<PAGE>
<PAGE> 1
The Coastal Corporation The Energy People
March 28, 1995
Dear Fellow Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of
Stockholders of The Coastal Corporation to be held on May 4, 1995, at the
Stouffer Renaissance Hotel, Greenway Plaza, Houston, Texas, at 10:00 a.m.
Your Board of Directors and executive officers look forward to personally
greeting those stockholders able to attend.
The matters to be acted on at the meeting are set forth in the
accompanying Notice of Annual Meeting and Proxy Statement.
It is important that your shares be represented at the meeting.
Would you please sign, date and mail the enclosed proxy in the envelope
provided at your earliest convenience.
Sincerely,
O. S. WYATT, JR.
--------------------------
O. S. Wyatt, Jr.
Chairman of the Board and
Chief Executive Officer
DAVID A. ARLEDGE
--------------------------
David A. Arledge
President and
Chief Operating Officer
COASTAL TOWER
NINE GREENWAY PLAZA
HOUSTON, TEXAS 77046-0995<PAGE>
<PAGE> 2
THE COASTAL CORPORATION
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
NOTICE OF THE 1995 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 1995
To the Stockholders of The Coastal Corporation:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Stockholders
of The Coastal Corporation ("Coastal" or the "Company") will be held at
10:00 a.m. on May 4, 1995, at the Stouffer Renaissance Hotel, Greenway
Plaza, Houston, Texas, for the following purposes:
(1) To elect four Class III directors to terms of office
expiring at the 1998 Annual Meeting of Stockholders; and
(2) To transact such other business as may properly come before
the meeting or any adjournments thereof.
The voting stock of the Company should be represented as fully as
possible at the Annual Meeting. Therefore, it will be appreciated if you
would sign, date and return the enclosed proxy at your earliest convenience.
You may, of course, change or withdraw your proxy at any time prior to the
voting at the meeting. However, signing and returning the proxy will assure
your representation at the Annual Meeting.
The Board of Directors has fixed the close of business on March 15,
1995 as the record date for the determination of holders of Common Stock,
Class A Common Stock, $1.19 Cumulative Convertible Preferred Stock,
Series A, $1.83 Cumulative Convertible Preferred Stock, Series B, and $5.00
Cumulative Convertible Preferred Stock, Series C, entitled to notice of, and
to vote at, the Annual Meeting.
By Order of the Board of Directors,
AUSTIN M. O'TOOLE
-----------------------------------
Austin M. O'Toole
Senior Vice President and Secretary
March 28, 1995
YOUR VOTE IS IMPORTANT
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AT THE MEETING AND SAVE THE
EXPENSE OF A SECOND MAILING, WOULD YOU PLEASE SIGN, DATE AND MAIL YOUR PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.<PAGE>
<PAGE> 3
TABLE OF CONTENTS
Page
Stock Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Proposal - Election of Directors . . . . . . . . . . . . . . . . . . . 3
Vote Required for Approval . . . . . . . . . . . . . . . . . . . 3
Information Regarding Directors . . . . . . . . . . . . . . . . . . . . 4
Committees and Meetings . . . . . . . . . . . . . . . . . . . . . 6
Compensation of Directors . . . . . . . . . . . . . . . . . . . . 6
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . 7
Summary of Cash and Certain Other Compensation . . . . . . . . . 7
Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Option/SAR Exercises and Holdings . . . . . . . . . . . . . . . . 8
Compensation and Executive Development Committee Report on Executive
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Pension Plan Table . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Performance Graphs - Shareholder Return on Common Stock . . . . . . . . 13
Transactions with Management and Others . . . . . . . . . . . . . . . . 14
Certain Business Relationships . . . . . . . . . . . . . . . . . . . . 14
Compliance with Section 16(a) of the Exchange Act . . . . . . . . . . . 15
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . 15
Stockholder Proposals . . . . . . . . . . . . . . . . . . . . . . . . . 15
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Availability of Form 10-K Annual Report . . . . . . . . . . . . . . . 15
(i)<PAGE>
<PAGE> 4
THE COASTAL CORPORATION
PROXY STATEMENT
The enclosed proxy is being solicited by the Board of Directors of The
Coastal Corporation ("Coastal" or the "Company"), Coastal Tower, Nine
Greenway Plaza, Houston, Texas 77046-0995, telephone number (713) 877-1400,
for use at the 1995 Annual Meeting of Stockholders (the "Meeting") to be
held at 10:00 a.m. on May 4, 1995, at the Stouffer Renaissance Hotel,
Greenway Plaza, Houston, Texas, or any adjournments thereof. Certain
directors, officers and employees of the Company will solicit proxies by
telephone, telegram, mail or personal contact at the Company's expense.
Arrangements will be made with brokers, nominees and fiduciaries to send
proxies and proxy material at the Company's expense to their principals.
This proxy statement is being mailed on or about March 28, 1995 to
stockholders of record on March 15, 1995.
The purpose of the Meeting is for the stockholders of the Company (1)
to elect four Class III directors to terms of office expiring at the 1998
Annual Meeting of Stockholders and (2) to transact such other business as
may properly come before the Meeting or any adjournments thereof.
The total number of shares of stock of the Company outstanding and
entitled to vote at the Meeting is 104,960,388 consisting of: 63,118 shares
of $1.19 Cumulative Convertible Preferred Stock, Series A (the "Series A
Preferred Stock"), 83,756 shares of $1.83 Cumulative Convertible Preferred
Stock, Series B (the "Series B Preferred Stock"), and 34,191 shares of $5.00
Cumulative Convertible Preferred Stock, Series C (the "Series C Preferred
Stock") (the Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock are referred to herein collectively as the "Preferred
Stock"), 104,363,374 shares of Common Stock, and 415,949 shares of Class A
Common Stock. Each share of Common Stock or Preferred Stock entitles the
holder to one vote with respect to all matters to come before the Meeting
and all of such shares will vote together as a single class. Except with
respect to the election of one of the four Class III directors, each share
of Class A Common Stock entitles the holder to 100 votes with respect to all
matters to come before the Meeting, voting with the Common Stock and the
Preferred Stock. In the election of directors, the Class A Common Stock will
vote, together as a class with the Common Stock and Preferred Stock, for the
election of three of the four Class III directors standing for election. The
Common Stock and Preferred Stock will vote together as a class for the
election of the one remaining Class III director standing for election. Only
holders of voting securities of record at the close of business on March 15,
1995 are entitled to notice of, and to vote at, the Meeting or any
adjournments thereof. Management knows of no person that owns beneficially
more than five percent (5%) of the outstanding shares of any class of voting
securities of the Company, other than as set forth below under "Stock
Ownership." The aggregate of all shares entitled to vote at the meeting have
146,139,339 votes. A quorum consists of a majority of the votes entitled to
be cast, or 73,069,670 votes.
The Annual Report of the Company for the year ended December 31, 1994,
including financial statements, is being mailed on or about March 28, 1995,
together with this Proxy Statement to all stockholders of record as of
March 15, 1995, except for accounts where the stockholder has filed a
written request to eliminate duplicate reports. Additional copies of the
Annual Report are available without charge, upon request. See "Availability
of Form 10-K Annual Report."
Each properly executed proxy received at or before the Meeting on May
4, 1995 will be voted at the Meeting as specified therein. If a stockholder
<PAGE>
<PAGE> 5
does not specify otherwise, the shares represented by his or her proxy will
be voted FOR the election of all the nominees as Class III directors. The
shares held by each stockholder who signs and returns the enclosed proxy
will be counted for purposes of determining the presence of a quorum at the
Meeting unless such proxy is timely revoked. If the enclosed form of proxy
is executed and returned, it may nevertheless be revoked at any time before
it is voted by giving written notice to the Secretary of the Company, or by
a stockholder personally voting his or her shares at the Meeting, or by
giving a later dated proxy.
STOCK OWNERSHIP
The following table sets forth information, as of March 15, 1995, with
respect to each person known or believed by the Company to be the beneficial
owner, who has or shares voting and/or investment power (other than as set
forth below), of more than five percent (5%) of any class of its voting
securities.
<TABLE>
<CAPTION>
Name and Address Percent (%)
of Beneficial Owner Title of Class Number of Shares of Class <F1>
___________________ ______________ ________________ _____________
<S> <S> <C> <C>
O. S. Wyatt, Jr. Class A Common Stock 154,577 <F2> 36.0
Chairman of the Board
of Coastal
Nine Greenway Plaza
Houston, Texas 77046-0995
Trustee/Custodian under the Common Stock 14,073,783 <F3> 13.4
Thrift Plan, ESOP and Class A Common Stock 76,988 <F3> 17.9
Pension Plan of Coastal
and its subsidiaries
Texas Commerce Bank
National Association
600 Travis, 10th Flr.
Houston, Texas 77002
Isabel H. Long Series A Preferred Stock 28,976 45.9
485 S. Parkview Ave.,
Columbus, Ohio 43209-1075
The DeZurik Family Series C Preferred Stock 34,191 <F4> 100.0
c/o David DeZurik
2460 S.E. 8th St.
Pompano Beach, Florida 33062
<FN>
__________
<F1>
Class includes presently exercisable stock options held by directors and
executive officers.
<F2>
Includes 7,354 shares of Class A Common Stock owned by the spouse and a son of
Mr. Wyatt, as to which shares beneficial ownership is disclaimed.
<F3>
The Trustee/Custodian is the record owner of these shares; and also is the
record owner of 953 shares of the Series B Preferred Stock, each of which
is convertible into 3.6125 shares of Common Stock and 0.1 share of Class A
Common Stock. Voting instructions
<PAGE>
<PAGE> 6
are requested from each participant in the Thrift Plan and ESOP and from the
trustees under a Pension Trust. Absent voting instructions, the Trustee is
permitted to vote Thrift Plan shares on any matter, but has no authority to
vote ESOP shares or Pension Plan shares. Nor does the Trustee/Custodian have
any authority to dispose of shares except pursuant to instructions of the
administrator of the Thrift Plan and ESOP or pursuant to instructions from the
trustees under the Pension Trust.
<F4>
Members of the DeZurik family acquired the Series C Preferred Stock in
connection with a 1972 Agreement of Merger involving the acquisition of
Colorado Interstate Gas Company, a subsidiary of the Company.
</FN>
</TABLE>
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation provides for a
Board of Directors to serve in three classes having staggered terms of three
years each. At present, there are thirteen directors: five directors whose
terms of office expire at the 1995 Annual Meeting; four directors whose
terms of office expire at the 1996 Annual Meeting; and four directors whose
terms of office expire at the 1997 Annual Meeting. Information regarding
each of the incumbent directors is set forth herein under the headings
"Information Regarding Directors," "Executive Compensation," and "Certain
Business Relationships." At the 1995 Annual Meeting, the stockholders will
be asked to elect four Class III directors.
The four nominees for Class III director, each of whom is presently
serving in that capacity, and whose new terms would expire at the 1998
Annual Meeting of Stockholders, are: James F. Cordes, Roy L. Gates,
Kenneth O. Johnson and Thomas R. McDade.
Mr. J. Howard Marshall II, who has served since 1973 as a member of the
Board of Directors and, until February 1995, the Executive Committee of the
Board of Directors, has been seriously ill for several months and is unable
to serve in an active capacity. His current term of office as a director
expires at the 1995 Annual Meeting. At such time as he advises the Company
that he is available to resume his duties on the Board and Executive
Committee, the Board of Directors could elect Mr. Marshall to a term of
office expiring at the 1996 Annual Meeting of Stockholders.
The holders of Common Stock, voting as a class with the Preferred
Stock, are entitled to elect 25% of the Company's directors standing for
election at each meeting held for the election of directors. Mr. Cordes has
been nominated by the Board of Directors to stand for election by the
holders of Common Stock and Preferred Stock at the 1995 Annual Meeting. Each
share of Common Stock and Preferred Stock has one vote for the election of
this director. All directors and executive officers as a group own shares
representing 3.5% of the votes entitled to be cast for the election of
Mr. Cordes.
The holders of Common Stock, Preferred Stock and Class A Common Stock,
voting together as a class, are entitled to elect the remaining 75% of the
Company's directors standing for election. Messrs. Gates, Johnson and McDade
have been nominated by the Board of Directors to stand for election by the
holders of Common Stock, Preferred Stock and Class A Common Stock at the
1995 Annual Meeting. Each share of Common Stock or Preferred Stock has one
vote for the election of these three directors. Each share of Class A Common
Stock has 100 votes for the election of these three directors. Holders of
3<PAGE>
<PAGE> 7
Class A Common Stock entitled to vote at the Meeting have 41,594,900 votes
of a total of 146,139,339 votes, or 28.5% of the votes entitled to be cast.
All directors and executive officers as a group own shares representing
15.3% of the votes entitled to be cast for the election of Messrs. Gates,
Johnson and McDade.
If any nominee becomes unwilling or unable to serve, which is not
expected, the proxies will be voted for a substitute person, if any,
designated by the Board of Directors.
The enclosed form of proxy provides a means for stockholders to vote
for the election of the Class III directors listed above, to withhold
authority to vote for one or more of such directors, or to withhold
authority to vote for all of such directors. Unless a stockholder who
withholds authority votes for the election of one or more other persons at
the Meeting or votes by means of another proxy, the withholding of authority
will have no effect upon the election of directors, assuming that a quorum
(a majority of the votes entitled to be cast), is present at the Meeting.
Vote Required for Approval
The nominees for director receiving a majority of the votes cast at the
Meeting by stockholders present in person or by proxy and entitled to vote
shall be elected. For purposes of counting the vote, the number of votes of
which a majority is required will be reduced by the number of votes not
cast.
INFORMATION REGARDING DIRECTORS
The following table sets forth information, as of March 15, 1995,
regarding each of the then current directors, including Class III directors
standing for election, and all directors and executive officers as a group.
Each director has furnished the information with respect to age, principal
occupation and ownership of shares of stock of the Company. Messrs. Bissell,
Burrow, Chapin and Katzin are Class I directors whose terms expire in 1996;
Messrs. Arledge, Brundrett, Wooddy and Wyatt are Class II directors whose
terms expire in 1997; and Messrs. Cordes, Gates, Johnson, Marshall and
McDade are Class III directors whose terms expire in 1995.
4<PAGE>
<PAGE> 8
<TABLE>
<CAPTION>
Number of Shares
Name, (Age), Year Offices with Coastal Beneficially Percent (%)
First Became Director and/or Principal Occupation Title of Class Owned<F1> of Class*
_____________________ ___________________________ ______________ _________________ ____________
<S> <S> <S> <C> <C>
O. S. Wyatt, Jr. Chairman of the Board and Common Stock 3,179,981 <F2> 3.0
(70), 1955 Chief Executive Officer Class A Common Stock 154,577 <F2> 36.0
Harold Burrow Vice Chairman of the Board; Common Stock 154,112 <F2>
(80), 1973 Chairman of Colorado Interstate Class A Common Stock 13,602 3.2
Gas Company and American Natural
Resources Company
David A. Arledge President and Common Stock 179,122
(50), 1988 Chief Operating Officer Class A Common Stock 13,940 3.2
John M. Bissell Chairman and Chief Executive Common Stock 4,576
(64), 1985 Officer of Bissell Inc. Class A Common Stock -0-
George L. Brundrett, Jr. Attorney; Former Senior Vice Common Stock 4,910
(73), 1973 President and General Counsel Class A Common Stock 2,290
of the Company
Roy D. Chapin, Jr. Former Chairman and Common Stock 3,250 <F2>
(79), 1988 Chief Executive Officer Class A Common Stock -0-
of American Motors Corporation
James F. Cordes Executive Vice President; Common Stock 120,062
(54), 1985 President of American Natural Class A Common Stock -0-
Resources Company; President,
Natural Gas Group
Roy L. Gates Retired; Ranching and Investments Common Stock 4,095
(66), 1969 Class A Common Stock 2,736
Kenneth O. Johnson Senior Vice President Common Stock 84,042
(74), 1988 Class A Common Stock 9,604 2.2
Jerome S. Katzin Retired Investment Banker Common Stock 41,803 <F2>
(76), 1983 Class A Common Stock -0-
J. Howard Marshall, II Retired; Former Executive of Common Stock 11,924 <F2>
(90), 1973 Allied Chemical Corporation, Class A Common Stock 600 <F2>
Ashland Oil and Refining Company
and Signal Oil and Gas Company
Thomas R. McDade Senior Partner, Law Firm of Common Stock 500
(62), 1993 McDade & Fogler L.L.P., Houston Class A Common Stock -0-
L. D. Wooddy, Jr. Retired; Former President of Exxon Common Stock 2,000
(68), 1992 Pipeline Company Class A Common Stock -0-
All directors and executive officers as a group Common Stock 4,383,914 <F3> 4.2
(34 persons, including the above) Class A Common Stock 200,700 <F3> 46.7
(See footnotes on following page)
<FN>
* Less than one percent unless otherwise indicated. Class includes
outstanding shares and presently exercisable stock options held by
directors and executive officers. Excluding presently exercisable
stock options, directors and executive officers as a group would
5<PAGE>
<PAGE> 9
own 186,832 shares of Class A Common Stock, which would constitute
44.9% of the shares of such class.
<F1> Except for the shares referred to in Notes 2 and 3 below, and the
shares represented by presently exercisable stock options, the
holders are believed by Coastal to have sole voting and investment
power as to the shares indicated. Amounts include shares in
Coastal ESOP and Thrift Plan, and presently exercisable stock
options held by Messrs. Burrow (14,189 shares of Common Stock),
Arledge (160,503 shares of Common Stock and 13,868 shares of
Class A Common Stock), Cordes (103,785 shares of Common Stock),
and Johnson (53,915 shares of Common Stock).
<F2> Includes shares owned by the spouse and a son of Mr. Wyatt
(266,295 shares of Common Stock and 7,354 shares of Class A Common
Stock), by the spouse of Mr. Burrow (5,000 shares of Common
Stock), by the spouse of Mr. Chapin (1,000 shares of Common Stock)
and by the spouse of Mr. Katzin (928 shares of Common Stock), as
to which shares beneficial ownership is disclaimed; also includes
shares owned by the estate of the late Mrs. Marshall (4,362 shares
of Common Stock and 100 shares of Class A Common Stock).
<F3> Includes presently exercisable stock options to purchase 674,265
shares of Common Stock and 13,868 shares of Class A Common Stock;
also includes 280,339 shares of Common Stock and 7,354 shares of
Class A Common Stock owned by spouses and children, as to which
shares beneficial ownership is disclaimed; also includes
4,362 shares of Common Stock and 100 shares of Class A Common
Stock owned by the estate named in Note 2 above. In addition, one
executive officer owns 8 shares of Series B Preferred Stock, each
of which is convertible into 3.6125 shares of Common Stock and 0.1
share of Class A Common Stock.
</FN>
</TABLE>
No incumbent director is related by blood, marriage or adoption to
another director or to any executive officer of the Company or its
subsidiaries or affiliates.
Except as hereafter indicated, the above table includes the principal
occupation of each of the directors during the past five years. The listed
executive officers have held various executive positions with Coastal,
American Natural Resources Company, ANR Pipeline Company and/or Colorado
Interstate Gas Company during the five-year period.
Mr. Bissell is a member of the Boards of Directors of Old Kent
Financial Corporation and Batts Inc.
Mr. Cordes is a member of the Board of Directors of Comerica Inc.
Mr. Katzin is a member of the Board of Directors of Qualcomm
Incorporated.
Mr. Marshall is a member of the Boards of Directors of
Missouri-Kansas-Texas Railroad Company and Presidio Oil Company.
Mr. McDade is a trial lawyer and the founding senior partner of the
Houston law firm of McDade & Fogler L.L.P. Prior to forming McDade & Fogler
L.L.P. he was a senior partner in the Houston law firm of Fulbright &
Jaworski. He is a member of the Board of Directors of Equity Corporation
International.
6<PAGE>
<PAGE> 10
Messrs. Arledge, Burrow, Cordes and Wyatt are directors of Colorado
Interstate Gas Company and ANR Pipeline Company. Both of these subsidiaries
of the Company are subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Committees and Meetings
The Company's Board of Directors has an Executive Committee which
consists of Messrs. Wyatt (Chairman), Arledge, Burrow, Cordes and Wooddy
which has general authority to act in the management and business affairs of
the Company when the full Board of Directors is not in session, except for
the review of capital expenditures in excess of $15,000,000.
As permitted by the General Corporation Law of the State of Delaware
and the Company's By-Laws, the Board of Directors and the Executive
Committee took various corporate actions during 1994 by means of unanimous
written consent. These actions included approval or review of certain
capital expenditures, credit arrangements, corporate guarantees, elections
of officers, establishment of bank accounts and similar authorizations.
During 1994, the Board of Directors held 10 meetings and also approved
7 separate actions by unanimous consent. The Executive Committee held no
meetings and approved 100 separate actions by unanimous consent.
Each incumbent director attended a minimum of 80% of the aggregate of
(i) the 1994 meetings of the Board of Directors held during the period for
which he has been a director and (ii) the total number of meetings held by
all committees of the Board of Directors on which he served, except J.
Howard Marshall II, who attended 70% of such meetings; Mr. Marshall was
unable to attend certain meetings in 1994 due to illness.
The Company also has an Audit Committee consisting of Messrs. Katzin
(Chairman), Bissell and Gates which meets periodically to review the results
of operations of the Company with members of the Company's staff who are
responsible for accounting matters and from time to time with the Company's
independent auditors, Deloitte & Touche LLP. During 1994, the Audit
Committee met 8 times.
In addition, the Company has a Compensation and Executive Development
Committee which consists of Messrs. Bissell (Chairman), Chapin and Katzin
which meets from time to time to review compensation, stock option awards
and other matters concerning remuneration of employees of the Company.
During 1994, the Compensation and Executive Development Committee met 4
times and also approved 16 separate actions by unanimous consent.
The Company does not have a nominating committee.
Compensation of Directors
There is a limitation of $60,000 per annum on director fees paid to any
non-officer director. During 1994, each director, except Messrs. Wyatt,
Burrow, Arledge, Cordes and Johnson received directors' fees at the annual
rate of $24,000 for services as a director; in addition, Mr. Marshall
received fees of $24,000 for services as a member of the Executive
Committee; Mr. Wooddy was elected to the Executive Committee in December,
1994 and received a fee of $2,000 in January, 1995 for his services in 1994;
Messrs. Bissell, Katzin and Gates each received fees of $24,000 for services
as a member of the Audit Committee; Messrs. Bissell and Katzin each received
fees of $12,000 for services as a member of the Compensation and Executive
Development Committee. Mr. Chapin received fees of $15,000 for services as a
member of the Compensation and Executive Development Committee. Directors
7<PAGE>
<PAGE> 11
can elect to defer the receipt of all or any portion of their directors'
compensation (including interest thereon at a market-related rate) until
termination of service as a director.
Mr. McDade's firm received a retainer of $250,000 and an additional
$198,000 for other legal services rendered to the Company in 1994; and is
receiving a retainer of $300,000 for legal services rendered and to be
rendered in 1995.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth information for the fiscal years ended
December 31, 1994, 1993 and 1992 as to cash compensation paid by the Company
and its subsidiaries, as well as certain other compensation paid or accrued
for those years, to the Company's Chief Executive Officer ("CEO") and its
four other most highly compensated executive officers (the "Named Executive
Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
______________________________
Annual Compensation<F1> Awards Payouts
_________________________________ __________ ____________
Securities All Other
Underlying LTIP Compen-
Name and Options/ Payouts sation
Principal Position Year Salary ($)<F2> Bonus ($)<F4> SARs (#)<F5> ($) $<F6>
__________________ ____ _____________ ____________ ___________ ___________ __________
<S> <C> <C> <C> <C> <C> <C>
O. S. Wyatt, Jr., 1994 849,093 200,000 -0- -0- 67,928
Chairman of the Board 1993 962,495 90,000 -0- 71,690
and CEO 1992 1,038,178<F3> -0- -0- 75,974
David A. Arledge, 1994 553,873 150,000 -0- -0- 44,310
President, Chief 1993 473,211 70,000 38,848 42,042
Operating Officer 1992 469,858<F3> 60,000 35,000 48,794
and Director
James F. Cordes, 1994 592,223 130,000 -0- -0- 47,378
Executive V.P. 1993 624,675 50,000 32,094 48,414
and Director 1992 596,221<F3> 60,000 25,000 48,118
James A. King, 1994 343,823 75,000 -0- -0- 6,877
Executive V.P. 1993 324,658 28,000 20,000 3,254
1992 208,038<F3> 60,000 10,000 -0-
Sam F. Willson, 1994 334,062 75,000 -0- -0- 26,725
Jr., 1993 334,062 28,000 15,000 28,600
Executive V.P. 1992 344,603<F3> 60,000 15,000 29,443
<FN>
________________________
<F1>
Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation, if any, does not
exceed the lesser of $50,000 or 10 percent of annual salary and bonus
for any named individual.
8<PAGE>
<PAGE> 12
<F2>
Salary amounts for Messrs. Wyatt, Arledge and Cordes for 1992 and 1993
include directors' fees paid during these periods which were previously
reported under "All Other Compensation." Directors' fees for members of
management of the Company were eliminated in September, 1993. There was
no salary change for Mr. Wyatt during 1994; the reduced base pay level
for 1994 was due to the September 1993 salary reduction (reported in
the 1994 Proxy Statement) being in effect for all of 1994.
<F3>
Due to the Company's practice of paying bi-weekly, there is one extra
pay period reflected in the 1992 salary. Normally there are 26 pay
periods, but approximately once every 11 years there are 27 pay
periods; 1992 was such a year.
<F4>
Although 1993 bonus awards were not finalized by the Committee until
after the 1994 Proxy Statement had been prepared, all awards were based
solely on 1993 performance. Bonuses for 1992 were paid in equal
installments over a three-year period, provided the employee was still
employed on the anniversary date of the award. The 1994 bonuses were
based on the following factors: the individual's position; the
individual's responsibility; and the individual's ability to impact the
Company's financial success. See Committee Report on page 9.
<F5>
The options do not carry any stock appreciation rights.
<F6>
All Other Compensation for 1994 consists of: (i) Company contributions
to the Coastal Thrift Plan (O. S. Wyatt, Jr. $12,000; David A. Arledge
$12,000; James F. Cordes $12,000; James A. King $4,232; and Sam F.
Willson, Jr. $12,000); and (ii) certain payments in lieu of Thrift Plan
contributions (O. S. Wyatt, Jr. $55,928; David A. Arledge $32,310;
James F. Cordes $35,378; James A. King $2,645; and Sam F. Willson, Jr.
$14,725). These payments are made to all employees of the Company and
its subsidiaries who participate in the Thrift Plan who must
discontinue their Thrift Plan participation due to federal statutory
limits.
</FN>
</TABLE>
Mr. Cordes is employed pursuant to a five-year employment contract
expiring in 1995, which provides that if he is terminated for a reason not
permitted by the employment contract, he will be entitled to receive for the
remainder of the term the salary, employee benefits, perquisites, salary
increases, bonuses and other incentive compensation which he would have
received had he not been terminated. Such reasons are a significant change
in title, duties, authorities or reporting responsibilities, a reduction in
salary or benefits or a move of the location of his office to a location not
acceptable to him.
Stock Options
No option/SAR grants were made to the Named Executive Officers during
the fiscal year ended December 31, 1994.
Option/SAR Exercises and Holdings
The following table sets forth information with respect to the Named
Executive Officers, concerning the exercise of options during the last
fiscal year and unexercised options and SARs held as of the fiscal year
("FY") ended December 31, 1994.
9<PAGE>
<PAGE> 13
<TABLE>
Aggregated Option/SAR Exercises In Last Fiscal Year
And FY-End Option/SAR Values (1994)
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)<F1>
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
_________________ _____________ __________________ _________________ _______________
<S> <C> <C> <C> <C>
O. S. Wyatt, Jr. -0- -0- -0- / -0- -0- / -0-
David A. Arledge -0- -0- 167,371 / 103,002 473,536 / -0-
James F. Cordes -0- -0- 98,785 / 73,002 206,367 / -0-
James A. King -0- -0- 2,000 / 28,000 -0- / -0-
Sam F. Willson, Jr. -0- -0- 28,149 / 45,000 12,825 / -0-
<FN>
__________________
<F1>
$-based on the market price of $25.63 at December 31, 1994.
</FN>
</TABLE>
COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The following report has been provided by The Coastal Corporation's
Compensation and Executive Development Committee (the "Committee") of the
Board of Directors in accordance with current Securities and Exchange
Commission ("S.E.C.") proxy statement disclosure requirements. The members
of the Committee include John M. Bissell (Chairman), Roy D. Chapin, Jr., and
Jerome S. Katzin.
This material states Coastal's current overall compensation philosophy
and program objectives. Detailed descriptions of the Company's compensation
programs are provided as well as the information on the Company's 1994 pay
levels for the CEO.
Overall Objectives of the Executive Compensation Program
The Company's compensation philosophy and program objectives are
directed by two primary guiding principles. First, the program is intended
to provide fully competitive levels of compensation at expected levels of
performance in order to attract, motivate and retain talented executives.
Second, the program is intended to create an alignment of interests between
the Company's executives and shareowners such that a significant portion of
each executive's compensation is directly linked to maximizing shareholder
value.
In support of this philosophy, the executive compensation program is
designed to reward performance that is directly relevant to the Company's
short-term and long-term success. As such, the Company attempts to provide
both short-term and long-term incentive pay that varies based on corporate
and individual performance.
10<PAGE>
<PAGE> 14
To accomplish these objectives, the Committee has structured the
executive compensation program with three primary underlying components:
base salary, annual incentives, and long-term incentives (i.e., stock
options). The following sections describe the Company's plans by element of
compensation and discuss how each component relates to the Company's overall
compensation philosophy.
In reviewing this information, reference is often made to the use of
competitive market data as criteria for establishing targeted compensation
levels. The Company targets the market 50th percentile for its total
compensation program and actual total compensation rates are generally
consistent with that target. (However, the Company's competitive pay posture
varies by pay element, as described below.) Several market data sources are
used by the Company, including energy industry norms for the publicly traded
peer companies included in the Company's shareholder return performance
graphs, as reflected in these companies' proxy statements. In addition, we
utilize published survey data and data obtained from independent consultants
that are for general industry companies similar in size (i.e., revenues) to
the Company. The published surveys include data on over 40 companies of
comparable size to the Company, as measured by revenues. Greater emphasis is
placed on the published data and data obtained from consultants than on the
data for proxy peers, since the published data and consulting data are
reflective of company size.
Base Salary Program
The Company's base salary program is based on a philosophy of providing
base pay levels that fall between the market 50th and 75th percentiles. The
Company periodically reviews its executive pay levels to assure consistency
with the external market. Generally, the Company's actual base salary levels
for 1994 for executives as a group were consistent with the targeted
percentiles. We believe it is crucial to provide strongly competitive
salaries over time in order to attract and retain executives who are highly
talented.
Annual salary adjustments for the Company are based on several factors:
general levels of market salary increases, individual performance,
competitive base salary levels, and the Company's overall financial results.
The Company reviews performance qualitatively considering total shareholder
returns, the level of earnings, return on equity, return on total capital
and individual business unit performance. These criteria are assessed
qualitatively and are not weighted. All base salary increases are based on a
philosophy of pay-for-performance and perceptions of an individual's long-
term value to the Company. As a result, employees with higher levels of
performance sustained over time will be paid correspondingly higher
salaries.
The Annual Bonus Plan
The Company's Annual Bonus Plan is intended to (1) reward key employees
based on company/business unit and individual performance; (2) motivate key
employees; and (3) provide competitive cash compensation opportunities to
plan participants. Under the plan, target award opportunities vary by
individual position and are expressed as a percent of base salary. The
individual target award opportunities, which are slightly below market
median levels, are then aggregated into a total target pool which is
adjusted as described below. The amount a particular executive may earn is
directly dependent on the individual's position, responsibility, and ability
to impact our financial success.
11<PAGE>
<PAGE> 15
The actual bonus pool is established each year by modifying the target
pool based on the Company's overall performance against measures established
by the Committee. In fiscal year 1994, the key performance measure
considered was earnings before interest and taxes ("EBIT") against plan.
This measure was weighted 50% of the total bonus program. In 1994 the
Company's EBIT performance significantly improved over 1993 performance.
This 1994 EBIT achievement was above threshold standards (minimum
performance level for bonus payment) but below a very aggressive plan,
resulting in the EBIT portion of the bonus paid being below target. The
remaining 50% of the annual bonus opportunity in 1994 is a discretionary
annual bonus pool. As a result, no formula performance measures were used in
establishing the size of awards under this portion of the plan. However, in
establishing the size of the discretionary bonus pool, the Committee
considered the Company's Return on Equity relative to industry peers (using
the same peers included in the shareholder return graphs), Return on Total
Capital compared to industry peers, the EBIT performance of each business
unit, progress made toward improving the Company's operational and financial
performance, and the need to reward unique individual contributions. These
measures were not formally weighted by the Committee. The size of the
discretionary bonus pool element was established above threshold but below
target based on the qualitative performance assessment described above. As a
result, actual bonus payments for 1994 were below target and median market
levels.
Individual awards from the established bonus pool are recommended by
senior management, with advice and consent from the Committee. Individual
awards from the pool are based on business unit and individual employee
performance, future potential, and competitive considerations. All
individual performance assessments are conducted in a non-formula fashion
without specific goal weightings. The total bonus awards made may not exceed
the amount of funds in the bonus pool.
Long-Term Incentive Plan
The Company's Long-Term Incentive Plan ("LTIP") is designed to focus
executive efforts on the long-term goals of the Company and to maximize
total return to our shareholders. While the Company's LTIP allows the
Committee to use a variety of long-term incentive devices, the Committee has
relied solely on stock option awards to provide long-term incentive
opportunities in recent years.
Stock options align the interests of employees and shareholders by
providing value to the executive through stock price appreciation only. All
stock options have a ten year term before expiration and are fully
exercisable within 7 years of the grant date.
No stock options were granted to the Named Executive Officers in 1994
since the Company made larger than normal grants to key executives in
December 1993. However, it is anticipated that stock option awards will be
made periodically at the discretion of the Committee in the future. As in
past years, the number of shares actually granted to a particular
participant is also based on the Company's financial success, its future
business plans, and the individual's position and level of responsibility
within the Company. All of these factors are assessed subjectively and are
not weighted.
1994 Chief Executive Officer Pay
As previously described, the Committee considers several factors in
developing an executive's compensation package. For the CEO, these include
competitive market practices (consistent with the philosophy described for
12<PAGE>
<PAGE> 16
other executives), experience, achievement of strategic goals, and the
financial success of the Company (considering the factors described under
the annual bonus plan above).
Mr. Wyatt received no salary increase in 1994. The Committee took no
action regarding Mr. Wyatt's base salary, in spite of significantly improved
Company performance during the year. This lack of any adjustment is not a
reflection of performance; rather, it is based on considering strong input
from the CEO, who wants to see continued improvement in shareholder returns
before receiving any base salary increase.
Mr. Wyatt's bonus for 1994 performance was $200,000. This bonus award
was below targeted levels (and below market median levels) since the
Company's aggregate performance on the measures described in the annual
bonus section of this report was below the aggressive Company targets (but
above 1993 levels).
The Committee granted no stock options to Mr. Wyatt in 1994 (consistent
with past practices), considering the strongly expressed opinion of the CEO.
Mr. Wyatt and the Committee considered Mr. Wyatt's current level of stock
ownership in reaching this decision.
$1 Million Pay Deductibility Cap
Under Section 162(m) of the Internal Revenue Code, public companies are
precluded from receiving a tax deduction on compensation paid to executive
officers in excess of $1 million. To address the $1 million pay
deductibility cap issue, the Company's 1994 LTIP was structured so that
stock option awards (which are intended to be the primary long-term
incentive vehicle for the present time) qualify for an exemption from the $1
million pay deductibility limit.
Also, at the present time, the CEO is the only executive whose base
salary plus target bonus exceeds $1 million. In order to preserve the
Company's tax deduction for the CEO's base salary plus bonus, the Company
has established a nonqualified deferred compensation program for Mr. Wyatt.
Under this program, any annual incentive awards that bring Mr. Wyatt's cash
compensation to a level over $1 million will be deferred so that payments
occur after Mr. Wyatt is no longer a Named Executive Officer, thus
preserving the deductibility of the pay for the Company.
Compensation and Executive Development Committee
John M. Bissell, Chairman
Roy D. Chapin, Jr.
Jerome S. Katzin
13<PAGE>
<PAGE> 17
Pension Plan Table
The following table shows for illustration purposes the estimated
annual benefits payable currently under the Pension Plan and the Company's
Replacement Pension Plan described below upon retirement at age 65 based on
the compensation and years of credited service indicated.
<TABLE>
<CAPTION>
Years of Credited Service
5-Year Final ------------------------------------------------------------------
Average Pay 15 Years 20 Years 25 Years 30 Years 35 Years
----------- -------- -------- -------- -------- --------
<C> <C> <C> <C> <C> <C>
$ 125,000 . . . . . . . $ 34,265 $ 45,687 $ 57,109 $ 68,531 $ 67,812
150,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
175,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
200,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
225,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
250,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
300,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
400,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
450,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
500,000 . . . . . . . 41,765 55,687 69,609 83,531 82,812
<FN>
(A) Compensation covered under the Pension Plan for employees of the
Company and the Company Replacement Pension Plan generally includes
only base salary and is limited to $150,000 for 1994.
(B) Federal legislation has reduced the benefit which may be earned due to
future service; however, benefits previously earned may not be reduced.
At December 31, 1994 each of the individuals named in the Summary
Compensation Table had covered salary for future benefit accrual of
$150,000 and the following years of credited service and pension
payable at age 65 (or current age, if over 65): Mr. Wyatt, 39 years,
$469,834; Mr. Arledge, 14 years, $54,181; Mr. Cordes, 17 years,
$74,523; Mr. King, 2 years $9,474 (not vested); and Mr. Willson, 22
years, $98,357.
(C) The normal form of retirement income is a straight life annuity.
Benefits payable under the Pension Plan are subject to offset by 1.5%
of applicable monthly social security benefits multiplied by the number
of years of credited service (up to 33-1/3 years).
</FN>
</TABLE>
The Employee Retirement Income Security Act of 1974, as amended by
subsequent legislation, limits the retirement benefits payable under the
tax-qualified Pension Plan. Where this occurs, the Company will provide to
certain executives, including persons named in the Summary Compensation
Table, additional nonqualified retirement benefits under a Company
Replacement Pension Plan. These benefits, plus payments under the Pension
Plan, will not exceed the maximum amount which the Company would have been
required to provide under the Pension Plan before application of the
legislative limitations, and are reflected in the above table and footnote
(B).
14<PAGE>
<PAGE> 18
PERFORMANCE GRAPHS - SHAREHOLDER RETURN ON COMMON STOCK
[GRAPH]
<TABLE>
Five-Year Cumulative Values
$100 Invested 12/31/89
Dividends Reinvested
<CAPTION>
DOLLAR VALUE OF $100 INVESTMENT AT DECEMBER 31,
---------------------------------------------------
1989 1990 1991 1992 1993 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
The Company . . . . . . $100 99 77 76 90 84
S&P 500 . . . . . . . . $100 97 126 136 150 152
Index<F1><F2> . . . . . $100 81 73 85 104 96
<FN>
<F1>
The Index is based on Value Line Diversified Natural Gas Group - the
Performance Graph reflects total shareholder return weighted to reflect
the market capitalizations of the peer companies. The peer group is
comprised of: NorAm, Burlington Res., Columbia, Consolidated Nat. Gas,
Eastern Enterprises, Enron, Enserch, Equitable Res.,KN Energy, Mitchell
Energy, National Fuel Gas, Panhandle Eastern, Seagull Energy, Sonat,
Southwestern Energy, Tenneco, Transco, Valero and Williams Cos.
<F2>
Coastal is excluded from the Index.
</FN>
</TABLE>
[GRAPH]
<TABLE>
Ten-Year Two Months Cumulative Values
$100 Invested 12/31/84
Dividends Reinvested
<CAPTION>
DOLLAR VALUE OF $100 INVESTMENT AT DECEMBER 31, FEB. 28
------------------------------------------------------------------------------------------------
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Company . . . . . . $100 209 190 214 283 408 403 317 313 370 345 382
S&P 500 . . . . . . . . $100 132 156 164 192 252 245 319 343 378 380 408
Index<F1><F2> . . . . . $100 107 105 103 120 173 145 135 161 200 186 210
<FN>
<F1>
The Index is based on Value Line Diversified Natural Gas Group - the
Performance Graph reflects total shareholder return weighted to reflect
the market capitalizations of the peer companies. The peer group is
comprised of: NorAm, Burlington Res., Columbia, Consolidated Nat. Gas,
Eastern Enterprises, Enron, Enserch, Equitable Res.,KN Energy, Mitchell
Energy, National Fuel Gas, Panhandle Eastern, Seagull Energy, Sonat,
Southwestern Energy, Tenneco, Transco, Valero and Williams Cos.
<F2>
Coastal is excluded from the Index.
</FN>
</TABLE>
15<PAGE>
<PAGE> 19
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In February 1987, Coastal Mart, Inc. ("Coastal Mart"), a subsidiary of
the Company, entered into a ten-year lease/purchase agreement (with options
to renew) with Pester Marketing Company ("Pester Marketing") for 220
gasoline service stations (subsequently reduced to 182 stations through
disposition of assets) located in the midwestern region of the United
States. Jack Pester, a principal stockholder and Chief Executive Officer of
Pester Marketing, subsequently became an employee, officer and director of
Coastal Mart and was elected a Senior Vice President of the Company.
Mr. Pester is no longer active in the management of Pester Marketing, and
his stock interest in that company has been placed in trust.
During 1994, the lease transaction was terminated pursuant to an
agreement under which Coastal Mart acquired ownership of and title to 175 of
the gasoline service stations and Pester Marketing retained the seven
remaining stations located in Colorado. Coastal Mart expended approximately
$16 million in connection with the transaction, which was paid to creditors
of Pester Marketing; various existing liens on the service stations were
released and payment obligations of Pester Marketing to Coastal Mart in the
amount of approximately $11 million were also released. The transaction was
favorably reviewed by the Board of Directors of the Company.
____________________
The following table sets forth ownership of units of limited
partnership interests in the Coastal 1986 Drilling Program, Ltd. and Coastal
1987 Drilling Program, Ltd. by directors and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
1986 1987
$1,000 $1,000
Directors unit unit
_________ ______ ______
<S> <C> <C>
O. S. Wyatt, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 750
Harold Burrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 100
David A. Arledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 -
John M. Bissell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 -
George L. Brundrett, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
Roy D. Chapin, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 20
James F. Cordes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
Roy L. Gates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
Kenneth O. Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 -
Jerome S. Katzin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 -
J. Howard Marshall, II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 350
Thomas R. McDade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
L. D. Wooddy, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
All directors and executive
officers as a group (34 persons,
including the above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 855 1,240
</TABLE>
16<PAGE>
<PAGE> 20
CERTAIN BUSINESS RELATIONSHIPS
Mr. J. Howard Marshall, II is part of the family group which owns 16%
of Koch Industries, Inc., to and from which the Company and/or its
subsidiaries frequently purchase, sell and exchange crude oil and refined
products in the ordinary course of business. Mr. Marshall is also a director
of Koch Industries, Inc. During 1994, the Company and/or its subsidiaries
purchased, sold and exchanged approximately 19,864,000 barrels of oil and
refined products with Koch Industries, Inc. and/or its subsidiaries ("Koch")
costing approximately $371,223,600. In addition, during 1994, subsidiaries
of the Company had natural gas and natural gas liquids purchases, sales,
transportation, gathering and compression fees of approximately $24,461,400
with Koch. It is anticipated that the Company and/or its subsidiaries will
continue to enter into similar transactions with Koch in the ordinary course
of business.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
officers to file reports of ownership and changes in ownership of shares of
the Company's stock with the S.E.C. Directors and officers are required by
Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) reports they file. Based on its review of the
copies of such reports received by it, or written representations from
certain reporting persons that no Forms 5 were required for those persons,
the Company believes that, from January 1 through December 31, 1994, its
directors and officers complied with all applicable filing requirements.
INDEPENDENT AUDITORS
The Board of Directors of Coastal has designated Deloitte & Touche LLP
to audit the books and accounts of the Company for the year ending
December 31, 1995. Deloitte & Touche LLP have been auditors for the Company
since 1957. It is anticipated that representatives of such firm will be
present at the Annual Meeting for the purpose of making a statement, should
they desire, and responding to appropriate stockholder questions.
STOCKHOLDER PROPOSALS
Stockholders who desire to submit proposals to the Company for
consideration for inclusion in the Company's Proxy Statement and form of
proxy for the 1996 Annual Meeting of Stockholders of Coastal must submit
such proposals to the Secretary of the Company by November 30, 1995.
OTHER MATTERS
Management does not intend to present any business at the Annual
Meeting other than as set forth in the Notice of Annual Meeting and knows of
no other business to be presented for action at the Meeting. If, however,
any other business should properly come before the Annual Meeting or any
adjournments thereof, it is intended that all proxies will be voted with
respect thereto in accordance with the best judgment of the persons named in
the proxies.
AVAILABILITY OF FORM 10-K ANNUAL REPORT
Copies of Coastal's Annual Report to Stockholders or its Annual Report
on Form 10-K for the year ended December 31, 1994, as filed with the
Securities and Exchange Commission, are available without charge to
stockholders upon request to Mr. Austin M. O'Toole, Senior Vice President
17<PAGE>
<PAGE> 21
and Secretary, The Coastal Corporation, Coastal Tower, Nine Greenway Plaza,
Houston, Texas 77046-0995.
18<PAGE>
