AMENDMENT ONE TO R. TERRY PHILLIPS EMPLOYMENT AGREEMENT

EXHIBIT 10.1

AMENDMENT ONE

TO R. TERRY PHILLIPS

EMPLOYMENT AGREEMENT

This Amendment One (this "Amendment") is made and entered into as of the 18th day of December, 2008, by and among United Security Bancshares, Inc. ("USB"), First United Security Bank ("FUSB") ("USB" and "FUSB" are hereinafter collectively referred to as the "Company"), and R. Terry Phillips (the "Executive").

WHEREAS , the Company and the Executive previously entered into the Employment Agreement (the "Agreement"), effective as of January 1, 2000, attached hereto as Exhibit A ;

WHEREAS , the American Jobs Creation Act of 2004 created new Internal Revenue Code Section 409A ("Code Section 409A"), which imposes documentary and operational requirements on non-qualified deferred compensation arrangements, such as the Agreement; and

WHEREAS , the Company desires to amend the Agreement as set forth herein to ensure that it and the amounts paid thereunder satisfy the requirements of Code Section 409A and any and all Treasury regulations and guidance promulgated thereunder.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows, effective January 1, 2009:

Further amend Section 6.4(b) by adding the following as the last sentence therein:

"In the event that payment is made pursuant to (iii) above, the payment of three (3) times Base Salary shall be made within the thirty (30) day period noted above; payment of the remaining two (2) times Base Salary shall be made within ten (10) days following the Change in Control."

"Notwithstanding the foregoing, with respect to any self-insured welfare plan benefits wherein adverse tax consequences to the Executive could apply due to the application of Section 105(h) and/or Section 409A of the Internal Revenue Code (the "Code") to such benefits, then in lieu of the Company’s waiver of any insurance "premiums" associated with such benefits ("Self-Insured Premiums"), the parties immediately shall retain a mutually-agreeable actuary to calculate a lump sum payment to be made to the Executive in an amount generally equal to the present value of the anticipated Self-Insured Premiums for the 3-year period, and Executive shall then be solely responsible for the payment of the Self-Insured Premiums. Such lump sum payment shall be paid to Executive within sixty (60) days following the Executive’s termination of employment. In the event that Executive receives substantially similar benefits from a subsequent employer within the 3-year period, the Executive shall, within sixty (60) days of gaining coverage for such benefits, repay to the Company an amount equal to the lump sum payment the Executive received under this Section 6.4(c) times a fraction, the numerator of which is the number of days remaining in the 3-year period and the denominator of which is 1095."

Page 1 of 4

"Within thirty (30) days following the effective date of the Executive’s termination of employment,"

"(a) At any time during the term of this Agreement, the Executive may terminate this Agreement for Good Reason by giving the Board written notice of the Good Reason condition and the Executive’s intent to terminate within ninety (90) days of the initial existence of the Good Reason condition. Such notice shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination. The Executive’s ability to terminate for Good Reason is contingent upon his agreement to allow the Company to remedy, within such ninety (90)-day period, the events constituting Good Reason. Additionally, the Executive’s termination of employment due to Good Reason must occur within six (6) months of the initial existence of the Good Reason condition in order to be entitled to any payments or benefits due to a Good Reason termination."

"(b) Upon the failure of the Company to remedy the events constituting Good Reason prior to the expiration of the ninety (90)-day notice period, the Good Reason termination shall become effective, and, within thirty (30) days following the effective date of the Executive’s termination of employment, the Company shall pay the Executive a lump sum cash payment in an amount equal to three (3) times the Base Salary currently in effect; provided, however, that if (i) the notice of termination is provided on or after a Change in Control, (ii) the effective date of such termination occurs on or after a Change in Control or (iii) a Change in Control occurs within the period beginning on the effective date of such termination and ending six (6) months thereafter, the payment under this sub-section (b) shall be a lump sum cash payment in an amount equal to five (5) times the Base Salary currently in effect. In the event that payment is made pursuant to (iii) above, the payment of three (3) times Base Salary shall be made within the thirty (30) day period noted above; payment of the remaining two (2) times Base Salary shall be made within ten (10) days following the Change in Control."

"All payments made pursuant to this Article 7 shall be made in accordance with Section 12.9(c) below."

Page 2 of 4

"(d) A "Change in Control" means a "change in the ownership" of USB or FUSB, a "change in the effective control" of USB, or a "change in the ownership of a substantial portion of the assets" of USB or FUSB, as each is defined in Code Section 409A and the regulations and guidance issued thereunder (collectively, "Section 409A")."

"(i) The assignment of the Executive to duties materially inconsistent with the Executive’s authorities, duties, or responsibilities (including a material change in to whom the Executive must report) as an officer of the Company, or a material reduction or alteration of the Executive’s authorities, duties or responsibilities from those in effect as of the Effective Date (or as subsequently increased), other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Executive; or"

"12.9 Internal Revenue Code Section 409A Compliance . This Agreement is intended in good faith to comply with Section 409A with respect to certain payments, and to be exempt from Section 409A with respect to other payments.

(a) Termination of Employment. With respect to payments made, or to be made, hereunder upon a termination of employment that are subject to Section 409A, a termination of employment must constitute a "separation from service" under Treas. Reg. Section 1.409A-1(h) in order for such payment to be made.

(b) Modification of Time or Form of Payments. Payments made hereunder that are subject to Section 409A may not be accelerated or delayed, except as specifically allowed under Section 409A.

(c) Reimbursements and Equalization Payments. Notwithstanding any other provisions herein to the contrary or any policy of the Company to the contrary, all reimbursements, Payments and Underpayments (as defined in Article 7) to be made hereunder shall be made within sixty (60) days of the date that the Executive incurs the reimbursable expense or remits the taxes to the applicable taxing authority, as applicable. Additionally, any amount payable to Section 7.2(b) must be made by the end of the Executive’s taxable year following the Executive’s taxable year in which the taxes that are subject to the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, the end of the Executive’s taxable year following the Executive’s taxable year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation. The amount of expenses eligible for reimbursement during the Executive’s taxable year may not affect the amount of expenses eligible for reimbursement in any other taxable year of the Executive, and the right to a reimbursement may not be liquidated or exchanged for any other benefit.

(d) Restriction on Timing of Distribution. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a "Specified Employee" at the

Page 3 of 4

time of his termination of employment under such procedures as established by USB in accordance with Section 409A, distributions that are made upon termination of employment (for reasons other than death) may not commence earlier than six (6) months after the date of such termination of employment. Therefore, in the event this Section 12.9(d) is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six (6) months following the termination of employment shall be accumulated and paid to the Executive in a lump sum during the seventh month following the termination of employment. Any subsequent distributions shall be paid in the manner otherwise specified herein."

IN WITNESS WHEREOF , the Company and the Executive have caused this Amendment One to the Employment Agreement to be executed as of the date first written above.

Page 4 of 4

EXHIBIT A

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is effective as of the 1 ^st day of January, 2000 (the "Effective Date"), and is made by and between UNITED SECURITY BANCSHARES, INC. , a Delaware corporation ("USB"); FIRST UNITED SECURITY BANK , an Alabama banking corporation ("FUSB"; USB and FUSB are hereinafter collectively referred to as the "Company"); and R. TERRY PHILLIPS (the "Executive").

WHEREAS , the Executive is presently employed by the Company in the capacity of President and Chief Executive Officer of USB and FUSB; and

WHEREAS , the Executive possesses considerable experience and an intimate knowledge of the business and affairs of the Company, its policies, methods, personnel and operations; and

WHEREAS , the Company recognizes that the Executive’s contributions have been substantial and meritorious and, as such, the Executive has demonstrated unique qualifications to act in an executive capacity for the Company; and

WHEREAS , the Company is desirous of assuring the continued employment of the Executive in the above stated capacities, and the Executive is desirous of having such assurance;

WHEREAS , the Executive and the Company previously entered into an employment agreement effective as of the 1st day of January, 1999 (the "1999 Agreement"), and the Executive and the Company now desire to amend and restate the 1999 Agreement hereby;

NOW THEREFORE , in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1

Term of Employment

(a) The Company hereby agrees to employ the Executive and the Executive hereby agrees to continue to serve the Company, in accordance with the terms and conditions set forth herein, for an initial period of three (3) years, commencing as of the Effective Date; provided, however, immediately upon a Change in Control, the initial period shall automatically extend to five (5) years.

(b) (i) Until a Change in Control occurs, upon each new day of the three (3) year period of employment from the Effective Date until the Executive’s sixty-fourth (64th) birthday, the term of this Agreement automatically shall be extended for one (1) additional day, to be added to the end of the then-existing three (3) year term. Accordingly, at all times prior to (i) the Executive’s attaining age 64 and (ii) a notice of employment termination (or an actual termination), the term of this Agreement shall be three (3) full years.

(ii) After a Change in Control occurs, upon each new day of the five (5) year period of employment from the date of such Change in Control until the Executive’s sixty-second (62nd) birthday, the term of this Agreement automatically shall be extended for one (1) additional day, to be added to the end of the then-existing five (5) year term. Accordingly, at all times prior to (i) the Executive’s attaining age 62 and (ii) a notice of employment termination (or an actual termination), the term of this Agreement shall be five (5) full years.

However, the automatic extensions of the term of this Agreement shall immediately be suspended upon a termination of the Executive’s employment in accordance with the terms of this Agreement.

ARTICLE 2

Position and Responsibilities

During the term of this Agreement, the Executive agrees to serve as President and Chief Executive Officer of USB and FUSB and as a member of the respective Boards of Directors if so elected. In his capacity as President and Chief Executive Officer, he shall have responsibility for all operations of the Company. The Executive shall have the same status, privileges and responsibilities normally inherent in such capacities in financial institutions of similar size and character to the Company.

ARTICLE 3

Standard of Care

(a) During the term of this Agreement, the Executive agrees to devote substantially his full time, attention and energies to the Company’s business and shall not be engaged in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage. However, the Executive may serve as a director of other companies so long as such service is not injurious to the Company, and provided that such service is approved by the Board. The Executive covenants, warrants and represents that he shall devote his full and best efforts to the fulfillment of his employment obligations and exercise the highest degree of loyalty and the highest standards of conduct in the performance of his duties.

–2–

(b) This Article 3 shall not be construed as preventing the Executive from investing assets in such form or manner as will not require his services in the daily operations of the affairs of the companies in which such investments are made.

ARTICLE 4

Compensation

As remuneration for all services to be rendered by the Executive during the term of this Agreement, and as consideration for complying with the covenants herein, the Company shall pay and provide to the Executive the following:

4.1 Base Salary .

(a) The Company shall pay the Executive a base salary in an amount which shall be established from time to time by the Board of Directors of the Company or the Board’s designee; provided, however, that such base salary shall not be less than $192,500 per year and if subsequently increased shall not be less than such increased amount ("Base Salary"). Base Salary shall be paid to the Executive in equal bi-weekly installments throughout the year, consistent with the normal payroll practices of the Company.

(b) Base Salary shall be reviewed at least annually during the term of this Agreement to ascertain whether, in the judgment of the Board or the Board’s designee, such Base Salary should be increased, based primarily on the performance of the Executive during the year.

4.2 Annual Bonus . In addition to Base Salary, in the discretion of the Board, the Executive shall be entitled to an opportunity to earn a cash bonus (the "Bonus") under the Executive Incentive Plan or any similar plan that may be adopted in the future.

4.3 Long-Term Incentives . During the term of this Agreement, the Executive shall be entitled to participate in any and all long-term incentive programs at a level that is commensurate with his position with the Company. Such programs include the United Security BancShares, Inc. Long Term Incentive Compensation Plan, or any successors thereto, as amended from time to time.

4.4 Retirement Benefits . The Company shall provide to the Executive participation in all Company qualified defined benefit and defined contribution retirement plans, if any, subject to the eligibility and participation requirements of such plans.

4.5 Life Insurance . The Company shall provide a policy of "term-life" insurance (in addition to any insurance described in Section 4.6) on the Executive’s life in the face amount of Two Hundred Fifty Thousand Dollars ($250,000), of which the Executive will be the owner. All of the premiums on such policy shall be paid by the Employer during the Executive?s employment hereunder.

–3–

4.6 Employee Benefits . The Company shall provide to the Executive all benefits to which other executives and employees of the Company are entitled to receive, as are commensurate with the Executive’s position, subject to the eligibility requirements and other provisions of such plans or arrangements.

4.7 Perquisites . The Company shall provide to the Executive, at the Company’s cost, all perquisites to which other senior executives are entitled to receive and such other perquisites which are suitable to the character of the Executive’s position with the Company and adequate for the performance of his duties hereunder, including, but not limited to the use of a Chevrolet Tahoe automobile, or its equivalent, plus an amount equal to the costs of maintenance, repairs, insurance and all other costs incident thereto.

4.8 Right to Change Plans . By reason of Sections 4.6 and 4.7 herein, the Company shall not be obligated to institute, maintain or refrain from changing, amending or discontinuing any benefit plan, program or perquisite, so long as such changes are similarly applicable to executive employees generally.

ARTICLE 5

Expenses

The Company shall pay or reimburse the Executive for all ordinary and necessary expenses, in a reasonable amount, which the Executive incurs in performing his duties under this Agreement including, but not limited to, (a) travel, (b) entertainment, (c) professional dues and subscriptions and (d) dues incurred by the Executive for membership in all local private or civic clubs of which he may become a member and which are deemed by the Executive to be beneficial to his role with the Company.

ARTICLE 6

Employment Terminations

6.1 Termination Due to Retirement or Death . In the event the Executive’s employment is terminated while this Agreement is in force by reason of Retirement or death, the following terms and conditions shall apply:

(a) The Company’s obligation under this Agreement to pay and provide to the Executive the elements of pay described in Sections 4.1, 4.2 and 4.3 shall immediately expire.

–4–

(b) Upon the effective date of any such termination, the Executive’s benefits including, without limitation, benefits under Section 4.4, 4.5, 4.6 and 4.7, shall be determined in accordance with the Company’s retirement, survivors’ benefits, insurance and other applicable programs of the Company then in effect; provided, however, that the Executive shall receive all rights and benefits that he is vested in, pursuant to plans and programs of the Company.

(c) Subject to any conflicting terms of any short-term incentive program which would provide for greater benefits following such termination, the Company shall, within sixty (60) days of the effective date of employment termination, pay to the Executive (or the Executive’s beneficiaries or estate, as the case may be) a Pro Rata share of the Bonus Opportunity.

(d) All unvested stock awards (including, but not limited to, any stock options and restricted stock) will vest in full on the date of any such termination.

6.2 Termination Due to Disability . In the event that the Executive is determined to have a Disability during the term of this Agreement, the Company shall have the right to terminate the Executive’s active employment as provided in this Agreement. However, the Board shall deliver written notice to the Executive of the Company’s intent to terminate the Executive’s employment for Disability at least thirty (30) calendar days prior to the effective date of such termination and only after any period or process for determining the Disability has been satisfied and completed. Upon a termination of employment for Disability, the following terms and conditions shall apply:

(a) The Company’s obligation to pay and provide to the Executive the element of pay described in Sections 4.1, 4.2 and 4.3 shall immediately expire; provided, however, that, during the period beginning on the effective date of such termination and ending six (6) months thereafter, the Company shall continue to make bi-weekly payments equal to one hundred percent (100%) of the Base Salary then in effect to the Executive pursuant to Section 4.1; provided, further, that each such bi-weekly payment during such period shall be reduced by a pro rata portion of the aggregate amount of any and all insurance benefits payable to the Executive during such period.

(b) The Executive shall receive all rights and benefits that he is vested in, pursuant to plans and programs of the Company.

(c) Subject to any conflicting terms of any short-term incentive program which would provide for greater benefits following such termination, the Company shall, within sixty (60) days of the effective date of employment termination, pay to the Executive a Pro Rata share of the Bonus Opportunity.

(d) All unvested stock awards (including, but not limited to, any stock options and restricted stock) will vest in full on the date of any such termination.

–5–

6.3 Voluntary Termination by the Executive . The E