APPENDIX A                                                            

                   AMERICAN NATIONAL BANCORP, INC.

                        1996 STOCK OPTION PLAN


1.   Purpose

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

2.   Definitions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     "Director" means a member of the Board.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3.   Plan Administration Restrictions

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

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

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

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

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

4.   Types of Awards

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

5.   Stock Subject to the Plan

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

6.   Eligibility

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

7.   Non-Statutory Stock Options

     7.1  Grant of Non-Statutory Stock Options

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

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

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

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

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

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

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

8.   Incentive Stock Options

     8.1  Grant of Incentive Stock Options

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

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

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

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

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

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

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

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

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

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

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

9.   Limited Rights

     9.1  Grant of Limited Rights

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

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

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

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

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

10.  Surrender of Option

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

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

11.  Rights of a Stockholder

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

12.  Agreement with Participants

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

13.  Designation of Beneficiary

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

14.  Dilution and Other Adjustments

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

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

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

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

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

15.  Withholding

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

16.  Amendment of the Plan

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

17.  Effective Date of Plan

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

18.  Termination of the Plan

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

19.  Applicable Law

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

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


Date Approved by Stockholders:     __________

Effective Date:          _____________



ATTEST:                       AMERICAN NATIONAL BANCORP, INC.


_________________________     ______________________________
Secretary                     President and Chief Executive Officer