<PAGE>
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 Materials Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
FIRST COASTAL CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies: _______
2) Aggregate number of securities to which transaction applies: __________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): ___________
4) Proposed maximum aggregate value of transaction: ___________
5) Total fee paid: ____________
[_] 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.
1) Amount previously paid: ____________.
2) Form, Schedule or Registration Statement No.: __________
3) Filing Party: ____________
4) Date Filed: ___________
<PAGE>
FIRST COASTAL CORPORATION
36 THOMAS DRIVE
WESTBROOK, MAINE 04092
(207) 774-5000
April 21, 1998
Dear Stockholder:
We cordially invite you to attend the 1998 annual meeting of stockholders
(the "Annual Meeting") of First Coastal Corporation (the "Company"), which will
be held on Tuesday, May 19, 1998 at 10:00 a.m. at the Portland Marriott, 200
Sable Oaks Drive, South Portland, Maine 04106. A copy of the Company's 1997
Annual Report to Stockholders, Notice of Annual Meeting, the Proxy Statement for
the Annual Meeting of Stockholders and Proxy Card are enclosed.
At the Annual Meeting, you are being asked (i) to elect three directors to
the Board of Directors (the "Board") for three-year terms, and (ii) to ratify
the Board's appointment of Coopers & Lybrand L.L.P. as the Company's independent
accountants for the year ending December 31, 1998.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual
Meeting in person, please complete, date and sign the enclosed Proxy Card and
return it promptly in the envelope provided.
Thank you for your cooperation and continuing support.
Sincerely,
/s/ Gregory T. Caswell
Gregory T. Caswell
President and Chief Executive Officer
<PAGE>
FIRST COASTAL CORPORATION
36 THOMAS DRIVE
WESTBROOK, MAINE 04092
(207) 774-5000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1998
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "Annual
Meeting") of First Coastal Corporation (the "Company") will be held on Tuesday,
May 19, 1998 at 10:00 a.m. at the Portland Marriott, 200 Sable Oaks Drive, South
Portland, Maine 04106, for the following purposes:
1. Election of Directors. To elect three directors for three-year terms
(Proposal One);
2. Ratification of Appointment of Accountants. To ratify the appointment
by the Board of Directors of the firm of Coopers & Lybrand L.L.P. as
independent accountants of the Company for the year ending December 31,
1998 (Proposal Two); and
3. Other Business. To transact such other business as may properly come
before the Annual Meeting or any adjournments or postponements thereof.
Pursuant to the Company's Amended and Restated Bylaws, the Board of
Directors has fixed the close of business on April 16, 1998 as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. Only stockholders of record at the close of business on that
date will be entitled to notice of and to vote at the Annual Meeting or any
adjournments or postponements thereof.
By Order of the Board of Directors
/s/ Gregory T. Caswell
Gregory T. Caswell
President and Chief Executive Officer
Westbrook, Maine
April 21, 1998
- -----------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
- -----------------------------------------------------------------------------
<PAGE>
FIRST COASTAL CORPORATION
36 THOMAS DRIVE
WESTBROOK, MAINE 04092
(207) 774-5000
------------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1998
------------------------------
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement is being furnished to the stockholders of First
Coastal Corporation (the "Company") in connection with the solicitation by the
Board of Directors of the Company (the "Board of Directors" or the "Board") of
proxies from holders of the outstanding shares of the Company's common stock,
par value $1.00 per share (the "Common Stock"), for use at the annual meeting of
stockholders (the "Annual Meeting"), to be held on Tuesday, May 19, 1998 at
10:00 a.m. at the Portland Marriott, 200 Sable Oaks Drive, South Portland, Maine
04106, and any adjournments or postponements thereof. This Proxy Statement,
together with the enclosed form of proxy, is first being mailed to stockholders
of the Company on or about April 23, 1998.
At the Annual Meeting, stockholders will be asked (i) to elect three
members of the Board of Directors for three-year terms, (ii) to ratify the
appointment by the Board of the firm of Coopers & Lybrand L.L.P. as independent
accountants of the Company for the fiscal year ending December 31, 1998, and
(iii) to transact such other business as may properly come before the meeting or
any adjournments or postponements thereof.
If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
EXECUTED BUT UNMARKED PROXIES WILL BE VOTED (I) FOR PROPOSAL ONE TO ELECT THE
THREE NOMINEES OF THE BOARD OF DIRECTORS AS DIRECTORS FOR THREE-YEAR TERMS, AND
(II) FOR PROPOSAL TWO TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS
INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 1998.
Except for procedural matters incident to the conduct of the Annual Meeting, the
Company does not know of any matters other than those described in the Notice of
Annual Meeting of Stockholders that are to come before the Annual Meeting. If
any other matters are properly brought before the Annual Meeting, the persons
named in the accompanying proxy will vote the shares represented by such proxies
on such matters as determined by a majority of the Board of Directors.
The presence of a stockholder at the Annual Meeting will not automatically
revoke such stockholder's proxy. A stockholder may, however, revoke a proxy at
any time prior to its exercise by filing a written notice of revocation with, or
by delivering a duly executed proxy bearing a later date to, First Coastal
Corporation, Attention: Secretary, 36 Thomas Drive, Westbrook, Maine 04092, or
by attending the Annual Meeting and voting in person.
The cost of soliciting proxies for the Annual Meeting will be borne by the
Company. In addition to the solicitation of proxies by mail, the Company,
through its directors, officers and employees, may also solicit proxies
personally or by telephone or telecopy. The Company will also request persons,
firms and corporations holding shares in their names or in the name of their
nominees, which are beneficially owned by others, to send proxy materials to and
obtain proxies from such beneficial owners and will reimburse such holders for
their reasonable expenses in doing so.
<PAGE>
The securities which can be voted at the Annual Meeting consist of shares
of Common Stock of the Company. Each share entitles its owner to one vote on
all matters properly presented at the Annual Meeting. There is no cumulative
voting of shares. The close of business on April 16, 1998 has been fixed by the
Board as the record date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting. At the close of business on April
16, 1998, there were approximately 1,505 holders of record of the 1,359,194
shares of Common Stock then outstanding. The presence, in person or by proxy,
of at least one-third of the total number of outstanding shares of Common Stock
entitled to vote at the Annual Meeting is necessary to constitute a quorum at
the Annual Meeting. Assuming the presence of a quorum at the Annual Meeting,
(i) directors are elected by a plurality of the votes of the holders of shares
of Common Stock present in person or represented by proxy and entitled to vote
at the Annual Meeting, and (ii) the affirmative vote of a majority of the votes
cast is required to ratify the appointment of the Company's independent
accountants. Stockholders' votes will be tabulated by the persons appointed by
the Board of Directors to act as inspectors of election for the Annual Meeting.
Abstentions will be treated as shares that are present or represented and
entitled to vote for purposes of determining a quorum but will not be counted as
a vote cast. Accordingly, abstentions with respect to shares represented at the
Annual Meeting will not affect Proposal One or Proposal Two.
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1997 accompanies this Proxy Statement. THE COMPANY IS REQUIRED TO
FILE AN ANNUAL REPORT ON FORM 10-K FOR ITS 1997 FISCAL YEAR WITH THE SECURITIES
AND EXCHANGE COMMISSION (THE "SEC"). STOCKHOLDERS MAY OBTAIN, FREE OF CHARGE, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K BY WRITING TO OR TELEPHONING
INVESTOR RELATIONS, FIRST COASTAL CORPORATION, 36 THOMAS DRIVE, WESTBROOK, MAINE
04092; (207) 774-5000.
ELECTION OF DIRECTORS
(PROPOSAL ONE)
GENERAL
Pursuant to the Company's Restated Certificate of Incorporation, the
directors are divided into three classes, as nearly equal in number as possible,
with the number of directors as specified in the Company's Amended and Restated
Bylaws. The term of office of only one class of directors expires in each year,
and their successors are elected for terms of three years and until their
successors are elected and qualified. Under the Company's Amended and Restated
Bylaws, newly created directorships resulting from any increase in the
authorized number of directors may be filled, for the unexpired term, by the
concurring vote of a majority of the directors then in office, whether or not a
quorum, and any director so chosen shall hold office for the remainder of the
full term of the class of directors in which the new directorship was created
and until such director's successor shall have been elected and qualified.
In January 1998, the size of the Board of Directors was increased from
seven directors to eight directors, resulting in the increase in the class of
directors whose term of office expires in 2000 from two directors to three
directors. MaryEllen FitzGerald was elected and chosen to fill such newly
created directorship.
At the Annual Meeting, three directors will be elected for three-year
terms. The Board's nominees for election as directors for three-year terms are
Gregory T. Caswell, David B. Hawkes, Sr. and Charles A. Stewart III. Messrs.
Caswell, Hawkes and Stewart have been members of the Board of Directors of the
Company since 1997, 1996 and 1995, respectively.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION
OF THE BOARD'S NOMINEES FOR ELECTION AS DIRECTORS OF THE COMPANY.
2
<PAGE>
INFORMATION AS TO DIRECTOR NOMINEES AND CONTINUING DIRECTORS
The following table sets forth the names of the Board of Directors'
nominees for election as directors and each continuing director. Each director
of the Company also serves as a director of Coastal Bank, a wholly owned
subsidiary of the Company (the "Bank"). Also set forth is certain other
information with respect to each such person's principal occupation or
employment during the past five years, the person's age at December 31, 1997 and
the periods during which such person has served as a director of the Company.
It is the intention of the persons named in the proxy to vote the shares
represented by each properly executed proxy for the election as directors of the
nominees listed below for terms of three years, unless otherwise directed by
stockholders. The Board of Directors believes that the nominees set forth below
will stand for election and will serve if elected as directors. If any person
nominated by the Board of Directors fails to stand for election or is unable to
accept election, the proxies will be voted for the election of such other person
or persons as the Board of Directors may recommend.
<TABLE>
<CAPTION>
MEMBER OF
AGE AT COMPANY TERM TO
DIRECTOR NOMINEES: DECEMBER 31, 1997 BOARD SINCE EXPIRE
- -------------------------- ----------------- ----------- -------
<S> <C> <C> <C>
Gregory T. Caswell /(a)/ 42 1997 2001
David B. Hawkes, Sr. 53 1996 2001
Charles A. Stewart III 63 1995 2001
<CAPTION>
MEMBER OF
AGE AT COMPANY TERM
CONTINUING DIRECTORS: DECEMBER 31, 1997 BOARD SINCE EXPIRES
- -------------------------- ----------------- ----------- -------
<S> <C> <C> <C>
Dennis D. Byrd /(b)/ 35 1997 1999
Roger E. Klein 55 1990 1999
MaryEllen FitzGerald 43 1998 2000
Normand E. Simard /(c)/ 56 1987 2000
Edward K. Simensky 56 1994 2000
</TABLE>
/(a)/ Mr. Caswell serves as President and Chief Executive Officer of the Company
and the Bank.
/(b)/ Mr. Byrd serves as Treasurer of the Company and Executive Vice President,
Chief Financial Officer and Treasurer of the Bank.
/(c)/ Mr. Simard serves as Chairman of the Board of Directors of the Company and
the Bank.
DIRECTOR NOMINEES
- -----------------
GREGORY T. CASWELL joined the Bank in December 1991 as Senior Vice
President and Senior Loan Officer responsible for managing the lending, loan
workout and credit administration functions of the Bank. From 1985 to 1991, he
was with First NH Banks initially as Vice President - Commercial Lending, then
as Vice President in the bank's special assets group. In 1994, Mr. Caswell was
promoted to Executive Vice President -- Lending Division of the Bank. Effective
March 1995, Mr. Caswell was elected President and Chief Executive Officer of the
Company and the Bank and a director of the Bank, and in March 1997, Mr. Caswell
became a director of the Company. Mr. Caswell is a director of the Greater
Portland Big Brothers/Big Sisters, Inc.
DAVID B. HAWKES, SR. is part owner of, and a consultant and business
advisor with, Cloudhawk, Inc., a consulting firm located in Portland, Maine,
which was established in 1993. Prior to 1993, Mr. Hawkes was a partner at KPMG
Peat Marwick, Portland, Maine, for 23 years. Mr. Hawkes also is a part owner of
New England Internet Services, Inc., a commercial internet consulting business
established in 1995. Mr. Hawkes is a director
3
<PAGE>
of AAA Northern New England, Bancroft & Martin, Inc., Northland Health Group,
PharmX Inc., Pride Manufacturing Company, Seven Islands Land Co. and Shawnee
Peak, Inc. Mr. Hawkes served as special consultant to Runyon, Kersteen &
Oullettee, certified public accountants, Portland, Maine, from 1995 to 1996. Mr.
Hawkes was elected to the Boards of Directors of the Company and the Bank in
September 1996.
CHARLES A. STEWART III was the President of A.L. Stewart & Sons, a food
processing company located in Cherryfield, Maine, from 1958 until 1982 when the
company was sold. Mr. Stewart also was the owner of Tennis of Maine, Inc., an
indoor tennis club located in Falmouth, Maine, from 1982 until 1985 when the
company was sold. Mr. Stewart is currently the Treasurer of M.C.S. Enterprises,
Inc., a real estate investment company based in Freeport, Maine. Mr. Stewart is
a director of the Boys & Girls Club of Greater Portland, the Maine Tennis
Foundation and Community Dispute Resolutions Center, a nonprofit mediation
organization based in Portland, Maine. In 1998 Mr. Stewart became a trustee of
White Mountain School, Bethlehem, New Hampshire. Mr. Stewart has been a director
of the Bank since 1986.
CONTINUING DIRECTORS
- --------------------
DENNIS D. BYRD joined the Bank in October 1985 as Deposit Operations
Technician. From 1987 to 1992, Mr. Byrd was responsible for financial
operations of the Bank, promoted to Assistant Treasurer/Controller in 1989 and
Assistant Vice President in 1990. In 1993, Mr. Byrd was promoted to Vice
President/Controller and Treasurer of the Bank, and Treasurer of the Company and
Coastal Bancorp. In 1994, Mr. Byrd was promoted to Executive Vice President,
Chief Financial Officer and Treasurer of the Bank and effective March 1995, Mr.
Byrd was elected to the Board of Directors of the Bank. Mr. Byrd became a
director of the Company in March 1997.
MARYELLEN FITZGERALD is President and owner of Critical Insights, Inc.,
Cape Elizabeth, Maine, a strategic market research and public opinion polling
firm established in 1992. Ms. FitzGerald also is a trustee of the Susan Curtis
Foundation, Portland, Maine, and a director of the Maine Summer Drama Institute.
Ms. FitzGerald was elected to the Boards of Directors of the Company and the
Bank in January 1998.
ROGER E. KLEIN is President and owner of Interest Rate Futures Research
Corporation of Princeton, New Jersey, a firm established in 1980 to manage money
in the financial futures markets. In 1982, Mr. Klein established two affiliated
companies, Futures Strategies Corp. and Timing Strategies Corp., through which
Mr. Klein manages funds and provides investment advice to institutions,
individuals and corporations. In September 1989, Mr. Klein became the Chief
Investment Officer, Executive Vice President and part owner of Quantum American,
Inc., a minority owned investment management company located in New Orleans.
Mr. Klein has been a director of the Bank since 1994.
NORMAND E. SIMARD has been President of York County Biscuit Company, a food
distributor in Biddeford, Maine, since July 1993, and prior thereto, served as
Vice President since 1967. Mr. Simard also is a partner of Simard Enterprises,
a family-owned real estate holding company established in 1996. Mr. Simard has
been a director of the Bank since 1981.
EDWARD K. SIMENSKY has been President of Simensky & Thomson, certified
public accountants, in Saco, Maine, since 1978. Mr. Simensky was a member of
the advisory board of EastGuard Insurance Company, Saco, Maine ("EastGuard")
from 1995 until 1996 when the advisory board was eliminated. Mr. Simensky was a
director of Mutual Fire Insurance Company, Saco, Maine, from 1987 until its
acquisition by EastGuard in 1995. Mr. Simensky has been a director of the Bank
since 1984.
CORPORATE GOVERNANCE AND OTHER MATTERS
The Board of Directors acts as a nominating committee for selecting
nominees for election as directors. The Company's Amended and Restated Bylaws
also permit stockholders eligible to vote at the Annual Meeting
4
<PAGE>
to make nominations for directors but only if such nominations are made pursuant
to timely notice in writing to the Secretary of the Company. To be timely,
notice must be delivered to, or mailed to and received at, the principal
executive offices of the Company not less than 30 days nor more than 90 days
prior to the date of the meeting, provided that at least 45 days' notice or
prior public disclosure of the date of the meeting is given or made to the
stockholders. If less than 45 days' notice or prior disclosure of the date of
the meeting is given or made to stockholders, notice by the stockholder to be
timely must be received not later than the close of business on the 15th day
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. A stockholder's notice of nomination must also
set forth certain information specified in Article III, Section 13 of the
Company's Amended and Restated Bylaws concerning each person the stockholder
proposes to nominate for election and the nominating stockholder. The Company's
Amended and Restated Bylaws provide that only persons who are nominated in
accordance with the procedures set forth in the Amended and Restated Bylaws
shall be eligible for election as directors.
The Board of Directors has appointed a standing Audit Committee of the
Board, which committee may consist only of non-employee directors of the Company
and the Bank. The Audit Committee receives and reviews the audit and
examination reports of the Company's independent accountants and, when
applicable, federal examiners. It also reviews the adequacy of internal
controls established by the Company's management, the independent accountant's
letter to management concerning the effectiveness of such controls and
management's response to that letter. In addition, the Audit Committee reviews
and recommends to the Board of Directors the firm to be engaged as the Company's
independent accountants. The members of the Audit Committee currently are
Messrs. Hawkes and Simensky.
Prior to March 1998, the Company and the Bank did not have a separate
Compensation Committee of the Board of Directors. In March 1998, the Board of
Directors appointed a Compensation Committee, which committee may consist only
of non-employee directors of the Company and the Bank. The Compensation
Committee reviews executive officer compensation on an annual basis and makes
recommendations to the full Board regarding changes in compensation. The
members of the Compensation Committee currently are Messrs. Hawkes and Simard
and Ms. FitzGerald.
During the year ended December 31, 1997, the Board of Directors held 12
meetings and the Audit Committee held one meeting. No incumbent director during
the year ended December 31, 1997 attended fewer than 75% of the total number of
meetings of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which he served during the period of his
directorship.
EXECUTIVE OFFICERS
The following table sets forth the names of the executive officers of the
Company and the Bank. For information regarding each such officer's principal
occupation or employment during the past five years, the officer's age at
December 31, 1997 and the positions currently held with the Company and the
Bank, see "Election of Directors -- Information as to Director Nominees and
Continuing Directors."
<TABLE>
<CAPTION>
Age at
Name December 31, 1997 Positions Held
- ---------------------------------------- ----------------- ----------------------------------------
<S> <C> <C>
Gregory T. Caswell 42 President, Chief Executive Officer and a
director of the Company and the Bank
Dennis D. Byrd 35 Treasurer and a director of the Company
and Executive Vice President, Chief
Financial Officer and Treasurer and a
director of the Bank
</TABLE>
5
<PAGE>
Each executive officer has entered into an employment agreement with the
Company and the Bank. Such employment agreements provided for an initial term
which ended on December 31, 1997, with automatic renewals for one additional
consecutive 12-month period as of December 31, 1996 and each subsequent
anniversary of December 31, unless the Company and the Bank, or the executive
officer, gives written notice to the contrary at least two months prior to any
such renewal date. In accordance with such agreements, the term of employment
has been extended to December 31, 1999. For more information regarding the
employment agreement of Mr. Caswell, see "Executive Compensation -- Employment
Agreement."
EXECUTIVE COMPENSATION
CASH COMPENSATION
The following table sets forth the compensation paid by the Company and the
Bank during 1997, 1996 and 1995 to the President and Chief Executive Officer of
the Company and the Bank, who was the only executive officer whose total annual
salary and bonus exceeded $100,000 for services rendered in all capacities to
the Company and the Bank during the year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------- -----------------------------
NUMBER
OF SECURITIES
RESTRICTED UNDERLYING ALL OTHER
PRINCIPAL POSITIONS YEAR SALARY BONUS STOCK AWARDS/(a)/ OPTIONS COMPENSATION/(b)/
- ---------------------- ---------- --------- ------- ------------------ ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Gregory T. Caswell 1997 $129,792 $15,000 - 10,000 $4,193
President and Chief 1996 124,800 15,000 $25,000 25,000 -
Executive Officer 1995 111,827 34,000 - - -
</TABLE>
- ------------
/(a)/ The value of the restricted stock award is based on the closing market
price of the Company's Common Stock on the date of grant multiplied by
the number of shares awarded. During 1996, Mr. Caswell was awarded
5,000 shares of restricted which vest ratably over a three-year period
(from May 2, 1996). At December 31, 1997, Mr. Caswell held 5,000 shares
of restricted stock which had a value of $74,375 based on the closing
market price of the Company's Common Stock at such date. Under the
Company's 1996 Stock Option and Equity Incentive Plan, holders of
restricted stock awards generally have the rights and privileges of a
stockholder of the Company, including the right to vote and to receive
dividends, except that the holder generally may not sell, transfer,
assign, pledge or otherwise encumber or dispose of the shares covered
by an award until such shares have become vested.
/(b)/ Consists of matching contributions made by the Bank pursuant to the
Bank's 401(k) defined contribution plan.
6
<PAGE>
OPTION GRANTS
The following table contains information with respect to grants of stock
options to the President and Chief Executive Officer of the Company during the
year ended December 31, 1997.
OPTION GRANTS DURING 1997
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES EXERCISE EXPIRATION ---------------------------
NAME GRANTED /(a)/ IN 1997 PRICE /(b)/ DATE 5% 10%
- -------------------- ------------- ---------- ----------- -------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Gregory T. Caswell.. 10,000 57.14% $15.25 December 2007 $95,906 $243,046
</TABLE>
/(a)/ Options granted to Mr. Caswell vest ratably over a three-year period,
subject to acceleration under certain circumstances.
/(b)/ All option grants were made at 100% of the fair market value of the
Common Stock on the date of grant.
OPTION EXERCISES AND HOLDINGS
The following table contains information with respect to the President and
Chief Executive Officer of the Company concerning the exercise of stock options
during 1997 and the value of all unexercised options held by such individual at
December 31, 1997.
AGGREGATE OPTION EXERCISES IN 1997 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY OPTIONS
SHARES UNEXERCISED OPTIONS AT FISCAL
ACQUIRED AT FISCAL YEAR-END YEAR-END /(a)/
ON ------------------------------- ------------------------------
NAME EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ---------- ---------------- ----------- ---------------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Gregory T. Caswell - - 8,333 26,667 $74,792 $298,333
- -------------------
</TABLE>
/(a)/ Based on the closing price of the Company's Common Stock on December 31,
1997, less the exercise price.
PENSION PLAN
The Bank maintained a qualified noncontributory pension plan (the "Pension
Plan") for its officers and other employees through RSI Retirement Trust,
created to provide retirement benefits for the employees of savings banks and
their allied organizations. Future benefit accruals under the Pension Plan were
eliminated as of July 31, 1997 and the plan was terminated as of September 30,
1997. The Bank currently is awaiting a determination letter from the Internal
Revenue Service with respect to the termination of the Pension Plan. Under the
Pension Plan, the single sum value of Mr. Caswell's retirement benefit is
estimated to be approximately $22,235, which amount is expected to be paid to
Mr. Caswell on or about June 1, 1998.
7
<PAGE>
COMPENSATION OF DIRECTORS
During 1997, there were no fees earned or paid to directors of the Company
for any service provided as a director of the Company. The Company has not made
and does not anticipate making any such payments to directors for 1998. During
1997, each non-employee director of the Bank received a quarterly retainer of
$2,500. No additional amounts were paid to non-employee directors of the Bank
for meetings of the Board of Directors or committees on which such directors
served. Employee directors of the Bank receive no additional compensation for
serving as directors or committee members of the Bank.
The First Coastal Corporation 1996 Stock Option and Equity Incentive Plan
(the "Plan") provides that, subject to the availability of shares, as of each
annual meeting of stockholders of the Company, each non-employee director of the
Company who is elected by the stockholders at, or whose term of office continues
after, such meeting will be granted a non-qualifying option with a 10-year term
for 500 shares upon the date of such election or meeting at a per share exercise
price equal to the market value of a share of Common Stock on the date of grant.
Pursuant to the Plan, in May 1997 each of Messrs. Hawkes, Klein, Simard,
Simensky and Stewart, the then-current non-employee directors of the Company,
was granted a non-qualifying option with a 10-year term for 500 shares of Common
Stock (representing an aggregate of options exercisable for 2,500 shares of
Common Stock) at an exercise price equal to $9.625 per share, representing the
price equal to the closing price of the Company's Common Stock on the date of
grant.
A deferred compensation plan (the "Deferred Compensation Plan") was
established in 1987 for members of the Board of Directors of the Company and
non-employee directors of the boards of subsidiaries of the Company. Under the
Deferred Compensation Plan, each participant has the right to elect to defer a
portion of his or her annual directors' fees, with amounts deferred credited
monthly with interest at an annual rate which is determined prior to the
beginning of each calender year. For 1997, the interest rate was 5.5%. Payment
of amounts credited is available to participants by a lump sum or a designated
number of monthly installments, which number may not be less than 12 nor more
than 120. For 1997, no director of the Bank elected to defer any portion of his
director fees.
EMPLOYMENT AGREEMENT
In July 1996, the Company and the Bank entered into an employment agreement
(the "Employment Agreement") with Mr. Caswell, which superseded the employment
protection agreement entered into by the Bank with Mr. Caswell in December 1994.
Under the Employment Agreement, Mr. Caswell may receive annual salary increases
based on increases in the cost of living and based upon performance or merit, as
determined by the Boards of Directors of the Company and the Bank. Mr. Caswell
is also eligible (i) to receive discretionary bonuses as may be authorized by
the Board of Directors of the Company or the Bank, (ii) to participate in any
plan of the Company or the Bank relating to stock options, stock purchases,
pension, thrift, profit sharing, employee stock ownership, group life insurance,
medical coverage, disability insurance, education or other retirement or
employee benefits that the Company or the Bank has adopted or may adopt for the
benefit of its executive employees, and (iii) to participate in any other fringe
benefits which are or may be or become applicable to executive employees of the
Company or the Bank. In addition, Mr. Caswell is authorized to incur reasonable
business expenses in the performance of his duties. The Employment Agreement
provided for an initial term which ended on December 31, 1997 with automatic
renewals for one additional consecutive 12-month period as of December 31, 1996
and each subsequent anniversary of December 31, unless the Company and the Bank,
or Mr. Caswell, gives written notice to the contrary at least two months prior
to any such renewal date. In accordance with the Employment Agreement, the term
of Mr. Caswell's employment has been extended to December 31, 1999. The base
salary for Mr. Caswell for the year ending December 31, 1998 is $136,282, which
salary may not be reduced under the Employment Agreement without his written
consent.
The Boards of Directors of the Company and the Bank may terminate Mr.
Caswell's employment at any time. The Employment Agreement provides that if Mr.
Caswell's employment is terminated other than for cause
8
<PAGE>
(as defined) or Mr. Caswell terminates his employment with good reason (as
defined), Mr. Caswell will be entitled (subject to certain limitations) (a) to
continue to participate in and accrue benefits under all retirement, pension,
profit-sharing, employee stock ownership and other deferred compensation plans
of the Company and the Bank for the remaining term of the Employment Agreement,
but not in excess of 24 months, (b) to receive discretionary bonuses as may be
authorized by the Board of Directors of the Company or the Bank for the
remaining term of the Employment Agreement, but not in excess of 24 months, (c)
to receive certain insurance and indemnification benefits with respect to Mr.
Caswell's acts or omissions while an officer or director until the final
expiration or running of all periods of limitation against action which may be
applicable to such acts or omissions, and (d) to be paid a lump sum cash payment
as liquidated damages in an amount equal to the amount that would be payable
over a period equal to the remaining term of the Employment Agreement, but not
in excess of 24 months. The Employment Agreement provides that no payment is
required to be made to Mr. Caswell that would constitute a "golden parachute
payment" (as defined) pursuant to certain rules and regulations of the Federal
Deposit Insurance Corporation for which no applicable exception exists
thereunder at the time of such payment. If Mr. Caswell becomes disabled or
incapacitated to the extent that he is unable to perform his duties and
obligations under the Employment Agreement, Mr. Caswell will be entitled to
receive disability benefits of the type provided for other executive employees
of the Company and the Bank, and the obligations of the Company and the Bank
under the Employment Agreement will be limited to providing such benefits for
the period of such disability.
CERTAIN TRANSACTIONS
From time to time the Bank makes residential mortgage loans to employees of
the Company, other than its executive officers. Management believes that these
residential mortgage loans are made in the ordinary course of business, are made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons, and
neither involve more than normal risks of collectibility nor present other
unfavorable features. Prior to Mr. Hawkes being nominated and elected to the
Boards of the Company and the Bank, the Bank made two commercial loans to a
partnership in which Mr. Hawkes is a general partner. The original loans were
made in 1986 and 1989 for $475,000 (the "1986 Loan") and $161,348 (the "1989
Loan"), respectively. Since January 1, 1997, the largest aggregate amount of
indebtedness outstanding under the 1986 Loan and the 1989 Loan was $422,439 and
$134,430, respectively, and at December 31, 1997 the outstanding loan balances
were $414,069 and $122,030, respectively. These loans, including any subsequent
modifications to the terms of these loans, were made in the ordinary course of
business and 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 neither involve more than normal risks of collectibility nor
present other unfavorable features. The 1989 Loan was paid off in full on April
9, 1998 and the 1986 Loan is current and is being paid in accordance with the
terms of the loan agreement.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of its
Common Stock, to file with the SEC initial reports of ownership of the Company's
equity securities and to file subsequent reports when there are changes in such
ownership. Based on a review of reports submitted to the Company, the Company
believes that, during the fiscal year ended December 31, 1997, all Section 16(a)
filing requirements applicable to the Company's officers, directors and more
than 10% owners were complied with on a timely basis.
9
<PAGE>
STOCK OWNED BY MANAGEMENT
The following table sets forth information as of April 16, 1998 with
respect to the amount of Common Stock of the Company beneficially owned by each
director of the Company, the nominees for election as directors, by the
President and Chief Executive Officer, and by all directors and executive
officers of the Company as a group. The information is based on information
furnished to the Company by each such person.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF BENEFICIAL COMMON STOCK
NAME OWNERSHIP /(a)/ OUTSTANDING
- ----------------------------------------------------- -------------------- -------------
<S> <C> <C>
Gregory T. Caswell
President and Chief Executive Officer and Director.. 28,333 /(b)/ 2.0%
Dennis D. Byrd
Treasurer and Director.............................. 10,966 /(c)/ *
MaryEllen FitzGerald
Director............................................ - -
David B. Hawkes
Director............................................ 500 /(d)/ -
Roger E. Klein
Director............................................ 2,182 /(e)/ *
Normand E. Simard
Chairman of the Board............................... 6,563 /(f)/ *
Edward K. Simensky
Director............................................ 4,205 /(e)/ *
Charles A. Stewart III
Director............................................ 4,000 /(e)/ *
All directors and executive officers
as a group (8 persons)............................... 56,749 /(g)/ 4.1%
</TABLE>
- ------------------------
* Less than 1% of shares outstanding.
/(a)/ In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, a
person is considered to "beneficially own" shares (i) over which he has or
shares voting or investment power or (ii) of which he has the right to
acquire beneficial ownership at any time within 60 days of April 16, 1998.
As used herein, "voting power" is the power to vote or direct the voting
of shares and "investment power" is the power to dispose or direct the
disposition of shares.
/(b)/ Consists of 10,000 shares held jointly by Mr. Caswell and his wife, 5,000
shares of restricted stock, which restricted stock vests over a three-year
period (from May 2, 1996), and options exercisable for 13,333 shares,
8,333 of which are presently exercisable and 5,000 of which vest within 60
days of April 16, 1998.
/(c)/ Consists of 1,800 shares held jointly by Mr. Byrd and his wife, 2,500
shares of restricted stock, which restricted stock vests over a three-year
period (from May 2, 1996), and options exercisable for 6,666 shares, 4,166
of which are presently exercisable and 2,500 of which vest within 60 days
of April 16, 1998.
/(d)/ Consists of options exercisable for 500 shares, which options are
presently exercisable.
/(e)/ Includes options exercisable for 2,000 shares, which options are presently
exercisable.
/(f)/ Includes options exercisable for 2,000 shares, which options are presently
exercisable and 1,098 shares held in a trust of which Mr. Simard is the
sole trustee.
/(g)/ Includes options exercisable for 28,499 shares and 7,500 shares of
restricted stock.
Based on information currently on file with the SEC, there are no
individuals believed by management to be the beneficial owner of more than 5% of
the Company's outstanding Common Stock as of April 16, 1998.
10
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(PROPOSAL TWO)
The Board of Directors has appointed the firm of Coopers & Lybrand L.L.P.
to continue as independent accountants for the Company for the year ending
December 31, 1998, subject to ratification of such appointment by the
stockholders. Coopers & Lybrand L.L.P. has served as the Company's independent
accountants for each of the fiscal years ended 1993 through 1997. Unless
otherwise indicated, properly executed proxies will be voted in favor of
ratifying the appointment of Coopers & Lybrand L.L.P., independent certified
public accountants, to audit the books and accounts of the Company for the year
ending December 31, 1998. No determination has been made as to what action the
Board of Directors would take if the stockholders do not ratify the appointment.
Assuming the presence of a quorum at the Annual Meeting, the affirmative
vote of a majority of the votes cast is required to ratify the appointment of
Coopers & Lybrand L.L.P. as the Company's independent accountants for the year
ending December 31, 1998.
Representatives of Coopers & Lybrand L.L.P. will be present at the Annual
Meeting. They will be given an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE INDEPENDENT ACCOUNTANTS OF
THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 1998.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder of the Company who intends to present a proposal for action
must file a copy thereof with the Secretary of the Company not less than 30 days
nor more than 90 days prior to the date of the annual meeting, unless notice or
public disclosure of the meeting occurs less than 45 days prior to the date of
the meeting, in which event stockholders may deliver such notice not later than
the 15th day following the day on which notice of the meeting was mailed or
public disclosure thereof was made. If the proposal or proposals are to be
included in the Company's proxy statement and form of proxy relating to the 1999
annual meeting, they must be received by the Secretary of the Company at 36
Thomas Drive, Westbrook, Maine 04092 by December 24, 1998 pursuant to the proxy
soliciting rules of the SEC. Nothing in this paragraph shall be deemed to
require the Company to include in its proxy statement and form of proxy relating
to the 1999 annual meeting any stockholder proposal which may be excluded under
the SEC regulations in effect at the time such proposals are received.
11
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any other matters to be presented for action by the stockholders at the
Annual Meeting. If, however, any other matters not now known are properly
brought before the Annual Meeting, the persons named in the accompanying proxy
will vote such proxy on such matters as determined by a majority of the Board of
Directors.
By Order of the Board of Directors
/s/ Gregory T. Caswell
Gregory T. Caswell
President and Chief Executive Officer
Westbrook, Maine
Dated: April 21, 1998
12
<PAGE>
REVOCABLE PROXY
FIRST COASTAL CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD
The undersigned stockholder of First Coastal Corporation (the "Company")
hereby authorizes Normand E. Simard, Edward K. Simensky, and each of them, with
full power of substitution, to vote and otherwise represent all the shares of
Common Stock of the Company held of record by the undersigned at the Annual
Meeting of Stockholders of the Company (the "Annual Meeting") to be held at the
Portland Marriott, 200 Sable Oaks Drive, South Portland, Maine 04106 on Tuesday,
May 19, 1998 at 10:00 a.m., and any adjournments or postponements thereof.
This proxy, when properly completed, will be voted in the manner directed
herein by the undersigned stockholder. UNLESS CONTRARY DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED (I) FOR THE ELECTION OF THE BOARD'S NOMINEES NAMED IN THE
PROXY STATEMENT AND ON THE REVERSE SIDE AS DIRECTORS OF THE COMPANY, AND (II)
FOR RATIFICATION OF THE APPOINTMENT BY THE BOARD OF THE FIRM OF COOPERS &
LYBRAND L.L.P. AS INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE YEAR ENDING
DECEMBER 31, 1998, AND IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE
BOARD AS TO OTHER MATTERS.
The undersigned stockholder may revoke this Proxy at any time before it is
voted by filing a written notice of revocation with the Secretary of the Company
prior to the Annual Meeting, by filing a duly executed proxy bearing a later
date with the Secretary of the Company prior to the Annual Meeting or by
attending the Annual Meeting and voting in person. The undersigned stockholder
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement and hereby revokes any proxy or proxies heretofore given.
(CONTINUED AND TO BE DATED AND SIGNED ON THE REVERSE SIDE)
----------------------------------------------------------
<PAGE>
(CONTINUED FROM OTHER SIDE)
---------------------------
1. Election of the following nominees as directors for a three-year term:
Gregory T. Caswell
David B. Hawkes, Sr.
Charles A. Stewart III
FOR ALL nominees listed above. WITHHOLD AUTHORITY to vote for all
nominees listed above.
[_] [_]
WITHHOLD AUTHORITY to vote for the following nominee(s) only (write the name of
the nominee(s) in the space below):
---------------------
2. Ratification of the appointment by the Board of the firm of Coopers &
Lybrand L.L.P. as independent accountants of the Company for the year
ending December 31, 1998.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Upon such other business as may properly come before the Annual Meeting or
any adjournments or postponements thereof, as determined by a majority of
the Company's Board.
_________________________________
Signature(s) of Stockholder or
Authorized Representative
Date: ____________________________
Please date and sign exactly as name appears hereon. Each
executor, administrator, trustee, guardian, attorney-in-fact and other
fiduciary should sign and indicate his or her full title. When stock has
been issued in the name of two or more persons, all should sign.
IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE SIGN AND RETURN
ALL CARDS IN THE ACCOMPANYING ENVELOPE.
