Filed by Hewlett-Packard Company Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-6
Under the Securities Exchange Act of 1934
Subject Company: Compaq Computer Corporation
Commission File No.: 333-73454
This filing relates to a planned merger (the "Merger") between Hewlett-Packard
Company ("HP") and Compaq Computer Corporation ("Compaq") pursuant to the terms
of an Agreement and Plan of Reorganization, dated as of September 4, 2001 (the
"Merger Agreement"), by and among HP, Heloise Merger Corporation and Compaq. The
Merger Agreement is on file with the Securities and Exchange Commission as an
exhibit to the Current Report on Form 8-K, as amended, filed by Hewlett-Packard
Company on September 4, 2001, and is incorporated by reference into this filing.
On February 28, 2002, HP issued the following press release.
[LETTERHEAD OF HEWLETT-PACKARD COMPANY]
[HP INVENT LOGO]
Editorial Contacts:
Judy Radlinsky, HP
+1 650 857 5034
judy_radlinsky@hp.com
Rebeca Robboy, HP
+1 650 857 2064
rebeca_robboy@hp.com
MEMBERS OF HP BOARD'S COMPENSATION COMMITTEE
ISSUE LETTER TO WALTER HEWLETT
PALO ALTO, Calif., Feb. 28, 2002 -- The following letter was sent today to
Walter Hewlett from Phil Condit and Sam Ginn, his fellow members of HP's Board
of Directors' Compensation Committee. For more information on Hewlett-Packard
Company's (NYSE:HWP) merger with Compaq, visit http://www.VotetheHPway.com.
February 28, 2002
Walter B. Hewlett
1501 Page Mill Road, MS 3U-10
Palo Alto, California 94304
Dear Walter:
As your fellow members of the Compensation Committee of the HP Board of
Directors, we are stunned by your blatant mischaracterizations of the actions of
our Committee.
As you know Walter, the three of us all unanimously agreed at our last
Compensation Committee meeting that the executive employment terms previously
discussed (including discussions at our prior meetings in September) were
specifically rejected and that these terms would not serve as benchmark or
minimum terms for any future employment arrangements following the merger. We
all agreed that we needed to do a better job of aligning management compensation
with shareowner interests. We concluded that it would be in the best interests
of shareowners that the Board of Directors of the combined HP/Compaq have
responsibility for determining appropriate compensation terms for the executive
officers of the combined company. To that end, we have requested new market data
and input from independent compensation consultants.
Your recent SEC filings and public announcements assert that Section 5.12(c) of
the Merger Agreement obligates HP to make the previously discussed terms a
benchmark in future negotiations. As you well know, Section 8.5 of the Merger
Agreement clearly states that Section 5.12(c) does not give rise to any binding
obligation and, as such, did not, and does not, in any way obligate HP to
consider, negotiate, offer or agree to any specific terms or consider any terms
as benchmarks for future terms.
The Compensation Committee and the Board have the final word on all executive
compensation matters, and as you know, the Compensation Committee has overtly
rejected the executive employment terms previously discussed. As such, they are
irrelevant. Until the Compensation Committee and the Board approve executive
employment terms, no agreements or arrangements exist. You have deliberately
made misleading statements to the public. You imply there is an agreement or
understanding regarding terms of future executive employment agreements when you
know there is none. You assert that HP is under an obligation to negotiate
employment agreements when you know it is not. At a time when shareowners should
expect transparent and reliable disclosure from public companies, your behavior
is extremely suspect and unacceptable.
You know that in order for our Committee and the Board to function properly, we
must freely debate proposed strategies and ideas in our meetings. Yet you have
put your personal agenda in front of the interests of HP and our shareowners. We
are saddened that you have mischaracterized the good work of our Committee.
Very truly yours,
(Original Signed By)
Sam Ginn Phil Condit
ABOUT HP
Hewlett-Packard Company -- a leading global provider of computing and imaging
solutions and services -- is focused on making technology and its benefits
accessible to all. HP had total revenue of $45.2 billion in its 2001 fiscal
year. Information about HP and its products can be found on the World Wide Web
at http://www.hp.com.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements that involve risks,
uncertainties and assumptions. If any of these risks or uncertainties
materializes or any of these assumptions proves incorrect, the results of HP and
its consolidated subsidiaries could differ materially from those expressed or
implied by such forward-looking statements.
All statements other than statements of historical fact are statements that
could be deemed forward-looking statements, including any projections of
earnings, revenues, synergies, accretion or other financial items; any
statements of the plans, strategies, and objectives of management for future
operations, including the execution of integration and restructuring plans and
the anticipated timing of filings, approvals and closings relating to the Merger
or other planned acquisitions; any statements concerning proposed new products,
services, developments or industry rankings; any statements regarding future
economic conditions or performance; any statements of belief and any statements
of assumptions underlying any of the foregoing.
The risks, uncertainties and assumptions referred to above include the ability
of HP to retain and motivate key employees; the timely development, production
and acceptance of products and services and their feature sets; the challenge of
managing asset levels, including inventory; the flow of products into
third-party distribution channels; the difficulty of keeping expense growth at
modest levels while increasing revenues; the challenges of integration and
restructuring associated with the Merger or other planned acquisitions and the
challenges of achieving anticipated synergies; the possibility that the Merger
or other planned acquisitions may not close or that HP, Compaq or other parties
to planned acquisitions may be required to modify some aspects of the
acquisition transactions in order to obtain regulatory approvals; the assumption
of maintaining revenues on a combined company basis following the close of the
Merger or other planned acquisitions; and other risks that are described from
time to time in HP's Securities and Exchange Commission reports, including but
not limited to HP's annual report on Form 10-K, as amended on January 30, 2002,
for the fiscal year ended October 31, 2001 and HP's registration statement on
Form S-4 filed on February 5, 2002.
HP assumes no obligation and does not intend to update these forward-looking
statements.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
On February 5, 2002, HP filed a registration statement with the SEC containing a
definitive joint proxy statement/prospectus regarding the Merger. Investors and
security holders of HP and Compaq are urged to read the definitive joint proxy
statement/prospectus filed with the SEC on February 5, 2002 and any other
relevant materials filed by HP or Compaq with the SEC because they contain, or
will contain, important information about HP, Compaq and the Merger. The
definitive joint proxy statement/prospectus and other relevant materials (when
they become available), and any other documents filed by HP or Compaq with the
SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents
filed with the SEC by HP by contacting HP Investor Relations, 3000 Hanover
Street, Palo Alto, California 94304, 650-857-1501. Investors and security
holders may obtain free copies of the documents filed with the SEC by Compaq by
contacting Compaq Investor Relations, P.O. Box 692000, Houston, Texas
77269-2000, 800-433-2391. Investors and security holders are urged to read the
definitive joint proxy statement/prospectus and the other relevant materials
(when they become available) before making any voting or investment decision
with respect to the Merger.
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