APPENDIX B                                                            

                   AMERICAN NATIONAL BANCORP, INC.

                 1996 RECOGNITION AND RETENTION PLAN
                                   

1.   Establishment of the Plan

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

2.   Purpose of the Plan

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


3.   Definitions

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

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

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

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

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

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

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

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

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

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

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

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

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

     "Director" means a member of the Board.

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

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

     "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
     
     "Key Employee" means any person who is currently employed by the
Company or an Affiliate who is chosen by the Committee to participate in
the Plan.

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

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

     "Offering" means the October 31, 1995 subscription offering of the
Common Stock of the Company.
     
     "Outside Director" means a Director of the Company or an Affiliate
who is not an employee of the Company or an Affiliate.

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

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

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

4.   Administration of the Plan. 

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

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

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

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

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

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


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

5.   Eligibility; Awards

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

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

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

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

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

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

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

6.   Terms and Conditions of Restricted Stock

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

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

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

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

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

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

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

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

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

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

7.   Adjustments upon Changes in Capitalization

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

8.   Assignments and Transfers

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

9.   Key Employee Rights under the Plan

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

10.  Outside Director Rights under the Plan

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

11.  Withholding Tax

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


12.  Amendment or Termination

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

13.  Governing Law

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

14.  Term of Plan

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




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

Date Approved by Shareholders:     __________

Effective Date:               __________


ATTEST:                       AMERICAN NATIONAL BANCORP, INC.



_________________________     _________________________________
Secretary                     President and Chief Executive Officer