EXHIBIT 10.3


                     CHANGE-IN-CONTROL SEVERANCE AGREEMENTS

                          EXECUTIVE SEVERANCE AGREEMENT


     THIS  AGREEMENT  is entered into and effective this 26th day of June, 1997,
("Effective  Date")  by  and  between  Coastal Bancorp, Inc. (the "Company") and
Coastal  Banc  ssb  (the  "Bank")  and  Catherine  N.  Wylie  (the  "Employee").

     WHEREAS,  the  Employee had heretofore been employed by the Company and the
Bank  as  an  executive  officer, and the Company and the Bank deems it to be in
their  best interest to enter into this Agreement as additional incentive to the
Employee  to  continue as an executive employee of the Company and the Bank; and

     WHEREAS,  the  parties  desire  by  this  writing  to  set  forth  their
understanding  as  to  their  respective  rights  and obligations in the event a
"change  in  control" (as defined herein) occurs with respect to the Bank or the
Company;

     NOW,  THEREFORE,  the  undersigned  parties  AGREE  as  follows:

     1.          Defined  Terms
                 --------------

          When  used  anywhere  in the Agreement, the following terms shall have
the  meaning  set  forth  herein.

          (a)          "Change  in  Control" shall mean any one of the following
events:  (i) where, during any period of two consecutive years, individuals (the
"Continuing Directors") who at the beginning of such period constitute the Board
of  Directors  of  the  Bank or the Company (the "Existing Board") cease for any
reason  to  constitute at least two-thirds thereof, provided that any individual
whose  election or nomination for election as a member of the Existing Board was
approved  by  a  vote of at least two-thirds of the Continuing Directors then in
office shall be considered a Continuing Director following:  (A) the acquisition
by  a  person of ownership, holding or power to vote more than 25% of the Bank's
or  the Company's voting stock, (B) the acquisition by any person of the ability
to  control  the election of a majority of any class or classes of the Bank's or
the  Company's directors, or (C) the acquisition of a controlling influence over
the management or policies of the Bank or the Company defined as set forth in 12
C.F.R.  574.4(b),(c)  and  (d)  by  any person or to persons acting as a "group"
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or
(ii)  the  sale,  exchange, lease, transfer or other disposition (in one or more
transactions)  to  any  person  of  all  or  a  substantial  part of the assets,
liabilities  or  business  of  the  Company  or  the  Bank,  (iii) any merger or
consolidation or share exchange of the Company or the Bank with any other person
which subsequent thereto the Company or the Bank is not the surviving entity, or
(iv)  any  change  in  business of the Company or the Bank such that the Company
does  not  own  the  voting  stock  of  an insured depository institution or the
business  of  the  Bank  is  not  as  an  insured  depository  institution.
Notwithstanding  the  foregoing,  in  the  case  of (i) or (ii) or (iii) hereof,
change  of  ownership  or  control of the Bank by the Company itself to or among
direct or indirect wholly-owned subsidiaries of the Company shall not constitute
a  Change  in  Control.   For purposes of this paragraph only, the term "person"
refers  to  an  individual  or  a  corporation,  limited  liability  company,
partnership,  trust,  association,  joint  venture,  pool,  syndicate,  sole
proprietorship,  unincorporated  organization  or  any  other form of entity not
specifically  listed  herein.  The decision of the Bank's non-employee directors
as  to  whether or not a Change in Control, as defined herein, has occurred, and
the  date  of  such  occurrence,  shall  be  conclusive  and  binding.

     (b)         "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as interpreted through applicable rulings and regulations
in  effect  from  time  to  time.

     (c)          "Code   280G Maximum" shall mean product of 2.99 and the "base
amount"  as  defined  in  Code      280G(b)(3).

     (d)     "Good Reason" shall mean 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  personal  residence,  or  perform  his principal
executive  functions,  more than thirty (30) miles from his 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 this Agreement; (iv) the Company, the Bank or
successor  thereto breaches any provision of this Agreement; or (v) the Employee
is  terminated  for  other  than  just  cause  after  the  Change  in  Control.

     (e)         "Just Cause" shall mean, 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  this Agreement.  The Employee shall have the right to make a presentation to
the Board of Directors with counsel prior to the 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 an 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.

     (f)        "Protected Period" shall mean the period that begins on the date
six  months before a Change in Control and ends on the later of the third annual
anniversary  of  the Change in Control or the expiration date of this Agreement.

     2.          Trigger  Events
                 ---------------

     The  Employee shall be entitled to collect the severance benefits set forth
in  Section  3  of  this Agreement in the event that (a) a Change of Control has
occurred  and  the  Employee  voluntarily  terminates  his employment within the
30-day  period  beginning on the first anniversary of the date of the occurrence
of  a  Change  in  Control,  (b)  the Employee voluntarily terminates employment
within  90  days  of  an  event that both occurs during the Protected Period and
constitutes  Good Reason, or (c) the Bank, the Company, or their successor(s) in
interest  terminate  the  Employee's  employment  for any reason other than Just
Cause  during  the  Protected  Period.

     3.          Amount  of  Severance  Benefit
                 ------------------------------

     (a)          If the Employee becomes entitled to collect severance benefits
pursuant  to Section 2(a) hereof, the Company and/or the Bank shall pay Employee
one  (1)  times  the  annual  salary  and  bonus  or incentive compensation (not
including  stock  compensation plans) paid to Employee by the Company and/or the
Bank  during  the immediately preceding year of the term of employment, such sum
to  be paid within five (5) days of the date that Employee's employment actually
ceases.
     (b)          If the Employee becomes entitled to collect severance benefits
pursuant  to  Section 2(b) or 2(c) hereof, the Company and/or the Bank shall pay
Employee  2.99  times the annual salary and bonus or incentive compensation (not
including  stock  compensation plans) paid to Employee by the Company and/or the
Bank  during  the immediately preceding year of the term of employment, such sum
to  be paid within five (5) days of the date that Employee's employment actually
ceases.

     (c)          The  provisions of this Agreement shall not reduce any amounts
otherwise  payable to the Employee or in any way diminish the employee's rights,
whether  existing  now or hereafter under any benefit plan of the Company or the
Bank.   The Employee shall not be obligated to mitigate any payments entitled to
be  received  hereunder.

     (d)     The foregoing payments and benefits shall be paid to the Employee's
beneficiaries  by  testate  or  intestate  succession in the event of Employee's
death  during  the  period  during  which  such  payments and benefits are being
provided.

     (e)      In the event that the Employee and the Company or the Bank, as the
case  may  be  (hereinafter, in this Section 3(e), the "Company") agree that the
Employee  has  collected an amount exceeding the Code  280G Maximum, the parties
agree  as  follows:

          (i)      In the calendar year that the Employee is entitled to receive
a  payment  or  benefits under the provisions of this Agreement, the independent
accountants  of  the  Company shall determine if an excess parachute payment (as
defined  in  Section  4999  of the Code, as amended, and any successor provision
thereto)  exists.

               Such  determination  shall  be  made  after taking any reductions
permitted  pursuant  to Section 280G of the Code and the regulations thereunder.
Any  amount  determined  to  be  an  excess  parachute payment after taking into
account  such  reductions  shall be hereafter referred to as the "Initial Excess
Parachute  Payment".    As  soon as practicable after a Change in Control of the
Company  or  the Bank, the Initial Excess Parachute Payment shall be determined.
Immediately  following  a  Change  in  Control  of  the Company or the Bank, the
Company  or  the  Bank shall pay the Employee, subject to applicable withholding
requirements  under  applicable  state  or  federal  law  an  amount  equal  to:

(a)         twenty (20) percent of the Initial Excess Parachute Payment (or such
other  amount  equal  to  the  tax  imposed under Section 4999 of the Code), and

(b)     such additional amount (tax allowance) as may be necessary to compensate
the  Employee  for  the  payment by the Employee of state and federal income and
excise  taxes on the payment provided under Clause (a) and on any payments under
this  Clause (b).  In computing such tax allowance, the payment to be made under
Clause  (a)  shall  be multiplied by the "gross up percentage" ("GUP").  The GUP
shall  be  determined  as  follows:


                                   GUP  =          Tax  Rate
                                                   ---------
                                        1  -  Tax  Rate

The  Tax  Rate  for  purposes of computing the GUP shall be the highest marginal
federal  and  state  income  and  employment-related  tax  rate,  including  any
applicable  excise tax rate, applicable to the Employee in the year in which the
payment  under  Clause  (a)  is  made.

     (ii)          Notwithstanding  the  foregoing,  if it shall subsequently be
determined  in  a  final  judicial  determination  or  a  final  administrative
settlement to which the Employee is a party that the excess parachute payment is
defined  in  Section  4999 of the Code, reduced as described above, is different
from the Initial Excess Parachute Payment (such different amount being hereafter
referred  to as the "Determinative Excess Parachute Payment") then the Company's
independent accountants shall determine the amount (the "Adjustment Amount") the
Employee must pay to the Company or the Bank or the Company or the Bank must pay
to the Employee in order to put the Employee (or the Company or the Bank, as the
case  may  be) in the same position the Employee (or the Company or the Bank, as
the  case  may  be)  would have been if the Initial Excess Parachute Payment had
been  equal  to  the Determinative Excess Parachute Payment.  In determining the
Adjustment  Amount,  the independent accountants shall take into account any and
all  taxes (including any penalties and interest) paid by or for the Employee or
refunded  to the Employee or for the Employee's benefit.  As soon as practicable
after  the  Adjustment  Amount  has  been so determined, the Company or the Bank
shall  pay the Adjustment Amount to the Employee or the Employee shall repay the
Adjustment  Amount  to  the  Company  or  the  Bank,  as  the  case  may  be.

     (iii)          In  any calendar year that the Employee receives payments of
benefits  under  this  Agreement,  the  Employee  shall  report on his state and
federal  income  tax  returns  such  information  as  is  consistent  with  the
determination  made  by  the independent accountants of the Company as described
above.   The Company and the Bank shall indemnify and hold the Employee harmless
from  any  and  all  losses,  costs  and expenses (including without limitation,
reasonable  attorney's  fees,  interest, fines and penalties) which the Employee
incurs  as  a  result of so reporting such information.  Employee shall promptly
notify the Company and the Bank in writing whenever the Employee receives notice
of  the  institution  of  a  judicial  or  administrative  proceeding, formal or
informal,  in  which the federal tax treatment under Section 4999 of the Code of
any amount paid or payable under this the Employment Agreement is being reviewed
or  is  in dispute.  The Company or the Bank shall assume control at its expense
over  all  legal and accounting matters pertaining to such federal tax treatment
(except  to  the extent necessary or appropriate for the Employee to resolve any
such  proceeding with respect to any matter unrelated to amounts paid or payable
pursuant  to  this  contract)  and  the  Employee shall cooperate fully with the
Company  or  the Bank in any such proceeding.  The Employee shall not enter into
any  compromise  or  settlement or otherwise prejudice any rights the Company or
the  Bank  may have in connection therewith without prior consent of the Company
or  the  Bank.

     4.          Term  of  the  Agreement
                 ------------------------

     This  Agreement  shall  remain  in  effect for the period commencing on the
Effective  Date  and  ending  on the earlier of (i) the date 36 months after the
Effective  Date,  and  (ii) the date on which the Employee terminates employment
with  the  Company  or  the  Bank; provided that the Employee's rights hereunder
shall  continue  following the termination of his employment with the Company or
the  Bank  under  any  of  the  circumstances  described  in  Section  2 hereof.

     5.          Termination  or  Suspension  Under  Federal  Law
                 ------------------------------------------------

     Any payments made to the Employee pursuant to this Agreement, or otherwise,
are subject to and conditioned upon their compliance with 12 U.S.C.  1828(k) and
any  regulations  promulgated  thereunder.

     6.          Expense  Reimbursement
                 ----------------------

     In  the  event that any dispute arises between the Employee and the Company
or  the  Bank  as  to  the  terms  or interpretations of this Agreement, whether
instituted  by  formal legal proceedings or otherwise, including any action that
the  Employee  takes to enforce the terms of this Agreement or to defend against
any  action  taken  by the Company or the Bank, the Employee shall be reimbursed
for  all  costs and expenses, including reasonable attorneys' fees, arising from
such  dispute, proceedings or actions, provided that the Employee shall obtain a
final  judgment in favor of the Employee in a court or competent jurisdiction or
in  binding arbitration under the rules of the American Arbitration Association.
Such  reimbursement,  which  may  be  in  advance  of  any  final  judgment  or
determination  in arbitration, if requested in writing by the Employee, shall be
paid  within  ten  (10) days of Employee's furnishing to the Company or the Bank
written  evidence,  which  may be in the form, among other things, or a canceled
check  or  receipt,  of  any  costs  or  expenses  incurred  by  the  Employee.

     7.          Successors  and  Assigns
                 ------------------------

     (a)        This Agreement shall inure to the benefit of and be binding upon
any  corporate  or  other  successor  or assign of the Company or the Bank which
shall  acquire,  directly  or  indirectly, by merger, consolidation, purchase or
otherwise,  all  or  substantially  all  of  the  assets or stock of the Bank or
Company.  This Agreement shall inure to the benefit of and be enforceable by the
Employee's  personal  and  legal  representatives,  executors,  administrators,
successors,  heirs, devisees and legatees.  If the Employee should die while any
amounts  are  still payable to him/her hereunder, all such amounts shall be paid
in  accordance  with  the  terms  of  this  Agreement to the Employee's devisee,
legatee  or  other  designee, or if there be no such designee, to the Employee's
Estate.

     (b)       Since the Company and the Bank are contracting for the unique and
personal  skills of the Employee, the Employee shall be precluded from assigning
or delegating his rights or duties hereunder without first obtaining the written
consent  of  the  Company  or  the  Bank.

     8.          Amendments
                 ----------

     No  amendments  or additions to this Agreement shall be binding unless made
in  writing  and  signed  by  all  of  the  parties,  except as herein otherwise
specifically  provided.    No  waiver  by either party hereto at any time of any
breach  by  the  other  party  hereto,  or  of compliance with, any condition or
provision  of  this Agreement to be performed by such other party will be deemed
to be a waiver of similar or dissimilar provisions or conditions, at the same or
any  prior  or  subsequent  time.

     9.          Applicable  Law
                 ---------------

     Except  to  the  extent  preempted by Federal law, the laws of the State of
Texas  shall  govern this Agreement in all respects, whether as to its validity,
construction,  capacity,  performance  or  otherwise.

     10.          Severability
                  ------------

     The  provisions  of  this  Agreement  shall  be  deemed  severable  and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability  of  the  other  provisions  hereof.

     11.          Entire  Agreement
                  -----------------

     This Agreement, together with any understanding or modifications thereof as
agreed  to  in  writing  by  the  parties, shall constitute the entire agreement
between  the  parties  hereto.

     12.          Notices
                  -------

     For  purposes  of this Agreement, notices and other communications provided
for  in this Agreement shall be in writing and shall be deemed to have been duly
given  when  delivered  or  mailed  by U.S. registered or certified mail, return
receipt  requested, postage prepaid, as follows:  If to the Company or the Bank:
Chairman  of  the Board and Chief Executive Officer, Coastal Bancorp, Inc., 5718
Westheimer,  Suite  600,  Houston,  Texas  77057.    If  to  the  Employee:

     Catherine  N.  Wylie
     3225  Bellefontaine
     Houston,  Texas  77025



                            Signature Page to Follow

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year  first  herein  above  written.



ATTEST:                                     COASTAL BANCORP, INC.


/s/    Linda  B.  Frazier              By:   /s/  Manuel J. Mehos
-------------------------                   ----------------------------
Secretary                                   Manuel J. Mehos,
                                            Chairman  of  the  Board
                                            and  Chief  Executive  Officer


                                        By:   /s/    James  C.  Niver
                                            -----------------------------
                                            James  C.  Niver
                                            Chairman,  Compensation  Committee


ATTEST:                                     COASTAL BANC SSB


/s/    Linda  B.  Frazier               By:   /s/  Manuel J. Mehos
-------------------------                   ----------------------------
Secretary                                   Manuel J. Mehos,
                                            Chairman  of  the  Board
                                            and  Chief  Executive  Officer

WITNESS


/s/    Pamela  S.  Watkins              By:   /s/  Catherine N. Wylie
--------------------------                   ---------------------------
       Pamela  S.  Watkins                   Gary R. Garrett
                                             Executive  Vice  President/
                                             Chief  Financial Officer




<PAGE>
                          EXECUTIVE SEVERANCE AGREEMENT


     THIS  AGREEMENT  is entered into and effective this 26th day of June, 1997,
("Effective  Date")  by  and  between  Coastal Bancorp, Inc. (the "Company") and
Coastal  Banc  ssb  (the  "Bank")  and  Gary  R.  Garrett  (the  "Employee").

     WHEREAS,  the  Employee had heretofore been employed by the Company and the
Bank  as  an  executive  officer, and the Company and the Bank deems it to be in
their  best interest to enter into this Agreement as additional incentive to the
Employee  to  continue as an executive employee of the Company and the Bank; and

     WHEREAS,  the  parties  desire  by  this  writing  to  set  forth  their
understanding  as  to  their  respective  rights  and obligations in the event a
"change  in  control" (as defined herein) occurs with respect to the Bank or the
Company;

     NOW,  THEREFORE,  the  undersigned  parties  AGREE  as  follows:

     1.          Defined  Terms
                 --------------

          When  used  anywhere  in the Agreement, the following terms shall have
the  meaning  set  forth  herein.

          (a)          "Change  in  Control" shall mean any one of the following
events:  (i) where, during any period of two consecutive years, individuals (the
"Continuing Directors") who at the beginning of such period constitute the Board
of  Directors  of  the  Bank or the Company (the "Existing Board") cease for any
reason  to  constitute at least two-thirds thereof, provided that any individual
whose  election or nomination for election as a member of the Existing Board was
approved  by  a  vote of at least two-thirds of the Continuing Directors then in
office shall be considered a Continuing Director following:  (A) the acquisition
by  a  person of ownership, holding or power to vote more than 25% of the Bank's
or  the Company's voting stock, (B) the acquisition by any person of the ability
to  control  the election of a majority of any class or classes of the Bank's or
the  Company's directors, or (C) the acquisition of a controlling influence over
the management or policies of the Bank or the Company defined as set forth in 12
C.F.R.  574.4(b),(c)  and  (d)  by  any person or to persons acting as a "group"
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or
(ii)  the  sale,  exchange, lease, transfer or other disposition (in one or more
transactions)  to  any  person  of  all  or  a  substantial  part of the assets,
liabilities  or  business  of  the  Company  or  the  Bank,  (iii) any merger or
consolidation or share exchange of the Company or the Bank with any other person
which subsequent thereto the Company or the Bank is not the surviving entity, or
(iv)  any  change  in  business of the Company or the Bank such that the Company
does  not  own  the  voting  stock  of  an insured depository institution or the
business  of  the  Bank  is  not  as  an  insured  depository  institution.
Notwithstanding  the  foregoing,  in  the  case  of (i) or (ii) or (iii) hereof,
change  of  ownership  or  control of the Bank by the Company itself to or among
direct or indirect wholly-owned subsidiaries of the Company shall not constitute
a  Change  in  Control.   For purposes of this paragraph only, the term "person"
refers  to  an  individual  or  a  corporation,  limited  liability  company,
partnership,  trust,  association,  joint  venture,  pool,  syndicate,  sole
proprietorship,  unincorporated  organization  or  any  other form of entity not
specifically  listed  herein.  The decision of the Bank's non-employee directors
as  to  whether or not a Change in Control, as defined herein, has occurred, and
the  date  of  such  occurrence,  shall  be  conclusive  and  binding.

     (b)         "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as interpreted through applicable rulings and regulations
in  effect  from  time  to  time.

     (c)          "Code   280G Maximum" shall mean product of 2.99 and the "base
amount"  as  defined  in  Code      280G(b)(3).

     (d)     "Good Reason" shall mean 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  personal  residence,  or  perform  his principal
executive  functions,  more than thirty (30) miles from his 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 this Agreement; (iv) the Company, the Bank or
successor  thereto breaches any provision of this Agreement; or (v) the Employee
is  terminated  for  other  than  just  cause  after  the  Change  in  Control.

     (e)         "Just Cause" shall mean, 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  this Agreement.  The Employee shall have the right to make a presentation to
the Board of Directors with counsel prior to the 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 an 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.

     (f)        "Protected Period" shall mean the period that begins on the date
six  months before a Change in Control and ends on the later of the third annual
anniversary  of  the Change in Control or the expiration date of this Agreement.

     2.          Trigger  Events
                 ---------------

     The  Employee shall be entitled to collect the severance benefits set forth
in  Section  3  of  this Agreement in the event that (a) a Change of Control has
occurred  and  the  Employee  voluntarily  terminates  his employment within the
30-day  period  beginning on the first anniversary of the date of the occurrence
of  a  Change  in  Control,  (b)  the Employee voluntarily terminates employment
within  90  days  of  an  event that both occurs during the Protected Period and
constitutes  Good Reason, or (c) the Bank, the Company, or their successor(s) in
interest  terminate  the  Employee's  employment  for any reason other than Just
Cause  during  the  Protected  Period.

     3.          Amount  of  Severance  Benefit
                 ------------------------------

     (a)          If the Employee becomes entitled to collect severance benefits
pursuant  to Section 2(a) hereof, the Company and/or the Bank shall pay Employee
one  (1)  times  the  annual  salary  and  bonus  or incentive compensation (not
including  stock  compensation plans) paid to Employee by the Company and/or the
Bank  during  the immediately preceding year of the term of employment, such sum
to  be paid within five (5) days of the date that Employee's employment actually
ceases.
     (b)          If the Employee becomes entitled to collect severance benefits
pursuant  to  Section 2(b) or 2(c) hereof, the Company and/or the Bank shall pay
Employee  2.99  times the annual salary and bonus or incentive compensation (not
including  stock  compensation plans) paid to Employee by the Company and/or the
Bank  during  the immediately preceding year of the term of employment, such sum
to  be paid within five (5) days of the date that Employee's employment actually
ceases.

     (c)          The  provisions of this Agreement shall not reduce any amounts
otherwise  payable to the Employee or in any way diminish the employee's rights,
whether  existing  now or hereafter under any benefit plan of the Company or the
Bank.   The Employee shall not be obligated to mitigate any payments entitled to
be  received  hereunder.

     (d)     The foregoing payments and benefits shall be paid to the Employee's
beneficiaries  by  testate  or  intestate  succession in the event of Employee's
death  during  the  period  during  which  such  payments and benefits are being
provided.

     (e)      In the event that the Employee and the Company or the Bank, as the
case  may  be  (hereinafter, in this Section 3(e), the "Company") agree that the
Employee  has  collected an amount exceeding the Code  280G Maximum, the parties
agree  as  follows:

          (i)      In the calendar year that the Employee is entitled to receive
a  payment  or  benefits under the provisions of this Agreement, the independent
accountants  of  the  Company shall determine if an excess parachute payment (as
defined  in  Section  4999  of the Code, as amended, and any successor provision
thereto)  exists.

               Such  determination  shall  be  made  after taking any reductions
permitted  pursuant  to Section 280G of the Code and the regulations thereunder.
Any  amount  determined  to  be  an  excess  parachute payment after taking into
account  such  reductions  shall be hereafter referred to as the "Initial Excess
Parachute  Payment".    As  soon as practicable after a Change in Control of the
Company  or  the Bank, the Initial Excess Parachute Payment shall be determined.
Immediately  following  a  Change  in  Control  of  the Company or the Bank, the
Company  or  the  Bank shall pay the Employee, subject to applicable withholding
requirements  under  applicable  state  or  federal  law  an  amount  equal  to:

(a)         twenty (20) percent of the Initial Excess Parachute Payment (or such
other  amount  equal  to  the  tax  imposed under Section 4999 of the Code), and

(b)     such additional amount (tax allowance) as may be necessary to compensate
the  Employee  for  the  payment by the Employee of state and federal income and
excise  taxes on the payment provided under Clause (a) and on any payments under
this  Clause (b).  In computing such tax allowance, the payment to be made under
Clause  (a)  shall  be multiplied by the "gross up percentage" ("GUP").  The GUP
shall  be  determined  as  follows:


                                        GUP  =          Tax  Rate
                                                        ---------
                                        1  -  Tax  Rate

The  Tax  Rate  for  purposes of computing the GUP shall be the highest marginal
federal  and  state  income  and  employment-related  tax  rate,  including  any
applicable  excise tax rate, applicable to the Employee in the year in which the
payment  under  Clause  (a)  is  made.

     (ii)          Notwithstanding  the  foregoing,  if it shall subsequently be
determined  in  a  final  judicial  determination  or  a  final  administrative
settlement to which the Employee is a party that the excess parachute payment is
defined  in  Section  4999 of the Code, reduced as described above, is different
from the Initial Excess Parachute Payment (such different amount being hereafter
referred  to as the "Determinative Excess Parachute Payment") then the Company's
independent accountants shall determine the amount (the "Adjustment Amount") the
Employee must pay to the Company or the Bank or the Company or the Bank must pay
to the Employee in order to put the Employee (or the Company or the Bank, as the
case  may  be) in the same position the Employee (or the Company or the Bank, as
the  case  may  be)  would have been if the Initial Excess Parachute Payment had
been  equal  to  the Determinative Excess Parachute Payment.  In determining the
Adjustment  Amount,  the independent accountants shall take into account any and
all  taxes (including any penalties and interest) paid by or for the Employee or
refunded  to the Employee or for the Employee's benefit.  As soon as practicable
after  the  Adjustment  Amount  has  been so determined, the Company or the Bank
shall  pay the Adjustment Amount to the Employee or the Employee shall repay the
Adjustment  Amount  to  the  Company  or  the  Bank,  as  the  case  may  be.

     (iii)          In  any calendar year that the Employee receives payments of
benefits  under  this  Agreement,  the  Employee  shall  report on his state and
federal  income  tax  returns  such  information  as  is  consistent  with  the
determination  made  by  the independent accountants of the Company as described
above.   The Company and the Bank shall indemnify and hold the Employee harmless
from  any  and  all  losses,  costs  and expenses (including without limitation,
reasonable  attorney's  fees,  interest, fines and penalties) which the Employee
incurs  as  a  result of so reporting such information.  Employee shall promptly
notify the Company and the Bank in writing whenever the Employee receives notice
of  the  institution  of  a  judicial  or  administrative  proceeding, formal or
informal,  in  which the federal tax treatment under Section 4999 of the Code of
any amount paid or payable under this the Employment Agreement is being reviewed
or  is  in dispute.  The Company or the Bank shall assume control at its expense
over  all  legal and accounting matters pertaining to such federal tax treatment
(except  to  the extent necessary or appropriate for the Employee to resolve any
such  proceeding with respect to any matter unrelated to amounts paid or payable
pursuant  to  this  contract)  and  the  Employee shall cooperate fully with the
Company  or  the Bank in any such proceeding.  The Employee shall not enter into
any  compromise  or  settlement or otherwise prejudice any rights the Company or
the  Bank may have in connection therewith without prior consent of the Company.

     4.          Term  of  the  Agreement
                 ------------------------

     This  Agreement  shall  remain  in  effect for the period commencing on the
Effective  Date  and  ending  on the earlier of (i) the date 36 months after the
Effective  Date,  and  (ii) the date on which the Employee terminates employment
with  the  Company  or  the  Bank; provided that the Employee's rights hereunder
shall  continue  following the termination of his employment with the Company or
the  Bank  under  any  of  the  circumstances  described  in  Section  2 hereof.

     5.          Termination  or  Suspension  Under  Federal  Law
                 ------------------------------------------------

     Any payments made to the Employee pursuant to this Agreement, or otherwise,
are subject to and conditioned upon their compliance with 12 U.S.C.  1828(k) and
any  regulations  promulgated  thereunder.

     6.          Expense  Reimbursement
                 ----------------------

     In  the  event that any dispute arises between the Employee and the Company
or  the  Bank  as  to  the  terms  or interpretations of this Agreement, whether
instituted  by  formal legal proceedings or otherwise, including any action that
the  Employee  takes to enforce the terms of this Agreement or to defend against
any  action  taken  by the Company or the Bank, the Employee shall be reimbursed
for  all  costs and expenses, including reasonable attorneys' fees, arising from
such  dispute, proceedings or actions, provided that the Employee shall obtain a
final  judgment in favor of the Employee in a court or competent jurisdiction or
in  binding arbitration under the rules of the American Arbitration Association.
Such  reimbursement,  which  may  be  in  advance  of  any  final  judgment  or
determination  in arbitration, if requested in writing by the Employee, shall be
paid  within  ten  (10) days of Employee's furnishing to the Company or the Bank
written  evidence,  which  may be in the form, among other things, or a canceled
check  or  receipt,  of  any  costs  or  expenses  incurred  by  the  Employee.

     7.          Successors  and  Assigns
                 ------------------------

     (a)        This Agreement shall inure to the benefit of and be binding upon
any  corporate  or  other  successor  or assign of the Company or the Bank which
shall  acquire,  directly  or  indirectly, by merger, consolidation, purchase or
otherwise,  all  or  substantially  all  of  the  assets or stock of the Bank or
Company.  This Agreement shall inure to the benefit of and be enforceable by the
Employee's  personal  and  legal  representatives,  executors,  administrators,
successors,  heirs, devisees and legatees.  If the Employee should die while any
amounts  are  still payable to him/her hereunder, all such amounts shall be paid
in  accordance  with  the  terms  of  this  Agreement to the Employee's devisee,
legatee  or  other  designee, or if there be no such designee, to the Employee's
Estate.

     (b)       Since the Company and the Bank are contracting for the unique and
personal  skills of the Employee, the Employee shall be precluded from assigning
or delegating his rights or duties hereunder without first obtaining the written
consent  of  the  Company  or  the  Bank.

     8.          Amendments
                 ----------

     No  amendments  or additions to this Agreement shall be binding unless made
in  writing  and  signed  by  all  of  the  parties,  except as herein otherwise
specifically  provided.    No  waiver  by either party hereto at any time of any
breach  by  the  other  party  hereto,  or  of compliance with, any condition or
provision  of  this Agreement to be performed by such other party will be deemed
to be a waiver of similar or dissimilar provisions or conditions, at the same or
any  prior  or  subsequent  time.

     9.          Applicable  Law
                 ---------------

     Except  to  the  extent  preempted by Federal law, the laws of the State of
Texas  shall  govern this Agreement in all respects, whether as to its validity,
construction,  capacity,  performance  or  otherwise.

     10.          Severability
                  ------------

     The  provisions  of  this  Agreement  shall  be  deemed  severable  and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability  of  the  other  provisions  hereof.

     11.          Entire  Agreement
                  -----------------

     This Agreement, together with any understanding or modifications thereof as
agreed  to  in  writing  by  the  parties, shall constitute the entire agreement
between  the  parties  hereto.

     12.          Notices
                  -------

     For  purposes  of this Agreement, notices and other communications provided
for  in this Agreement shall be in writing and shall be deemed to have been duly
given  when  delivered  or  mailed  by U.S. registered or certified mail, return
receipt  requested, postage prepaid, as follows:  If to the Company or the Bank:
Chairman  of  the Board and Chief Executive Officer, Coastal Bancorp, Inc., 5718
Westheimer,  Suite  600,  Houston,  Texas  77057.    If  to  the  Employee:

     Gary  R.  Garrett
     1231  Creekford
     Sugar Land,  Texas  77478




                            Signature Page to Follow

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year  first  herein  above  written.



ATTEST:                                     COASTAL BANCORP, INC.


/s/    Linda  B.  Frazier              By:   /s/  Manuel J. Mehos
-------------------------                   ----------------------------
Secretary                                   Manuel J. Mehos,
                                            Chairman  of  the  Board
                                            and  Chief  Executive  Officer


                                        By:   /s/    James  C.  Niver
                                            -----------------------------
                                            James  C.  Niver
                                            Chairman,  Compensation  Committee


ATTEST:                                     COASTAL BANC SSB


/s/    Linda  B.  Frazier               By:   /s/  Manuel J. Mehos
-------------------------                   ----------------------------
Secretary                                   Manuel J. Mehos,
                                            Chairman  of  the  Board
                                            and  Chief  Executive  Officer

WITNESS


/s/    Pamela  S.  Watkins              By:   /s/  Gary R. Garrett
--------------------------                   ---------------------------
       Pamela  S.  Watkins                   Gary R. Garrett
                                             Executive  Vice  President/
                                             Chief  Lending  Officer



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