<COVER SHEET>
SCHEDULE 14A
Information Required in Proxy Statement
Reg. Section 240.14a-101
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
UNITED SECURITY BANCSHARES, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6)i)(4)
and 0-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
</COVER>
<PAGE>
UNITED SECURITY BANCSHARES, INC.
TO OUR SHAREHOLDERS:
The annual meeting of the shareholders of United Security
Bancshares, Inc. ("Bancshares"), will be held at 2:00 p.m., local
time, on Tuesday, May 5, 1998, at the H. W. Pearce. Jr. Memorial Park
Assembly House, 500 Vanity Fair Park Drive, Jackson, Alabama.
Enclosed is a notice of the meeting, a proxy statement, a
proxy and the Annual Report to Shareholders for 1997. We hope that
you will study the enclosed material carefully and attend the
meeting in person.
Whether you plan to attend the meeting or not, please sign and
date the enclosed proxy and return it in the accompanying envelope
as promptly as possible. The proxy may be revoked by your vote in
person at the meeting, by your execution of a later dated proxy, or
by your giving written notice of revocation to the Secretary of
Bancshares at any time prior to the voting thereof.
Sincerely,
/s/ James L.Miller
____________________________
James L. Miller
Chairman of the Board
/s/ Jack M. Wainwright, III
_____________________________
Jack M. Wainwright, III
President and Chief Executive Officer
April 1, 1998
<PAGE>
UNITED SECURITY BANCSHARES, INC.
131 West Front Street
Post Office Box 249
Thomasville, Alabama 36784
Telephone 334-636-5424
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
May 5, 1998
TO THE SHAREHOLDERS OF UNITED SECURITY BANCSHARES, INC.:
Notice is hereby given that the 1998 Annual Meeting of
Shareholders (the "Meeting") of United Security Bancshares, Inc.
("Bancshares") will be held at the H. W. Pearce, Jr. Memorial Park
Assembly House, 500 Vanity Fair Park Drive, Jackson, Alabama, on Tuesday,
May 5, 1998, at 2:00 p.m., local time, for the following purposes:
(1) To elect 16 directors of Bancshares to serve for the
ensuing year;
(2) To transact such other business as may properly come
before the Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on
March 27, 1998, as the record date for the determination of
shareholders entitled to notice of and to vote at the Meeting or
any adjournments thereof.
A complete list of the shareholders of Bancshares will be
available and open for examination by any shareholder of Bancshares
during ordinary business hours for a period beginning two business
days after the mailing of this notice.
All shareholders are cordially invited to attend the Meeting.
Whether or not you plan to attend the Meeting in person, you are
requested to complete, sign, and date the enclosed proxy card and
mail it promptly in the envelope provided for that purpose. The
proxy may be revoked by your vote in person at the Meeting, by your
executing a later dated proxy, or by your giving written notice to
the undersigned Secretary of Bancshares at any time prior to the
voting thereof.
By Order of the Board of Directors
/s/ Larry M. Sellers
____________________________
Larry M. Sellers
Secretary
Thomasville, Alabama
April 1, 1998
<PAGE>
UNITED SECURITY BANCSHARES, INC.
131 West Front Street
Post Office Box 249
Thomasville, Alabama 36784
Telephone 334-636-5424
PROXY STATEMENT
FOR 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1998
INTRODUCTION
This Proxy Statement is furnished on or about April 1, 1998 by
United Security Bancshares, Inc. ("Bancshares") to the holders of
Common Stock of Bancshares in connection with Bancshares' Annual
Meeting of Shareholders, and any adjournments thereof, to be held
on Tuesday, May 5, 1998 at 2:00 p.m. As more fully described
herein, the matters to be considered and acted upon are: (1) the
election of 16 directors of Bancshares; and (2) the transaction of
such other business as may properly come before the meeting. The
Board of Directors of Bancshares recommends the election of the 16
director-nominees named in this Proxy Statement.
The enclosed proxy is solicited on behalf of the Board of
Directors of Bancshares and is revocable at any time prior to the
voting of such proxy by voting in person at the meeting, by giving
written notice to the Secretary of Bancshares or by executing a
later-dated proxy, provided that such later-dated proxy or
revocation is actually received by Bancshares before the vote of
the shareholders. All properly executed proxies delivered pursuant
to this solicitation will be voted at the meeting and in accordance
with instructions, if any. If no instructions are given, the
proxies will be voted FOR item 1 on the proxy form and in
accordance with the instructions of management as to any other
matters that may come before the meeting.
The cost of soliciting proxies will be borne by Bancshares. In
addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegraph, and banks, brokers,
nominees or fiduciaries will be required to forward the soliciting
material to their principals and to obtain authorization for the
execution of proxies. Bancshares will, upon request, reimburse
banks, brokers and other institutions, nominees and fiduciaries for
their expenses in forwarding proxy material to their principals.
Bancshares and its Subsidiaries
Bancshares is a bank holding company registered under the Bank
Holding Company Act of 1956, as amended. Bancshares operates one
banking subsidiary in Alabama, First United Security Bank, with
assets of approximately $426 million and fifteen banking offices.
At December 31, 1997, First United Security Bank, a bank organized
and existing under the laws of Alabama (sometimes herein referred
to as "First United Security" or the "Bank") accounted for
substantially all of Bancshares' consolidated assets.
Bancshares also owns all the stock of First Security Courier
Corporation, Inc. ("First Security"), an Alabama corporation
organized to provide certain bank courier services. In addition,
Acceptance Loan Company, Inc. ("ALC"), is a wholly-owned subsidiary
of the Bank. ALC provides consumer loans and purchases consumer
loans from vendors.
Bancshares derives substantially all of its income from
dividends from First United Security Bank. Various statutory
provisions restrict the amount of dividends that First United
Security Bank may pay to Bancshares without regulatory approval.
Shareholders Eligible to Vote
This Proxy Statement is furnished to the holders of record of
Bancshares Common Stock as of the close of business on March 27,
1998. Only holders as of such date are eligible to vote at the
meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
As of January 31, 1998, Bancshares had issued 3,603,335 shares
of common stock, of which 3,539,235 were outstanding, with
approximately 850 holders of record. Bancshares also holds 64,100
shares as treasury stock. There are currently 10,000,000 shares of
Common Stock, par value $.01 per share, authorized for issuance.
<TABLE>
<CAPTION>
Principal Shareholders Shares Owned(1) Percent Owned
<S> <C> <C>
John C. Gordon 219,101(2) 6.19
P. O. Box 238
Grove Hill, Alabama 36451
<FN>
(1) Based on information furnished by the named individual. Under
applicable regulations, shares are deemed to be beneficially
owned by a person if he directly or indirectly has or shares
the power to vote or to dispose or direct the disposition of
the shares, whether or not he has any economic interest in the
shares. Unless otherwise indicated, the named beneficial owner
has sole voting and dispositive power with respect to the
shares.
(2) Includes 93,780 shares owned by Mr. Gordon's aunt and with
respect to which Mr. Gordon has a power of attorney to vote
the shares and 72,084 shares owned by Mr. Gordon's mother and
with respect to which Mr. Gordon has a power of attorney to
vote the shares.
</FN>
Security Ownership of Management
The following table indicates for each director the number of
shares of outstanding Common Stock of Bancshares beneficially
owned.
</TABLE>
<TABLE>
<CAPTION>
Number and Percent of
Shares of Common Stock
Name Owned at January 31, 1998
---- -------------------------
<S> <C>
Dan R. Barlow 13,464(1)
*
John H. Becton 35,451(2)
1.03%
Linda H. Breedlove 3,499
*
Gerald P. Corgill 84,080(3)
2.38%
Roy G. Cowan, D.M.D. 23,624
*
John C. Gordon 219,101(4)
6.19%
William G. Harrison 28,175(5)
*
Fred L. Huggins 8,498(6)
*
Hardie B. Kimbrough 14,135(7)
*
Jack W. Meigs -0-
James L. Miller 12,680
*
D. C. Nichols 82,300(8)
2.33%
Ray Sheffield 27,243(9)
*
Harold H. Spinks 23,728(10)
*
James C. Stanley, D.M.D. 4,000(11)
*
Jack M. Wainwright, III 25,100(12)
*
Clarence Watters 15,777(13)
*
Howard M. Whitted 3,696
*
Bruce N. Wilson 5,948
*
Ernest F. Woodson 7,615(14)
*
All directors and executive officers
as a group (21 persons,
including the persons named above) 645,380
18.24%
<FN>
* Represents less than one percent of the outstanding shares.
(1) Includes 174 shares owned by Mr. Barlow's spouse. Mr.
Barlow disclaims beneficial ownership of such shares. Also includes
4,000 shares which could be acquired within 60 days pursuant to
stock options.
(2) Includes 15,622 shares, owned by Mr. Becton's spouse.
Mr. Becton disclaims beneficial ownership of such shares.
(3) Includes 60,984 shares owned by Mr. Corgill's spouse
or by Mr. Corgill's children. Mr. Corgill disclaims beneficial
ownership of such 60,984 shares. Also includes 2,144 shares owned
by Dozier Hardware Company, of which Mr. Corgill is President. Also
includes 3,620 shares owned by Dozier Hardware Profit Sharing Plan
& Trust.
(4) Includes 93,780 shares owned by Mr. Gordon's aunt and
with respect to which Mr. Gordon has a power of attorney to vote
the shares and 72,084 shares owned by Mr. Gordon's mother and with
respect to which Mr. Gordon has a power of attorney to vote the
shares. Includes 5,280 shares with respect to which Mr. Gordon
shares voting and investment power.
(5) Includes 7,264 shares with respect to which Mr.
Harrison shares voting and investment power.
(6) Includes 2,332 shares with respect to which Mr.
Huggins shares investment and voting power. Also includes 5,000
shares which could be acquired within 60 days pursuant to stock
options.
(7) Includes 140 shares with respect to which Mr.
Kimbrough shares voting and investment power. Also includes 352
shares owned by Mr. Kimbrough's spouse with respect to which Mr.
Kimbrough disclaims beneficial ownership.
(8) Includes 36,676 shares owned by Nichols Trucking
Company, of which Mr. Nichols is President.
(9) Includes 24,343 shares with respect to which Mr. Sheffield
shares voting and investment power.
(10) Includes 6,424 shares owned by H. I. Spinks Inc. of which
Mr. Spinks is President, and 17,304 shares owned by The Harold Spinks
Revocable Trust of 1996, of which Mr. Spinks is the grantor.
(11) Includes 3,800 shares held by the James C. Stanley
Trust, of which Dr. Stanley is the Trustee.
(12) Includes 14,080 shares with respect to which Mr.
Wainwright shares voting and investment power. Also includes 7,500
shares which could be acquired within 60 days pursuant to stock
options.
(13) Includes 7,889 shares owned by Mr. Watters' spouse.
Mr. Watters disclaims beneficial ownership of such shares.
(14) Includes 2,367 shares owned by Mr. Woodson's spouse.
Mr. Woodson disclaims beneficial ownership of such shares.
</FN>
ELECTION OF DIRECTORS
Bancshares recommends that the shareholders elect the 16
persons named below to hold office until the 1999 annual meeting of
shareholders of Bancshares or until their successors are elected
and qualified. All director-nominees are proposed for election for
a term of one year. It is intended that unless "Withhold Authority"
is noted as to all or some of the nominees, proxies in the
accompanying form will be voted at the Annual Meeting for the
election to the Board of Directors of the 16 nominees.
If, prior to the voting at the annual meeting, any person to
be elected a director is unable to serve or for good cause cannot
serve, the shares represented by all valid proxies electing such
person may be voted for the election of such substitute as the
members of the board of directors may recommend. Bancshares
management knows of no reason why any person would be unable to
serve as a director.
The following table provides certain biographical information
about the persons who have been nominated for election as directors
of Bancshares. All of these persons are currently directors of
Bancshares, and ten of them, noted by footnote below, are also
directors of First United Security Bank. Bancshares, as the sole
shareholder of First United Security Bank, intends to reelect all
directors of Bancshares as directors of First United Security Bank.
Unless otherwise indicated in the following table, all positions
held with Bancshares are also held with First United Security Bank.
Information regarding the executive officers of Bancshares and
First United Security Bank who are not directors is also provided.
</TABLE>
<TABLE>
<CAPTION>
Name, Age and Year
First Became Director Position With Principal Occupation for
or Executive Officer Bancshares Last Five Years
- --------------------- ------------- -----------------------
<S> <C> <C>
Dan R. Barlow Director(1) Bank Officer
56, 1997
Linda H. Breedlove Director Co-publisher of The South
54, 1997 Alabamian
Gerald P. Corgill Director(1) President of Dozier Hardware
56, 1985 Company
Roy G. Cowan, D.M.D. Director Dentist (Retired)
64, 1990
John C. Gordon, Director(1) Teacher; Forestry, timberland and
40, 1997 investment services
William G. Harrison Director Insurance Agent & President
51, 1976 Bedsole Dry Goods, Inc.
(retail department stores)
(Retired)
Fred L. Huggins Director, Chairman Banking
62, 1997 of the Board of
Directors of First
United Security
Bank(1)
Hardie B. Kimbrough Director(1) Attorney; Retired Presiding
60, 1986 Judge, First Judicial Circuit
of the State of Alabama
Jack W. Meigs Director Circuit Judge of the Fourth
Judical Circuit
40, 1997
James L. Miller Chairman of the Senior Vice President,
68, 1985 Board of Directors Finance, Administration
of Bancshares and Planning, MacMillan
and Director(1) Bloedel Packaging Inc.
(forest products and container
board manufacturer) (Retired)
Ray Sheffield Director(1) President of Deas Insurance
60, 1997
James C. Stanley, D.M.D. Director Dentist (Retired)
61, 1978
Jack M. Wainwright, III President, Chief President and Chief
53, 1986 Executive Officer, Executive Officer of
and Director(1) First United Security
Bank since November 1986
Clarence Watters Director Probate Judge of Clarke County
66, 1997
Howard M. Whitted Director(1) Industrial Forester,
53, 1985 MacMillan Bloedel Packaging
Inc. (forest products and
container board manufacturer)
Bruce N. Wilson Director(1) Attorney
43, 1997
EXECUTIVE OFFICER WHO
IS NOT ALSO A DIRECTOR
Larry M. Sellers Secretary/Treasurer Secretary/Treasurer of
49, 1984 of Bancshares since Bancshares and Senior
1987 and Senior Executive Vice Presi-
Executive Vice Pres- dent and Chief Adminis-
ident and Chief trative Officer of First
Administrative United Security Bank
Officer of First since 1984
United Security Bank
<FN>
(1) Also a director of First United Security Bank.
</FN>
</TABLE>
Current directors Becton, Nichols, Spinks and Woodson, having
served United Security Bancshares with distinction, are not seeking
re-election.
The Boards of Directors of Bancshares and First United
Security Bank conduct their business through meetings of the boards
and through their committees. During 1997, the Board of Directors
of Bancshares met twelve times and the Board of First United
Security Bank met thirteen times. In 1997, each director attended
at least 75% of the meetings of the Board of Directors.
There is no nominating committee or other committee performing
similar functions of the Board of Directors of First United
Security Bank. First United Security Bank's Board has an audit
committee which functions to ensure that the Bank's and Bancshares'
financial statements present fairly the condition of the Bank and
Bancshares, to determine that adequate accounting and operational
controls are in place to protect First United Security Bank's and
Bancshares' assets, to report to the Board of Directors of the Bank
any of its findings, and to ensure that the affairs of the Bank and
Bancshares are being conducted in accordance with policy and
regulatory and legal requirements. The members of the audit
committee are Roy G. Cowan, D.M.D., Chairman, Hardie B. Kimbrough,
James C. Stanley, D.M.D., Linda H. Breedlove, John H. Becton and
John C. Gordon. During 1997, the audit committee met four times.
First United Security Bank's Board has a compensation committee
which reviews officers' salaries, benefits, incentive programs and
other items of compensation. The members of the compensation
committee are Bruce N. Wilson, Chairman, Howard Whitted, Gerald P.
Corgill, Linda H. Breedlove, and Clarence Watters. Jack M.
Wainwright, III and Larry M. Sellers serve in a non-voting
ex-officio capacity. The compensation committee met two times in
1997.
The policy of Bancshares is that the directors of Bancshares
receive $600 per month for service as directors, with the exception
of the Chairman of the Board who receives $900 per month. Directors
of Bancshares who also serve as directors of First United Security
Bank receive a fee of $300 per regular board meeting attended of
First United Security Bank. Members of committees of First United
Security Bank receive fees of $100 per meeting attended.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section16(a) of the Securities Exchange Act of 1934 requires
the directors and executive officers of Bancshares, and persons who
own more than 10% of a registered class of Bancshares' equity
securities, to file with the Securities and Exchange Commission the
initial reports of ownership and reports of changes in ownership of
common stock of Bancshares. Officers, directors and greater than
10% shareholders are required by SEC regulations to furnish
Bancshares with copies of all Section16(a) forms they file.
To Bancshares' knowledge, based solely on review of the copies
of such reports furnished to Bancshares and written representations
that no other reports were required, during the fiscal year ended
December 31, 1997, all Section16(a) filing requirements applicable
to its officers, directors and greater than 10% beneficial owners
were complied with, except that (i) the Initial Reports on Form 3
for Directors Barlow, Becton, Breedlove, Gordon, Huggins, Meigs,
Sheffield, Watters, Wilson, and Woodson, were filed late but within
thirty (30) days of such persons becoming directors, and (ii) one
report, covering two transactions, was filed late by Mr. Sheffield.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain directors and officers of Bancshares and First United
Security Bank and their associates were customers of, and had
transactions with, First United Security Bank in the ordinary
course of business since the beginning of the last fiscal year, and
additional transactions may be expected to take place in the
ordinary course of business. Included in such transactions are
outstanding loans, all of which were made on substantially the same
terms, including interest rates and collateral, as those prevailing
at the time for comparable transactions with other persons and did
not involve more than the normal risks of collectibility or present
other unfavorable features.
During 1997, the law firm of Wilson & Drinkard, of which Bruce
N. Wilson, a director of Bancshares, is a partner, rendered various
legal services to Bancshares, and its subsidiaries.
COMPENSATION COMMITTEE REPORT
This report is provided by the Compensation Committee of the
Board of Directors (the "Committee") to assist stockholders in
understanding the Committee's objectives and procedures in
establishing the compensation of First United Security's Chief
Executive Officer and other senior executives.
The Committee consists of five outside directors and also
includes the chief executive officer and senior executive officer
who serve in a non-voting ex officio capacity. The committee is
responsible for establishing and administering Bancshares' and
First United Security's executive compensation program.
The Committee has been provided with competitive pay and
performance information by outside sources. First United Security's
staff provided additional analysis that was used by the Committee.
In structuring the incentive programs, the Committee has been
advised by external legal counsel, as well as Bancshares' staff, on
plan design.
Compensation Philosophy and Objective
The Committee believes that compensation of Bancshares' or
First United Security's key executives should:
-- link rewards to business results and stockholders'
returns,
-- encourage creation of stockholders' value and achievement
of strategic objectives,
-- maintain an appropriate balance between salary and
incentive opportunity,
-- attract and retain, on a long-term basis, high caliber
personnel,
-- provide a total compensation opportunity that is
competitive with the banking industry, taking into
account relative company size and performance as well as
individual responsibilities and performance, and
-- continue to provide compensation that is tax deductible.
Key Elements of Executive Compensation
Bancshares' and First United Security's existing executive
compensation program consists of three elements: Base Pay,
Incentives and Stock Options. Payment of the incentive depends on
performance measured against annual objectives as described below.
Base Pay
-- Salary structures are targeted to average pay levels of
other regional banks of similar size and structure.
Individual base pay within the structures is based on
sustained individual performance toward achieving USB's
goals and objectives.
-- Executive salaries are reviewed annually.
Incentive
-- The incentive plan is an annual cash incentive plan that
links incentives to performance results of the prior
year. Awards are based on three components: corporate
results, bank operating results and individual
performance.
-- Operating and financial targets are set at the beginning
of each year. Targets include a variety of elements such
as: loan growth, expense control, income generation,
return on average equity (ROAE), and loan portfolio
performance. Results are measured against annual business
plan objectives and against industry standards.
-- Actual individual incentives depend on assessments of
individual success in meeting targets.
Stock Options
Stock options are granted for two primary reasons:
-- The Committee believes stock options associate executive
compensation with shareholders' interest, since no
rewards are realized unless the stock value increases.
-- Stock options are the most common type of long term
incentive among banks and bank holding companies, and
they enable First United Security to be competitive in
retaining qualified management.
United Security's Long Term Incentive Compensation Plan was
approved by shareholders in 1997. This Plan provides for the
issuance of up to 60,000 shares of Bancshares' common stock. During
1997, options for 57,350 shares were granted and exercisable. They
were made available to all First United Security employees. The
options were issued at the fair market value of Bancshares' common
stock on the date of the grant and expire five years after the date
of the grant.
1997 CEO Compensation
In assessing the performance and establishing the base salary
and incentive compensation of the Chief Executive Officer and other
members of Bancshares' or First United Security's senior
management, the Committee paid particular attention to management's
sustained success in operating First United Security.
The 1997 base salary of First United Security's Chief
Executive Officer was set without his participation. In setting the
Chief Executive Officer's base salary, special consideration was
given to First United Security's superior earnings record since his
appointment. Earnings have increased every year for the past nine
years. Consideration was also given to his personal job
performance, expectations of his anticipated contributions to First
United Security's future and his rights under his three-year
employment agreement dated March 18, 1997, described herein.
The 1997 incentive compensation for the Chief Executive
Officer was based on the same goals and criteria as the incentive
for bank loan officers. Employees earned a cash incentive based on
a return on average asset goal of two percent and a return on
average equity goal of fifteen percent. All loan officers were
given additional financial incentives based on the performance of
the loan portfolio they administer, and the Chief Executive Officer
participated in this incentive program. For example: the Chief
Executive Officer was awarded a cash incentive for his success in
reducing the charge-off loans in his portfolio to less than .05%.
However, since his portfolio had a delinquency rate of greater than
2.0%, his total cash incentive was reduced. The Committee's base
salary and incentive recommendation for the Chief Executive Officer
was reviewed and approved by the full board of directors.
Based on recommendations to the Committee from the Chief
Executive Officer, the 1997 base salaries for the other executive
officers were set by the Committee, using the same review process
as applied when establishing the chief executive's base salary. The
Committee reviewed their individual recommendations regarding each
named executive officer with the Board of Directors and secured
full board approval.
Other Executive Compensation
First United Security provides programs to executives that are
also available to other employees, including The United Security
Bancshares, Inc. Employee Stock Ownership Plan, health insurance
and stock options. Bancshares provides no pension programs.
This Report furnished by:
Bruce N. Wilson (Chairman)
Linda H. Breedlove
Clarence Watters
Howard M. Whitted
Gerald P. Corgill
Comparative Stock Performance
The following graph compares cumulative total shareholder
returns on Bancshares Common Stock for the five years ended
December 31, 1997, with that of The Standard and Poor's Composite
Index ("S&P 500") and a peer group stock performance index defined
as follows: 21 independent community banks located in the Southeast
United States (the "Independent Bank Index"). The graph shows the
comparative values for $100 invested on December 31, 1992.
<TABLE>
UNITED SECURITY BANCSHARES, INC.
Five Year Performance Index
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
UNITED SECURITY BANCSHARES, INC. 100 141 149 161 225 591
INDEPENDENT BANK INDEX 100 125 153 208 248 358
S&P 500 INDEX 100 110 111 153 189 251
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer-company director interlocks existed for
1997. During 1997, Jack M. Wainwright III, President and Chief
Executive Officer, and Larry M. Sellers, Senior Executive
Vice-President, were ex officio non-voting members of the
compensation committee. They participated only in compensation
recommendations, discussions and decisions involving Company
officers other than themselves.
EXECUTIVE COMPENSATION BENEFITS
The following table indicates all compensation paid by
Bancshares or First United Security Bank for services rendered to
Bancshares or First United Security Bank during 1997 by Jack M.
Wainwright, III and Larry M. Sellers, the only executive officers
whose total cash compensation exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Name/Title Year Salary Bonus(1) Other(2)
- ---------- ---- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Jack M. Wainwright, III 1997 $206,730.51 $53,550.28 $16,673.44
President & Chief 1996 151,915.68 53,550.20 16,634.54
Executive Officer 1995 137,550.00 48,148.75 17,036.38
Larry M. Sellers 1997 $ 88,640.24 30,831.18 13,063.11
Secretary/Treasurer of Bancshares 1996 83,730.96 30,143.15 11,654.12
and Executive Vice President and 1995 79,736.43 29,901.16 9,432.05
Chief Administrative Officer of
First United Security Bank
<FN>
(1) Bonuses are earned solely through the incentive compensation
program based on (i) a return on average asset goal of two
percent; (ii) a return on average equity goal of fifteen
percent; and (iii) financial incentives based on the
performance of the loan portfolio administered by the named
officer.
(2) The totals in this column reflect First United Security
contributions under The United Security Bancshares, Inc.
Employee Stock Ownership Plan and other perquisites.
</FN>
</TABLE>
Stock Options Granted
The table below represents options granted to the named
executive officers.
<TABLE>
OPTION GRANTS IN THE LAST FISCAL YEAR
<CAPTION>
Potential
Percent of Realizable Value
Number of Total Options of Assumed
Shares Granted to Annual Rates
Underlying Employees of Stock Price
Unexercised During Appreciation
Options at the for Option Term(3)
Fiscal Fiscal Exercise Expiration -------------------
Year-End(1) Year(2) Price Date 5% 10%
----------- ------------ -------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Jack M. Wainwright 7,500 13.08% $17.50 June 17, 2002 $36,300 $80,100
Larry M. Sellers 5,000 8.71% $17.50 June 17, 2002 $24,150 $53,400
<FN>
(1) Options expire five years after the date of grant.
(2) Based on 57,350 options granted to all employees in the fiscal
year ended December 31, 1997.
(3) The dollar amounts set forth under these columns are the
result of calculations at the 5% and 10% rates specified by
SEC rules; they are not intended to forecast future
appreciation of Bancshares' stock price.
</FN>
Bancshares entered into an employment agreement on March 18,
1997, with Jack M. Wainwright, III, President and Chief Executive
Officer, which provides, among other things, that Mr. Wainwright
will be employed for a period of three years as President and Chief
Executive Officer of First United Security Bank and that he would
receive a minimum salary of $200,000 in 1997, with minimum annual
salary increases until the expiration of such contract in 2000. Mr.
Wainwright's employment agreement also provides that he is entitled
to receive severance compensation in an amount equal to three times
his average annual salary for the period of the contract if he is
terminated for any reason other than his death or disability, his
resignation, his conviction of a crime of moral turpitude, or the
expiration of his agreement. Also, Mr. Wainwright will be entitled
to such severance compensation upon any reduction in the level or
a change in nature of his responsibilities to Bancshares or First
United Security Bank.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
At its meeting on October 2, 1997, the Board of Directors of
Bancshares, upon recommendation of the Audit Committee of the First
United Security Bank Board of Directors, approved the engagement of
the accounting firm of Arthur Andersen LLP as the independent
public accountants to audit Bancshares' financial statements for
the year ending December 31, 1997.
Arthur Andersen LLP will serve as Bancshares' principal
independent public accountant for the current year. Representatives
of Arthur Andersen are expected to be present at the 1998 Annual
Meeting of Stockholders, with the opportunity to make a statement
if they desire to do so, and are expected to be available to
respond to appropriate questions.
PROPOSALS OF SHAREHOLDERS
Subject to certain rules of the Securities and Exchange
Commission, proposals by shareholders intended to be presented at
Bancshares' 1999 annual meeting of shareholders must be received at
Bancshares' principal executive office not less than 120 days in
advance of April 1, 1999 for inclusion in the proxy or information
statement relating to the 1999 annual meeting.
OTHER MATTERS
Bancshares does not know of any matters to be presented for
action at the annual meeting other than those listed in the notice
of the annual meeting and referred to herein.
Bancshares will furnish without charge to its shareholders,
upon written request, a copy of its annual report on Form 10-K,
including the accompanying financial statements and schedules,
required to be filed with the Securities and Exchange Commission
for the year ended December 31, 1997. Copies of the exhibits to
such report will also be available upon payment of a reasonable fee
for copying charges. Requests should be made to Larry M. Sellers,
Treasurer, United Security Bancshares, Inc., 131 West Front Street,
Post Office Box 249, Thomasville, Alabama 36784.
PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN
THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. YOU MAY REVOKE
THE PROXY BY GIVING WRITTEN NOTICE TO THE SECRETARY OF BANCSHARES
AT ANY TIME PRIOR TO THE VOTING THEREOF, BY EXECUTING A LATER DATED
PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
UNITED SECURITY BANCSHARES, INC.
Thomasville, Alabama
April 1, 1998
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
UNITED SECURITY BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
May 5, 1998
The undersigned hereby appoints James L. Miller and Jack M.
Wainwright, III, or _________________________ _________________,
or any one of them, proxies for the undersigned, or such other
persons as the board of directors of United Security Bancshares,
Inc. ("Bancshares") may designate, with full power of substitution,
to represent and act for and in the name and stead of the
undersigned and to vote all of the shares of Common Stock of
Bancshares, which the undersigned is entitled to vote at the annual
meeting of stockholders of Bancshares to be held on May 5, 1998,
and at any and all adjournments thereof.
1. The election of all the nominees listed below to serve as
directors until the next annual meeting of stockholders or until
their successors shall be elected and qualified.
NOMINEES: Dan Barlow, Linda Breedlove, John C. Gordon, Gerald
P. Corgill, Roy G. Cowan, William G. Harrison, Fred L.
Huggins, Hardie B. Kimbrough, Jack W. Meigs, James L. Miller,
Ray Sheffield, James C. Stanley, Jack M. Wainwright, III,
Clarence Watters, Howard M. Whitted, Bruce N. Wilson.
_____FOR ALL NOMINEES _____WITHHOLD AUTHORITY TO VOTE
(except for all nominees whose (for all nominees listed above)
names have been struck out)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST
ABOVE.
2. In their discretion, to vote on such other matters as may
properly come before the meeting, but which are not now
anticipated, and to vote for the election of any person as a
director should any persons named in the proxy statement to be
elected be unable to serve or for good cause cannot serve.
_____FOR _____WITHHOLD AUTHORITY TO VOTE
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH INSTRUCTIONS GIVEN BY
THE STOCKHOLDER. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1.
Dated: __________________________________, 1998
Phone No.______________________________________
_______________________________________________
(Signature of Stockholder)
_______________________________________________
(Signature of Stockholder, if held jointly)
</TABLE>
