SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ____________)
FILED BY THE REGISTRANT
FILED BY A PARTY OTHER THAN THE REGISTRANT
CHECK THE APPROPRIATE BOX:
PRELIMINARY PROXY STATEMENT
CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
X DEFINITIVE PROXY STATEMENT
DEFINITIVE ADDITIONAL MATERIALS
SOLICITING MATERIAL UNDER RULE 14A-12
COASTAL BANCORP, INC.
(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>
March 28, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the stockholders
of Coastal Bancorp, Inc. (the "Company"). The meeting will be held at the
corporate offices of Coastal Bancorp, Inc., at 5718 Westheimer, Houston, Texas
in the Coastal Banc auditorium, Suite 1101, on Thursday, April 27, 2000, at
11:00 a.m., Central Time.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. Stockholders will vote to
elect directors and ratify the Company's independent auditors. The Company's
Board of Directors believes that these proposals are in the best interest of the
Company and its stockholders and recommends that stockholders vote "for" them at
the Annual Meeting. Directors and officers of the Company and representatives
of the Company's independent auditors will be present to respond to any
questions that our stockholders may have.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. Let me urge you to mark, sign and date your proxy card today
and return it in the postage paid envelope provided, even if you plan to attend
the Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
Your continued support of and interest in Coastal Bancorp, Inc. is
appreciated.
Sincerely,
/s/ Manuel J. Mehos
Manuel J. Mehos
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
COASTAL BANCORP, INC.
COASTAL BANC PLAZA
5718 WESTHEIMER, SUITE 600
HOUSTON, TEXAS 77057
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of Coastal Bancorp, Inc. (the "Company") will be held at the corporate
offices of Coastal Bancorp, Inc., at 5718 Westheimer, Suite 1101, Houston, Texas
at 11:00 a.m., Central Time, on April 27, 2000 for the following purposes, all
of which are more completely set forth in the accompanying Proxy Statement:
(1) To elect two directors of the Company to serve until the annual
meeting of stockholders in the year 2003 and until their successors are elected
and qualified;
(2) To ratify the appointment of KPMG LLP as the Company's independent
auditors for the fiscal year ending December 31, 2000; and,
(3) To transact such other business as may properly come before the
Annual Meeting, or any adjournment or postponement thereof. Except with respect
to procedural matters incident to the conduct of the Annual Meeting, management
of the Company is not aware of any matters other than those set forth above
which may properly come before the Annual Meeting.
The Board of Directors has fixed February 29, 2000 for the determination of
stockholders entitled to notice of, and to vote at, the Annual Meeting and any
adjournment or postponement thereof. Only those stockholders of record as of
the close of business on that date will be entitled to vote at the Annual
Meeting or at any such adjournment or postponement.
BY ORDER OF THE BOARD OF
DIRECTORS
/s/ Linda B. Frazier
Linda B. Frazier
Secretary
Houston, Texas
March 28, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING,
YOU MAY VOTE IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
- ------
COASTAL BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of the common stock, $.01
par value per share (the "Common Stock") of Coastal Bancorp, Inc. (the
"Company") in connection with the solicitation of proxies on behalf of the Board
of Directors of the Company, to be used at the Annual Meeting of Stockholders to
be held at the corporate offices of Coastal Bancorp, Inc., at 5718 Westheimer,
Houston, Texas in the Coastal Banc auditorium, Suite 1101, at 11:00 a.m.,
Central Time, on April 27, 2000 and at any adjournment or postponement thereof
for the purposes set forth in the Notice of Annual Meeting of Stockholders.
This Proxy Statement is expected to be mailed to stockholders on or about March
28, 2000.
Each proxy solicited hereby, if properly signed and returned to the
Company, will be voted in accordance with the instructions contained therein if
it is not revoked prior to its use. If no contrary instructions are given, each
proxy received will be voted: (i) for the election of the board's nominees as
directors of the company; (ii) for the proposal to ratify the appointment of
KPMG LLP as the company's independent auditors for the fiscal year ending
December 31, 2000; and (iii) upon the transaction of such other business as may
properly come before the annual meeting, in accordance with the best judgment of
the persons appointed as proxies. Any holder of common stock who returns a
signed proxy but fails to provide instructions as to the manner in which such
shares are to be voted will be deemed to have voted in favor of the matters set
forth in the preceding sentence.
Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company written
notice of revocation thereof (Linda B. Frazier, Coastal Bancorp, Inc., Coastal
Banc Plaza, 5718 Westheimer, Suite 600, Houston, Texas 77057), (ii) submitting a
duly executed proxy bearing a later date; or (iii) by appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person. Proxies solicited hereby may be exercised only at the Annual Meeting
and any adjournment or postponement thereof and will not be used for any other
meeting.
<PAGE>
BACKGROUND INFORMATION
ON
COASTAL BANCORP, INC.
AND
SUBSIDIARIES
Coastal Bancorp, Inc. (the "Company") is engaged primarily in the business
of serving as the parent holding company for Coastal Banc ssb (the "Bank"). The
Company was incorporated in March 1994 in connection with the reorganization of
Coastal Banc Savings Association, a Texas-chartered thrift institution (the
"Association") into the holding company form of organization. In connection
with the reorganization, which was completed in July 1994, the Association
concurrently converted into a Texas-chartered savings bank and took its present
name. In November 1996, in order to minimize state taxes, the Company's
corporate structure was again reorganized by forming Coastal Banc Holding
Company, Inc. ("HoCo") as a Delaware holding company. HoCo became a
wholly-owned subsidiary of the Company and the Bank became a wholly-owned
subsidiary of HoCo. Coastal Bancorp, Inc. is a registered unitary savings and
loan holding company regulated by the Office of Thrift Supervision.
VOTING SECURITIES AND BENEFICIAL
OWNERSHIP THEREOF
Only holders of record of the Company's Common Stock at the close of
business on February 29, 2000 ("Record Date") will be entitled to notice of, and
to vote at, the Annual Meeting. On the Record Date, there were 6,354,187 shares
of Common Stock outstanding and the Company had no other class of voting equity
securities outstanding. Only holders of Company Common Stock will be entitled
to vote at the Annual Meeting and each share of Common Stock will be entitled to
one vote on all matters properly presented. Stockholders of the Company are not
permitted to cumulate their votes for the election of directors.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote is necessary to constitute a
quorum at the Annual Meeting. Directors will be elected by a plurality of the
votes cast at the Annual Meeting. The affirmative vote of a majority in
interest of those present (in person or by proxy) at the Annual Meeting is
required to approve the proposal to ratify the appointment of the Company's
independent auditors.
Abstentions will be counted for purposes of determining the presence of a
quorum at the Annual Meeting. Because of the required votes, abstentions will
have the same effect as a vote against the proposal ratify the appointment of
the Company's independent auditors, but will not be counted as votes cast for
the election of directors and, thus, will have no effect on the voting for the
election of directors. Under the applicable rules, all of the proposals for
consideration at the Annual Meeting are considered "discretionary" items upon
which brokerage firms may vote in their discretion on behalf of their clients if
such clients have not furnished voting instructions. Thus, there are no
proposals to be considered at the Annual Meeting which are considered
"non-discretionary" and for which there will be "broker non-votes."
<PAGE>
At February 29, 2000, directors, executive officers and their affiliates
beneficially owned 1,636,960 shares of Common Stock or 24.46% of the total
shares of Common Stock outstanding on such date. It is anticipated that all of
such shares will be voted for the election of the nominees of the Company's
Board of Directors and in favor of the proposal to ratify the selection of KPMG
LLP as the Company's independent auditors.
The following table sets forth the beneficial ownership of the Common Stock
as of February 29, 2000, with respect to (i) any person or entity who is known
to the Company to be the beneficial owner of 5% or more of the Common Stock;
(ii) each nominee for director; (iii) each director of the Company; (iv) each of
the executive officers named in the summary compensation table (see "Executive
Compensation - Summary Compensation Table") and (v) all directors and executive
officers of the Company and its subsidiary, Coastal Banc ssb, as a group. The
address for all directors and executive officers of the Company and the Bank is
Coastal Banc Plaza, 5718 Westheimer, Suite 600, Houston, Texas 77057. Except as
set forth below, as of February 29, 2000, the Company was aware of no other
person or entity unaffiliated with the Company that was the beneficial owner of
5% or more of the Common Stock.
<TABLE>
<CAPTION>
Amount of Shares of
Common Stock
Name Beneficially Owned
(and Address) of as of February 29, Percent of
Beneficial Owner 2000(1) Class
- ------------------------------------------ ------------------------ -----------
<S> <C> <C>
First Manhattan Co.
437 Madison Avenue
New York, New York 10022 616,095(2) 9.21%
Thomson Horstmann & Bryant, Inc.
Park 80 West, Plaza II
Saddle Brook, New Jersey 07662 608,300(2) 9.09
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 460,550(2) 6.88
Robert Edwin Allday, Director
Coastal Bancorp, Inc. and Coastal Banc ssb 0(3) *
D. Fort Flowers, Jr., Director
Coastal Bancorp, Inc. and Coastal Banc ssb 274,020(4) 4.09
Dennis S. Frank, Director *
Coastal Bancorp, Inc. and Coastal Banc ssb 2,700
Paul W. Hobby, Director
Coastal Bancorp, Inc. and Coastal Banc ssb 1,000 *
(continued on next page)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Amount of Shares of
Common Stock
Name Beneficially Owned
(and Address) of as of February 29, Percent of
Beneficial Owner 2000(1) Class
- ---------------------------------------------- -------------------- -----------
<S> <C> <C>
Robert E. Johnson, Jr., Director
Coastal Bancorp, Inc. and Coastal Banc ssb 19,320 *
Manuel J. Mehos, Chairman of the Board,
President and Chief Executive Officer
Coastal Bancorp, Inc., Coastal Banc Holding
Company, Inc. and Coastal Banc ssb 601,500(5) 8.99
James C. Niver, Director
Coastal Bancorp, Inc. and Coastal Banc ssb 553,428(6) 8.27%
Gary R. Garrett, Sr. Executive Vice President
and Chief Lending Officer 61,241(5)
Coastal Banc ssb *
David R. Graham, Executive Vice President
- -Real Estate Lending
Coastal Banc ssb 29,780(5) *
Nancy S. Vadasz, Executive Vice President
Market and Product Strategies
Coastal Banc ssb 29,094(5) *
Catherine N. Wylie, Sr. Executive Vice
President and Chief Financial Officer Coastal
Bancorp, Inc., Coastal Banc Holding
Company, Inc. and Coastal Banc ssb 64,877(5)(7) *
All directors and executive officers of the
Company and the Bank as a group (11 persons) 1,636,960(5) 24.46
</TABLE>
______________________
- ----------------------
* Represents less than 1.0% of the Common Stock beneficially owned.
(footnotes on next page)
<PAGE>
(1) Based upon information furnished by the respective individuals and
filings pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The information is not necessarily indicative of beneficial
ownership for any other purpose. Under regulations promulgated pursuant to the
Exchange Act, shares are deemed to be beneficially owned by a person if he or
she directly or indirectly has or shares (i) voting power, which includes the
power to vote or to direct the voting of the shares, or (ii) investment power,
which includes the power to dispose or to direct the disposition of the shares.
Unless otherwise indicated, the named beneficial owner has sole voting and
dispositive power with respect to the shares.
(2) Based on a Schedule 13G filed under the Exchange Act.
(3) Mr. Allday is the beneficial owner of 2,000 shares of the Bank's 9.0%
Noncumulative Preferred Stock, Series A.
(4) Of such shares, 269,520 are owned by a trust over which Mr. Flowers has
shared voting and dispositive power with two other co-trustees.
(5) Under applicable regulations, a person is deemed to have beneficial
ownership of any shares of Common Stock which may be acquired within 60 days of
the Record Date pursuant to the exercise of outstanding stock options. Shares
of Common Stock which are subject to stock options are deemed to be outstanding
for the purpose of computing the percentage of outstanding Common Stock owned by
such person or group but not deemed outstanding for the purpose of computing the
percentage of Common Stock owned by any other person or group. The amounts set
forth in the table include 60,741, 29,780, 158,000, 29,094 and 60,952 shares
which may be received upon the exercise of stock options by Messrs. Garrett,
Graham and Mehos and Mmes. Vadasz and Wylie, respectively, pursuant to stock
options. For all directors and executive officers as a group, the number of
shares includes 338,567 shares of Common Stock subject to outstanding stock
options.
(6) Mr. Niver is the co-trustee with his wife of a trust which holds such
shares for their benefit.
(7) Ms. Wylie is the beneficial owner of 2,000 shares of the Bank's 9.12%
Cumulative Preferred Stock, Series A.
______________________
- ----------------------
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
DIRECTORS WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
Coastal Bancorp, Inc. is a Texas corporation, formed pursuant to the Texas
Business Corporation Act which requires that the business and affairs of the
Company shall be managed by or under the direction of the Board of Directors.
The Company's Articles of Incorporation provide that the Company's Board of
Directors be divided into three classes as nearly equal in number as possible,
with one class to be elected annually, and the Bylaws state that members of each
class are to be elected for a term of office to expire at the third succeeding
annual meeting of stockholders and when their respective successors have been
elected and qualified. The number of directors is determined from time to time
by resolution of the Board.
Two directors are to be elected at this Annual Meeting to hold office until
the Annual Meeting in 2003 or until their successors are elected and qualified.
The information set forth below relating to a director's tenure is as of the
date he was first elected as director of either the Association or the Company,
where applicable. There are no arrangements or understandings between the
Company and any person pursuant to which such person has been selected as a
nominee, and no director is related to any other director or executive officer
of the Company or the Bank by blood, marriage or adoption.
INFORMATION WITH RESPECT TO CONTINUING DIRECTORS
Information concerning those members of the Board whose terms do not expire
in 2000, including age, tenure and principal position with the Company and
principal occupation during the past five years, as well as the year his term
will expire, is set forth below:
R. EDWIN ALLDAY. Age 49. Director since 1986. Mr. Allday is a private
investor and in September 1993 became a senior consultant with The Dini
Partners, Inc., Houston, Texas, a company that provides counseling in
philanthropy and non-profit company management. Mr. Allday was an independent
consultant for community relations for charitable organizations from March 1990
to June 1993. From August 1988 to March 1990, Mr. Allday was the Chief
Operating Officer of the American Leadership Forum, a non-profit organization
which teaches business leadership skills located in Houston, Texas. From March
1982 to August 1988, Mr. Allday was the General Manager of Anglia Companies, a
family-owned investment management business in Houston, Texas. His term as a
director of the Company will expire in 2001.
D. FORT FLOWERS, JR. Age 38. Director since 1992. Mr. Flowers is the
President of Sentinel Trust Company, a Texas Limited Banking Association,
Houston, Texas, providing fiduciary and investment management services to
affluent families, their closely held corporations and foundations, a position
he has held since January 1997. Mr. Flowers was Chairman of the Board of DIFCO,
Inc., a railroad car engineering and manufacturing company from before the time
he became a director until August, 1997 when that company was sold. His term as
a director of the Company will expire in 2001.
DENNIS S. FRANK. Age 43. Director since 1988. Mr. Frank is the Chairman
of the Board, Chief Executive Officer and President of Silvergate Bancorp, La
Mesa, California, a position he has held since December 1996. Additionally, he
has been the President and Chief Executive Officer of DSF Management Corp., a
private investment company, located in Houston, Texas, since March 1994. Prior
to that, Mr. Frank was the Manager of the Association's Capital Markets Division
from July 1988 to April 1993 and a consultant to the Association from April 1993
to April 1994. His term as a director of the Company will expire in 2001.
<PAGE>
PAUL W. HOBBY. Age 39. Director since January, 1999. Mr. Hobby is
Chairman and Chief Executive Officer of Hobby Media Services, Inc., Houston,
Texas, a Houston based corporation which invests in traditional and new media
services. Mr. Hobby also serves on the board of directors of various civic,
charitable and professional associations. His term as a director of the Company
will expire in 2002.
ROBERT E. JOHNSON, JR. Age 46. Director since 1986. Mr. Johnson is a
partner in the law firm of Johnson & Johnson, Austin, Texas. His term as a
director of the Company will expire in 2002.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted "FOR" the election of each of the nominees listed
below. If any person named as a nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the Board of Directors will
nominate, and the persons named as proxies will vote, for any replacement
nominee or nominees recommended by the Board of Directors. At this time, the
Board of Directors knows of no reason why either of the nominees listed below
may not be able to serve as a director if elected.
Information concerning the nominees for director, including age, tenure,
principal position with the Company and principal occupation during the past
five years, as well as the year his term will expire, is set forth below:
MANUEL J. MEHOS. Age 45. Director since 1986. Mr. Mehos is the Chairman
of the Board, President and Chief Executive Officer of the Company, Coastal Banc
Holding Company, Inc., Coastal Banc Capital Corp., and the Bank and also Chief
Executive Officer of CoastalBanc Financial Corp., a Bank subsidiary. He is also
a director of each of the Bank's subsidiaries and is the President of CBS Asset
Corp., CBS Builders, Inc. and CoastalBanc Investment Corporation, which are
wholly-owned subsidiaries of the Bank, all of which are located in Houston,
Texas. CBS Asset Corp., CBS Builders, Inc. and CoastalBanc Investment
Corporation are presently inactive. Mr. Mehos also currently serves on the
Finance Commission of Texas. If elected, his term as a director of the Company
will expire in 2003.
JAMES C. NIVER. Age 70. Director since 1986. Mr. Niver is retired and
from 1972 until 1995 was employed by Century Land Company, Houston, Texas,
retiring as its President. If elected, his term as a director of the Company
will expire in 2003.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE ABOVE
NOMINEES BE ELECTED AS DIRECTORS OF THE COMPANY.
STOCKHOLDER NOMINATIONS
The Company's Articles of Incorporation govern nominations for election to
the Board of Directors and require that all nominations for election to the
Board of Directors other than those made by the Board, be made by a stockholder
who has complied with the notice provisions in the Articles. Written notice of
a stockholder's nomination must be communicated to the attention of the
Company's Secretary and either delivered to, or mailed and received at, the
principal executive offices of the Company not less than 60 days prior to the
anniversary date of the mailing of the proxy materials by the Company in
connection with the immediately preceding annual meeting of stockholders of the
Company, and with respect to a special meeting of stockholders for the election
of directors, on the close of business on the tenth day following the date on
which notice of such meeting is first given to stockholders. Such notice shall
include specified matters as set forth in the Articles of Incorporation. If the
nomination is not made in accordance with the requirements set forth in the
Articles of Incorporation, the defective nomination will be disregarded at the
Annual Meeting. The Company did not receive any nominations from stockholders
for the Annual Meeting.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
OF COASTAL BANCORP, INC. AND COASTAL BANC SSB
Regular meetings of the Board of Directors of the Company are held at least
quarterly and special meetings may be called at any time as necessary. During
the year ended December 31, 1999, the Board of Directors of the Company held
eleven meetings. No incumbent director of the Company attended fewer than 75%
of the Board meetings held during the period in which he served as a director in
1999.
The Board of Directors is authorized by its Bylaws to elect members of the
Board to committees of the Board which may be necessary or appropriate for the
conduct of the business of the Company.
Regular meetings of the Board of Directors of the Bank are held monthly and
special meetings may be called at any time as necessary. During the year ended
December 31, 1999, the Board of Directors of the Bank held twelve meetings. No
incumbent director of the Bank attended fewer than 75% of the aggregate of the
total number of Board meetings held during the period in which he served as a
director and the total number of meetings held by committees of the Board of
Directors of the Bank on which he served in 1999.
The Board of Directors of the Bank is authorized by its Bylaws to elect
members of the Board to committees of the Board which may be necessary or
appropriate for the conduct of the business of the Bank. At December 31, 1999,
the Bank had various committees, including an Audit, Compensation,
Asset/Liability, Directors' Loan Review and Community Reinvestment Act
Committee.
The Audit Committee of the Bank's Board is responsible for reviewing the
reports of the independent auditors and examination reports of regulatory
authorities, monitoring the functions of the internal audit department, which
reports directly to this Committee, and generally overseeing compliance with
internal policies and procedures. The Audit Committee members are Messrs. Niver
(Chairman), Allday and Johnson. This Committee met six times during 1999.
The Compensation Committee reviews the compensation of senior executive
officers and recommends to the Board adjustments in such compensation based on a
number of factors, including the profitability of the Bank. Messrs. Niver
(Chairman), Flowers and Johnson comprise the Compensation Committee, which met
three times during 1999. See "Executive Compensation - Report of the Board of
Directors on Compensation During Fiscal 1999."
The Asset/Liability Committee met four times in 1999 to review and analyze
the investment securities portfolio, insure that the Bank's interest rate risk
policy is followed and to insure that policies and procedures for all investment
securities are adequate and appropriate. The Committee also makes interest rate
risk assessments and formulates asset/liability management policy for the
forthcoming quarterly period. This Committee consists of Messrs. Frank
(Chairman), Flowers, Mehos and Hobby.
The Directors' Loan Review Committee met twelve times in 1999 to approve
and/or review certain loans. The Committee can approve any class or type of
loan which is authorized for investment by the Board. Specified loan authority
limits are further delegated to the management loan committee, the management
construction loan committee or an individual officer of the Bank. The
Directors' Loan Review Committee consists of Messrs. Mehos (Chairman), Flowers
and Niver.
The Community Reinvestment Act ("CRA") Committee was established to monitor
the Bank's efforts in serving the credit needs of the residents of the
communities in which it does business, including those credit-worthy persons
having low and moderate incomes. The CRA Committee has appointed a CRA Officer
who is responsible for developing and administering the Bank's CRA program and
for training the Bank's staff to comply with CRA regulations, and Bank policies
and procedures. The CRA Officer chairs a management CRA Committee which works
to oversee that the Bank meets the procedural requirements of the CRA. The CRA
Committee is composed of Messrs. Allday (Chairman), Frank, Mehos and Johnson and
met two times in 1999.
BOARD FEES
During 1999, each non-employee director of the Company and the Bank was
paid a fee of $2,000 for attendance at Board meetings, $400 for each committee
meeting attended and $800 for each Loan Review Committee meeting attended. When
the Board of the Company meets on the same day as the Board of the Bank, only
one attendance fee is paid for that date. No fees are paid for non-attendance;
attendance by conference telephone is similarly not compensated. Directors are
also reimbursed for reasonable travel expenses. Directors who are also
employees of the Company and the Bank receive no fees for attendance at Board or
committee meetings.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers,
directors and beneficial owners of more than 10% of any class of equity
securities of the Company to file reports to indicate ownership and changes in
ownership with the Securities and Exchange Commission and to furnish the Company
with copies of such reports.
Based upon a review of the copies of such forms, the Company believes that
during the year ended December 31, 1999, all Section 16(a) filing requirements
applicable to the Company's officers and directors of the Company and/or the
Bank were complied with.
<PAGE>
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth information concerning executive officers of
the Company, the Bank or other subsidiaries who do not serve on the Company's
Board of Directors. All executive officers are elected by the Board of
Directors of the Company or the Bank or of the respective subsidiary and serve
until their successors are elected and qualified. No such executive officer is
related to any director or other executive officer of the Company or the Bank or
its subsidiaries by blood, marriage or adoption, and there are no arrangements
or understandings between a director and any other person pursuant to which such
person was elected an executive officer.
<TABLE>
<CAPTION>
Position with the Company and/or
the Bank and other subsidiaries
Name Age Principal Occupation During Last Five Years
- ---------------- ---- --------------------------------------------------------------------
<S> <C> <C>
John D. Bird 56 Retired from the Bank on January 31, 2000; Executive Vice President of
the Bank since August 1993, Chief Administrative Officer since June
1993, and Assistant Secretary of the Bank since March 1986; Chief
Operations Officer of the Bank from March 1986 to June 1993; President
and sole stockholder of Coastal Banc Insurance Agency, Inc., an affiliate
of the Bank, since May 1987.
Gary R. Garrett 53 Senior Executive Vice President of the Bank since July 1999 and
Executive Vice President of the Bank from August 1993 to July 1999 and
a director of each of the Bank's subsidiaries; Chief Lending Officer of the
Bank since 1995; Senior Vice President-Mortgage Lending of the Bank
from October 1991 to August 1993; Chief Executive Officer and President
of CBS Mortgage Corp. from August 1993 through its dissolution into the
Bank in December 1998; Executive Vice President, CBS Mortgage Corp.
from January 1989 to August 1993. Director and Executive Vice President
of Coastal Banc Capital Corp., an affiliate of the Bank, since August 1997.
David R. Graham 56 Executive Vice President of the Bank since August 1993 and a director of
each of the Bank's subsidiaries; Senior Vice President-Real Estate Lending
Division of the Bank from May 1988 to August 1993. Senior Vice
President of CBS Asset Corp. since April 1993.
Nancy S. Vadasz 46 Executive Vice President of the Bank since June of 1994, Senior Vice
President since September 1991. Ms. Vadasz is responsible for Market
and Product Strategies.
Catherine N. Wylie 45 Senior Executive Vice President of the Company, Coastal Banc Holding
Company, Inc. and the Bank since July 1999 and a director of Coastal
Banc Holding Company, Inc., and of each of the Bank's subsidiaries;
Executive Vice President of Coastal Banc Holding Company, Inc. from
November 1996 to July 1999, of the Company from July 1994 to July
1999 and of the Bank from August 1993 to July 1999; Chief Financial
Officer of the Company and the Bank since October 1993; Controller of
the Bank from April 1989 to October 1993; also Executive Vice
President/Treasurer of each of the Bank's subsidiaries since October 1990.
Director and Executive Vice President of Coastal Banc Capital Corp., an
affiliate of the Bank since August 1997.
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON
COMPENSATION DURING FISCAL 1999. Officers of the Company do not receive
separate compensation for their services to the Company.
The Compensation Committee of the Board of Directors of the Bank (the
"Committee") is composed entirely of independent outside directors. See
"Information With Respect to Nominees for Director, Directors Whose Terms
Continue and Executive Officers - Board of Directors Meetings and Committees of
Coastal Bancorp, Inc. and Coastal Banc ssb." The Committee is responsible for
reviewing the compensation of senior executive officers of the Bank and
recommending senior executive compensation proposals to the Bank's Board of
Directors for approval.
The Board of Directors of the Bank has a compensation philosophy pursuant
to which executive compensation is designed to be at least comparable with
average executive compensation for the Bank's peers, which are generally
considered to be companies of approximately the same size and in the same
industry. Companies included are independent financial companies, banks and
savings and loan associations, ranging from $900 million to $4.0 billion in
asset size. In May 1992, the Bank retained an executive compensation consultant
to review its senior executive compensation policies. The consultant developed
a compensation program for the Bank's senior executive officers which is a
combination of base salary plus incentive compensation linked to the Bank's
profitability.
The Committee evaluates the base salaries of the Bank's senior executive
officers annually. A senior executive officer's base salary is determined based
upon longevity with the Bank, the effectiveness of such individual in performing
his or her duties, peer averages at the position in question and the Bank's
overall performance. No particular weight is assigned to these variables. The
base salary component alone, while designed to be competitive with peer group
averages, is not designed to produce top levels of compensation for the Bank's
senior executive officers when compared to its peer group. The incentive
component, as described below, which requires the Bank to achieve returns at a
pre-specified level before additional compensation is paid, is the element which
is designed to make total compensation for each of the Bank's senior executive
officers comparable or better than the comparable executive compensation for the
senior executive officers in the Bank's peer group. Based upon the foregoing,
Mr. Mehos, the Chief Executive Officer, earned $303,500 in base salary during
1999.
The amount of incentive compensation is related to the financial
performance of the Bank. No cash incentive compensation will be paid to the
Bank's senior executive officers unless the Committee determines the Bank is
safe and sound in the following areas: capital adequacy, earnings composition,
earnings capability, liquidity, risk management (classified assets), strategic
planning, and compliance with laws and regulations.
During 1999, the Board of Directors determined that no incentive awards to
its Senior Executive Management would be paid unless a 10.0% return on average
equity ("ROE") was achieved. Any earnings from extraordinary items or unsound
practices are excluded from such calculations at the Board's discretion. Gains
on sales of securities from the investment account, net of losses of sales from
the investment account, are deducted from the earnings pool. During 1999, the
Committee calculated that the Company achieved a 8.83% ROE, therefore no
incentive awards were paid to senior executive officers of the Company or Bank.
During 1999, Ms. Wylie received a $100,000 bonus. See "Summary Compensation
Table."
By the Committee:
James C. Niver (Chairman)
D. Fort Flowers, Jr.
Robert E. Johnson, Jr.
<PAGE>
SUMMARY COMPENSATION TABLE. To meet the goal of providing shareholders a
concise, comprehensive overview of compensation awarded, earned or paid in the
reporting period, the Summary Compensation Table is utilized by the Company.
The Summary Compensation Table includes individual compensation information with
respect to the Chief Executive Officer and the four other most highly
compensated executive officers of the Bank and its subsidiaries whose total
compensation exceeded $100,000 for services rendered in all capacities during
the fiscal years ended December 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
ANNUAL ALL
NAME AND PRINCIPAL COMPENSATION AWARDS OTHER
POSITION(1) YEAR SALARY(2) BONUS(3) OPTIONS(4) COMPENSATION(5)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Manuel J. Mehos
Chairman of the Board, 1999 $303,500 $ -- 45,000 $ 2,850
President and 1998 269,900 174,899 10,000 2,000
Chief Executive Officer 1997 264,000 127,900 22,000 2,000
John D. Bird 1999 132,500 -- 4,000 8,866
Executive Vice President and 1998 128,369 27,000 2,000 8,000
Chief Administrative Officer 1997 124,630 30,000 5,000 8,000
Gary R. Garrett 1999 210,000 -- 20,000 7,000
Sr. Executive Vice President 1998 179,900 87,149 3,000 5,669
and Chief Lending Officer 1997 164,800 64,000 11,000 5,000
David R. Graham 1999 137,700 29,500 6,000 3,203
Executive Vice President 1998 131,071 34,291 2,000 2,000
Real Estate Lending Division 1997 124,630 32,895 8,000 2,000
Catherine N. Wylie 1999 210,000 100,000 20,000 25,119
Sr. Executive Vice President 1998 179,900 87,149 3,000 26,120
and Chief Financial Officer 1997 164,800 64,000 11,000 5,000
</TABLE>
______________________
- ----------------------
(1) Principal positions are for fiscal 1999.
(2) Does not include amounts attributable to miscellaneous benefits received
by executive officers of the Bank, including use of Bank-owned vehicles and
reimbursement of educational expenses. In the opinion of management of the
Company, the costs to the Company of providing such benefits to any individual
executive officer during the year ended December 31, 1999 did not exceed the
lesser of $50,000 or 10% of the total of annual salary and bonus reported for
the individual.
(3) Includes lump sum cash bonuses earned for the fiscal year stated and
paid in some casesin the subsequent year.
(4) Free standing stock options; see "- Option Grants in Last Fiscal Year."
(5) Includes, for the named individuals, employer matching contributions
accrued pursuant to the Company's Profit Sharing (401(k)) Plan, any car
allowances and educational reimbursements.
<PAGE>
EXECUTIVE SEVERANCE AGREEMENTS
On May 27, 1999, the Company and the Bank extended the term of the
executive severance agreements (the "Executive Severance Agreements") with Mr.
Garrett and Ms. Wylie (the "Employees" or "Employee") three years to expire on
May 31, 2003. The Executive Severance Agreements provide for the payment of
certain severance benefits to Mr. Garrett and Ms. Wylie in the event of a
trigger event under the Executive Severance Agreements, which means (i) the
occurrence of a change in control of the Company as defined below, or (ii) the
voluntary termination within 90 days of an event which occurs during the
"Protected Period" (i.e., the period six months before and three years after a
change of control or after the expiration of the Executive Severance Agreement)
and constitutes "Good Reason" (as defined below), or (iii) termination of the
Employee's employment for any reason other than "Just Cause" during the
Protected Period. If a trigger event occurs, the Employees will be entitled to
(x) payment by the Company or the Bank for a trigger event described in (i)
above of one times the annual salary and bonus for incentive compensation (not
including stock compensation plans) paid to the Employee during his or her
immediately preceding year of employment or (y) the payment by the Company or
the Bank for a trigger event described in (ii) or (iii) above of an amount equal
to 2.99 times their annual salary plus bonuses paid during the immediately
preceding year; and (z) the Company will cause any and all outstanding options
to purchase stock of the Company held by each Employee to become immediately
exercisable in full. The Executive Severance Agreement also provides that the
Company will reimburse the Employee for all costs and expenses, including
reasonable attorney's fees incurred by the Employee to enforce rights or
benefits under such agreements. Other than the foregoing, the Company has not
entered into any employment contracts with any of its officers.
Under the Executive Severance Agreements, a "Change In Control" of the
Company would be deemed to occur if (i) the Company is not the surviving entity
in any merger, consolidation, or other reorganization, (ii) the sale, exchange,
lease, transfer or other disposition to any person of all or a substantial part
of the assets, liabilities, or business of the Company or the Bank, (iii) any
change in business of the Company or the Bank such that the Company does not own
the voting stock of the Bank or the business of the Bank is not as an insured
depository institution, (iv) any person or entity including a "group" as
contemplated by Section 13(d)(3) of the Exchange Act acquires or gains ownership
or control (including, without limitation, power to vote) of more than 25% of
the outstanding shares of the Bank's or the Company's voting stock, or (v) as a
result of or in connection with a contested election of directors, the persons
who were directors of the Bank or the Company before such election cease to
constitute at least two-thirds of the Board of Directors.
Under the Executive Severance Agreements (a) "Good Reason" means any of
the following events, which has not been consented to in advance by the Employee
in writing: (i) the requirement that the Employee move his or her personal
residence, or perform his or her principal executive functions, more than thirty
(30) miles from his or her primary office as of the date of the Change in
Control; (ii) a material (defined to be 10% or more) reduction in the Employee's
base compensation as in effect on the date of the Change in Control or as the
same may be increased from time to time; (iii) a successor to the Company or the
Bank fails or refuses to assume the Company's and the Bank's obligations under
the Executive Severance Agreement; (iv) the Company, the Bank or successor
thereto breaches any provision of the Executive Severance Agreement; or (v) the
Employee is terminated for other than Just Cause after the Change in Control;
and (b) "Just Cause" means, in the good faith determination of the Company's and
the Bank's Boards of Directors, the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of the
Executive Severance Agreement. The Employee shall have the right to make a
presentation to the Board of Directors with counsel prior to rendering of such
determination by the Board. The Employee shall have no right to receive
compensation or other benefits for any period after termination for Just Cause.
No act, or failure to act, on the Employee's part shall be considered "willful"
unless he has acted, or failed to act, with the absence of good faith and
without a reasonable belief that his action or failure to act was in the best
interest of the Bank and the Company.
In the event that the Employee and the Company or the Bank agree that the
Employee will be paid an amount under the Executive Severance Agreement which
triggers the requirement to pay the excise tax required under Section 280G of
the Internal Revenue Code of 1986, as amended, the Company or the Bank will
reimburse the Employee for all such excise taxes.
The Executive Severance Agreement remains in effect for the modified period
commencing on May 31, 1999 (the "Effective Date") and ending on the earlier of
(i) May 31, 2003, or (ii) the date on which the Employee terminates his or her
employment with the Company or the Bank. Any payments made to the Employee
pursuant to the Executive Severance Agreement, or otherwise, are subject to and
conditioned upon their compliance with the Federal Deposit Insurance Act and any
regulations promulgated by the Federal Deposit Insurance Corporation thereunder.
<PAGE>
AGGREGATE OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth individual grants of options that were made
during the last fiscal year to the executive officers named in the Summary
Compensation Table. This table is intended to allow stockholders to ascertain
the number and size of option grants made during the fiscal year, the expiration
date of the grants and the potential realizable present value of such options
under specified assumptions.
<TABLE>
<CAPTION>
PERCENT OF
OPTIONS TOTAL OPTIONS
GRANTED GRANTED TO EXERCISE GRANT DATE
(NO. OF EMPLOYEES PRICE EXPIRATION PRESENT
NAME SHARES)(1) IN FISCAL YEAR PER SHARE DATE VALUE(2)
- ------------------- ---------- -------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Manuel J. Mehos 45,000 24.35% $16.00 5/27/09 $365,220
John D. Bird 4,000 2.16 16.00 5/27/09 32,464
Gary R. Garrett 20,000 10.82 16.00 5/27/09 162,320
David R. Graham 6,000 3.25 16.00 5/27/09 48,696
Catherine N. Wylie 20,000 10.82 16.00 5/27/09 162,320
</TABLE>
______________________
- ----------------------
(1) Total options granted in 1999 were 184,800 shares. The options vest 25%
during the first year and an additional 25% for each of the next three years.
(2) The potential realizable value of the grant of options is the present
value of the grant at the date of grant using a variation of the Black-Scholes
option pricing model. Assumptions used to calculate the present value of the
options granted on May 27, 1999, respectively, were as follows: an expected
volatility rate of 36.156%, a risk free rate of return of 5.628%, a dividend
yield of $.32 per share per year and the expiration date of May 27, 2009,
respectively.
<PAGE>
AGGREGATE OPTIONS EXERCISED IN LAST YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth, with respect to the executive officers
named in the Summary Compensation Table, information with respect to the
aggregate amount of options exercised during the last fiscal year, any value
realized thereon, the number of unexercised options at the end of the fiscal
year (exercisable and unexercisable) and the value with respect thereto.
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Unexercised in-the-Money Options at
Acquired on Value Options at Fiscal Year-End Fiscal Year-End(1)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------- ------------ -------- --------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
Manuel J. Mehos -- -- 158,000 47,000 $865,586 $61,984
John D. Bird 27,880 $169,792 18,786 5,875 176,410 8,869
Gary R. Garrett -- -- 60,741 22,495 377,086 34,721
David R. Graham -- -- 29,780 8,791 144,856 14,008
Catherine N. Wylie -- -- 60,952 21,494 369,614 34,136
</TABLE>
______________________
- ----------------------
(1) Based upon a closing market price for the Company's Common Stock as of
December 31, 1999 of $17.50.
COMPARATIVE STOCK PERFORMANCE GRAPH
The stock performance graph below compares the cumulative total stockholder
return of the Company's Common Stock from December 31, 1994 to December 31, 1999
with the cumulative total return of the National Association of Securities
Dealers Automated Quotations ("NASDAQ") Market Index and certain thrift
institutions traded on the NASDAQ, as compiled by SNL Securities, L.P. in its
OTC Thrift Index, assuming an investment of $100 on December 31, 1994 and the
reinvestment of all dividends. In 1994, the Company paid its first dividend of
$.08 per share on June 15, 1994. Quarterly dividends of the same amount were
paid on September 15, 1994, December 15, 1994, March 15, 1995, June 15, 1995,
September 15, 1995, and December 15, 1995. The Board of Directors voted at the
January 25, 1996 regularly scheduled Board Meeting to increase the dividend for
the fourth quarter of 1995 from $.08 per share to $.10 per share. Quarterly
dividends of $.10 per share were paid on March 15, 1996, June 15, 1996,
September 15, 1996 and December 15, 1996. During 1997, the Company paid
quarterly dividends in the amount of $.10 per share on March 15, 1997 and
quarterly dividends of $.12 per share on June 15, 1997, September 15, 1997 and
December 15, 1997. In 1998, the Company split the stock 3:2 at which time the
$.12 per share dividend, adjusted for the split was $.08 per share. During 1998
and 1999, the Company paid quarterly dividends in the amount of $.08 per share,
as adjusted for the stock split, on March 15, 1998, June 15, 1998, September 15,
1998, December 15, 1998, March 15, 1999, June 15, 1999, September 15, 1999 and
December 15, 1999.
<PAGE>
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURN PERFORMANCE
<TABLE>
<CAPTION>
PERIOD ENDING
---------------------------------------------------------------
INDEX 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
<S> <C> <C> <C> <C> <C> <C>
Coastal Bancorp, Inc. 100.00 124.25 165.91 257.17 196.48 200.14
NASDAQ - Total US* 100.00 141.33 173.89 213.07 300.25 542.43
SNL OTC Thrift Index 100.00 152.05 197.81 321.29 280.92 241.62
SNL $1B-$5B Bank Index 100.00 134.48 174.33 290.73 290.06 266.58
SNL $1B-$5B Thrift Index 100.00 153.72 201.70 358.03 321.38 287.80
</TABLE>
SNL Securities LC (804) 977-1600
2000
* Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 1999. Used with permission. All rights
reserved. crsp.com.
______________
Notes:
A. Each Index is weighted for all companies that fit the criteria of
that particular Index. The Index is calculated to exclude companies as they are
acquired, and add them to the Index calculation as they become publicly traded
companies. All companies in the particular Index that were in existence at
December 31, 1999 are included in the calculations.
B. Each Index value measures dividend re-investment by assuming
dividends are received in cash on the ex-date and re-invested back into the
company stock paying the dividend on the same day. The stock price on the
ex-date is used to calculate how many shares can be bought with the dividend.
CERTAIN TRANSACTIONS
In 1987, the Bank entered into an Administrative Services Agreement with
Coastal Banc Insurance Agency, Inc. ("CBIA"), a Texas business corporation
licensed under Texas law to act as a life insurance agent. CBIA is wholly-owned
by an executive officer of the Bank who receives no salary or dividends from
CBIA. CBIA has granted to the Bank the legal ownership of all of its books and
records and the stockholder of CBIA has granted to the Bank the right to assign
all of its stock in CBIA to any other properly licensed life insurance agent in
the Bank's sole discretion. The Bank has agreed to provide to CBIA certain
services, including but not limited to employee training, office space,
furniture, fixtures, equipment, clerical services, data processing and other
services as well as marketing leads and information to assist CBIA in the sale
of annuities underwritten by an independent annuity company to the Bank's
deposit and loan customers. In consideration for such services, CBIA has agreed
to pay the Bank a flat fee which is subject to renegotiation on a quarterly
basis. The fee payable to the Bank was last negotiated on December 31, 1999,
and was $580,000 for the year ended December 31, 1999. Such fee represented
substantially all of CBIA's net income for the year then ended.
<PAGE>
PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed KPMG LLP as independent
auditors for the Company for the year ending December 31, 2000, and has further
directed that the selection of auditors be submitted for ratification by the
stockholders at the Annual Meeting. The Company has been advised by KPMG LLP
that neither the firm nor any of its associates has any relationship with the
Company or its subsidiaries other than the usual relationship that exists
between independent public accountants and clients. KPMG LLP will have one or
more representatives at the Annual Meeting who will have an opportunity to make
a statement, if he or she so desires, and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS FOR FISCAL 2000.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have presented at the next
Annual Meeting of Stockholders of the Company and included in the proxy
materials used by the Company in connection with such meeting must be received
at the corporate headquarters office of the Company at Coastal Banc Plaza, 5718
Westheimer, Suite 600, Houston, Texas 77057, no later than November 28, 2000.
If such proposal is in compliance with all of the requirements of Rule 14a-8
promulgated under the Exchange Act, it will be included in the Proxy Statement
and set forth on the form of proxy issued for the next Annual Meeting of
Stockholders. It is urged that any such proposals be sent by certified mail,
return receipt requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to the Company's Articles of
Incorporation, which provide that business must be properly brought before the
meeting by or at the direction of the Board of Directors, or otherwise properly
brought before the meeting by a stockholder. For business to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary of the Company. To be
timely, a stockholder's notice must be delivered to, or mailed and received at,
the principal executive offices of the Company not less than 60 days prior to
the anniversary date of the mailing of proxy materials by the Company in
connection with the immediately preceding annual meeting of stockholders of the
Company. A stockholder's notice shall set forth as to each matter the
stockholder proposes to bring before an annual meeting such information
specified in the Company's Articles of Incorporation. If the proposal is not
made in accordance with the terms of the Articles of Incorporation, such
proposal will not be acted upon at the Annual Meeting. No stockholder proposals
were received by the Company in connection with the 2000 Annual Meeting.
PROXY SOLICITATION
The Company has not retained a professional proxy solicitation firm, to
assist in the solicitation of proxies or for related services.
<PAGE>
OTHER MATTERS
Management is not aware of any business to come before the 2000 Annual
Meeting other than those matters described above in this Proxy Statement and
possibly, procedural matters incident to the conduct of the meeting. However,
if any other matters should properly come before the meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
The cost of the solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Company's Common Stock. In addition to
solicitations by mail, directors, officers and employees of the Company or its
subsidiary may solicit proxies personally or by telephone without additional
compensation.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of the Company's Annual Report for the year ended December 31, 1999
("Annual Report") accompanies this Proxy Statement. The Annual Report is not a
part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1999, AND ANY EXHIBITS THERETO REQUIRED TO BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE EXCHANGE ACT. SUCH
WRITTEN REQUEST SHOULD BE DIRECTED TO CATHERINE N. WYLIE, CHIEF FINANCIAL
OFFICER, COASTAL BANCORP, INC., COASTAL BANC PLAZA, 5718 WESTHEIMER, SUITE 600,
HOUSTON, TEXAS 77057. THE FORM 10-K IS NOT A PART OF THE PROXY SOLICITATION
MATERIALS.
By Order of the Board of Directors
/s/ Linda B. Frazier
Linda B. Frazier
Secretary
March 28, 2000
