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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (Fee Required)
For the fiscal year ended September 3, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from _____________ to _____________.
Commission file number 0-20355
PRICE/COSTCO, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0572969
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
999 LAKE DRIVE, ISSAQUAH, WA 98027
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (206) 313-8100
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 Par Value
5 3/4 Convertible Subordinated Debentures Due 2002
6 3/4 Convertible Subordinated Debentures Due 2001
Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant at October 31, 1995, was $2,863,618,868.
The number of shares outstanding of the registrant's common stock as of
October 31, 1995, was 195,235,264.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on February 1, 1996 are incorporated by reference into
Part III of this Form 10-K.
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ITEM 11. EXECUTIVE COMPENSATION
The following tables and descriptive materials set forth information
concerning compensation earned for services rendered to the Company by (A) the
Chief Executive Officer of the Company (the "CEO"), and (B) the four other most
highly compensated individuals (other than the CEO) who were serving as
executive officers of the Company at the end of the 1995 fiscal year
(collectively, together with the CEO, the "Named Executive Officers").
SUMMARY OF COMPENSATION
The following table summarizes the compensation earned by the Named
Executive Officers during fiscal 1995, 1994 and 1993.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
--------------------------------------- LONG TERM
COMPENSATION
AWARDS
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
FISCAL COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(A) BONUS ($)(B) (#) ($)(C)
- --------------------------- ------ ------------- ------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
James D. Sinegal 1995 305,769 0 0 50,000 16,900
President and Chief 1994 300,000 0 0 19,400 10,495
Executive Officer 1993 300,000 0 0 45,000 8,625
Jeffrey H. Brotman 1995 305,769 0 0 50,000 15,820
Chairman of the Board 1994 300,000 0 0 19,400 8,884
1993 300,000 0 0 45,000 7,583
Richard D. DiCerchio 1995 265,000 37,000 0 20,000 15,820
Executive Vice 1994 256,923 40,000 0 30,900 8,358
President 1993 240,000 30,000 0 45,000 6,902
Richard A. Galanti 1995 240,480 37,000 0 20,000 15,070
Executive Vice 1994 210,385 40,000 0 20,000 6,913
President and Chief 1993 187,308 24,000 0 0 5,812
Financial Officer
Edward B. Maron, Jr. 1995 297,710 44,358 0 20,000 11,110
Executive Vice 1994 234,086 44,260 78,472 20,000 9,590
President 1993 219,600 28,657 113,651 0 7,015
</TABLE>
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(A) Because the Company's fiscal year 1995 was a 53-week year, salary amounts
shown for each Named Executive Officer include one week of compensation in
addition to the amounts otherwise payable on an annualized basis.
(B) Amounts shown for Mr. Maron in 1993 and 1994 represent tax equalization
payments.
(C) In fiscal year 1995, amounts shown for each named Executive Officer include
the Company's matching contributions under a deferred compensation plan of
$5,000 each. In fiscal year 1995, amounts shown for Messrs. Sinegal,
Brotman, DiCerchio and Galanti include matching contributions of $500 each,
and Company contributions of $9,000 each, under the PriceCostco 401(k)
Retirement Plan. Amounts shown for each Named Executive Officer include
premiums representing the term insurance portion under the executive life
program of $2,400, $1,320, $1,320, $570 and $6,110, respectively, in fiscal
year 1995.
GRANTS OF STOCK OPTIONS
The following table sets forth information concerning the award of stock
options to the Named Executive Officers during fiscal 1995:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM (C)
OPTIONS/SARS EMPLOYEES EXERCISE OR EXPIRATION ------------------------
NAME GRANTED (#)(A) FISCAL YEAR (B) BASE PRICE ($/SH) DATE 5% ($) 10%
- ---- -------------- --------------- ----------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
James D. Sinegal 50,000 1.42 13.3125 05/26/05 418,605 1,060,833
Jeffrey H. Brotman 50,000 1.42 13.3125 05/26/05 418,605 1,060,833
Richard D. DiCerchio 20,000 .57 13.3125 05/26/05 167,442 424,333
Richard A. Galanti 20,000 .57 13.3125 05/26/05 167,442 424,333
Edward B. Maron, Jr. 20,000 .57 13.3125 05/26/05 167,442 424,333
</TABLE>
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(A) These stock options vest 20% per year for five years from the date of grant
and expire ten years from the date of grant. The exercise price for these stock
options equals the fair market value of the Common Stock on the date of grant.
(B) The total number of stock options granted in fiscal 1995 by the Company was
3,515,776.
(C) These assumed rates of appreciation are provided in order to comply with
requirements of the Securities and Exchange Commission, and do not represent the
Company's expectation as to the actual rate of appreciation of the Common Stock.
The actual value of the options will depend on the performance of the Common
Stock, and may be greater or less than the amounts shown.
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EXERCISE OF STOCK OPTIONS
The following table sets forth information concerning the exercise of stock
options during fiscal 1995 by each of the Named Executive Officers and the
fiscal year-end value of unexercised options.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT FY-END (#) AT FY-END ($)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($)(A) UNEXERCISABLE UNEXERCISABLE
- ---- ---------------- -------------- --------------------------- ----------------------
<S> <C> <C> <C> <C>
James D. Sinegal 0 0 127,797/70,603 0/206,250
Jeffrey H. Brotman 0 0 148,798/70,603 0/206,250
Richard D. DiCerchio 54,246 672,655 218,598/49,803 1,292,499/119,500
Richard A. Galanti 68,140 777,934 88,750/52,500 449,875/119,500
Edward B. Maron, Jr. 0 0 44,956/52,500 82,500/156,125
</TABLE>
___________________
(A) Market value of underlying securities at the exercise date, minus the
exercise price of such options.
COMPENSATION OF DIRECTORS
Each non-employee director of the Company earns $30,000 per year for
serving on the Board and $1,000 for each Board meeting and $500 for each
committee meeting attended. In addition, non-employee directors receive an
annual grant of options to purchase 8,000 shares of common stock, and are
reimbursed for travel expenses incurred in connection with the performance of
their duties as directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during fiscal 1995 were John W.
Meisenbach, Hamilton E. James and Frederick O. Paulsell, Jr.
John W. Meisenbach is a principal shareholder of MCM (Meisenbach Capital
Management) Financial, Inc. MCM provided consulting and insurance services in
managing the Company's employee benefit plans and executive life insurance
programs covering over $70,000,000 in total annual benefit costs, for which MCM
received total compensation from third party insurers of $580,773 in fiscal
1995.
Hamilton E. James is a Managing Director of DLJ. During fiscal 1995, DLJ
represented the Company in connection with the spin-off of certain assets of the
Company to Price Enterprises (the "Exchange Transaction") and also provided
services to the Company in connection with a $300,000,000 Senior Note Offering.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: March 14, 1995 PRICE/COSTCO, INC.
By: /s/ Richard A. Galanti
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Richard A. Galanti
Its: Executive Vice President and
Chief Financial Officer
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