HP Statement on Walter Hewlett's Compensation Claims

As previously disclosed, after the merger is closed, the Board of Directors will determine whether there will be employment agreements with executives of the new HP, and if so, what the terms of those agreements would be.

As Walter Hewlett well knows and fully agreed to as a member of HP's compensation committee, there are no agreements or understandings regarding the terms of future executive employment agreements. Early discussions around executive compensation for certain executive officers of both HP and Compaq were aborted and do not constitute minimum or benchmark terms for future agreements, if any. The Board will review new market data following the merger and input from independent compensation consultants with the goal of best aligning management incentives with shareowner interests.

It is bizarre that Walter Hewlett is disseminating misinformation about non-existent employment terms for HP and Compaq senior executive --while at the same time, as a director, he actively supported the Board's conclusion that more research and analysis is necessary before HP can even begin to formulate appropriate market-based executive compensation proposals.

Simply stated, Walter Hewlett is again attempting to mislead investors--but worse than his usual flip-flop, it is plainly deceptive. As a director, he willingly supported the Board's decision to delay development of the employment contracts until after the merger's close.

For Walter Hewlett to disseminate this type of misinformation just three weeks before the merger vote is another example of his recent "do anything say anything to win" strategy. It is unfortunate that he is willing to blatantly breach his fiduciary duties as a HP director by misstating Board discussions and fabricating information solely in an effort to gain votes.