Price/Costco Shareholders Committee – ‘PREN14A’ for 8/30/97 re: Costco Wholesale Corp/New

As of:  Friday, 12/20/96   ·   For:  8/30/97   ·   Accession #:  1029455-96-1   ·   File #:  0-20355

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

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

Document/Exhibit                   Description                      Pages   Size 

 1: PREN14A     Preliminary Non-Management Proxy Solicitation          8±    28K 
                          Material -- Non-Contested Solicitation                 

PREN14A
1st “Page” of 4
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
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: _______________________________                           

PREN14A
2nd “Page” of 4
TOC
1st
Previous
Next
↓Bottom
Just 2nd
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 4, 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 person who possesses material             
nonpublic information about a public company to buy or sell the                 
company's stock.  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.  At the time of the alleged                 
insider trading, Office Depot and Costco shared a director, Denis               
Defforey, then Carrefour's CEO.  At the time the trading occurred,              
Galanti was the chief financial officer of Costco.                              

Management is conspicuously silent in its proxy statement as          
to whether Galanti actually did what the SEC accused him of.                    
Management is equally 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.  Consent decrees often get               
entered when the evidence of illegality is so clear that the                    
defendant wisely decides to "cut a deal" rather than risk worse at              
trial. The SEC will not enter into a consent decree for penalties               
unless the person charged agrees he will not deny committing the                
acts of which he has been accused.                                              

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.                                                            

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. JUST SAY NO TO GALANTI                                                       

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 and                   
abstain on all other voting matters. We incorporate herein by                   
reference the discussion in the Company's proxy statement of the                
election of directors, voting requirements and outstanding                      
securities.                                                                     

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.                     

PROXY SOLICITATION                                                              

The Committee consists currently of shareholder Joni Kahn and         
Teamsters Local 542.  Ms. Kahn began acquiring Price/Costco stock               
in 1993 and now beneficially owns 313 shares. She is retired from               
Local 542 staff. Local 542 does not own stock in its own name, but              
it represents about 1800 Price/Costco employees, and believes most              
of its members have invested in the Company's stock through its                 
401K retirement plan. Other Teamster locals represent approximately             
5200 Price employees who also participate in this plan. 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                  
locals' staff. The locals have collective bargaining agreements                 
with various Price stores and work to organize others, which                    
management resists.  No strike, contract negotiations, boycott or               
picketing is occurring.                                                         

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.                                                                      

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                      

PREN14A
3rd “Page” of 4
TOC
1st
Previous
Next
↓Bottom
Just 3rd
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) ELECTION OF DIRECTORS:                                                      

Put a check mark next to each nominee for which you wish to vote:               

a. Jim Senegal                [  ]                                    
b. Jeffrey Brotman            [  ]                                    
c. Richard Galanti            [  ]                                    

WITHHOLD from all nominees              [  ]                                    
We recommend you do NOT vote for Galanti.                                       

(2) Shareholder Proposal for Zero Tolerance on Insider Trading                  
FOR [   ]   AGAINST [   ]     ABSTAIN [   ]                           
We recommend a vote FOR this proposal.                                          
(3) Company Proposal to Change Name to Costco Companies, Inc.                   
FOR [   ]   AGAINST [   ]     ABSTAIN [   ]                           
(4) Company Proposal to Double Amount of Stock Available for Stock              
Option Plan                                                                     
FOR [   ]   AGAINST [   ]     ABSTAIN [   ]                           
(5) Company Proposal to Ratify Auditors                                         
FOR [   ]   AGAINST [   ]     ABSTAIN [   ]                           

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.                        

PREN14A
Last “Page” of 4
TOC
1st
Previous
Next
↓Bottom
Just 4th
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 ‘PREN14A’ Filing		Date		First		Last			Other Filings
For Period End:		8/30/97
Filed on:		12/20/96							10-Q
		1/29/96		2		3
		1/4/96		2
									List all Filings