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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COAST SAVINGS FINANCIAL, INC.
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
[LOGO OF COAST SAVINGS FINANCIAL, INC.(R)]
March 26, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Coast Savings Financial, Inc., which will be held at the Omni Los Angeles
Hotel, 930 Wilshire Boulevard, Los Angeles, California on April 23, 1997,
beginning at 2:00 p.m. The formal notice and the proxy statement of the Board
of Directors for this meeting are attached to this letter.
Your vote is very important. On behalf of the Board of Directors, I urge you
to vote, sign, date and return the enclosed proxy card as soon as possible,
even if you currently plan to attend the Annual Meeting. A postage-paid return
envelope is provided for your convenience. You may still attend the Annual
Meeting and vote in person, but returning your proxy card now will assure that
your vote is counted if you are unable to attend.
Sincerely,
/s/ Ray Martin
RAY MARTIN
Chairman of the Board and
Chief Executive Officer
[LOGO OF COAST SAVINGS FINANCIAL, INC.(R)]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 23, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Coast
Savings Financial, Inc. (the "Company") will be held at the Omni Los Angeles
Hotel, 930 Wilshire Boulevard, Los Angeles, California, on April 23, 1997, at
2:00 p.m., California time, for the following purposes:
1. To elect four directors of the Company to serve until the Annual
Meeting to be held in 2000 or until their successors are elected and have
been qualified. The Board of Directors has nominated Robert L. Hunt II,
Thomas V. McKernan, Jr., Keith W. Renken and Harold B. Starkey, Jr.
2. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditing firm for 1997.
3. To consider such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors of the Company has selected March 5, 1997, as the
record date for the Annual Meeting. Only those 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 adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Priscilla Finch,
Priscilla Finch,
Corporate Secretary
Los Angeles, California
March 26, 1997
COAST SAVINGS FINANCIAL, INC.
1000 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90017-2457
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1997
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Coast Savings Financial, Inc. (the
"Company"), for use at the Annual Meeting of Stockholders of the Company (the
"Meeting") to be held at the Omni Los Angeles Hotel, 930 Wilshire Boulevard,
Los Angeles, California on April 23, 1997, at 2:00 p.m., California time, and
at any adjournment thereof. The approximate date of mailing of this Proxy
Statement and the enclosed proxy card is March 26, 1997.
The principal solicitation of proxies is being made by mail. However,
certain officers, directors and employees of the Company, or of its wholly
owned subsidiary, Coast Federal Bank, Federal Savings Bank ("Coast"), none of
whom will receive additional compensation therefor, may solicit proxies by
telegram, telephone or other personal contact. The Company has retained D.F.
King & Co., Inc. to assist in the solicitation of proxies for an estimated fee
of $3,800 plus reimbursement for certain expenses. The Company will bear the
cost of the solicitation of the proxies, including postage, printing and
handling, and will reimburse brokerage firms and other record holders of
shares beneficially owned by others for their reasonable expenses incurred in
forwarding solicitation material to beneficial owners of shares.
VOTING
The Meeting is being held (i) to elect four directors; (ii) to ratify the
appointment of KPMG Peat Marwick LLP as the Company's independent auditing
firm for 1997; and (iii) to consider such other business as may properly be
brought before the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 5, 1997, as
the record date for the determination of stockholders entitled to notice of
and to vote at the Meeting. On that date, 18,591,317 shares of the Company's
common stock, par value $.01 per share (the "Common Stock"), were outstanding.
Each share is entitled to one vote on any matter that may be presented for
consideration and action by the stockholders. The presence at the meeting, in
person or by proxy, of the holders of a majority of the outstanding shares of
Common Stock is necessary to constitute a quorum for conducting business. The
inspectors of election appointed for the meeting will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but as unvoted for purposes of determining the approval
of any matter submitted to the shareholders for a vote. If a broker indicates
on a proxy that the broker does not have authority as to certain shares to
vote on a particular matter, such shares will be treated as present for
purposes of determining the presence of a quorum but will not be considered as
present and entitled to vote with respect to that matter.
Unless otherwise indicated on the proxy, shares represented by any proxy in
the form of the enclosed proxy card will, if the proxy is properly executed
and received by the Company before the Meeting, be voted FOR each of the four
nominees for director of the Company shown on the proxy and FOR ratification
of the appointment of KPMG Peat Marwick LLP as the Company's independent
auditing firm for 1997. Although the Board of Directors currently knows of no
other matter to be brought before the Meeting, if other matters properly come
before the Meeting and may properly be acted upon, including voting on a
substitute nominee for director
in the event that any of the nominees named in this Proxy Statement becomes
unwilling or unable to serve before the Meeting, the proxy will be voted in
accordance with the best judgment of the persons named in the proxy. Any
stockholder has the power to revoke his proxy at any time before it is voted
at the Meeting by delivering a later signed and dated proxy or other written
notice of revocation to Priscilla Finch, Corporate Secretary of the Company,
at 1000 Wilshire Boulevard, 22nd Floor, Los Angeles, California 90017-2457. A
proxy may also be revoked if the person executing the proxy is present at the
Meeting and chooses to vote in person.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information concerning the shares of Common
Stock beneficially owned as of March 5, 1997, by all directors of the Company,
by each of the executive officers named in the Summary Compensation Table and
by all directors and executive officers of the Company and Coast as a group.
Each beneficial owner listed has sole investment and voting power with respect
to the Common Stock indicated.
NAME OF BENEFICIAL NUMBER OF
OWNER SHARES
OR NUMBER OF BENEFICIALLY
PERSONS IN GROUP OWNED(1)
------------------ ------------
Leon S. Angvire............................................... 25,547(2)
John C. Argue................................................. 6,000(2)
James F. Barritt.............................................. 133,985
Gerald D. Barrone............................................. 86,301
Thomas V. McKernan, Jr. ...................................... 6,500(3)
James R. Boyle................................................ 75,000
Joan Milke Flores............................................. 6,487(2)
Robert L. Hunt II............................................. 252,003
Jack P. Libby................................................. 7,000(2)
Ray Martin.................................................... 319,956
James P. Miscoll.............................................. 15,000(2)
Norman H. Raiden.............................................. 111,772
Keith W. Renken............................................... 5,500(2)
Harold B. Starkey, Jr......................................... 10,600(2)
All directors and executive officers as a group (15 persons).. 1,143,102
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(1) Each of the named persons owns less than 1% of the outstanding shares of
Common Stock except for Mr. Martin who owns 1.69% and Mr. Hunt who owns
1.34%. All directors and executive officers as a group own 5.83% of the
outstanding shares of Common Stock. The foregoing percentages and the
share amounts shown in the table include with respect to Messrs. Barritt,
Barrone, Boyle, Hunt, Martin, Raiden and all directors and executive
officers as a group (including those named) 132,185 shares, 79,301 shares,
70,000 shares, 208,211 shares, 295,441 shares, 105,772 shares, and
1,004,661 shares, respectively, that are subject to options which are
exercisable within 60 days of March 5, 1997.
(2) Includes 5,000 options exercisable within 60 days of March 5, 1997.
(3) Includes 5,000 options which vest in June of 1997.
2
PRINCIPAL STOCKHOLDERS
The following table sets forth as of March 5, 1997, (i) the name of each
person known to the Company, based upon filings made by such person with the
Securities and Exchange Commission or information provided by such person to
the Company, to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock, (ii) the total number of shares of Common
Stock beneficially owned by such person, and (iii) the percentage of the
outstanding shares of Common Stock so owned.
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OWNERSHIP(1) OF CLASS
---------------- ----------------------- --------
Jenswold, King and Associates, Inc. ........ 1,014,166 5.46
Two Post Oak Central
1980 Post Oak Boulevard
Suite 2400
Houston, Texas 77056-3898
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(1) Except as otherwise noted, the number of shares beneficially owned is
deemed to include shares of Common Stock in which the person named has or
shares either investment or voting power.
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS
The Company's Bylaws provide that the number of directors shall be fixed by
resolution of the Board of Directors. The present resolution provides for
eleven directors. The three year terms of directors are staggered to provide
for the election of approximately one-third of the Board of Directors each
year.
The following table sets forth the names and certain information regarding
the persons who are currently members of the Company's Board of Directors,
including those nominated by the Board of Directors for reelection. If
elected, Messrs. Hunt, McKernan, Renken and Starkey will each serve for a term
of three years or until their successor is elected and qualified. All nominees
have consented to be named and have indicated their intent to serve if
elected. If any of the nominees becomes unavailable for any reason, the shares
represented by proxies solicited hereby will be voted for the person, if any,
who is designated by the Company's current Board of Directors to replace the
nominee.
DIRECTOR
NOMINEES FOR DIRECTOR AGE SINCE* POSITION(S) HELD WITH THE COMPANY AND COAST
--------------------- --- -------- ---------------------------------------------
Robert L. Hunt II........ 46 1991 President, Chief Operating Officer and
Director of the Company and of Coast
Thomas V. McKernan, Jr. . 52 1996 Director of the Company and of Coast
Keith W. Renken.......... 62 1992 Director of the Company and of Coast
Harold B. Starkey, Jr. .. 70 1981 Director of the Company and of Coast
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* Indicates, where applicable, the year in which a director became a director
of Coast prior to the formation of the Company in 1988.
3
TERM OF
DIRECTOR OFFICE
CONTINUING DIRECTORS AGE SINCE* EXPIRES POSITION(S) HELD WITH THE COMPANY AND COAST
-------------------- --- -------- ------- -------------------------------------------
Gerald D. Barrone..... 65 1987 1999 Director of the Company and of Coast
Joan Milke Flores..... 60 1994 1999 Director of the Company and of Coast
Jack P. Libby......... 74 1992 1999 Director of the Company and of Coast
Leon S. Angvire....... 68 1968 1998 Director of the Company and of Coast
John C. Argue......... 65 1996 1998 Director of the Company and of Coast
Ray Martin............ 61 1979 1998 Chairman of the Board, Chief Executive Officer
and Director of the Company and of Coast
James P. Miscoll...... 62 1992 1998 Director of the Company and of Coast
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* Indicates, where applicable, the year in which a director became a director
of Coast prior to the formation of the Company in 1988.
The Board of Directors recommends that you vote FOR the above nominees for
director.
NOMINEES FOR ELECTION AS DIRECTORS
Mr. Hunt joined Coast as Senior Vice President of Finance in 1983. Mr. Hunt
was named to the position of Executive Vice President and Chief Financial
Officer in 1985. In this capacity he was responsible for the Finance Group,
which included planning, accounting, investments, treasury, risk management
and investor relations. Mr. Hunt was elected a director of the Company and of
Coast in 1991. He was named President and Chief Operating Officer of both in
1993. Mr. Hunt is a graduate of the University of Southern California with a
B.A. in accounting, finance and quantitative business analysis. He is a member
of the American Institute of Certified Public Accountants, the California
Society of Certified Public Accountants and the Financial Managers Society, of
which he is a past president.
Thomas V. McKernan, Jr., is President and Chief Executive Officer of the
Automobile Club of Southern California, with which he has been associated for
30 years. McKernan serves on the boards of the American Automobile
Association, Newhall Land and Farming, the Payden and Rygel Mutual Funds, and
the Claremont Graduate School. He was appointed by Governor Wilson as Chair of
the State School-to-Career Task Force, and was recently elected as Chair of
the California State Chamber of Commerce. He has been a director of the
Company and of Coast since June of 1996.
Mr. Renken was elected a director of the Company and of Coast in 1992. He
retired at the end of 1992 as Senior Partner and Chairman of the Executive
Committee of Southern California of the accounting firm of Deloitte & Touche
LLP. He joined DeLoitte & Touche in 1959 when it was known as Deloitte Haskins
& Sells. He is an active civic leader and a board member of a number of
organizations in Los Angeles County.
Mr. Starkey became Senior Executive Vice President and a director of Coast
in 1981 following Coast's acquisition of First Federal Savings and Loan
Association of San Diego ("First Federal of San Diego"). He served First
Federal of San Diego in various capacities beginning in 1950 and was named its
President in 1969. Mr. Starkey retired as Senior Executive Vice President of
Coast in 1991.
CONTINUING DIRECTORS
Mr. Argue is of counsel with the law firm of Argue Pearson Harbison & Myers,
a downtown Los Angeles business law firm. Mr. Argue has been a director of the
Company and of Coast since January 1996. Mr. Argue serves on the board of a
number of corporations, including Avery Dennison, CalMart Co., and the TCW/DW
Mutual Funds. He serves as Chairman of Rose Hills Memorial Park, and is a
trustee of the University of Southern
4
California, of Occidental College and of Pomona College. Mr. Argue has served
as Chairman or President of the Los Angeles Area Chamber of Commerce, the
American Heart Association and the California Club.
Mr. Angvire is a partner of Hill, Farrer & Burrill, a Los Angeles law firm,
where he has practiced since 1954. He has been a director of Coast since 1968
and a director of the Company since its organization in 1988.
Mr. Martin has been affiliated with Coast since 1959, and has been a
director of Coast since 1979. He was elected President and named Chief
Operating Officer in 1980. In 1984 he was named Chief Executive Officer, and
in 1987 he was elected Chairman of the Board of Directors, continuing as Chief
Executive Officer. Mr. Martin has served as Chairman of the Board of the
Company since its organization in 1988. He is a past Chairman of the
California League of Savings Institutions and previously served on the
Executive Committee of the United States League of Savings Institutions. In
1990, he served as a member of the Federal Deposit Insurance Corporation's
Savings Association Insurance Fund Advisory Committee, representing
institutions in California, Nevada and Arizona. He is the current Vice
Chairman of the Board of Directors of the Federal Home Loan Bank ("FHLB") of
San Francisco. He is a member of the Board of Directors and of the executive
committee of the Los Angeles Area Chamber of Commerce and is past Chairman of
the Los Angeles Area Council of the Boy Scouts of America.
Mr. Miscoll retired as Vice Chairman/Executive Officer of Bank of America
NT&SA in 1992. Mr. Miscoll has a 30-year background of extensive
responsibilities in domestic, international and multinational banking.
Mr. Miscoll was elected to the board of the Company and of Coast in 1992. He
is also on the Boards of Directors of Rykoff-Sexton, Northern Instruments Inc.
and American International Companies.
Mr. Barrone was President and Chief Operating Officer of Coast from 1987 to
1991. He has been a director of Coast since 1987. Mr. Barrone was President
and has been a director of the Company since its organization in 1988. Before
joining Coast, he had been affiliated with Fidelity Federal Savings and Loan
Association ("Fidelity Federal") in Glendale, California since 1955, where he
was elected to the Board of Directors in 1973. Mr. Barrone served as President
and Chief Executive Officer of Fidelity Federal and of Citadel Holding Corp.,
the parent company of Fidelity Federal, and as Vice Chairman of the Board of
Directors of Citadel Holding Corp. and Fidelity Federal. He served as Chairman
of the California League of Savings Institutions in 1985 and 1986. Mr. Barrone
is a past director of the FHLB of San Francisco and he is presently on the
Board of Directors of the Electro Rent Corporation.
Ms. Milke Flores has been the president of Joan Milke Flores Group, Inc., a
California-based, woman-owned government and public affairs consulting firm,
since 1993. She has been a director of the Company and of Coast since 1994.
From 1981 until 1993 Ms. Milke Flores served as a member of the Los Angeles
City Council and she is a past President Pro Tempore of that Council. Ms.
Milke Flores has served as acting president of the Southern California
Regional Airport Authority, was the founder and President of the Alameda
Corridor Transportation Authority and is past president of the South Bay
Cities Association. A former member of the United States League of Cities
International Trade Task Force, she is currently a gubernatorial appointee to
the Commission of the Californias. Among other community activities, she
serves as a Member of the Board of the South Bay Economic Development Council
and as chair of the Board of Directors of World Opportunities International.
Mr. Libby has been the President of Libby Construction Co., Inc. since 1989.
Prior to that date Mr. Libby was President of Nevada Young American Homes,
Inc. for 20 years. He was a public interest director of the FHLB of San
Francisco from 1983 to 1990, and is a director of NewWest Mortgage Company.
BOARD MEETINGS AND COMMITTEES
The Board of Directors, which met 11 times in 1996, generally meets
regularly each month and has special meetings as necessary. The standing
committees of the Board of Directors of the Company and of Coast include a
Nominating Committee, an Audit and Compliance Committee and a
Compensation/Pension/Benefits Committee (the "Compensation Committee").
5
The Nominating Committee, consisting of Joan Milke Flores, Chairwoman, Leon
S. Angvire and Gerald D. Barrone, was established by the Board of Directors in
January 1990 to recommend nominees for the Board of Directors and held two
meetings during 1996. The Nominating Committee does not consider nominations
submitted by shareholders.
The Audit and Compliance Committee, which held four meetings in 1996,
consists of Leon S. Angvire, who is Chairman, Joan Milke Flores, Jack P.
Libby, James P. Miscoll and Keith W. Renken. It makes recommendations to the
Board of Directors regarding the independent auditor to perform audits and
other services, reviews the scope and results of such services, oversees
Coast's internal audit department, reviews the system of internal controls and
results of audits with management and the independent auditor, monitors
adherence to generally accepted accounting principles relating to accounting
and financial reporting and has oversight of Coast's and the Company's
compliance with savings institution and savings institution holding company
regulatory requirements.
The Compensation Committee, which held six meetings in 1996, consists of
Keith W. Renken, who is Chairman, Leon S. Angvire, Joan Milke Flores, James P.
Miscoll and Jack P. Libby, all of whom are outside directors. The Compensation
Committee reviews and makes recommendations to the Board of Directors
regarding the salaries and compensation of senior executive officers,
administers Coast's pension plan and the Company's stock option program and
recommends other forms of compensation and benefits to the Board of Directors.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth certain information relating to executive
officers of the Company and of Coast who are not directors.
NAME AGE TITLE
---- --- -----
James F. Barritt........ 38 Senior Executive Vice President and Chief Financial
Officer of the Company and of Coast (Finance,
Investments and MIS Group)
James R. Boyle.......... 52 Senior Executive Vice President of the Company and
of Coast (Loan Group)
Mark T. Neal............ 36 Senior Vice President of Coast (Corporate Planning
and Investor Relations)
Norman H. Raiden........ 64 Senior Executive Vice President and General Counsel
of the Company and of Coast (Administrative Group)
Gerald I. Rich.......... 47 Senior Vice President, Controller and Treasurer of
the Company and of Coast
Priscilla Finch......... 41 Corporate Secretary of the Company and of Coast
Mr. Barritt joined Coast in 1986 and was promoted to Senior Vice President,
Finance, in 1987. In January 1993, Mr. Barritt was named Chief Financial
Officer and Executive Vice President and in January 1996 he was named Senior
Executive Vice President. Mr. Barritt graduated with a degree in Business
Administration from California State University at Northridge. Prior to
joining Coast, Mr. Barritt worked with KPMG Peat Marwick LLP, specializing in
financial services.
Mr. Boyle joined Coast in 1991. He is the Senior Executive Vice President
responsible for the Loan Group. He was the Chief Executive Officer of
Gibraltar Savings prior to joining Coast.
Mr. Neal joined Coast in 1993. He is the Senior Vice President responsible
for Corporate Planning and Investor Relations. He is a certified public
accountant and held the position of Director, Corporate Accounting at National
Medical Enterprises for a one year period prior to joining Coast. Prior to
that, he worked with KPMG Peat Marwick LLP for eight years specializing in the
audits of financial institutions and held the title of Senior Audit Manager.
6
Mr. Raiden joined Coast in 1990. As Senior Executive Vice President he is
responsible for the Administrative Group. Prior to joining Coast, Mr. Raiden
was a senior partner with the law firm of McKenna, Conner & Cuneo and was
General Counsel of the Federal Home Loan Bank Board from 1983 to 1985.
Mr. Rich, Senior Vice President, Controller and Treasurer, joined Coast in
1985. He is a certified public accountant and worked with KPMG Peat Marwick
LLP from 1975 to 1985 as a Senior Audit Manager specializing in financial
institutions.
Miss Finch joined Coast in 1985. She is currently Corporate Secretary of the
Company and of Coast as well as Assistant Vice President of Investor Relations
for Coast.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation paid by Coast during the
year ended December 31, 1996, to its Chief Executive Officer and to its four
most highly compensated executive officers other than the Chief Executive
Officer (together with the Chief Executive Officer, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS(2)
------------------------------- ------------
SECURITIES
OTHER UNDERLYING ALL OTHER
NAME AND PRINCIPAL ANNUAL OPTIONS/SARS COMPENSATION
POSITION YEAR SALARY($) BONUS($) COMPENSATION (#) ($)
------------------ ---- --------- -------- ------------ ------------ ------------
Ray Martin, Chairman of
the Board 1996 500,004 268,000 -0- 100,000 516,431(3)
and Chief Executive
Officer of the 1995 500,004 -0- -0- -0- 172,754(3)
Company and of Coast 1994 500,004 -0- 7,499(1) -0- 4,048(3)
Robert L. Hunt II,
President and Chief 1996 374,879 195,300 -0- 75,000 129,429(3)
Operating Officer of
the Company 1995 364,316 -0- -0- -0- 28,599(3)
and of Coast 1994 364,316 -0- -0- -0- 135,523(3)
James R. Boyle, Senior
Executive 1996 317,309 135,800 -0- 30,000 103,098(3)
Vice President of the
Company 1995 311,304 -0- -0- -0- 42,512(3)
and of Coast 1994 305,054 -0- -0- -0- 32,875(3)
Norman H. Raiden,
Senior Executive 1996 294,020 124,900 -0- 40,000 332,145(3)
Vice President and
General Counsel 1995 286,304 -0- -0- -0- 113,004(3)
of the Company and of
Coast 1994 286,304 -0- -0- -0- 289,307(3)
James F. Barritt,
Senior Executive Vice 1996 276,803 118,300 -0- 55,000 37,837(3)
President and Chief
Financial Officer 1995 236,304 -0- -0- -0- 10,719(3)
of the Company and of
Coast 1994 221,464 -0- -0- -0- 14,104(3)
- --------
(1) Represents Coast's share of the cost of the purchase of Common Stock. See
"Directors' Share Purchase Plan" below.
(2) At December 31, 1996, Messrs. Martin, Hunt, Boyle, Raiden and Barritt held
performance shares having a value of $776,250, $1,328,125, $2,180,000,
$340,625 and $681,250, respectively. All such shares were awarded in 1992
and 1993 pursuant to the Coast Performance Share Plan for Key Employees.
See "Long-Term Incentive Plan" below.
(3) These amounts represent accruals by Coast for the Executive Supplemental
Retirement Plan on behalf of the Named Executive Officer (see "Retirement
Plans" below).
7
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ------------- ------------- --------- ---------- ---------- ----------
Ray Martin.............. 100,000 11.6% $33.00 May 2006 $2,075,352 $5,259,350
Robert L. Hunt II....... 75,000 8.7% $33.00 May 2006 $1,556,514 $3,944,513
James R. Boyle.......... 30,000 3.5% $33.00 May 2006 $ 622,606 $1,577,805
Norman H. Raiden........ 40,000 4.6% $33.00 May 2006 $ 830,141 $2,103,740
James F. Barritt........ 55,000 6.4% $33.00 May 2006 $1,141,444 $2,892,643
- --------
(1) All options listed were granted pursuant to the 1996 Coast Savings
Financial, Inc. Equity Incentive Plan. Option exercise prices were at the
market price when granted. The options have a term of 10 years and vested
on the date of grant. At the discretion of the Compensation Committee, the
exercise price and federal tax withholding may be paid in cash or with
shares of Company stock already owned.
(2) Potential realizable values are based on assumed annual rates of return
specified by the Securities and Exchange Commission. By way of comparison,
using the same assumed annual rates of stock price appreciation over the
ten-year term of the stock options granted in May 1996 above, all holders
of the Company's stock would realize the following increases in the market
value of $100 invested in the Company's stock on the date that the options
were issued: $62.89 (5% annual appreciation) and $159.37 (10% annual
appreciation). Company management cautions shareholders and option holders
that such increases in values are based on arbitrary assumptions and
should not be used as a basis for expectations of the future value of
their holdings.
OPTION/SAR HOLDINGS
During 1996, none of the Named Executive Officers exercised any stock
options or SARs. The following table provides information concerning
unexercised options and SARs held by such officers as of the end of the last
fiscal year:
AGGREGATED FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
Ray Martin............... 339,786/ -0- $7,112,448/ -0-
Robert L. Hunt II........ 231,862/ -0- 4,748,213/ -0-
James R. Boyle........... 70,000/ -0- 1,137,000/ -0-
Norman H. Raiden......... 129,796/ -0- 2,800,880/ -0-
James F. Barritt......... 138,097/ -0- 2,308,071/ -0-
LONG-TERM INCENTIVE PLAN
During 1992, Coast adopted its Performance Share Plan for Key Employees (the
"Performance Plan"). Awards under the Plan provide for future cash payments
based upon market performance of the Company's stock and compliance by Coast
with certain capital requirements. No awards were made during 1996 under the
Performance Plan.
8
PENSION PLANS
Coast maintains a noncontributory, defined-benefit pension plan (the
"Pension Plan") which covers all employees. Certain of Coast's executive
officers (senior vice presidents and above) also participate in a non-
qualified Executive Supplemental Retirement Plan (the "Supplemental Plan")
which pays benefits to participants in addition to benefits paid under the
Pension Plan. The Supplemental Plan has three classes of participants.
Mr. Martin and Mr. Hunt are Class I participants and the other Named Executive
Officers are Class II participants. The following tables set forth, in
straight life annuity amounts, the estimated annual benefits payable upon
retirement under both the Pension Plan and the Supplemental Plan to Class I
and Class II participants.
PENSION PLAN TABLES
Class I
YEARS OF SERVICE
---------------------------------------
SALARY 15 20 25 30 35
------ ------- ------- ------- ------- -------
125,000.............................. 98,604 98,604 98,604 102,816 113,702
150,000.............................. 121,104 121,104 121,104 124,191 137,390
175,000.............................. 143,604 143,604 143,604 143,604 144,890
200,000.............................. 166,104 166,104 166,104 166,104 166,104
225,000.............................. 188,604 188,604 188,604 188,604 188,604
250,000.............................. 211,104 211,104 211,104 211,104 211,104
300,000.............................. 256,104 256,104 256,104 256,104 256,104
350,000.............................. 301,104 301,104 301,104 301,104 301,104
400,000.............................. 346,104 346,104 346,104 346,104 346,104
450,000.............................. 391,104 391,104 391,104 391,104 391,104
500,000.............................. 436,104 436,104 436,104 436,104 436,104
550,000.............................. 481,104 481,104 481,104 481,104 481,104
Class II
YEARS OF SERVICE
---------------------------------------
SALARY 15 20 25 30 35
------ ------- ------- ------- ------- -------
125,000.............................. 79,854 79,854 79,854 90,316 101,202
150,000.............................. 98,604 98,604 98,604 109,191 122,390
175,000.............................. 117,354 117,354 117,354 117,354 127,390
200,000.............................. 136,104 136,104 136,104 136,104 136,104
225,000.............................. 154,854 154,854 154,854 154,854 154,854
250,000.............................. 173,604 173,604 173,604 173,604 173,604
300,000.............................. 211,104 211,104 211,104 211,104 211,104
350,000.............................. 248,604 248,604 248,604 248,604 248,604
400,000.............................. 286,104 286,104 286,104 286,104 286,104
450,000.............................. 323,604 323,604 323,604 323,604 323,604
500,000.............................. 361,104 361,104 361,104 361,104 361,104
550,000.............................. 398,604 398,604 398,604 398,604 398,604
The compensation covered by the Supplemental Plan is the average "annual
salary," which would correspond to the amount set forth in the "Salary" column
of the "Summary Compensation Table" set forth above, during the employee's
three highest paid consecutive years in the ten years preceding retirement.
Monthly benefits payable under the Supplemental Plan are reduced (but not
below a specified percentage of average annual salary) by the sum of the
annual life annuity benefit payable to the employee under the Pension Plan,
and the employee's actual monthly receipts of Social Security payments, and
may be reduced by certain other payments, including the annual amount, if
applicable, received pursuant to Coast's directors retirement plan described
below. Participants are generally eligible to receive benefits under the
Supplemental Plan after the
9
completion of 10 years of service with Coast and attaining the age of 60 or,
regardless of the number of years of service, after attaining the age of 65.
At December 31, 1996, the number of years of credited service under the
Supplemental Plan for Messrs. Martin, Hunt, Boyle, Raiden and Barritt was 37,
12, 5, 6 and 11, respectively. In general, benefits payable under the
Supplemental Plan are reduced if a participant retires prior to attaining
age 65.
EMPLOYMENT AGREEMENTS
In connection with Coast's acquisition of First Federal of San Diego in
1980, Coast assumed the obligations of First Federal of San Diego under a
deferred compensation agreement entered into by First Federal of San Diego and
Mr. Starkey in 1980. Mr. Starkey was an employee of Coast until his retirement
in 1991. Pursuant to the agreement, Coast pays monthly benefits to Mr. Starkey
which when aggregated with his monthly qualified pension plan and primary
Social Security benefits equal one-twelfth of 80% of Mr. Starkey's highest
annual compensation during his last five years of employment with Coast.
During 1996 payments under the agreement amounted to $33,148. Mr. Starkey will
receive this benefit for a period of ten years following his retirement.
Coast currently has employment agreements with its Chief Executive Officer,
President, and Senior Executive Vice Presidents, as well as certain other
officers of Coast and its subsidiaries. Mr. Martin's agreement provides for a
three year term renewable annually by the Board of Directors. The agreements
with Messrs. Hunt, Boyle, Raiden and Barritt provide for two year terms
renewable annually by the Board of Directors. However, in the event of a
"change in control" of Coast, the term of such executives' agreements
automatically converts to three years renewable annually by the Board of
Directors. All of the agreements may be terminated for cause, or by either
party upon 90 days prior notice, and automatically terminate in the event of
the executive's death or disability. Coast's obligation to pay compensation
and benefits under each of the agreements continues in the event that the
executive separates from service as a result of death or disability, and
terminates if the separation is for cause or is voluntary. The agreements
provide that Coast will pay each executive a base monthly compensation equal
to his monthly salary in effect in 1996, with increases in base monthly salary
being subject to the discretion of the Board of Directors. The executives'
monthly base salary under the agreements as currently in effect cannot be
decreased below their 1996 levels, or any greater future levels, without their
consent. In the event of a change in control, for the remainder of the term of
the agreement, Coast will pay each executive a base monthly compensation equal
to his monthly salary then in effect plus 1/12 of the aggregate amount of the
higher of the discretionary bonuses attributable to the last two bonus
computation years that ended before the change in control.
In general, in the event that Coast elects to terminate any of the
executives' employment, or if the executive elects to terminate his employment
within one year of a change of control of Coast, the affected executive will
be entitled to receive a lump sum payment equal to the discounted present
value of the compensation due under the agreement for the balance of its term.
In addition, the executives will be entitled to receive medical insurance
benefits for the remaining term of the agreement. Had Coast elected to
terminate their employment effective January 1, 1997, the lump sum payments to
Messrs. Martin, Hunt, Boyle, Raiden and Barritt would have been approximately
$1,722,485, $833,346, $681,137, $633,571, and $614,545 respectively.
DIRECTORS' COMPENSATION
All directors who are not employees of the Company or Coast receive $1,000
for each monthly meeting of the Board of Directors attended and an additional
$1,000 fee for each special meeting of the Board of Directors attended or any
committee meeting held on a date other than the day of the regular Board
Meeting. In addition, each director who is not an employee of the Company or
Coast receives an annual retainer fee of $28,000.
Pursuant to the provisions of the 1996 Coast Savings Financial, Inc., Equity
Incentive Plan adopted by the Company's shareholders at the 1996 annual
meeting, an award of an option to purchase 5,000 shares of Common Stock was
granted to each of the directors of the Company as of the date of the plan's
adoption. Each of the awards had an exercise price equal to the market price
of the Common Stock on the date of grant, will become fully vested one year
from the date of grant, and has a ten year term. In accordance with the terms
of the plan,
10
upon his election to the Board of Directors in June of 1996, Mr. McKernan also
received an award to purchase 5,000 shares of Common Stock with an exercise
price equal to the market price of the Common Stock as of the date of grant,
that will vest in one year, and that has a ten year term.
Coast maintains a non-qualified, unfunded retirement plan for its directors
who have at least ten years of service as a director, including service on the
Board of Directors of Coast prior to the formation of the Company and service
on the boards of directors of institutions acquired by Coast. The benefit is
paid for life following retirement, except that if a director terminates
service on the Board of Directors before reaching the age of 65, no benefits
will be paid until he/she reaches the age of 65. If a director's service on
the Board of Directors is terminated for cause, no benefits are paid under the
plan. The minimum benefit is 50% of the current director's fee at the
applicable date of retirement and rises to 75% of such fee after 30 years of
service. Any retiring director who has served as President or Chairman of the
Board of the Company or of Coast (prior to the formation of the Company) is
entitled upon retirement to monthly benefits equal to 100% of the monthly
director's fee earned by such retiring director during the month preceding his
or her retirement. In 1996, Coast paid an aggregate of $186,020 under the
plan. Coast also continues medical and dental coverage for directors following
their retirement at their own expense.
The directors retirement plan also provides a death benefit for directors
elected or appointed prior to 1990 who are not officers of the Company or of
Coast, which benefit provides for the payment of $100,000, payable in ten
equal annual installments, to the director's spouse or issue surviving at the
time the benefit is payable. The benefit is reduced to $25,000 in the case of
a director who dies following his retirement or resignation from the Board of
Directors.
DIRECTOR SHARE PURCHASE PLAN
The Board of Directors of Coast adopted the Coast Director Share Purchase
Plan (the "Purchase Plan") in April of 1994. The Purchase Plan is intended to
encourage and increase the investment of individual directors in the Company
in order to further align shareholder and director interests. Pursuant to the
Purchase Plan, Coast will contribute toward the total purchase price paid by a
director of Coast to purchase shares of Common Stock an amount equal to 15% of
such total purchase price. The aggregate amount of such contribution by Coast
per director under the Purchase Plan may not exceed $15,000 per year. During
1996, a total of 3,793 shares of Common Stock was purchased under the Purchase
Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee Report on Executive Compensation set forth below
shall not be deemed incorporated by reference by any general statement
incorporating this proxy statement by reference into any filing under the
Securities Act of 1933, as amended, or under the Securities Exchange Act of
1934, as amended, except to the extent the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
Decisions on compensation of the Company's executive officers generally are
made by the Compensation Committee of the Board of Directors of Coast. Each
member of the Compensation Committee is a non-employee director. All decisions
by the Compensation Committee relating to the compensation of the Company's
executive officers are reviewed by the full Board of Coast. Pursuant to rules
designed to enhance disclosure of companies' policies regarding executive
compensation, set forth below is a report by the Compensation Committee
addressing Coast's compensation policies for 1996 as they affected Messrs.
Martin, Hunt, Boyle, Raiden and Barritt.
To the Board of Directors:
Compensation paid to Coast's executive officers is composed primarily of
base salary compensation, short-term incentive compensation, and long-term
incentive compensation. In general, overall executive officer compensation is
intended to be consistent with that paid by other companies in the financial
services industry. With respect to executive compensation, the trend in the
industry is to structure such compensation to support
11
and reinforce an institution's business goals, to award executives for the
achievement of annual results, and to link a significant portion of executive
compensation to the creation of shareholder value. Coast's policy is to pursue
these objectives in the framework of providing competitive compensation
opportunities to attract and retain the highest caliber of capable and
experienced executives.
Provisions of the Internal Revenue Code would disallow the deduction from
income of certain forms of compensation paid by Coast to a single employee in
excess of $1 million. In 1996, no employee received compensation in excess of
such amount. Coast does not intend to compensate any employee in an amount in
excess of $1 million unless such compensation is performance-based and
effected pursuant to an incentive plan that complies with Internal Revenue
Code provisions and has been approved by shareholders.
BASE SALARY COMPENSATION
Coast's base salary compensation for executive officers is established after
examining both objective and subjective criteria, with each set of criteria
weighted equally. Objective criteria include the commission, review and
evaluation of surveys of compensation paid to the executives of similarly
sized financial institutions. Subjective criteria encompass the evaluation of
each officer's managerial ability, knowledge of the industry, initiative and
contribution to overall corporate performance. Factors considered to reflect
corporate performance include traditional business and earnings criteria as
well as criteria specific to the thrift industry, such as capital levels and
asset quality.
Mr. Martin's base salary was established in 1990 and was intended to be
competitive with base salaries paid other chief executive officers of
institutions of similar size and scope of operations. In keeping with Coast's
restructuring initiatives and cost reduction program in effect at the time,
Mr. Martin's base salary was reduced in 1991 and further reduced in 1992. Each
of the other executive officers' base salaries were frozen during 1991 and
1992. In 1993, the Committee commissioned a survey of compensation paid during
fiscal year 1992 to executives of five savings and loan and nineteen
commercial bank holding companies, including the Company. An independent
compensation consulting firm retained by the Committee selected the
institutions for inclusion in the survey. The criteria for inclusion were that
the institutions be of similar size to the Company, provide services similar
to those provided by the Company and be at least as financially healthy as the
Company. Certain of the institutions are included in the peer group index used
to prepare the Performance Graph set forth in the Company's Proxy Statement.
Based upon findings of the survey, in 1993 the base salary compensation paid
to several of the Named Executive Officers was increased to bring such
officers' salary into accord with what the Committee considered to be
reasonable and appropriate levels relative to their respective contributions
and industry norms. In 1994, Mr. Martin was granted the use of a leased
automobile and the other Named Executive Officers' base salary compensation
was increased to include a monthly automobile allowance paid to each such
officer. During 1994, 1995 and 1996, the base salaries of one or more of the
Named Executive Officers other than Mr. Martin were further increased to
maintain such salaries at competitive levels.
SHORT-TERM INCENTIVE COMPENSATION
In addition to base salary compensation, the Company's executive officers
also may, from time to time, receive short-term incentive compensation awards
in the form of cash bonuses as is consistent with general industry practice.
Although such awards are not necessarily made pursuant to any specific
incentive compensation plan, the Committee may recommend and the Board of
Directors may approve the payment of such short-term incentive compensation in
any fiscal year based on the contribution each executive officer makes to the
accomplishment of the Company's primary corporate objective or objectives for
such year. Such objectives may be specific numeric improvements in financial
performance, but they may also be more subjective and it is within the
discretion of the Board of Directors to determine whether and the extent to
which such subjective goals are attained.
In January of 1995, the Board of Directors of Coast adopted the Executive
and Senior Management Short-Term Compensation Incentive Plan (the "Incentive
Plan"). Provisions of the Incentive Plan applicable to the Named Executives,
including Mr. Martin, provided for short-term incentive compensation payments
for the year
12
ending December 31, 1995 based upon targeted overall corporate performance.
Overall corporate performance was measured by Coast's capital position,
nonperforming assets ratio, and operating expense level. Certain thresholds
for net earnings had to be met and the other goals achieved for an incentive
award pool to be established. If an award pool was established, a short-term
incentive compensation payment would be made to each of the Named Executives
in an amount equal to a specified percentage of the Named Executive Officer's
base salaries. Such percentage was determined based on the extent to which
Coast's performance met the established net earnings targets. Coast's
corporate performance met the thresholds established under the Incentive Plan,
and, in accordance with the terms of the Incentive Plan, short-term incentive
compensation payments were made to the Named Executive Officers in 1996 for
their performance in 1995 in the amounts set forth in the Summary Compensation
Table of the Company's Proxy Statement.
LONG-TERM INCENTIVE COMPENSATION
In addition to base salary compensation and short-term incentive
compensation, during 1996 the Company's executive officers were eligible to
receive long-term incentive compensation through participation in the 1996
Coast Savings Financial, Inc., Equity Incentive Plan (the "Stock Option
Plan"), the Coast Performance Share Plan for Key Employees (the "Performance
Plan"), an Executive Supplemental Retirement Plan and Coast's noncontributory,
defined-benefit pension plan. Coast may also choose to enter into or renew
employment agreements with its executive officers. The purpose of each of
these plans and of employment agreements is to align the long-term interests
of the executive officers with those of the Company and its shareholders.
In the fall of 1995, the Committee commissioned an independent compensation
consulting firm to review the compensation paid to Coast's executive officers.
The consulting firm compared the compensation paid to Coast's executive
officers to the compensation paid to the executive officers of 11 peer
institutions selected by the consulting firm that are similar in size to the
Company, provide services similar to those provided by the Company and are at
least as financially stable as the Company. Certain of the institutions are
included in the peer group index used to prepare the Performance Graph set
forth in the Company's Proxy Statement. As a result of the findings of this
study, the Committee's perception that management is largely responsible for
the substantial increase in shareholder value which has been registered in
recent years and in light of the fact that no awards of long-term compensation
had been granted since 1993, in May of 1996, the Board of Directors of the
Company, based on the Committee's recommendation, granted awards of options to
the Named Executive Officers in accordance with the terms of the Stock Option
Plan. The awards to the Named Executive Officers, including the award to Mr.
Martin, were an attempt to increase the ownership level of senior management
to align such level more closely with that of the Company's peer institutions
as discussed in the compensation study. The awards were also granted as part
of a wider distribution of awards to several levels of Coast's management as
part of the Company's effort to more fully align the interests of management
with those of shareholders.
Coast has entered into a three-year employment contract with Mr. Martin and
two year contracts with each of the other Named Executive Officers as
described in the Company's Proxy Statement under "Employment Agreements."
These contracts are reviewed annually by Coast's Board of Directors and may be
extended for an additional year at each review, based upon the performance of
the officer.
13
In addition to base salary compensation, short-term incentive compensation
and long-term incentive compensation, the Company's executive officers also
benefit from the receipt of certain perquisites, including the payment by the
Company of specific club dues and, in the case of Mr. Martin, the use of a
leased Company automobile.
The Compensation Committee
Keith W. Renken, Chairman
Leon S. Angvire
Joan Milke Flores
Jack P. Libby
James P. Miscoll
PERFORMANCE GRAPH
The Performance Graph set forth below shall not be deemed incorporated by
reference by any general statement incorporating this proxy statement by
reference into any filing under the Securities Act of 1933, as amended, or
under the Securities Exchange Act of 1934, as amended, except to the extent
the Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock against the cumulative total return of
the Russell 2000 Index, a broad market index, and the Russell 3000 S&L Peer
Group Index, an industry index, for the period commencing December 31, 1991
and ended December 31, 1996.
COMPARATIVE FIVE-YEAR TOTAL RETURNS*
COAST SAVINGS FINANCIAL, INC., RUSSELL 2000, PEER GROUP
(Performance results through 12/31/96)
PERFORMANCE GRAPH APPEARS HERE
Measurement Period Coast Savings
(Fiscal Year Covered) Financial, Inc. Russell 2000 Peer Group
- --------------------- --------------- ------------ ----------
Measurement Pt- 12/31/1991 $100.00 $100.00 $100.00
FYE 12/31/1992 $146.67 $118.41 $119.87
FYE 12/31/1993 $190.00 $140.80 $136.06
FYE 12/31/1994 $195.00 $138.24 $126.37
FYE 12/31/1995 $461.67 $177.55 $200.97
FYE 12/31/1996 $488.33 $206.83 $268.61
Assumes $100 invested at the close of trading on the last trading day
preceding the first day of the fifth preceding fiscal year in CSA common
stock, Russell 2000 Index, and Peer Group.
* Cumulative total return assumes reinvestment of dividends.
Source: Frank Russell Company
14
CERTAIN TRANSACTIONS OF MANAGEMENT WITH COAST
Coast makes home mortgage loans to certain full-time employees under Coast's
Employee Loan Plan. These are adjustable rate mortgage loans made in the
ordinary course of business and in the judgment of management do not involve
more than the normal risk of collectability. Loans made under the Employee
Loan Plan are made on substantially the same terms as those prevailing at the
time for comparable transactions with non-affiliated persons, except for the
interest rates charged on such loans. All mortgage loans under Coast's current
Employee Loan Plan are written at Coast's prevailing rates of interest at the
times of origination, but a rider is attached to the note which provides for a
reduced rate while the borrower is employed by or affiliated with Coast. Under
the Employee Loan Plan, the interest rate to which a borrower's loan adjusts
on the date of the first interest rate adjustment is one percentage point
lower than the comparable rate for a non-affiliate. The rate of interest borne
by the loan reverts to the normal rate provided in the note upon termination
of the borrower's employment or affiliation with Coast, except for employees
who retire at age 62 or older and, under certain circumstances, certain
terminated employees who may retain the preferential interest rate for 24
months. Prior to August 1989, directors and executive officers of Coast were
entitled to participate in Coast's Employee Loan Plan. Under regulations which
became applicable to Coast during August 1989, Coast may no longer offer loans
to executive officers and directors on terms more favorable than those
available to the public. However, directors and executive officers who
obtained loans under Coast's Employee Loan Plan prior to August 1989 will
continue to have reduced interest rates.
The following table sets forth information relating to loans made by Coast
to its directors and executive officers with outstanding loans aggregating
more than $60,000 at any time since January 1, 1996. Except as otherwise
indicated, each loan was used for the purchase of such director's or executive
officer's primary residence.
HIGHEST BALANCE
OUTSTANDING DURING CURRENT
YEAR ENDED BALANCE AT INTEREST YEAR
NAME TYPE OF LOAN DECEMBER 31, 1996 DECEMBER 31, 1996 RATE MADE
- ---- ------------ ------------------ ----------------- -------- ----
James F. Barritt........ First Lien $253,652 $245,029 6.19% 1988
Priscilla Finch......... First Lien 66,693 65,477 6.09 1989
Robert L. Hunt II....... First Lien 242,842 231,122 5.84 1986
Gerald I. Rich.......... First Lien 244,387 238,659 5.84 1987
Harold B. Starkey, Jr. . First Lien(1) 227,390 225,223 8.44 1993
- --------
(1) Refinance of prior loan.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITOR
KPMG Peat Marwick LLP has served as the independent auditing firm for Coast
since 1982 and for the Company since 1989. Coast's and the Company's Boards of
Directors have approved the retention of KPMG Peat Marwick LLP to audit the
consolidated financial statements of the Company and of Coast for 1997. It is
anticipated that representatives of KPMG Peat Marwick LLP will be present at
the Meeting and will be given an opportunity to make a statement, if they
desire to do so, and to respond to any appropriate inquiries of the
stockholders.
In recognition of the important role of the Company's independent auditor,
the Board of Directors has determined that its appointment of KPMG Peat
Marwick LLP as the independent auditing firm for the Company and Coast should
be submitted to the stockholders for ratification. If the appointment is not
ratified, the Board of Directors will take the vote of the stockholders into
account in determining whether to appoint another firm as the company's
independent auditor for 1997. The Board of Directors also retains the power to
appoint another independent auditor for the Company to replace an auditor
ratified by the stockholders in the event the Board of Directors determines
that the interests of the Company require such a change.
15
The Board of Directors recommends that you vote FOR ratification of the
appointment of KPMG Peat Marwick LLP as independent auditor of the Company's
consolidated financial statements for 1997.
ANNUAL REPORT ON FORM 10-K
The Company has filed an Annual Report on Form 10-K (the "Annual Report")
with the Securities and Exchange Commission for the year ended December 31,
1996 together with applicable financial statements and schedules thereto. A
copy of the Annual Report was furnished to shareholders in connection with the
distribution of this Proxy Statement. The Company will also furnish to any
stockholder a copy of the exhibits to the Annual Report on Form 10-K upon
written request and payment of a copying charge of $0.25 per page. Requests
should be addressed to: Investor Relations Department, Coast Savings
Financial, Inc., 1000 Wilshire Blvd., 22nd Floor, Los Angeles, California
90017-2457.
DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS
FOR PRESENTATION AT THE 1998 ANNUAL MEETING
Any proposal that a stockholder wishes to present for consideration at the
1998 Annual Meeting must be received by the Company no later than November 26,
1997, in order to be included in the proxy statement and form of proxy for
such Annual Meeting. Stockholder proposals may not be included in the proxy
statement and form of proxy for the 1998 Annual Meeting unless certain
conditions specified in the rules of the Securities and Exchange Commission
are met.
OTHER BUSINESS TO BE TRANSACTED
As of the date of this Proxy Statement, the Board of Directors knows of no
other business to be presented for action at the Meeting. If any other
business is properly brought before the Meeting and may properly be acted
upon, proxies in the form of the enclosed proxy cards confer discretionary
authority on the persons named therein. Those persons will vote or act in
accordance with their best judgment with respect to those matters.
You are urged to vote, sign, date, and return the accompanying proxy card in
the enclosed postage-paid envelope at your earliest convenience, whether or
not you currently plan to attend the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Priscilla Finch
Priscilla Finch,
Corporate Secretary
16
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REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
COAST SAVINGS FINANCIAL, INC.
The undersigned holder of shares of common stock of Coast Savings Financial,
Inc. (the "Company") hereby appoints Leon Angvire, Robert L. Hunt II and Ray
Martin, or any of them, each with full power of substitution, to vote all shares
of said stock which the undersigned could vote if personally present at the
Annual Meeting of Stockholders of the Company to be held on Wednesday, April 23,
1997 at 2:00 p.m., California time, at the Omni Los Angeles Hotel, 930 Wilshire
Blvd., Los Angeles, California, and at adjournments thereof, on the matters set
forth on the reverse hereof.
Whether or not you plan to attend the meeting, you are urged to execute and
return this Proxy, which may be revoked at any time prior to its use. This
Proxy, when properly executed, will be voted in the manner directed herein by
the undersigned stockholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR EACH NOMINEE AND PROPOSAL LISTED.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please mark [X]
your votes as
indicated in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
ITEMS 1 AND 2.
WITHHOLD
AUTHORITY TO
Item 1-Election of directors: FOR VOTE FOR ALL
Robert L. Hunt II [ ] [ ]
Thomas V. McKernan, Jr.
Keith W. Renken
Harold B. Starkey, Jr.
FOR AGAINST ABSTAIN
Item 2-Proposal to ratify the appointment of KPMG [ ] [ ] [ ]
Peat Marwick LLP as the independent auditing firm
for the Company for the fiscal year ending December
31, 1997.
Item 3-In their discretion, on such other business
as may properly come before the Annual Meeting of
Stockholders or any adjournments thereof.
WITHHOLD AUTHORITY TO VOTE FOR: (Write that nominee's WILL ATTEND [ ]
name in the space provided below). MEETING
- ------------------------------------------------------
This proxy should be dated and signed by
the stockholder or his attorney
authorized in writing or in any other
manner permitted by law. Joint owners
should each sign. If signing as executor,
administrator, trustee or guardian or as
a corporate officer, please give full
title. If a corporation, please sign in
full corporate name by the president or
other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
Signature(s) ____________________________ Date ___________, 1997
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. DATE AND RETURN THIS PROXY
IN THE REPLY ENVELOPE. IF YOU RECEIVE MORE THAN ONE PROXY CARD PLEASE SIGN AND
RETURN ALL CARDS RECEIVED.
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