculated to four (4) decimal places. 14. When will shares be purchased? Shares of Common Stock may be purchased at any time but generally not later than 30 days after the Investment Date. Temporary suspension of purchases may occur at any time when, in the judgment of the Plan Agent, the purchase of shares would violate any governmental, judicial, securities exchange or National Association of Securities Dealers, Inc. order. Dividend and voting rights will commence upon settlement of the purchase. For the purposes of making purchases, the Purchasing Agent will commingle each Participant's funds with those of all other Participants. Dividends 15. How will dividends be paid on shares held by the Plan Agent? As record holder of the shares held in Participants' accounts under the Plan, the Plan Agent will receive dividends on all such shares held on each Record Date, will credit such dividends to Participants' accounts on the basis of whole or fractional shares held in each account and will automatically reinvest these dividends in shares of Common Stock. Costs 16. What are the costs to a Participant in the Plan? Participants will be charged the actual cost (excluding brokerage commissions, which shall be paid by the Company) of all Common Stock purchased in the open market. All costs of administration of the Plan will be borne by the Company; however, a reasonable service charge may be assessed at the time of a Participant's withdrawal from the Plan or at any time any share certificate is requested by a Participant. Reports to Participants 17. What kind of reports will be sent to Participants in the Plan? As soon as practicable after completion of each investment on behalf of a Participant, the Plan Agent will mail to such Participant a statement showing (i) the amount of the dividend and voluntary cash contribution, if any, applied toward such investment (ii) the taxes withheld, if any, (iii) the net amount invested, (iv) the number of shares purchased, (v) the average cost per share, (vi) the total shares accumulated under the Plan, computed to four (4) decimal places, (vii) the cost basis of whole and fractional shares purchased, and (viii) the date of purchase. Each Participant will receive annually an Internal Revenue Service Form 1099, or any successor form, reporting dividend income received. 3 Certificates for Shares 18. Will certificates be issued for shares purchased? All shares purchased under the Plan will be registered in the name of the Plan Agent or its nominee, as agent for the Participants. Certificates for Plan shares will not be issued to Participants unless requested in writing. Certificates for any number of whole Plan shares will be issued to a Participant within 15 days of a written request to the Plan Agent signed by the Participant. Any remaining whole or fractional Plan Shares will continue to be held by the Plan Agent as the agent for the Participant. Certificates for fractional shares will not be issued under any circumstances. Voting Rights 19. How will shares held by the Plan Agent be voted? For each meeting of shareholders, the Plan Agent will forward a proxy to each Participant and will vote all whole Plan Shares in the Participant's account in accordance with the instructions received from the Participant. Fractional shares will not be voted. The Plan Shares of a Participant who does not return a proxy will not be voted. Stock Dividends; Stock Splits; Rights Offerings 20. What happens if the Company declares a stock dividend or a stock split? Any stock dividends or split shares distributed by the Company on the Plan Shares of a Participant will be added to his account with the Plan Agent as additional Plan Shares. Stock dividends or split shares distributed with respect to shares of Common Stock registered in a Participant's name will be mailed directly to the Participant in the same manner as to shareholders who do not participate in the Plan. 21. What happens if the Company makes a rights offering? In the event of a rights offering by the Company, the Plan Agent will sell rights received with respect to Plan Shares held of record by the Plan Agent as custodian, or in its discretion, may distribute rights to Participants. If the Plan Agent sells all rights received with respect to Plan Shares, the Plan Agent will invest the proceeds of such sales in additional shares of Common Stock, which will be retained by the Plan Agent as custodian and credited proportionately to the accounts of the Participants. Participants who wish to exercise such rights must request the Plan Agent to forward a share certificate to the Participant (See Question 18 above). Such request must be made prior to the Record Date for exercising such rights. Rights on shares of Common Stock registered in the name of a Participant will be mailed directly to the Participant. Withdrawal from Plan 22. How and when may a Participant withdraw from the Plan? Participation in the Plan may be terminated not less than 15 days prior to an Investment Date by a Participant at any time by giving written notice to the Plan Agent. Within a reasonable time after termination, the Plan Agent will deliver to the Participant (i) a certificate for all whole shares held under the Plan, and (ii) a check representing any uninvested dividends and voluntary cash contributions. A check in lieu of the issuance of any fractional share in the Participant's account, equal to the fractional share held under the Plan multiplied by the fair market value per share of Common Stock, determined pursuant to the Plan, on the date that a Participant withdraws from the Plan, will be mailed to the Participant on the next succeeding Investment Date. 4 As an alternative, upon termination of participation in the Plan, a Participant may request in writing that any number of whole shares credited to the Participant's account be sold by the Plan Agent. When a request to sell whole shares for a Participant's account has been received, such shares will be sold by the Plan Agent, and the Participant will receive a check for the proceeds of the sale, less any brokerage fees and commissions, the applicable withdrawal fee and any transfer taxes. Sales may be made on any securities exchange on which the shares are traded or listed for trading, in the over-the-counter market or in negotiated transactions and on such terms as to price, delivery and otherwise as the Plan Agent may, in its sole and absolute discretion, determine. Any such sale shall be made within five business days following the receipt of the Participant's written request to sell such shares, unless sales are curtailed or suspended in accordance with the Plan. See Question 14. 23. If you are an employee of the Company or the Bank, what happens if you terminate your employment? Termination of employment does not automatically terminate participation in the Plan. Dividends on shares held in the Plan for an employee who leaves the Company or the Bank will continue to be reinvested until the former employee terminates participation in the Plan. Of course, optional cash payments through payroll deductions will no longer be possible once the employee terminates employment. Amendment and Termination of Plan 24. May the Plan be amended or terminated? Yes. The Company may amend, supplement, suspend, modify or terminate the Plan at any time without the approval of the Participants. Thirty (30) days' notice of any suspension or material amendment shall be sent to all Participants, who shall in all events have the right to withdraw from the Plan. Federal Income Tax Consequences 25. What are the federal income tax consequences of participating in the Plan? The following discussion summarizes the principal federal income tax consequences, under current law, of participation in the Plan. It does not address all potentially relevant federal income tax matters, including consequences peculiar to persons subject to special provisions of federal income tax law (such as tax-exempt organizations, insurance companies, and foreign persons). The discussion is based on various rulings of the Internal Revenue Service regarding several types of dividend reinvestment plans. No ruling, however, has been issued or requested regarding the Plan. The following discussion is for your general information only, and you are urged to consult your own tax advisor to determine the particular tax consequences that may result from your participation in the Plan and in the disposition of any shares of common stock purchased pursuant to the Plan. Reinvested Dividends Dividends that are reinvested to acquire shares of Common Stock will be taxable to you (including any fractional share), as if you received the dividends. You also will be treated as receiving an additional dividend equal to the amount of your share of brokerage commissions paid by the Company when dividends are reinvested. For example, if $100 of your dividends are reinvested to purchase shares of Common Stock with a fair market value of $100 in the open market under the Plan, and if the amount of the related brokerage commission is $1, the total amount of the dividend you will be treated as receiving for federal income tax purposes will be $101. (The $1 figure in the preceding example is for purposes of illustration only; it is not a representation or estimate of the amount or percentage of brokerage commissions and other acquisition fees that may be paid under the Plan.) 5 The initial tax basis of shares of Common Stock you acquire with reinvested dividends will equal the amount of the dividend you are treated as having received. Consequently, your initial basis in a share acquired with reinvested dividends will be the share's purchase price plus the amount of any brokerage commissions fees allocable to the share. The holding period for shares of Common Stock acquired with reinvested dividends will begin the later of the day after the date the shares are purchase for you, which may be later than the dividend payment date. A whole share resulting from the acquisition of two or more fractional shares on different dates will have a split holding period, with the holding period for each fractional component beginning the day after the purchase date when the fraction was acquired. Optional Cash Payments The purchase of shares of Common Stock under the Plan with your optional cash payments will result in a dividend to you for federal income tax purposes equal to your share of brokerage commissions paid by the Company. The initial tax basis in shares of Common Stock acquired with an optional cash payment will be the purchase price plus the amount of brokerage commissions allocable to the shares. The holding period for shares acquired with optional cash payments under the Plan will begin the day after the purchase date. A share consisting of fractional shares purchased on different dates will have a split holding period, with the holding period for each fractional component beginning the day after its purchase date. Receipt of Share Certificates and Cash You will not realize any income when you receive certificates for whole shares credited to your account under the Plan. Any cash received for a fractional share held in your account will be treated as an amount realized on the sale of the fractional share. You therefore will recognize gain or loss equal to any difference between the amount of cash received for a fractional share and your tax basis in the fractional share. Similarly, if the Plan Agent sells your shares pursuant to your request upon termination of your participation in the Plan, you will recognize gain or loss equal to the difference between the amount you realize on the sale and your tax basis in the shares. Inquiries Concerning the Plan 26. Who should be contacted with questions concerning the Plan? All inquiries concerning the Plan should be directed to: American National Bankshares Inc. P.O. Box 191 Danville, VA 24543-0191 Attention: President and Chief Executive Officer Interpretation of the Plan 27. Who will interpret the provisions of the Plan? Any question of interpretation arising under the Plan will be determined by the Board of Directors of the Company pursuant to applicable federal and state law and the rules and regulations of all regulatory authorities, and such determination shall be final and binding on all Participants. 6 Responsibility of the Company and the Plan Agent 28. What are the responsibilities of the Company and the Plan Agent, if any, with respect to the Plan? Neither the Company, the Plan Agent nor its nominees shall have any responsibility beyond the exercise of ordinary care for any action taken or omitted pursuant to the Plan, nor shall they have any duties, responsibilities or liabilities except such as are expressly set forth in the Plan. Neither the Company nor the Plan Agent shall be liable for any act done in good faith, or for any good faith omission to act, including, without limitation, any claim or liability (a) arising out of failure to terminate a Participant's account upon such Participant's death prior to receipt of notice in writing of his or her death, (b) with respect to the prices at which shares are purchased, the times when purchases or sales are made or (c) for any fluctuation in the market value of the Common Stock. The Participants must realize that neither the Company nor the Plan Agent can provide any assurance of a profit or protection against loss on any shares purchased under the Plan. USE OF PROCEEDS Since all purchases of Common Stock made pursuant to the Plan will be in open market transactions, no proceeds are expected to flow to the Company as a result of the offering. The principal reason for the Plan is to provide shareholders with a convenient method of investing cash dividends in additional shares of Common Stock. MATERIAL CHANGES On April 9, 1997, the Company commenced a self tender offer (the "Offer) pursuant to Rule 13e-4 of the Securities Exchange Act of 1934. Under the terms of the Offer, which was conducted pursuant to a "Dutch Auction" process, the Company offered to purchase from its shareholders up to 250,000 shares of Common Stock at prices not in excess of $27.00 nor less than $25.00 per share. The Offer was concluded on May 8, 1997, with the Company purchasing 229,781 shares of Common Stock, representing approximately 7% of the number of issued and outstanding shares of Common Stock at such time, at $27.00 per share. DESCRIPTION OF THE COMPANY'S CAPITAL STOCK The following information with respect to the capital stock of the Company is subject to the detailed provisions of the Company's Articles of Incorporation and bylaws, as currently in effect. These statements do not purport to be complete, or to give full effect to the provisions of statutory or common law, and are subject to, and are qualified in their entirety by reference to, the terms of the Company's Articles of Incorporation and bylaws. The securities offered hereby are shares of the Common Stock, $1.00 par value. As of August 20, 1997, there were 10,000,000 shares authorized, of which 3,051,733 shares were issued and outstanding. The Company's Articles of Incorporation also authorize 2,000,000 shares of preferred stock. Holders of Common Stock, to the exclusion of any other class of stock, have the sole and full power to vote for the election of directors and all other purposes without limitation, except (i) as otherwise provided in the certificate of serial designation for a particular series of preferred stock and (ii) as otherwise provided by Virginia law. Holders of Common Stock are entitled to one vote per share of Common Stock held. The holders of Common Stock do not have cumulative voting rights nor do they have preemptive rights to subscribe for unissued shares of stock of any class of the Company. Subject to the provisions of articles of serial designation for each series of preferred stock, the holders of Common Stock are entitled to receive dividends if, when and as declared from time to time by the Board of Directors from funds available therefor and to the net assets remaining upon liquidation of the Company. 7 The Board of Directors has the authority, by resolution, to divide the preferred stock into series and fix the dividend rate (including the time of payment, the dates from which dividends may be cumulative and the extent of participation rights), voting rights, redemption rights, liquidation preferences and conversion rights of any such series. No preferred stock has been issued as of the date of this Prospectus nor does the Board of Directors have plans to issue preferred stock. INDEMNIFICATION Directors and officers of the Company may be indemnified against liabilities, fines, penalties, and claims imposed upon or asserted against them. This indemnification covers all costs and expenses reasonably incurred by an officer or director, except for matters as to which a director or officer is liable because of willful misconduct or a knowing violation of criminal law. In addition, the Virginia Stock Corporation Act and the Company's Articles of Incorporation, under certain circumstances, limit the liability of directors and officers in a shareholder or derivative proceeding. As permitted by the Virginia Stock Corporation Act, the Company has purchased a directors' and officers' liability insurance policy that will, subject to certain limitations, indemnify the Company and its officers and directors for damages they become legally obligated to pay as a result of any negligent act, error or omission committed by directors or officers while acting in their capacities as such. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is therefore unenforceable. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following reports, which were filed by the Company with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, are incorporated in this Prospectus by reference: (a) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996. (b) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997. (c) The Company's Issuer Tender Offer Statement on Schedule 13E-4, dated April 9, 1997, and the amendments thereto on Schedule 13E-4/A, dated April 25, 1997, May 13, 1997 and May 20, 1997. (d) All other reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act since the end of the Company's fiscal year covered by the Annual Report referred to in (a) above. (e) All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the termination of this offering. The Company will forward without charge to each person to whom this Prospectus is delivered, on written or oral request, a copy of the documents incorporated herein by reference (other than exhibits to such documents which are not specifically incorporated by reference in such document). Requests should be directed to American National Bankshares Inc., P.O. Box 191, Danville, VA 24543-0191, Attention: President and Chief Executive Officer, telephone number (804) 792-5111. LEGAL MATTERS The legality of the shares of Common Stock offered hereby will be passed upon for the Company by Hunton & Williams, 951 East Byrd Street, Richmond, Virginia 23219. 8 EXPERTS The consolidated financial statements of the Company incorporated in this Prospectus and Registration Statement by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996 have been audited by Arthur Andersen LLP, independent accountants, as indicated in their report with respect thereto, and are incorporated herein by reference in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. [Rest of Page Intentionally Left Blank] 9 American National Bankshares Inc. Dividend Reinvestment Plan Participant Card -------------------------- TO AMERICAN NATIONAL BANKSHARES INC. ("Plan Agent") I hereby appoint you as my Plan Agent, subject to the terms and conditions of the Dividend Reinvestment Plan of American National Bankshares Inc. (the "Company"), as set forth in the accompanying Prospectus, and authorize you, to the extent indicated, to apply all cash dividends payable to me on the common stock of the Company, $1.00 par value (the "Common Stock"), and all my voluntary cash contributions, to purchase whole shares and fractional shares of Common Stock. This appointment relates only to the shares of Common Stock held by me of record in the account listed below and all whole shares and fractional shares acquired under the Plan. I understand that I may terminate my participation in the Plan at any time by notifying you in writing. If the undersigned is a nominee participating in the Plan on behalf of underlying beneficial owners, the undersigned agrees to participate on behalf of such beneficial owners in compliance with all relevant provisions of the Plan. I wish to participate in the American National Bankshares Dividend Reinvestment Plan on the following basis (select one): [ ] FULL DIVIDEND REINVESTMENT. I want to reinvest dividends on all shares of Common Stock now or hereafter registered in my name or held by me in the Plan by the Plan Agent. I may also make voluntary cash contributions. [ ] PARTIAL DIVIDEND REINVESTMENT. I want to reinvest dividends on only ______ shares of Common Stock registered in my name. I understand that dividends on all shares of Common Stock held for me in the Plan by the Plan Agent will be reinvested. I may also make voluntary cash contributions. My initial voluntary cash contribution is enclosed: $___________ (minimum $200, maximum $3,500 per any dividend period per Participant or beneficial owner on whose behalf a Participant acts). Check or money order should be made payable to "American National Bankshares Inc." Please Print or Type: ______________________ SOCIAL SECURITY NUMBER OR TAXPAYER ID NUMBER ______________________________________________ NAME OF PARTICIPANT(S) (AS IT APPEARS ON YOUR DIVIDEND CHECK) - -------------------------- --------------------------------------------- STREET ADDRESS SIGNATURE - -------------------------- ---------------------------------------------- CITY STATE ZIP TITLE IF SIGNING IN A REPRESENTATIVE CAPACITY ( ) ____________________ DAYTIME PHONE NUMBER MAIL TO: AMERICAN NATIONAL BANKSHARES INC., P.O. BOX 191, DANVILLE, VIRGINIA 24543-0191 10 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14 Other expenses of issuance and distribution. The following is an estimate of all expenses expected to be incurred by the Registrant in connection with the issuance and distribution of the securities registered hereby: Registration Fees $ 1,697 Federal Taxes -- State Taxes and Fees 1,000 Trustees and Transfer Agents Fees -- Costs of Printing and Engraving 1,000 Legal Fees 15,500 Accounting Fees 5,000 Engineering Fees -- ------ TOTAL $24,197 The Company has not paid a premium on any policy obtained in connection with the offering and sale of the securities registered herein which insures or indemnifies directors or officers against any liabilities they may incur in connection with the registration, offering or sale of such securities. ITEM 15 Indemnification of Directors and Officers. The Virginia Stock Corporation Act permits, and the registrant's Articles of Incorporation require, indemnification of the registrant's directors and officers in a variety of circumstances, which may include indemnification for liabilities under the Securities Act. Under Sections 13.1-697 and 13.1-702 of the Virginia Stock Corporation Act, a Virginia corporation generally is authorized to indemnify its directors and officers in civil and criminal actions if they acted in good faith and believed their conduct to be in the best interests of the corporation and, in the case of criminal actions, had no reasonable cause to believe that the conduct was unlawful. The registrant's Articles of Incorporation require indemnification of directors and officers with respect to certain liabilities, expenses and other amounts imposed upon them by reason of having been a director or officer, except in the case of willful misconduct or a knowing violation of criminal law. In addition, the registrant carries insurance on behalf of directors, officers, employees or agents that may cover liabilities under the Securities Act. The registrant's Articles of Incorporation also provide that, to the full extent the Virginia Stock Corporation Act (as it presently exists or may hereafter be amended) permits the limitation or elimination of the liability of directors and officers, no director or officer of the registrant shall be liable to the registrant or its shareholders for monetary damages with respect to any transaction, occurrence or course of conduct. Section 13.1-692.1 of the Virginia Stock Corporation Act presently permits the elimination of liability of directors and officers in any proceeding brought by or in the right of the registrant or brought by or on behalf of shareholders of the registrant, except for liability resulting from such person's having engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities law, including, without limitation, any unlawful insider trading or manipulation of the market for any security. Sections 13.1-692.1 and 13.1-696 to -704 of the Virginia Stock Corporation Act are hereby incorporated by reference herein. II-1 ITEM 16 Exhibits Filed Pursuant to Item 601 of Regulation S-K. 4.1 Articles of Incorporation, as amended (filed herewith) 4.2 Bylaws, as amended (filed herewith) 5 Opinion of Hunton & Williams (filed herewith) 23.1 Consent of Arthur Andersen LLP (filed herewith) 23.2 Consent of Hunton & Williams (included in Exhibit 5) 24 Power of Attorney (filed herewith) 99 American National Bankshares Inc. Dividend Reinvestment Plan (filed herewith) ITEM 17 Undertakings Required by Item 512 of Regulation S-K. The undersigned registrant hereby undertakes: (a) To file, during any period in which offers or sales are being made, a post effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-2 (d) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Danville, Commonwealth of Virginia, on August 19, 1997. American National Bankshares Inc. (Registrant) By: /s/ Charles H. Majors -------------------------------- Charles H. Majors President and Chief Executive Officer POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on August __, 1997. Each of the directors and/or officers of American National Bankshares Inc. whose signature appears below hereby appoints Charles H. Majors as his attorney-in-fact to sign in his name and behalf, in any and all capacities stated below and to file with the Commission any and all amendments, including post-effective amendments to this registration statement, making such changes in the registration statement as appropriate, and generally to do all such things in their behalf in their capacities as officers and directors to enable American National Bankshares Inc. to comply with the provisions of the Securities Act of 1933, and all requirements of the Securities and Exchange Commission.
Signature Title - --------- ----- /s/ Bill Barker, Jr. Director - --------------------------------- Bill Barker, Jr. /s/ Richard G. Barkhouser Director - --------------------------------- Richard G. Barkhouser /s/ B. Carrington Bidgood Director - --------------------------------- B. Carrington Bidgood /s/ Fred A. Blair Director - --------------------------------- Fred A. Blair /s/ Ben J. Davenport, Jr. Director - --------------------------------- Ben J. Davenport, Jr. /s/ H. Dan Davis Executive Vice President and Director - --------------------------------- H. Dan Davis II-4 /s/ Lester A. Hudson, Jr. Director - --------------------------------- Lester A. Hudson, Jr. /s/ David Hyler Senior Vice President, Chief Financial Officer, - --------------------------------- David Hyler Secretary and Treasurer /s/ E. Budge Kent, Jr. Senior Vice President, Assistant Secretary and - --------------------------------- Director E. Budge Kent, Jr. Director - --------------------------------- Fred B. Leggett, Jr. /s/ Charles H. Majors President, Chief Executive Officer and Director - --------------------------------- Charles H. Majors /s/ James A. Motley Director - --------------------------------- James A. Motley /s/ Claude B. Owen, Jr. Director - --------------------------------- Claude B. Owen, Jr. Director - --------------------------------- Landon R. Wyatt, Jr.
II-5 EXHIBIT INDEX Exhibit Exhibit Index 4.1 Articles of Incorporation, as amended 4.2 Bylaws, as amended 5 Opinion of Hunton & Williams 23.1 Consent of Arthur Andersen LLP 23.2 Consent of Hunton & Williams (included in Exhibit 5) 24 Power of Attorney (located on signature page) 99 American National Bankshares Inc. Dividend Reinvestment Plan II-6 EX-4.1 2 ARTICLES OF INCORPORATION, AS AMENDED Exhibit 4.1 AMENDED AND RESTATED ARTICLES OF INCORPORATION OF AMERICAN NATIONAL BANKSHARES INC. 1. Name. The name of the Corporation is AMERICAN NATIONAL BANKSHARES INC. 2. Purpose. The purpose of the Corporation is to transact any or all lawful business not required to be specifically stated in these Articles of Incorporation for which corporations may be incorporated under the Virginia Stock Corporation Act. 3. Authorized Stock. The Corporation shall have authority to issue 200,000 shares of Preferred Stock, par value $5 per share, and 10,000,000 shares of Common Stock, par value $1 per share. A. Preferred Stock. Authority is expressly vested in the Board of Directors to divide the Preferred Stock into series and, within the following limitations, to fix and determine the relative rights and preferences of the shares of any series so established and to provide for the issuance thereof. Each series shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. All shares of Preferred Stock shall be identical except as to the following relative rights and preferences, as to which there may be variations between different series: (i) The rate of dividend, the time of payment and the dates from which dividends shall be cumulative, and the extent of participation rights, if any; (ii) Any right to vote with holders of shares of any other series or class and any right to vote as a class, either generally or as a condition to specified corporate action; (iii) The price at and the terms and conditions on which shares may be redeemed; (iv) The amount payable upon shares in event of involuntary liquidation; (v) The amount payable upon shares in event of voluntary liquidation; (vi) Sinking fund provisions for the redemption or purchase of shares; and (vii) The terms and conditions on which shares may be converted, if the shares of any series are issued with the privilege of conversion. Prior to the issuance of any shares of a series of Preferred Stock, the Board of Directors shall establish such series by adopting a resolution setting forth the designation and number of shares of the series and the relative rights and preferences thereof to the extent that variations are permitted by the provisions hereof. All series of Preferred Stock shall rank on a parity as to dividends and assets with all other series according to the respective dividend rates and mounts distributable upon any voluntary or involuntary liquidation of the Corporation fixed for each such series and without preference or priority of any series over any other series; but all shares of Preferred Stock shall be preferred over shares of Common Stock as to both dividends and mounts distributable upon any voluntary or involuntary liquidation of the Corporation. All shares of any one series shall be identical. B. Common Stock. The holders of Common Stock shall, to the exclusion of the holders of any other class of stock of the Corporation, have the sole and full power to vote for the election of directors and for all other purposes without limitation except only (i) as otherwise provided in the certificate of serial designation for a particular series of Preferred Stock, and (ii) as otherwise expressly provided by the then existing statutes of Virginia. The holders of Common Stock shall have one vote for each share of Common Stock held by them. Subject to the provisions of articles of serial designation for each series of Preferred Stock, the holders of shares of Common Stock shall be entitled to receive dividends if, when and as declared by the Board of Directors out of funds legally available therefor and to the net assets remaining after payment of all liabilities upon any voluntary or involuntary liquidation of the Corporation. 4. Preemptive Rights. Stockholders of the Corporation shall not have the preemptive right to acquire unissued shares of any class of the Corporation. 5. Cumulative Voting. Stockholders of the Corporation shall not have cumulative voting rights. 6. A. To the full extent that the Virginia Stock Corporation Act, as it exists on the date hereof or may hereafter be mended, permits the limitation or elimination of the liability of directors or officers, a Director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages. B. To the full extent permitted and in the manner prescribed by the Virginia Stock Corporation Act and any other applicable law, the Corporation shall indemnify a Director or officer of the Corporation who is -2- or was a party to any proceeding by reason of the fact that he is or was such a Director or officer or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise. The Board of Directors is hereby empowered, by majority vote of a quorum of disinterested Directors, to contract in advance to indemnify any Director or officer. C. The Board of Directors is hereby empowered, by majority vote of a quorum of disinterested Directors, to cause the Corporation to indemnify or contract in advance to indemnify any person not specified in Section B of this Article who was or is a party to any proceeding, by reason of the fact that he is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, to the same extent as if such person were specified as one to whom indemnification is granted in Section B. D. The Corporation may purchase and maintain insurance to indemnify it against the whole or any portion of the liability assumed by it in accordance with this Article and may also procure insurance, in such amounts as the Board of Directors may determine, on behalf of any person who is or was a Director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against any liability asserted against or incurred by such person in any such capacity or arising from his status as such, whether or not the Corporation would have power to indemnify him against such liability under the provisions of this Article. E. In the event there has been a change in the composition of a majority of the Board of Directors alter the date of the alleged act or omission with respect to which indemnification is claimed, any determination as to indemnification and advancement of expenses with respect to any claim for indemnification made pursuant to Section A of this Article 6 shall be made by special legal counsel agreed upon by the Board of Directors and the proposed indemnitee. If the Board of Directors and the proposed indemnitee are unable to agree upon such special legal counsel, the Board of Directors and the proposed indemnitee each shall select a nominee, and the nominees shall select such special legal counsel. F. The provisions of this Article 6 shall be applicable to all actions, claims, suits, or proceedings commenced after the adoption hereof, whether arising from any action taken or failure to act before or after such adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby or diminish the right to indemnification with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect or any alleged action or failure to act prior to such amendment, modification, or repeal. -3- G. Reference herein to Directors, officers, employees, or agents shall include former Directors, officers, employees, and agents and their respective heirs, executors, and administrators. 7. Registered Office. The Corporation's initial registered office shall be located in the City of Danville at 628 Main Street, Danville, Virginia 24541. The Corporation's initial registered agent shall be Charles H. Majors, whose address is the same as the Corporation's registered office and who is a resident of Virginia and a member of the Virginia State Bar. 8. Directors. The number of Directors shall be as stated in the Corporation's bylaws but the number of directors set forth in the bylaws cannot be increased by more than two during any 12-month period except by the affirmative vote of holders of 80% of all shares of voting stock of the Corporation. In the absence of a bylaw, the number of Directors shall be three. The Corporation's initial Board of Directors shall consist of three individuals whose names and addresses are as follows: Name Address ---- ------- James A. Motley 175 Acorn Lane Danville, Virginia 24541 E. Budge Kent, Jr. 292 Dogwood Drive Danville, Virginia 24541 Charles H. Majors 415 Chadwyck Drive Danville, Virginia 24541 Commencing with the 1984 Annual Meeting of Stockholders, the Board of Directors shall be divided into three classes -- Class I, Class II and Class III -- as nearly equal in number as possible. At the 1984 Annual Meeting of Stockholders, directors of the first class (Class I) shall be elected to hold office for a term expiring at the 1985 Annual Meeting of Stockholders; directors of the second class (Class II) shall be elected to hold office for a term expiring at the 1986 Annual Meeting of Stockholders; and directors of the third class (Class III) shall be elected to hold office for a term expiring at the 1987 Annual Meeting of Stockholders. At each annual meeting of stockholders after 1984, the successors to the class of directors whose term shall then expire shall be identified as being of the same class as the directors they succeed and elected to hold office for a term expiring at the third succeeding annual meeting of stockholders. When the number of directors is changed, any newly-created directorships or any decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as possible. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any vacancy occurring in the Board of Directors, including a vacancy resulting in an increase by not more than two in the number of -4- directors, may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors, and directors so.chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of the class to which they have been elected expires. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director may be removed, with or without cause, but only by the affirmative vote of the holders of at least 80% of the outstanding shares of Common Stock. 9. Voting Requirements for Certain Business Combinations. (1) The affirmative vote of the holders of 80% of all shares of stock of the Corporation entitled to vote on any business combination (as hereinafter defined) considered for the purposes of this Article 9 as one class (herein called "voting stock"), shall be required for the adoption or authorization of such business.combination with any other entity (as hereinafter defined) if, as of the record date for the determination of stockholders entitled to notice thereof and to vote thereon, such other entity is the beneficial owner, directly or indirectly, of more than 25% of the voting stock of the Corporation; provided that such 80% voting requirement shall not be applicable if: (a) The cash, or fair market value of the property, securities or other consideration to be received per share by common stockholders of the Corporation in such business combination: (i) is not less than the highest per share price (including brokerage commissions and/or soliciting dealers' fees) paid by such other entity in acquiring any of its holdings of the Corporation's Common Stock; (ii) bears the same or a greater percentage relationship to the market price of the Corporation's Common Stock immediately prior to the public announcement of such business combination as the highest per share price (including brokerage commissions and/or soliciting dealers' fees) that such other entity has theretofore paid for any of the shares of the Corporation's Common Stock already owned by it bears to the market price of the Common Stock of the Corporation immediately prior to the public announcement or commencement of the tender offer or market acquisition of the Corporation's Common Stock by such other entity; and (iii) if the public announcement of such business combination occurs more than one year after the transaction which resulted in such other entity having a 25% interest, is not less than the earnings per share of Common Stock of the Corporation for the four full consecutive fiscal quarters immediately preceding the record date for solicitation of votes on such business combination, multiplied by the price-earnings multiple represented by the price referred to in paragraph (i) in relation to the earnings per share of Common Stock of the -5- Corporation for the four full consecutive fiscal quarters immediately preceding the transaction which resulted in such other entity having a 25% interest; (b) After such other entity has acquired a 25% interest and prior to the consummation of such business combination: (i) the Corporation's Board of Directors shall have included at all times representation by continuing director(s) (as hereinafter defined) proportionate to the voting stock of the Corporation not held by such other entity (with a continuing director to occupy any resulting fractional board position); (ii) such other entity shall not have acquired any newly issued or treasury shares of stock, directly or indirectly, from the Corporation (except upon conversion of convertible securities acquired by it prior to obtaining a 25% interest or as a result of a pro rata stock dividend or stock split); and (iii) such other entity shall not have acquired any additional shares of the Corporation's outstanding Common Stock or securities convertible into Common Stock except as a part of the transaction which results in such other entity having a 25% interest; (c) Such other entity shall not have: (i) received the benefit, directly or indirectly (except proportionately as a stockholder) of any loans, advances, guarantees, pledges or other financial assistance provided by the Corporation, or (ii) made any major change in the Corporation's business or capital structure without the unanimous approval of the directors, in either case prior to the consummation of such business combination; and (d) A proxy statement responsive to the requirements of the Securities Exchange Act of 1934 shall be mailed to public stockholders of the Corporation for the purpose of soliciting stockholder approval of such business combination and shall contain at the front thereof, in a prominent place, any recommendations as to the advisability (or inadvisability) of the business combination which the continuing directors, or any of them, may choose to state and, if deemed advisable by a majority of the continuing directors, an opinion of a reputable investment banking firm as to the fairness (or not) of the terms of such business combination, from the point of view of the remaining public stockholders of the Corporation (such investment banking firm to be selected by a majority of the continuing directors and to be paid a reasonable fee for its services by the Corporation upon receipt of such opinion). -6- The provisions of this Article 9 shall also apply to a business combination with any other entity which at any time has been the beneficial owner, directly or indirectly, of more than 25% of the outstanding shares of voting stock of the Corporation, notwithstanding the fact that such other entity has reduced its shareholdings below 25% if, as the record date for the determination of stockholders entitled to notice of and to vote on the business combination, such other entity is an "affiliate" of the Corporation (as herder defined). (2) For the purposes of this Article 9, (a) the term "other entity" shall include any corporation, person or other entity and other entity with which it or its "affiliate" or "associate" (as defined below) has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of stock of the Corporation, or which is its "affiliate" or "associate" as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934 as in effect on January 1, 1984, together with the successors and assigns of such persons in any transaction or series of transactions not involving a public offering of the Corporation's stock within the meaning of the Securities Act of 1933; (b) another entity shall be deemed to be the beneficial owner of any shares of stock of the Corporation which the other entity (as defined above) has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise; (c) the outstanding shares of any class of stock of the Corporation shall be deemed to include shares deemed owned through application of clause (b) above but shall not include any other shares which may be issuable pursuant to any agreement, or upon exercise of conversion fights, warrants or options or otherwise; (d) the term "business combination" shall include (i) any merger or consolidation of the Corporation or any Subsidiary with or into any other entity; (ii) any statutory stock exchange for cash, property, securities or obligations of any other entity; (iii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of all or substantially all of the property and assets of the Corporation or any Subsidiary to any other entity, (iv) the issuance or transfer by the Corporation or any Subsidiary of any securities having an aggregate fair market value greater than $1,000,000; (v) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation; or (vi) any reclassification of securities (including any reverse stock split) or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries, or any other transaction which has the effect, directly or indirectly, of increasing the proportion of any class of securities of the Corporation or any Subsidiary directly or indirectly owned by any other entity who, prior to such transaction, owned 00% of the voting stock of the Corporation; -7- (e) the team "continuing director" shall mean a person who was a member of the Board of Directors of the Corporation prior to the time that such other entity acquired in excess of 25% of the voting stock of the Corporation, or a person designated (whether before or after election as a director) to be a continuing director by a majority of continuing directors; (f) the "fair market value" of property, securities or other consideration shall be as determined in good faith by the Board of Directors of the Corporation and concurred in by a majority of continuing directors; (g) in the event of a business combination in which the Corporation is the surviving corporation, the term "other consideration to be received" as used in paragraph 9(a) shall mean Common Stock of the Corporation retained by its existing public stockholders; (h) a "Subsidiary" is any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation. (3) A majority of the continuing directors shall have the power and duty to determine for the purposes of this Article 9, on the basis of information known to them, whether (a) such other entity beneficially owns more than 25% of the outstanding shares of voting stock of the Corporation, (b) another entity is an "affiliate" or "associate" of another, (c) another entity has an agreement, arrangement or understanding with another, or (d) the assets being acquired by the Corporation, or any subsidiary thereof; have an aggregate fair market value of less than $1,000,000. (4) Nothing contained in this Article 9 shall be construed to relieve any other entity from any fiduciary obligation imposed by law. The voting requirements of this Article 9 shall be in addition to the voting requirements imposed by law or other provisions of these Articles of Incorporation in favor of certain classes of stock. 10. Voting Requirements for Certain Amendments. No amendment to the Articles of Incorporation of the Corporation shall change, repeal or make inoperative any of the provisions of Article 5, Article 8 or Article 9, unless such amendment receives the affirmative vote of the holders of 80% of all shares of voting stock of the Corporation, provided that this Article 10 shall not apply to, and such 80% vote shall not be required for, any such amendment unanimously recommended to the stockholders by the Board of Directors of the Corporation (a) at a time when no other entity beneficially owns or to the knowledge of any director proposes to acquire 25% or more of the Corporation's voting stock, or (b) if all such directors are "continuing directors" within the meaning of paragraph (2) of Article 9. 11. Voting Requirements for Certain Other Amendments. Except as expressly otherwise required in these Articles of Incorporation, an amendment or -8- restatement of these Articles other than an amendment or restatement that amends or affects the shareholder vote required by the Virginia Stock Corporation Act to approve a merger, statutory share exchange, sale of all or substantially all of the Corporation's assets or the dissolution of the Corporation shall be approved by a majority of the votes entitled to be cast by each voting group that is entitled to vote on the matter. -9- EX-4.2 3 BYLAWS, AS AMENDED Exhibit 4.2 BYLAWS OF AMERICAN NATIONAL BANKSHARES INC. ARTICLE I MEETING OF SHAREHOLDERS Section 1.1 Annual Meeting. The regular annual meeting of the shareholders of the Company for the election of directors and for the transaction of such other business as may properly come before it shall be held at the principal office of the Company in Danville, Virginia, or at such other place as the Board of Directors may designate, on the fourth Tuesday in April. Notice of such meeting, setting forth clearly the time, place and purpose of the meeting, shall be mailed, postage prepaid, at least ten (10) days before the date thereof, addressed to each shareholder at his address appearing on the books of the Company. If, for any reason, an election of those directors whose terms expire is not made at this meeting, the meeting may be adjourned to a later date for the purpose or, if this is not done, the Board of Directors shall order an election to be held on some subsequent day as soon thereafter as practicable, according to the provisions of law; and notice thereof shall be given in the manner herein provided for the annual meeting. Section 1.2 Special Meetings. Except as otherwise specifically provided by statute, special meetings of the shareholders may be called for any purpose at any time by the Board of Directors or by any shareholder at the written request of at least ten per cent (10%) of the shares entitled to vote at the meeting. Every such special meeting, unless otherwise provided by law, shall be called by mailing, postage prepaid, not less than ten (10) days before the date fixed for such meeting, to each shareholder at his address appearing on the books of the Company, notice stating the time, place and purpose of the meeting. 1 Section 1.3 Record Date for Shareholders Meetings. Shareholders entitled to notice of the annual meeting or any special meeting shall be shareholders shown by the records of the Company to be shareholders fifty (50) days before the date of any such meeting or on such other date as may be fixed in advance by the Board of Directors, which date shall not be more than fifty (50) days and not less than ten (10) days before the date of the shareholders meeting. Section 1.4 Proxies. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing. Proxies shall be valid only for one meeting, to be specified therein, and any adjournments of such meeting. Section 1.5 Quorum. At every meeting of shareholders, each shareholder shall be entitled to cast one vote either in person or by proxy for each share of stock held by him as shown by the records of the Company fifty (50) days before the date of the shareholders meeting or held by him on the record date fixed by the Board of Directors pursuant to Section 1.3 hereof upon any matter coming before the meeting except as otherwise expressly provided by these bylaws. A majority of the outstanding stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders unless otherwise provided by law; but less than quorum may adjourn a meeting from time to time, and the meeting may be held, as adjourned, without further notice. Section 1.6 Judges of Elections. Every election of directors shall be managed by three judges, who shall be appointed from among the shareholders by the Board of Directors. The judges of election shall hold and conduct the election at which they are appointed to serve; and, after the election, they shall file with the Secretary a certificate under their hands, certifying the result thereof and the names of the directors elected. The judges of election, at the request of the 2 Chairman of the meeting, shall act as tellers of any other vote by ballot taken at such meeting, and shall certify the result thereof. ARTICLE II DIRECTORS Section 2.1 Authority of Directors. The Board of Directors (referred to in these bylaws as the "Board") shall have power to manage and administer the business and affairs of the Company. Except as expressly limited by law, all corporate powers of the Company shall be vested in and may be exercised by the Board, but the Board may delegate powers as provided in these bylaws. Section 2.2 Number. The Board of Directors shall consist of thirteen (13) shareholders. Section 2.3 Regular Meetings. Regular meetings of the Board of Directors shall be held, without notice, at the principal office of the Company on the third Tuesday of each month or on such other day or at such other place as the Board may previously designate. When any regular meeting of the Board falls upon a holiday, the meeting shall be held on the next business day unless the Board shall designate some other day. Section 2.4 Organization Meeting. If possible, the Board shall meet on the same day of the annual meeting of shareholders for the purpose of organizing the new Board and for the purpose of electing officers of the Company for the succeeding year, but in any event, the new Board shall be organized and officers elected no later than the next regular meeting of the Board. Section 2.5 Special Meeting. Special meetings of the Board may be called by the Chairman of the Board or the President, or at the request of three or more directors upon not less than two days' notice. Each director shall be given notice stating the time, place and purpose of a special meeting. Notice may be given in writing or in person or by telegraph. 3 Section 2.6 Quorum. At any meeting of the Board; a majority of the Board shall constitute a quorum. Less than a quorum may adjourn any meeting from time to time, and the meeting may be held as adjourned without further notice. In the event of the death or disability of directors by reason of war or other catastrophe, reducing the total Board to less than that required for a quorum, a majority of the remaining Board shall constitute a quorum. Section 2.7 Waiver of Notice. Any director may in writing waive notice of any regular or special meeting at any time before or after the holding thereof. Section 2.8 Vacancies. When any vacancy occurs among the directors, the remaining members of the Board may appoint a director to fill such vacancy at any regular meeting of the Board or at any special meeting called for that purpose. Any directorships not filled by the shareholders shall be treated as vacancies to be filled by and in the discretion of the Board. Section 2.9 Qualification of Directors. No person shall be elected a director who is not the owner and holder in his own name, unpledged and unencumbered in any way, of shares of stock of the Company having a par value or market value of not less than One Thousand Dollars ($1,000). Section 2.10 Committees. The Board may appoint such committees from time to time as the Board deems proper for the management of the business and affairs of the Company, and the Board may delegate to the President the appointment of other committees which the Board deems necessary for the direction of the business and affairs of the Company. Section 2.11 Declaration of Dividends. The Board may, in its discretion, from time to time declare dividends as permitted by law. Such dividends may be payable in money, stock of the Company, or in other assets of the Company. The Directors may fix a date not exceeding thirty (30) days preceding the date fixed for the payment of any dividend as 4 the record date for the determination of shareholders entitled to receive payment of any dividend, provided the record date shall be not less than seven (7) days after the date on which the dividend is declared; and only shareholders of record on the date so fixed shall be entitled to receive such dividend notwithstanding any transfer of shares on the books of the Company after any record date so fixed. ARTICLE III OFFICERS Section 3.1 Officers to be Elected by the Board. The Board of Directors shall annually elect the following officers: a President, a Secretary, and a Treasurer. The Directors may annually elect one or more Vice President, Senior Vice Presidents, and Executive Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as the Board may think necessary or desirable. The President shall be a director. Other officers may, but need not be directors. Any two offices not inconsistent with each other may be held by the same person, except no person may serve as both President and Secretary. Section 3.2 Term. Unless otherwise specified, each officer shall be elected for a term of one year but shall continue to hold office thereafter until his successor is elected or until he resigns, retires, or is removed from office. Section 3.3 Salaries. The salaries and other compensation of officers shall be fixed by the Board or by such person or persons to whom the power to fix compensation has been delegated. Section 3.4 President. The President shall be the Chief Executive Officer of the Company and shall have and may exercise all of the powers and duties customarily performed and exercised by the chief executive officer of a corporation by 5 whatever name called. He shall have and may exercise such further powers and duties as from time to time may be conferred upon, or assigned to, him by the Board. He shall be a member ex officio of all regular and special committees of the Board. He shall act as chairman of the Board and shall preside at all meetings of the Board and meetings of shareholders. Any reference to the "Chairman of the Board" contained in the Articles of Incorporation or these bylaws shall be deemed a reference to the President. It shall be the duty of the President to make a report of the Company's condition to the shareholders at their annual meeting. Unless the Board shall otherwise direct by resolution, the President shall vote the shares of all securities held by the Company. Section 3.5 Vice Presidents. Vice Presidents may be designated as Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, and Assistant Vice Presidents. The Board may annually elect such number of each designation as it may deem proper. Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Assistant Vice Presidents shall have such responsibilities and duties as shall be specifically assigned to them by the Board or, in the absence of such specific assignment of duties by the Board, they shall have such responsibilities and duties as shall be assigned to them by the President. Section 3.6 Secretary. The Secretary shall act as secretary at all meetings of the shareholders and at all meetings of the Board. He shall issue notices for such meetings in accordance with the requirements of the Bylaws. He shall have custody of the corporate seal and, upon request of the President, shall attest any instrument relating to real or personal property and perform such other duties as from time to time shall be assigned to him by the Board or by the President. 6 Section 3.7 Assistant Secretaries. Each Assistant Secretary shall perform such duties as shall be assigned to him by the Board or by the President and, in the absence or disability of the Secretary, one or more of the Assistant Secretaries designated by the President shall have all of the powers and perform all of the duties of the Secretary. Section 3.8 Treasurer. The Treasurer shall have such responsibilities and duties as shall be assigned to him by the Board or by the President. Section 3.9 Assistant Treasurers. An Assistant Treasurer shall have such responsibilities and duties as shall be assigned to him by the Board or by the President. ARTICLE IV STOCK AND STOCK CERTIFICATES Section 4.1 Certificates. The shares of stock of the Company shall be represented by certificates signed by the President or a Vice President and the Secretary or an Assistant Secretary, manually or by facsimile, and shall bear the seal of the Company or a printed or engraved facsimile or the seal, shall be in such form as the Board may prescribe, and shall be issued for one or more full shares only. Section 4.2 Transfer. Shares of stock shall be transferable on the books of the Company by the holder or by an attorney or legal representative thereof duly authorized by a power of attorney filed with the Company and upon surrender of the stock certificate or certificates for such shares properly endorsed. Section 4.3 Address of Shareholders. Every shareholder shall keep the Company advised of his mailing address. The Company may rely upon its shareholder records as to the mailing address of any shareholder unless and until otherwise advised in writing. 7 Section 4.4 Lost Certificates. The holder of any shares of stock of this Company, the certificate or certificates for which shall have been lost or destroyed, shall immediately notify the Company for such fact. A new certificate or certificates may be issued upon satisfactory proof of the loss or destruction of the old certificate, and the Company may require a bond which shall be in such sum, contain such terms and provisions, and have such surety or sureties as the Company may require. ARTICLE V SEAL Section 5.1 Form. The seal of the Company shall consist of the words "American National Bankshares Inc." in concentric circles with the work "Seal" appearing in the inner circle, and shall be in the form impressed hereon. Section 5.2 Use of Seal. The seal may be affixed to any document by the Secretary, any Assistant Secretary, or other person specifically authorized by the Board or the President. ARTICLE VI FISCAL YEAR Section 6.1 Fiscal Year. The fiscal year of the Company shall be the calendar year. ARTICLE VII BYLAWS Section 7.1 Amendments. The bylaws may be amended, altered or repealed either by the shareholders at any regular meeting of the shareholders or at any special meeting called for that purpose or by an affirmative vote of a majority of the Board at any regular or special meeting, and the authority of the Board shall include the authority to amend, alter or repeal any bylaw adopted by the 8 shareholders unless the shareholders with respect to any specific bylaw shall limit the power of the Board to amend or repeal any such specific bylaw. Section 7.2 Inspection. A copy of the bylaws with all amendments thereto shall be kept in the custody of the Secretary at the principal office of the Company and shall be open for inspection to all shareholders during normal business hours. 9 EX-5 4 OPINION OF HUNTON & WILLIAMS Exhibit 5 HUNTON & WILLIAMS 951 East Byrd Street Riverfront Plaza, East Tower Richmond, VA 23219 FILE NO.: 36569.8 August 20, 1997 Board of Directors American National Bankshares Inc. 628 Main Street Danville, Virginia 24543 Registration Statement on Form S-3 American National Bankshares Inc. Dividend Reinvestment Plan Gentlemen: We are acting as counsel for American National Bankshares Inc. (the "Company") in connection with its registration under the Securities Act of 1933 of 200,000 shares of its common stock (the "Shares") which are proposed to be offered and sold as described in the Company's Registration Statement on Form S-3 for the Company's Dividend Reinvestment Plan (the "Registration Statement") to be filed with the Securities and Exchange Commission (the "Commission") on August 20, 1997. In rendering this opinion, we have relied upon, among other things, our examination of such records of the Company and certificates of its officers and of public officials as we have deemed necessary. Based upon the foregoing, we are of the opinion that: 1. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the Commonwealth of Virginia. 2. Although the Dividend Reinvestment Plan does not currently provide for the issuance and sale of the Shares by the Company, should the Dividend Reinvestment Plan be amended in the future to provide for such sale, after appropriate authorization by the Board of Directors of the Company of the issue and sale of the Shares and a good faith determination by the Board of Directors that the consideration to be received therefor is adequate, upon issuance and sale of the Shares under the terms of the Dividend Reinvestment Plan as amended Board of Directors August 20, 1997 Page 2 and receipt by thet Company of full payment therefor in accordance with the corporate authorization, the Shares will be legally issued, fully paid and non-assessable. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. Very truly yours, /s/ Hunton & Williams 06193/08184 EX-23.1 5 CONSENT OF ARTHUR ANDERSEN LLP Exhibit 23.1 Consent of Independent Public Accountants As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated January 15, 1997, included in American National Bankshares Inc.'s Form 10-K for the year ended December 31, 1996 and to all references to our firm included in this registration statement. Greensboro, North Carolina Arthur Andersen LLP August 18, 1997 EX-99 6 DIVIDEND REINVESTMENT PLAN Exhibit 99 AMERICAN NATIONAL BANKSHARES INC. DIVIDEND REINVESTMENT PLAN DESCRIPTION, TERMS AND CONDITIONS 1. PURPOSE OF THE PLAN The purpose of this Dividend Reinvestment Plan (the "Plan") is to provide the participating shareholders of American National Bankshares Inc. (the "Company") with a convenient method of investing cash dividends and voluntary cash contributions in additional shares of the common stock of the Company at a cost representing a savings over that available in normal market purchases. 2. DEFINITIONS. For purposes of the Plan, the following words or phrases shall have meanings assigned to them below: (a) "Bank" shall mean American National Bank and Trust Company. (b) "Common Stock" shall mean the $1.00 par value Common Stock of the Company. (c) "Company" shall mean American National Bankshares Inc. (d) "Dividend Reinvestment Committee" shall mean the committee so designated by the Board of Directors of the Company. The Dividend Reinvestment Committee shall be composed of at least three (3) persons, two of whom shall be the chief executive officer of the Company and an officer of the Plan Agent. (e) "Employee" shall mean an employee of the Bank or the Company. (f) "Fair Market Value" shall mean the value of the Common Stock determined by the Dividend Reinvestment Committee as follows: (i) During such time as the Common Stock is listed on an established stock exchange or exchanges, the fair market value shall be deemed to be the closing price of the Common Stock on the stock exchange(s) on the applicable date or, if no sale of the Common Stock has been made on any exchange on that day, the fair market value shall be determined by reference to such prices on the next preceding day on which Common Stock was traded. (ii) During such time as the Common Stock is not listed on an established stock exchange but is listed in the National Association of Securities Dealers Automated Quotation System (NASDAQ) National Market System, the fair market value per share shall be the average of the highest and lowest trading prices for the Common Stock on the applicable date or, if no trade of Common Stock occurred on that day, the fair market value shall be determined by reference to such price on the next preceding day on which the Common Stock was traded. (iii) During such time as the Common Stock is not listed on an established stock exchange or on the NASDAQ National Market System but is quoted by NASDAQ, the fair market value per share shall be the average of the closing dealer "bid" and "ask" prices for the Common Stock, as quoted by NASDAQ for the applicable day or, if no "bid" and "ask" prices are quoted for that day, the fair market value shall be determined by reference to such prices on the next preceding day on which such prices were quoted. (iv) During such time as the Common Stock is not listed on an established stock exchange or quoted by NASDAQ, the fair market value per share shall be the average of the lowest "bid" and highest "ask" quotations of the Common Stock on the applicable date, as reported by one or more brokerage firms which then make a market in the Common Stock or, in the absence of either a "bid" or "ask" quotation, the quotation (or average of the quotations, if several) reported on the applicable date, whether "bid" or "ask". (v) In the event the Common Stock is not traded on an established stock exchange or quoted by NASDAQ and no "bid" and "ask" prices are available or if, in the determination of the Dividend Reinvestment Committee, the value determined pursuant to subparagraph (iv) above does not accurately reflect the fair market value of the Common Stock, the fair market value of the Common Stock shall be as determined in good faith by the Dividend Reinvestment Committee. (g) "Investment Dates" shall mean the date a dividend is actually paid by the Company. (h) "Participant" shall mean a holder of Common Stock of the Company who has elected to participate in the Plan by delivering an executed Participant Card to the Plan Agent. (i) "Participant Card" shall mean the card or other document designated by the Plan Agent as the required evidence of a shareholder's election to participate in the Plan. (j) "Payroll Deduction Authorization Form" shall mean the form or other document designated by the Plan Agent as the required evidence of an Employee's election to make voluntary cash contributions through an automatic payroll deduction mechanism. (k) "Plan Agent" shall mean the Company, and shall also mean any other entity to which the Company has delegated all or any part of its responsibilities hereunder, with the exception of purchasing Plan Shares pursuant to the Plan. (l) "Plan Shares" shall mean shares of Common Stock that have been purchased by a Participant under the Plan and which are held by the Plan Agent in a custodial account. 2 (m) "Purchasing Agent" shall mean the entity designated by the Plan Agent to purchase Plan Shares for the Participants. (n) "Record Date" shall mean the date on which a person must be registered as a shareholder on the stock books of the Company in order to receive a dividend. 3. ADMINISTRATION The Plan shall be administered by the Company, however, the purchase of Plan Shares will be delegated to an unaffiliated third party (the "Purchasing Agent"). The initial Purchasing Agent shall be Scott & Stringfellow, Inc. All Plan Shares will be registered in the name of the Plan Agent (or its nominee) as agent for the Participants. The Plan Shares will be credited to the accounts of the respective Participants as their interest may appear. 4. PARTICIPATION Subject to the provisions of Sections 4, 5, and 17 herein, all holders of record of the Common Stock of the Company are eligible to participate in the Plan. A beneficial owner whose shares are registered in a name other than his own must become a shareholder of record by having all or a part of such shares transferred into his own name or arrange for the holder of record of such shares to enroll in the Plan by submitting a Participant Card to the Plan Agent in order to participate in the Plan. The Company reserves the right not to offer participation in the Plan to those holders of record who reside in jurisdictions which require registration of the Plan with the securities commission of that jurisdiction. 5. ENROLLMENT A shareholder of record may enroll in the Plan at any time, unless (a) the Plan Agent or the Purchasing Agent has reason to believe that such enrollment is not, at such time, permitted under the laws of the jurisdiction in which such shareholder resides or under the laws of the United States, or (b) the Plan is suspended or terminated as hereinafter provided, by completing and signing a Participant Card and returning it to the Plan Agent. If a Participant Card requesting reinvestment of dividends is received by the Plan Agent on or before the Record Date established for a particular dividend, reinvestment will commence with that dividend. If a Participant Card is received from a shareholder after the Record Date established for a particular dividend, the reinvestment of dividends will begin on the Investment Date following the next Record Date if the shareholder is still a holder of record. A shareholder who elects to enroll in the Plan may participate with respect to some, but not all shares of Common Stock owned of record by that shareholder. Once a shareholder has enrolled in the Plan, his participation continues with respect to his participating shares until terminated by such shareholder or by the Company pursuant to the terms of the Plan. 3 6. VOLUNTARY CASH CONTRIBUTIONS Each Participant may make voluntary cash contributions to the Plan of not less than $200 nor more than $3,500 during any single dividend period. Participants need not invest the same amounts during each dividend period. Participants are under no obligation to make any cash contributions. A voluntary cash contribution shall be made by forwarding a check or money order, payable to the Plan Agent, with a completed Participant Card when enrolling, or thereafter, accompanied by the transmittal form for mailing voluntary cash contributions that will be included with each statement of account furnished to Participants pursuant to Section 11. Employees may make voluntary cash contributions by completing a Payroll Deduction Authorization Form and returning it to the Plan Agent. The Purchasing Agent will apply each voluntary cash contribution received from a Participant before a Record Date to the purchase of Common Stock for the account of that Participant on the next Investment Date. A voluntary cash contribution will not be deemed to have been made by a Participant or received by the Purchasing Agent until the funds contributed are actually collected. Interest will not be paid on voluntary cash contributions. Voluntary cash contributions will be returned to a Participant upon written request to the Plan Agent, provided that the request is received not later than 48 hours prior to the next scheduled Record Date. 7. PURCHASES On each Investment Date, the Company will pay to the Purchasing Agent the total amount of dividends payable on each Participant's shares of Common Stock enrolled in the Plan (including Plan Shares) and, except as otherwise directed by the Company, the Purchasing Agent shall use that amount, in addition to the Participant's voluntary cash contributions, if any, to purchase Common Stock in the open market for the account of the Participant. Purchases will be made as soon as possible after the applicable Investment Date, but not more than 30 days after such date. The purchase price to a Participant of Common Stock purchased in the open market will be the cost (excluding brokerage commissions) to the Purchasing Agent of such purchases. No Common Stock will be allocated to a Participant's account until the date on which the Purchasing Agent has purchased sufficient shares of Common Stock to cover purchases for all Participants in the Plan. If purchases occur at different prices, the purchase price per share of Common Stock to all Participants will be based upon the average of the prices of all shares of Common Stock purchased. Each Participant's account will be credited with the number of whole and fractional shares (calculated to four (4) decimal places) equal to the amount to be invested divided by the applicable purchase price. 4 8. TEMPORARY CURTAILMENT OF PURCHASES OR SALES Temporary curtailment or suspension of purchases or sales of shares may be made at any time when such purchases or sales would, in the judgment of the Plan Agent, contravene or be restricted by applicable regulations, interpretations or orders of the Securities and Exchange Commission, or any other governmental commission, agency or instrumentality, of any court or securities exchange or of the National Association of Securities Dealers, Inc. The Plan Agent shall not be accountable or otherwise liable for failure to make purchases or sales at such times. 9. DIVIDENDS As record holder of the Plan Shares held in Participants' Accounts under the Plan, the Plan Agent will receive dividends on all Plan Shares held on each dividend Record Date, will credit such dividends to Participants' accounts on the basis of whole or fractional shares held in each account and will automatically reinvest these dividends in the Common Stock of the Company. 10. COSTS Participants will be charged the actual cost (excluding brokerage commissions, which shall be paid by the Company) of all Common Stock purchased in the open market. All costs of administration of the Plan will be borne by the Company; however, a reasonable service charge may be assessed at the time of a Participant's withdrawal from the Plan or at any time a share certificate is requested by a Participant. 11. REPORTS TO PARTICIPANTS As soon as practicable after completion of each investment on behalf of a Participant, the Plan Agent will mail to such Participant a statement of account showing (i) the amount of the dividend and voluntary cash contribution, if any, applied toward such investment, (ii) the taxes withheld, if any, (iii) the net amount invested, (iv) the number of shares purchased, (v) the average cost per share, (vi) the total shares accumulated under the Plan, computed to four decimal places, (vii) the cost basis of whole and fractional shares purchased and (viii) the date of purchase. Each Participant will receive annually Internal Revenue Service Form 1099, or any successor form, reporting dividend income received. 12. VOTING OF SHARES For each meeting of shareholders, the Plan Agent will forward a proxy to each Participant, and will vote the whole Plan Shares in the Participant's account in 5 accordance with the instructions received from the Participant. Fractional shares will not be voted. The Plan Shares of a Participant who does not return a proxy will not be voted. 13. CERTIFICATES FOR SHARES All Plan Shares will be registered in the name of the Plan Agent or its nominee, as agent for the Participants. Certificates for Plan Shares will not be issued to Participants unless requested in writing. Certificates for any number of whole Plan Shares will be issued to a Participant within 15 days of a written request to the Plan Agent signed by the Participant. A reasonable fee may be charged for each certificate requested. Any remaining whole or fractional Plan Shares will continue to be held by the Plan Agent as the agent for the Participant. Certificates for fractional shares will not be issued under any circumstances. 14. TERMINATION OF ACCOUNT AND WITHDRAWALS A Participant may terminate his account not less than 15 days prior to any Investment Date by giving written notice of termination to the Plan Agent. Any notice received less than 15 days prior to an Investment Date shall not be effective until dividends and other accumulated funds, if any, have been invested and credited to his account. The Plan Agent may terminate any account by written notice to the Participant. Within a reasonable time after termination, the Plan Agent will deliver to the Participant (i) a certificate for all whole Plan Shares held under the Plan, (ii) a check for any uninvested dividends and voluntary cash contributions, and (iii) a check in lieu of the issuance of a fractional share equal to the fractional Plan Share multiplied by the fair market value per share of the Common Stock on the date of termination. The Participant shall have no right to draw checks or drafts against his account or to give instructions to the Plan Agent with respect to any Plan Shares or cash held in the Participant's account except as expressly provided in the Plan. The Participant may be charged a reasonable fee for issuance of the certificate. As an alternative, upon termination of participation in the Plan, a Participant may request in writing that any number of whole shares credited to the Participant's account be sold by the Plan Agent. The Plan Agent shall have the right to require that the Participant's signature on such request be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guaranty medallion program). When a request to sell whole shares for a Participant's account has been received, such shares will be sold by the Plan Agent, and the Participant will receive a check for the proceeds of the sale, less any brokerage fees and commissions, the applicable withdrawal fee and any transfer taxes. Sales may be made on any securities exchange on which the shares are traded or listed for trading, in the over-the-counter market or in negotiated transactions and on such terms as to price, delivery and otherwise as the Plan Agent may, in its sole and absolute discretion, determine. Any such sale shall 6 be made within five business days following the receipt of the Participant's written request to sell such shares, unless sales are curtailed or suspended in accordance with Section 8. Such request can apply only to authorization for sale and not as to the price, terms or timing of such sale. 15. DISPOSITION OF SHARES After receipt of notice that a Participant has disposed of all shares of Common Stock registered in his name, the Plan Agent will request instructions from the Participant as to the disposition he wishes to be made of shares in his Dividend Reinvestment Account. If the Plan Agent is unable to obtain instructions within 30 days after the mailing of such request, it may terminate the account and have a certificate issued and delivered for all full shares in the plan together with cash for any fractional interest in a share at the current fair market value, or it may, at its discretion, continue to reinvest the dividends until otherwise instructed. 16. STOCK DIVIDENDS; STOCK SPLITS; RIGHTS OFFERINGS Any stock dividends or split shares distributed by the Company with respect to the Plan Shares of a Participant will be added to his account with the Plan Agent as additional Plan Shares. Stock dividends or split shares distributed with respect to shares of Common Stock registered in a Participant's name will be mailed directly to the Participant in the same manner as to shareholders who do not participate in the Plan. In the event of a rights offering by the Company, the Plan Agent may either sell all rights received with respect to Plan Shares held of record by the Plan Agent as custodian, or, in its discretion, may distribute rights to Participants. If the Plan Agent sells all rights received with respect to Plan Shares, the Plan Agent will invest the proceeds of such sales in additional shares of Common Stock, which will be retained by the Plan Agent as custodian and credited proportionately to the accounts of the Participants. Participants who wish to exercise rights with respect to Plan Shares must request the Plan Agent to forward a share certificate to the Participant as provided in Section 13 of the Plan. Such request must be made prior to the Record Date for exercising such rights. Rights on shares of Common Stock registered in the name of a Participant will be mailed directly to the Participant. 17. AMENDMENT OR DISCONTINUANCE OF THE PLAN The Company may amend, supplement, suspend, modify or terminate the Plan at any time without the approval of the Participants. Thirty (30) days' notice of any suspension or material amendment shall be sent to all Participants, who shall in all events have the right to withdraw from the Plan. 7 18. INTERPRETATION OF THE PLAN Any question of interpretation arising under the Plan will be determined by the Board of Directors of the Company pursuant to applicable federal and state law and the rules and regulations of all regulatory authorities, and such determination shall be final and binding on all Participants. 19. NOTICES All communications with or notices to the Participants may be given by letter addressed to the Participant at the Participant's last address of record with the Company. The Participant agrees to give prompt written notice to the Company of any change of address. All communications with or notices required to be given to the Plan Agent should be addressed to: IF MAILED: American National Bankshares Inc. P. O. Box 191 Danville, Virginia 24543-0191 Attention: President and Chief Executive Officer IF DELIVERED: American National Bankshares Inc. 628 Main Street Danville, Virginia 24541 Attention: President and Chief Executive Officer Additional Participant Cards may be requested and inquiries made about the Plan by writing to the mailing address shown above or by calling the Plan Agent at (804) 792-5111. In the event of any change in or substitution of the Plan Agent, a notice of the new Plan Agent's address and telephone number shall be sent to all participants and this Section 19 shall be amended accordingly. 20. DUTIES AND RESPONSIBILITIES Neither the Company, the Plan Agent nor its nominees shall have any responsibility beyond the exercise of ordinary care for any action taken or omitted pursuant to the Plan, nor shall they have any duties, responsibilities or liabilities except such as are expressly set forth herein. Neither the Company nor the Plan Agent shall be liable for any act done in good faith, or for any good faith omission to act, including, without limitation, any claims of 8 liability (a) with respect to the time or prices at which Common Stock is purchased or sold for a Participant's account, or any inability to purchase or sell Common Stock, for any reason, (b) for any fluctuation in the market value after purchase or sale of Common Stock, or (c) arising out of failure to terminate the Participant's account upon the Participant's death prior to receipt of notice in writing of his or her death. 21. GOVERNING LAW This Plan is governed by the laws of the Commonwealth of Virginia. 22. NO TERMINATION BY OPERATION OF LAW The delivery by a Participant of a signed Participant Card to the Plan Agent shall constitute an irrevocable appointment of the Plan Agent as such Participant's agent, which appointment can be terminated by terminating such Participant's account in the manner provided in Section 14. The authority conferred by the Participant Card shall not be terminated by operation of law, whether by the death or incapacity of the Participant, the termination of any trust, the dissolution of any corporation or the occurrence of any other event. 23. GENDER AND NUMBER Except when otherwise indicated by the context, the masculine gender shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural. 24. EFFECTIVE DATE The effective date of the plan is as of August 20, 1997. 9 -----END PRIVACY-ENHANCED MESSAGE-----