Annie may have had unpleasant experiences with children before you got her. Maybe her hair was pulled, or a child was rough with her in the past. I agree that Annie is scared of your grandson . Have your grandson sit down on the floor , this is a less threatning position. Also tell him not to directly look at Annie in the eyes. This is anther threat to a dog. Have your son toss out a small treat to Annie, and see if she will take it. Annie needs to slowly gain trust in your grandson. Instruct him not to run away from Annie, and try to keep him calm. The more anxious he is the more Annie will feel it.
Using positive reinforcement is the best way to train a dog. When things become too stressful for Annie, separate the two for a little bit until things calm down.