Price/Costco Shareholders Committee – ‘PRRN14A’ on 1/7/97 re: Costco Wholesale Corp/New

As of:  Tuesday, 1/7/97   ·   Accession #:  1029455-97-1   ·   File #:  333-04355

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Revised Preliminary Non-Management Proxy Solicitation Material — Contested Solicitation or Other Situation   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRRN14A     Revised Preliminary Non-Management Proxy               9±    30K 
                          Solicitation Material -- Contested                     
                          Solicitation or Other Situation                        

PRRN14A
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SCHEDULE 14A              
SCHEDULE 14 INFORMATION               

Proxy Statement Pursuant to Section 14(a) of                                    
the Securities Exchange Act of 1934                                             

Filed by the Registrant       [   ]                                             

Filed by a Party other than the Registrant        [ X ]                         

Check the appropriate box:                                                      

[X ]  Preliminary Proxy Statement                                               

[  ]  Definitive Proxy Statement                                                

[  ]  Definitive Additional Materials                                           

[  ]  Soliciting Material Pursuant to Section 240.14a-11(c) or                  
Section 240.14a-12                                                              

Name of Registrant as Specified in Its Charter:                                 

Price/Costco, Inc.                                                              

Name of Person(s) Filing Proxy Statement:                                       

Price/Costco Shareholders Committee                                             

Payment of Filing Fee (check the appropriate box)                               

[X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or                

14a-6(j) (2).                                                         

[  ] $500 per each party to the controversy pursuant to Exchange                
Act Rule 14a-6(i)(3).                                                           

[  ] 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:                                                                        
____________________________________________________________                

2) Aggregate number of securities to which transaction                
applies:                                                                        

_____________________________________________________________                 

3) Per unit price or other underlying value of transaction            
computed pursuant to Exchange Act Rule 0-11:  (1)                               

_____________________________________________________________                 

4) Proposed maximum aggregate value of transaction:                   

_____________________________________________________________                 

(1) Set forth the amount on which the filing fee is calculated                  
and state how it was determined.                                                

[ ] Check box if any part of the fee is offset as provided by                   
Exchange Act Rule 0-11(a)(2) and identify the filing for which                  
the offsetting fee was paid previously.  Identify the previous                  
filing by registration statement number, or the Form or Schedule                
and the date of its filing.                                                     

1) Amount previously paid:                                            

____________________________                                    

2) Form, Schedule or Registration Statement No:                       

______________________________                                    

3) Filing Party: _________________________                            

Date Filed: _______________________________                           

PRRN14A
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Price/Costco Shareholders Committee                                             
c/o Teamsters Local 542                                                         
4666 Mission Gorge Place                                                        
San Diego CA 92120                                                              
Tel. (619) 582-0542                                                             
Fax (619) 582-0059                                                              

PRELIMINARY PROXY STATEMENT               

INDEPENDENT SHAREHOLDER SOLICITATION                                            
AGAINST BOARD NOMINEE GALANTI AND FOR SHAREHOLDER PROPOSAL ON                   
INSIDER TRADING                                                                 
at                                                                              
ANNUAL STOCKHOLDERS MEETING of                                                  
PRICE/COSTCO, INC.                                                              
January 29, 1996                                                                
Double Tree Resort, 5401 N. Scottsdale Rd.                                      
Scottsdale AZ 7:30pm                                                            

Date sent to shareholders:    
January 28, 1996              

Dear Price/Costco Shareholder:                                                  

In the board of directors election, we urge you NOT to vote           
for nominee Richard Galanti. In 1995 Galanti entered into a                     
consent decree in an SEC insider stock trading lawsuit against                  
him.                                                                            

We urge you to vote FOR the shareholder proposal that the             
board not nominate anyone in the future found guilty of insider                 
trading or bound by a consent decree concerning insider trading.                

1. SHAREHOLDER PROPOSAL FOR ZERO TOLERANCE FOR INSIDER TRADING                  

Please vote FOR the following recommendation concerning               
future elections:                                                               

RESOLVED, that shareholders recommend the Board adopt a policy                  
for future board elections of "zero tolerance" for insider                      
trading, under which the board will not nominate anyone for                     
election as director who has been convicted of insider trading                  
or entered into a consent decree with respect to insider                        
trading.                                                                        

For good reasons, it is illegal for            a public company                 
director or executive     who possesses material nonpublic                      
information about            his     company to     use that                    
information      buy or sell the company's stock.      In the                   
view of many,     , insider trading activity violates a                         
fundamental principle of a free market:  that everyone in the                   
market have equal access to information.  Insider trading allows                
a person with special access to information to fleece other                     
investors, by selling stock in advance of a public disclosure                   
likely to depress the price, or buying it before other investors                
have information which will tend to increase the price.                         

A person who would act this way cannot be given a position            
of trust.  It does not matter whether the insider trading                       
occurred in the stock of this company or another, any more than                 
Price/Costco should hire someone who embezzled from a previous                  
employer.                                                                       

In 1995, Price/Costco Chief Financial Officer Galanti                 
consented to entry of a final judgment against him in an action                 
brought by the SEC alleging that he engaged in illegal insider                  
trading in the stock of Office Club, Inc.  He was permanently                   
enjoined from violating federal laws against insider trading.  He               
agreed to disgorge $26,875 in insider profits, to pay a civil                   
penalty of $26,875, and to pay interest of $10,658.                             

The SEC complaint alleged that in 1990, while in possession           
of material non-public information about an impending merger                    
transaction involving Office Club and Office Depot, Galanti                     
purchased 5,000 shares of Office Club stock.  Office Depot is no                
stranger to Costco.  Carrefour was the dominant stockholder in                  
both Office Depot and Costco until this year, when it divested                  
its Price Costco stock.  Carrefour described Office Depot and                   
Costco as its two United States allied companies. <FN1>                         
At the time the trading occurred, Galanti was the chief financial               
officer of Costco.                                                              

Management is         silent about whether it has     
taken any actions to alter his access to inside information or to               
discipline him. Shareholders need to forcefully advise management               
this is unacceptable.                                                           

Management's argument against this proposal is that a                 
consent decree should not be treated the same way as a                          
conviction, and seems to imply Galanti was innocent but entered                 
into the decree to avoid legal expenses.                                        

In our view the SEC generally conducts a thorough                     
investigation before it files an insider trading lawsuit.  We                   
feel shareholders can trust the SEC more than they can trust this               
board of directors to punish one of its own.                                    

<FN1> We make no claim that Carrefour or its officials were                     
involved in the alleged insider trading.                                        

PRRN14A
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Management offers you no reason to believe that consent               
decrees result from the SEC filing frivolous cases and coercing                 
innocent people into consent decrees merely because they cannot                 
afford to litigate. Could a man in Mr. Galanti's position not                   
afford to fight a false accusation?                                             

The board should not expect unfettered discretion on how to           
deal with inside trading simply because there is a consent decree               
rather than a trial.    The Board's nominating committee has                    
discretion under the bylaws as to whom it will nominate for                     
future vacancies.                                                               

This shareholder proposal simply asks the Board to find               
someone to nominate new to nominate for Mr. Galanti's slot 3                    
years from now.                                                                 

Passage of this proposal will send a strong message to all            
insiders at Price/Costco (and elsewhere) that shareholders will                 
not stand for insiders taking unfair advantage.                                 

2.    DO NOT VOTE FOR GALANTI'S REELECTION TO THE BOARD:                        

There are three board nominees up for reelection this year,           
all current executives:  Galanti, President Jim Senegal, and                    
Chairman Jeffrey Brotman.                                                       

Price/Costco bought $200,528 worth of apparel in FY 1996              
from a company which Galanti's sister owns and runs.                            

We feel additional independence is needed on the                      
Price/Costco board.  Four of the board's nine members are current               
Price/Costco executives. The 5th is a retired Costco executive                  
now employed by the company as a consultant ($174,996 in fees in                
1996).  The 6th owns a business which consults on the Company's                 
employee insurance matters, receiving $990,974 in 1996. The 7th                 
is a senior executive of the managing underwriter of the latest                 
public offering of Company stock. That leaves only two board                    
members with no ties to incumbent management.  We believe this is               
too few on a 9-member board.                                                    

We urge you to vote against Galanti. If you wish to use               
management's proxy card to express this view, write his name on                 
the line next to "WITHHOLD AUTHORITY".                                          

VOTING RIGHTS AND PROCEDURES:                                                   

If you have already sent in the proxy card you received from          
the company, you can still change your vote. A proxy can be                     
revoked at any time prior to being counted at the meeting simply                
by filling out a later proxy card (or by appearing at the meeting               
to vote, or delivering the Company secretary written notice of                  
revocation prior to the meeting.)                                               

Employees owning stock through their 401K Plan have the               
right to instruct the plan trustee confidentially on how to vote                
their stock, without any fear of management finding out and                     
retaliating. The Committee will keep all proxy cards and surveys                
we receive confidential (except that proxy cards from non-401K                  
shareholders must be presented to the company's inspector of                    
election at the meeting for counting).                                          

The enclosed proxy card grants no discretionary authority:            
if matters come before the meeting which are not set forth in the               
Company's proxy statement or this proxy statement (which we do                  
not anticipate), we will not vote your shares on those matters.                 

All holders of common stock as of 12/6/96 record date are             
entitled to vote. If you sign the enclosed card but do not direct               
us how to vote, we will vote FOR the shareholder proposal,                      
vote for Brotman and Senegal, withhold authority as to                          
Galanti,     and abstain on all other voting matters. We                        
incorporate herein by reference the discussion in the Company's                 
12/96     proxy statement of the election of directors, voting            
requirements and outstanding securities     at pp. ____    .                    

OTHER ITEMS SET FOR A VOTE                                                      

Management proposes to: (1) change the company name to                
Costco Companies, Inc.; (2) increase the number of shares                       
available for issuance under the management stock option plan                   
from 10 million to 20 million, and (3) ratify the independent                   
auditors. We take no position on these issues. We incorporate                   
herein by reference the discussion of these issues in                           
management's proxy statement     at pp. _____.                                  

PARTICIPANTS IN THIS     PROXY SOLICITATION                             

The Committee consists currently of shareholder Joni Kahn             
(P.O. Box ____, San Diego, CA)     and Teamsters Local 542.             
Ms. Kahn began acquiring Price/Costco stock in 1993 and now                     
beneficially owns 313 shares. She is    currently     retired                   

(she was on     Local 542 staff    until 1990).     Local 542             
does not own stock in its own name, but it represents about 1800                
Price/Costco employees     in the San Diego area    , and                       
many of them have advised the Local that they     have invested                 
in the Company's stock through its 401K retirement plan    (the                 
dates and amounts of these purchases are not known to Local                     
542).      Other Teamster locals represent approximately 5200                   
Price employees who also participate in this plan.     The                      
Company claims that less than 10% of its California employees                   
have chosen to invest in Company stock.     Proxies will be                     
sought by mail, fax, telephone and personal interview.  The cost                
of proxy solicitation, estimated at $2500, will be borne by Local               
542. For proxy solicitation Local 542 will use regular staff, not               
specially-engaged solicitors, and may be assisted by    other                   
West Coast     locals' staff.  These locals have collective                     
bargaining agreements with various    company     stores and                    
have                                                                      

worked to organize others, which management resisted.                   

Local 542 has no organizing campaign, strike, boycott or                  
picketing currently underway.  Some Eastern locals are in                       
negotiations with the Company.                                                  

No participant is (or has been)                                           
a party to any contract arrangement or understanding with respect               
to any securities of the company, nor with respect to any future                
employment by the company, nor with respect to any further                      
transactions to which the company may be a party.                               

PROPOSALS FOR FUTURE MEETINGS                                                   

SEC Rule 14a-8 gives shareholders who have owned more than            
$1000 worth of the company's stock for more than one year the                   
right to have the company's proxy statement include a shareholder               
proposal and supporting statement. The deadline for submitting                  
such proposals for inclusion in the proxy statement for the 1997                
annual meeting will be 9/1/97. Feel free to contact us if you                   
would like more information about shareholder proposals.                        

EXECUTIVE COMPENSATION/SECURITY OWNERSHIP OF DIRECTORS AND                      
EXECUTIVE OFFICERS                                                              

In 1996, CEO Senegal and Chairman Brotman each received               
$450,000 in cash compensation, up from $305,769 each in 1995                    
(they received stock options in 1995, none in 1996). CFO Galanti                
received $355,000 in cash compensation (up from $277,000) and                   
80,000 stock options (up from 20,000). We incorporate herein by                 
reference the more complete information on these matters in the                 
company proxy statement     at pp. ____    .                                    

THANK YOU FOR VOTING FOR THE SHAREHOLDER PROPOSAL AGAINST INSIDER               
TRADING                                                                         

PLEASE RETURN THE ENCLOSED SURVEY AND PROXY CARD TO                             
Price/Costco Shareholders Committee     
c/o Teamsters Local 542                 
4666 Mission Gorge Place                
San Diego CA 92120                      
Fax (619) 582-0059                      

PRRN14A
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PROXY                                                                           
SOLICITED BY PRICE/COSTCO SHAREHOLDERS COMMITTEE                                
for                                                                             
ANNUAL SHAREHOLDERS MEETING OF                                                  
PRICE/COSTCO, INC.                                                              
January 29, 1996                                                                

The undersigned shareholder hereby appoints Joni Kahn, Norma          
DeSaulnier and proxies with full power of substitution to vote                  
for the undersigned at the Company's annual meeting, and at any                 
adjournments thereof, on the matters set forth in the Proxy                     
Statement.  The undersigned hereby directs these proxies be voted               
in accordance with the instructions herein.  Unless marked                      
otherwise, this proxy will be voted FOR the shareholder proposal                
and not voted on any other matter.                                              

(1) Shareholder Proposal for Zero Tolerance on Insider Trading                  
FOR [   ]   AGAINST [   ]     ABSTAIN [   ]                           
We recommend a vote FOR this proposal.                                          

(2) Company Proposal to Change Name to Costco Companies, Inc.                   
FOR [   ]   AGAINST [   ]     ABSTAIN [   ]                           
(3) Company Proposal to Double Amount of Stock Available for                    
Stock Option Plan                                                               
FOR [   ]   AGAINST [   ]     ABSTAIN [   ]                           
(4) Company Proposal to Ratify Auditors                                         
FOR [   ]   AGAINST [   ]     ABSTAIN [   ]                           

(5) ELECTION OF DIRECTORS:                                                      

Nominees:                                                               
                FOR     WITHHOLD AUTHORITY

Jim Senegal                [  ]    [  ]                           
Jeffrey Brotman            [  ]    [  ]                           
Richard Galanti            [  ]    [  ]                           

FOR all nominees:                            [  ]                         
WITHHOLD    AUTHORITY     for all nominees      [  ]                            
We recommend you     withhold authority     as to Galanti.                      

PLEASE DATE, SIGN AND PROMPTLY MAIL.                                            
[ADDED TO CARDS SENT TO INSTITUTIONS:] IF YOU OWN STOCK THROUGH A               
STOCKBROKER OR OTHER NOMINEE, DO NOT SEND THIS CARD TO THE                      
COMMITTEE: INSTEAD, CONTACT YOUR BROKER OR OTHER NOMINEE (STOCK                 
CAN ONLY BE VOTED BY THE BROKER OR OTHER HOLDER OF RECORD ON THE                
PRICE/COSTCO SHAREHOLDERS LIST).                                                

SIGNATURE ________________________________   DATE ___________                   

PERSONS SIGNING IN REPRESENTATIVE CAPACITY SHOULD INDICATE            
AS SUCH. IF SHARES ARE HELD JOINTLY, BOTH OWNERS SHOULD SIGN.                   

PRINT NAME ________________________________                                     

ADDRESS _____________________________________________________                   
___________________      ___________    __________________                      
ACCOUNT NO./SSN          # OF SHARES    TEL. NO./FAX NO.                        

PRRN14A
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SURVEY OF PRICE/COSTCO SHAREHOLDERS                                             

THIS IS NOT A PROXY: PLEASE RETURN IT EVEN IF YOU DO NOT              
FILL OUT A PROXY                                                      

1. Do you support the proposal asking that future board nominees                
not include anyone who has entered into a SEC insider trading                   
consent decree?                                                                 

Yes  _____     No   ____  Undecided  ________               

If you wish to vote on this proposal, you need to return a proxy                
card or vote at the meeting.                                                    

2. Do you support Mr. Galanti's candidacy for the Board of                      
Directors?                                                                      

Yes  _____     No   ____  Undecided  ________               

If you wish to vote on his candidacy, you need to return a proxy                
card or vote at the meeting.                                                    

3. List anything you would like management to change about                      
Price/Costco:                                                                   
_________________________________                                               

4. List any additional info you would like from the Committee:                  
_________________________________                                               

THE FOLLOWING INFORMATION WILL BE KEPT CONFIDENTIAL:                            

Name __________________________________Title, if any __________                 

Address _______________________________________________________                 

Phone/Fax ________ # Shares owned  ________                                     

Return to: Price/Costco Shareholders Committee, c/o Teamsters                   
Local 542, 4666 Mission Gorge Pl., San Diego CA 92120. Fax (619)                
582-0059.                                                                       

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PRRN14A’ Filing		Date		First		Last			Other Filings
Filed on:		1/7/97							15-12G
		1/29/96		2		4
		1/28/96		2
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