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.
<PAGE>
UNITED SECURITY BANCSHARES, INC.
TO OUR SHAREHOLDERS:
We will hold the annual meeting of shareholders of United Security
Bancshares, Inc. ("Bancshares"), at 2:00 p.m., local time, on Tuesday, May 2,
2000, at the Pearce Memorial Park Assembly House, 500 Vanity Fair Park Drive,
Jackson, Alabama.
We have enclosed a notice of the meeting, a proxy statement, a proxy and
the Annual Report to Shareholders for 1999, and 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 via facsimile (334-636-9606) or in the
accompanying envelope as promptly as possible. You may revoke the proxy by
voting in person at the meeting, by signing a later dated proxy, or by giving
written notice of revocation to the Secretary of Bancshares at any time
before the proxy is voted.
Sincerely,
/s/ James L. Miller
________________________________________
James L. Miller
Chairman of the Board
/s/ R. Terry Phillips
_________________________________________
R. Terry Phillips
President and Chief Executive Officer
April 3, 2000
<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 2, 2000
TO THE SHAREHOLDERS OF UNITED SECURITY BANCSHARES, INC.:
Notice is hereby given that the 2000 Annual Meeting of Shareholders (the
"Meeting") of United Security Bancshares, Inc. ("Bancshares") will be held at
the Pearce Memorial Park Assembly House, 500 Vanity Fair Park Drive, Jackson,
Alabama, on Tuesday, May 2, 2000, 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 24,
2000, 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 ten days before the meeting.
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 send it via facsimile
(334-636-9606) or 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 and delivering 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
April 3, 2000
<PAGE>
UNITED SECURITY BANCSHARES, INC.
131 West Front Street
Post Office Box 249
Thomasville, Alabama 36784
Telephone 334-636-5424
PROXY STATEMENT
FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 2000
INTRODUCTION
This Proxy Statement is furnished on or about April 3, 2000 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 2, 2000 at 2:00 p.m. 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 Board of Directors of Bancshares is soliciting the proxy, which is
revocable at any time before it is voted. You may revoke the proxy by voting
in person at the meeting, by giving written notice to the Secretary of
Bancshares or by signing a later-dated proxy. We must, however, actually
receive the later-dated proxy or revocation befohe shareholders. We will vote
all properly executed proxies delivered pursuant to this solicitation at the
meeting and in accordance with instructions, if any. If no instructions are
given, we will vote the proxies 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.
Bancshares will pay the cost of soliciting proxies. In addition to the
use of the mails, we may solicit proxies by personal interview, telephone,
facsimile and telegraph. 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, with assets of approximately $477 million. We operate
one banking subsidiary in Alabama, First United Security Bank, a bank
organized and existing under the laws of Alabama ("First United Security" or
the "Bank"), with eighteen banking offices. At December 31, 1999, First
United Security 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. The Bank owns all the stock of
Acceptance Loan Company, Inc. ("ALC"), which provides consumer loans and
purchases consumer loans from vendors.
Bancshares derives substantially all of its income from dividends from
First United Security Bank. Banking laws restrict the amount of dividends
that First United Security Bank may pay to Bancshares without regulatory
approval.
Shareholders Eligible to Vote
We are sending this Proxy Statement to shareholders of record as of the
s on March 24, 2000. Only shareholders as of such date are eligible to vote
at the meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
As of January 31, 2000, Bancshares had issued 3,634,381 shares of common
stock, of which 3,570,381 were outstanding, with approximately 1,013 holders
of record. Bancshares also holds 64,000 shares as treasury stock. We
currently have 10,000,000 shares of common stock, par value $.01 per share,
authorized for issuance.
Principal Shareholder Shares Owned(1) Percent Owned
_____________________ _______________ _____________
John C. Gordon 214,441(2) 6.01%
P. O. Box 238
Grove Hill, Alabama 36451
(1) Based on information furnished by Mr. Gordon. 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.
(2) Includes 5,280 shares owned jointly with Mr. Gordon's wife, 88,895
shares owned by the estate of Mr. Gordon's late aunt, of which estate
Mr. Gordon is executor, and 72,209 shares owned by Mr. Gordon's mother
and with respect to which Mr. Gordon shares a power of attorney to vote
the shares. Also, includes 50 shares owned by Mr. Gordon's minor son and
50 shares owned by Mr. Gordon's minor daughter. Mr. Gordon has sole
voting and dispositive power for 136,952 shares.
Security Ownership of Management
The following table indicates for each director the number of shares of
outstanding Common Stock of Bancshares beneficially owned.
Number and Percent of
Shares of Common Stock
Name Owned at January 31, 2000
____ _________________________
Dan R. Barlow 14,780(1)
*
Linda H. Breedlove 3,499
*
Gerald P. Corgill 75,882(2)
2.13%
Roy G. Cowan 23,624(3)
*
Wayne C. Curtis -0-
John C. Gordon 214,441(4)
6.01%
William G. Harrison 28,175(5)
*
Fred L. Huggins 8,498(6)
*
Hardie B. Kimbrough 16,519(7)
*
Jack W. Meigs 100
*
R. Terry Phillips 2,100(8)
*
Ray Sheffield 29,000(9)
*
James C. Stanley 5,000(10)
*
Clarence Watters 16,250(11)
*
Howard M. Whitted 4,800
*
Bruce N. Wilson 7,320(12)
*
All directors and executive officers 465,049
as a group (19 persons,
including the persons named above) 13.03%
* Represents less than one percent of the outstanding shares.
(1) Includes 274 shares owned by Mr. Barlow's spouse. Mr. Barlow
disclaims beneficial ownership of such shares.
(2) Includes 52,536 shares owned by Mr. Corgill's spouse. Mr. Corgill
disclaims beneficial ownership of such 52,536 shares. Also includes 2,394
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.
(3) Includes 23,424 owned by Dr. Cowan's spouse, and Dr. Cowan
disclaims beneficial ownership of such shares.
(4) Includes 88,895 shares owned by the Estate of Mr. Gordon's aunt
with respect to which Mr. Gordon is executor and 72,209 shares owned by Mr.
Gordon's mother and with respect to which Mr. Gordon shares a power of
attorney to vote the shares. Includes 5,280 shares with respect to which Mr.
Gordon shares voting and investment power. Includes 50 shares owned by Mr.
Gordon's minor son and includes 50 shares owned by Mr. Gordon's minor
daughter.
(5) Includes 264 shares with respect to which Mr. Harrison is
co-executor for his father's estate.
(6) Includes 2,332 shares with respect to which Mr. Huggins shares
investment and voting power.
(7) Includes 140 shares with respect to which Mr. Kimbrough shares
voting and investment power. Also includes 736 shares owned by Mr.
Kimbrough's spouse with respect to which Mr. Kimbrough disclaims beneficial
ownership.
(8) Includes 50 shares with respect to which Mr. Phillips shares
voting and investment powers. Also includes 2,050 shares which could be
acquired within 60 days pursuant to stock options.
(9) Mr. Sheffield shares voting and iwith respect to 24,343 shares.
(10) Includes 4,800 shares held by the James C. Stanley Trust, of which
Dr. Stanley is the Trustee.
(11) Includes 8,000 shares owned by Mr. Watters' spouse. Mr. Watters
disclaims beneficial ownership of such shares. Includes 150 shares with
respect to which Mr. Watters shares voting power.
(12) Includes 1,272 shares with respect to which Mr. Wilson shares
voting power. Includes 50 shares owned by Mr. Wilson's minor son and includes
50 shares owned by Mr. Wilson's minor daughter.
ELECTION OF DIRECTORS
Bancshares recommends that the shareholders elect the 16 persons named
below to hold office until the 2001 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. 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, before the voting at the annual meeting, any person to be elected a
director is unable to serve, the shares that would otherwise be voted for
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 are, with the
exception of Mr. Curtis, 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 except Dr. Curtis. Mr. Miller is currently the chairman of the Board of
Bancshares, and Mr. Huggins is the chairman of the Board of First United
Security Bank. Information regarding the executive officers of Bancshares and
First United Security Bank who are not directors is also provided.
<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 Bank Officer
58, 1997
Linda H. Breedlove Director Co-publisher of "The South
56, 1997 Alabamian"
Gerald P. Corgill Director President of Dozier Hardware
58, 1985 Company
Roy G. Cowan Director Dentist (Retired)
66, 1990
Wayne C. Curtis, Director Director of Education and Regula-
60, 2000 tory Affairs, Community Bankers
Association of Alabama since
1999; Assistant Superintendent
and Superintendent of Alabama
Banks from 1995 to 1999; Dean and
Eminent Scholar in Banking, Troy
State University from 1994 to
1995 (Retired)
John C. Gordon, Director Teacher; Forestry, timberland and
42, 1997 investment services
William G. Harrison Director Timber Harvesting; Trucking and
53, 1976 Computer Operator
Fred L. Huggins Director, Chairman Banking (Retired)
64, 1997 of the Board of
Directors of First
United Security Bank
Hardie B. Kimbrough Director Attorney; Retired Presiding
62, 1986 Judge, First Judicial Circuit of
the State of Alabama
Jack W. Meigs Director Circuit Judge
42, 1997
Ray Sheffield Director President of Deas Insurance
62, 1997
James C. Stanley Director Dentist (Retired)
63, 1978
R. Terry Phillips President, Chief President and Chief Executive
46, 1999 Executive Officer, Officer of First United Security
and Director Bank since January 1999; President
and CEO of First Community Bank,
Chatom, AL until January, 1999
Clarence Watters Director Probate Judge of Clarke County
68, 1997
Howard M. Whitted Director Industrial Forester, Weyerhauser
55, 1985 Co. (forest products and container
board manufacturer)
Bruce N. Wilson Director Attorney
45, 1997
EXECUTIVE OFFICERS WHO
ARE NOT ALSO DIRECTORS
Larry M. Sellers, Vice President/Secretary/ Vice President/Secretary/
51, 1984 Treasurer of Bancshares Treasurer of Bancshares and
Senior Executive Vice President and
Chief Administrative Officer of
First United Security Bank
William D. Morgan, Assistant Secretary Bank Officer
50, 2000
Robert Steen, Assistant Treasurer Bank Officer
51, 2000
</TABLE>
The Boards of Directors of Bancshares and First United Security Bank
conduct their business through meetings of the boards and through their
committees. During 1999, the Board of Directors of Bancshares met twelve
times and the Board of First United Security Bank met twelve times. In 1999,
each director attended at least 75% of the meetings of the Board of
Directors.
We have 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 presendition 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, Chairman, Hardie B. Kimbrough, James
C. Stanley, Linda H. Breedlove, John C. Gordon and Jack W. Meigs. During
1999, 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. R. Terry Phillips and
Larry M. Sellers serve in a non-voting ex-officio capacity. The compensation
committee met two times in 1999.
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. The Directors of Bancshares who also serve as directors of First
United Security Bank, receive a fee of $400 per regular board meeting of
First United Security Bank. Outside members of committees of Bancshares and
First United Security Bank receive fees of $100 per meeting attended.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(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 6(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, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with, except that one report
covering one transaction was filed late by Mr. Kimbrough.
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 1999, the law firms of Wilson & Drinkard, of which Bruce N.
Wilson, a director of Bancshares, is a partner, and Gilmore & Gilmore, of
which Hardie B. Kimbrough, a director of Bancshares, is Of Counsel, rendered
various legal services to Bancshares and its subsidiaries.
COMPENSATION COMMITTEE REPORT
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 tgrams,
the Committee has been advised by external legal counsel, as well as
Bancshares' staff, on plan design.
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.
Compensation Philosophy and Objectives
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.
Incentives
-- 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 assets
(ROAA), 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 were exercisable. They were made available to all First
United Security employees. During 1998, options for 600 shares were granted
to two executive officers of ALC, and in 1999, options for 2,050 shares were
granted to the Company's Chief Executive Officer. 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.
1999 CEO Compensation
Due to the untimely death of the Company's Chief Executive Officer, Jack
M. Wainwright, III, on August 29, 1998, the Board of Directors formed a
Search Committee to interview candidates for the CEO position. R. Terry
Phillips was selected, was approved by the full board of directors, and
executed an employment agreement effective January 1, 1999. The 1999 base
salary of First United Security's new Chief Executive Officer was set through
a negotiating process and was part of the three-year employment agreement.
The contract also called for an initial bonus that is included in the CEO's
1999 compensation.
The 1999 incentive compensation for the Chief Executive Officer was
based on the same goals and criteria as the incentive for bank loan officers.
Bank employees earned a cash incentive based on a minimum return on an
average asset goal for the Bank of 1.30% and a minimum return on average
equity goal of 14%. The incentive award was based on the actual achievement
of 1 and ROAE, respectively. Additionally, the Chief Executive Officer was
awarded a cash incentive for his success in reducing other non-interest
expense. 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 1999 base salaries for the other executive officers were set by
the Committee. The Committee reviewed their overall 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, 1999, with that
of The Standard and Poor's Composite Index ("S&P 500") and a peer group stock
performance index defined as follows: 23 independent community banks located
in the Southeastern United States (the "Independent Bank Index"). The graph
shows the comparative values for $100 invested on December 31, 1994.
<TABLE>
UNITED SECURITY BANCSHARES, INC.
Five Year Performance Index
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
UNITED SECURITY BANCSHARES, INC. 100 108 151 397 384 284
INDEPENDENT BANK INDEX 100 122 155 235 246 222
S&P 500 INDEX 100 141 174 213 300 542
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer-company director interlocks existed for 1999.
During 1999, R. Terry Phillips, 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 AND 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 1999 by R. Terry Phillips, Larry M. Sellers, Dan
R. Barlow, William D. Morgan and Robert Steen, the executive officers whose
total cash compensation exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Securities
Underlying
Name/Title Year Salary Bonus(2) Other(3) Options
__________ ____ ___________ __________ __________ __________
<S> <C> <C> <C> <C> <C>
R. Terry Phillips 1999 $185,000.00 $72,637.00 $15,372.00 2,050
President & Chief
Executive Officer (1)
of Bancshares and First
United Security Bank
Larry M. Sellers 1999 $ 97,500.00 $25,106.00 $14,486.00 4,685
Vice-President/Secretary/ 1998 93,000.00 32,187.00 16,668.48
Treasurer of Bancshares and 1997 88,640.24 30,831.18 13,063.11
Senior Executive Vice-President
and Chief Administrative Officer
of First United Security Bank
Dan R. Barlow 1999 $ 84,000.00 $26,040.16 $22,762.01
Executive Vice President of 1998 82,000.00 26,035.00 20,079.82
First United Security Bank and
Director Bancshares and First
United Security Bank
William D. Morgan 1999 $ 84,000.00 $18,270.03 $11,445.78 4,000
Assistant Secretary of Bancshares
and Executive Vice-President of
First United Security Bank
Robert Steen 1999 $ 77,000.00 $19,827.67 $ 8,216.99 4,000
Assistant Treasurer of Bancshares
and Executive Vice-President of
First United Security Bank
<FN>
(1) Bancshares entered into an employment agreement on January 1, 1999, with
R. Terry Phillips, President and Chief Executive Officer, which
provides, among other things, that Mr. Phillips 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 annual salary
of $185,000.00 and a signing bonus of $25,000.00. Mr. Phillips is also
eligible to participate in First United Security's incentive
compensation plan. Mr. Phillips' employment agreement also provides that
he is entitled to receive severance compensation in an amount equal to
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. Phillips will be entitled to such
severance compensation upon any reduction in the level or change in the
nature of his responsibilities to Bancshares or First United Security
Bank. If Mr. Phillips' employment is terminated due to a change in
ownership of the Bank, he will receive three times his annual salary.
(2) Except as noted above, 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.
(3) The totals in this column reflect First United Security contributions
under The United Security Bancshares, Inc. Employee Stock Ownership
Plan, other perquisites, and directors' fees.
</FN>
</TABLE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
At its meeting on June 17, 1999, 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 acct Bancshares' financial statements
for the year ending December 31, 1999.
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 2000 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
If any shareholder wishes to present a proposal for action at the 2001
Annual Meeting of the shareholders, the shareholder must comply with
applicable SEC regulations, including adequate notice to Bancshares.
Shareholder proposals submitted to Bancshares in compliance with SEC Rule
14a-8 (which concerns shareholder proposals that are requested to be included
in a company's proxy statement) must be received at Bancshares' executive
offices on or before December 3, 2000. Pursuant to SEC Rules 14a-4 and 14a-5
(which, among other things, concern the exercise of discretionary voting
authority with respect to shareholder proposals other than proposals that
have been requested to be included in the company's proxy statement)
shareholders are advised that a shareholder proposal will be considered
untimely if provided to Bancshares after February 18, 2001. Any proposal must
be submitted in writing by Certified Mail-Return Receipt Requested, to United
Security Bancshares, Attention: Larry M. Sellers, 131 West Front Street, Post
Office Box 249, Thomasville, Alabama 36784.
OTHER MATTERS
We do 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.
We will furnish without charge to its shareholders, upon written
request, a copy of Bancshares' 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, 1999.
Copies of tuch 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 VIA FACSIMILE
(334-636-9606) OR 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 AND DELIVERING A LATER
DATED PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
UNITED SECURITY BANCSHARES, INC.
Thomasville, Alabama
April 3, 2000
<PAGE>
<CARD>
[ x ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
REVOCABLE PROXY
UNITED SECURITY BANCSHARES, INC.
SOLICITED BY THE BOARD OF DIRECTORS
UNITED SECURITY BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
May 2, 2000
The undersigned hereby appoints James L. Miller and R. Terry Phillips,
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 2, 2000, and at any and all
adjournments thereof.
1. The election of all the nominees With- For All
listed below to serve as directors For hold Except
until the next annual meeting of
stockholders or until their [ ] [ ] [ ]
successors shall be elected and
qualified.
NOMINEES:
Dan R. Barlow Hardie B. Kimbrough
Linda H. Breedlove Jack W. Meigs
John C. Gordon Ray Sheffield
Gerald P. Corgill James C. Stanley
Roy G. Cowan R. Terry Phillips
Wayne C. Curtis Clarence Walters
William G. Harrison Howard M. Whitted
Fred L. Huggins Bruce N. Wilson
INSTRUCTION: To withhold authority to vote for any individual
nominee, mark "For All Except" and write that nominee's name
in the space provided below.
______________________________________________________________
2. In their discretion, to vote on such
other matters as may properly come Grant Withhold
before the meeting, but which are not Authority Authority
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.
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.
Please be sure to sign and date Date
this Proxy in the box below.
_____________________________________________________________
Stockholder sign above Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid enveloped provided.
UNITED SECURITY BANCSHARES, INC.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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