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.
The following is a newsletter relating to the Merger. This newsletter is posted
on HP's external web site, www.VotetheHPway.com, and was e-mailed to individuals
who subscribe to the newsletter through the www.VotetheHPway.com web site.
VOTETHEHPWAY NEWSLETTER -- MARCH 6, 2002
This is the second edition of the VotetheHPway.com e-mail newsletter. This
newsletter is intended to keep you informed of important activity related to the
HP/Compaq merger. From time to time we will also send newsletter subscribers
alerts on breaking news and information related to the HP/Compaq merger.
FEDERAL TRADE COMMISSION CLEARS HP/COMPAQ MERGER
Today, HP cleared its final antitrust review with the United States Federal
Trade Commission (FTC). HP has already secured approvals from the
antitrust/competition agencies of Canada and the European Union.
"We are gratified by the FTC's decision. It validates our conviction from the
outset that the merger can only enhance competition throughout our markets,"
said Carly Fiorina, HP chairman and chief executive officer. "Completion of the
FTC review marks a major milestone in the approval process, and we are now
focused on winning the shareowner vote."
INSTITUTIONAL SHAREHOLDER SERVICES (ISS) RECOMMENDS SHAREOWNERS VOTE FOR
HP/COMPAQ MERGER
On March 5, 2002, ISS, a leading provider of proxy voting and corporate
governance services, announced its recommendation that its 750 clients vote FOR
the HP/Compaq merger.
In their report to shareowners, ISS concluded:
"Based on our assessment of the strategic and financial prospects of the
combined company and our analysis of the integration plan and other procedural
aspects of the merger, we recommend that shareholders vote for the HP-Compaq
combination," said ISS's Proxy Analysis, dated March 5, 2002.
ISS's Patrick McGurn also stated, "We believe the Compaq merger provides an
excellent means of maximizing shareholder value." And, "We really believe this
is a deal that's going to work... We think this is a winner."
ISS considered two overarching factors in its evaluation of the
HP/Compaq merger:
1. The strategic rationale for and the financial prospects of the
combination, and
2. The process employed, including the sufficiency of the board's
deliberations and the alignment of management's interest with
shareholders.
ISS represents about 23 percent of HP outstanding shares as clients.
HP HOLDS SECURITY ANALYST MEETING IN NEW YORK
HP held its semi-annual Security Analyst Meeting in New York City on February
27, 2002. Over 300 institutional investors and members of the press attended the
event where they learned more about the strategic rationale, financial case and
integration planning for the merger.
Videos and transcripts of the event can be found on the VotetheHPway site under
the "speeches and interviews" section in the "newsroom".
ANSWERS TO YOUR FREQUENTLY ASKED QUESTIONS:
Thank you for all of the comments and questions that have been submitted to
VotetheHPway.com. Many of these questions are addressed in the "answers to
questions" section accessible from the VotetheHPway home page. However, there
are a few questions that we'd like to also address here:
Q: WHY WOULD I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS FROM HP AND WHAT
SHOULD I DO WITH THEM?
A: You may receive more than one set of voting materials, including multiple
copies of the joint proxy statement/prospectus and multiple WHITE proxy
cards or voting instruction cards from HP for any one of the following
reasons:
1) You hold your HP shares in more than one brokerage account,
2) You hold HP shares in more than one name,
3) You hold HP shares through HP's TAXCAP or Stock Ownership Plan in
addition to other holdings.
In order for your total share ownership to count in this vote, please
complete, sign, date and return EACH WHITE proxy card and voting
instruction card that you receive from HP.
4) You are a shareowner of both HP and Compaq.
The proxy cards or voting instruction cards from HP and Compaq are
both WHITE. If you are a shareowner of both HP and Compaq, please
note that the merger votes for HP and Compaq are separate events.
A vote for the issuance of shares in connection with the merger
for the HP special meeting (i.e. a FOR vote) WILL NOT constitute a
vote for the proposal to approve and adopt the merger agreement
and approve the merger for the Compaq special meeting (i.e. a FOR
vote), and vice versa.
Please complete, sign, date and return EACH WHITE proxy card and voting
instruction card that you receive from HP AND Compaq in order for your full
number of shares to be counted in both the HP merger vote and the Compaq
merger vote.
Q: WHY AM I RECEIVING SO MUCH MAIL ABOUT THE HP/COMPAQ MERGER?
A: You are receiving various mailings relating to the merger because HP is
engaged in a continuing effort to keep shareholders informed and make sure
they understand the true facts about the merger.
Q: DO I HAVE TO MAIL BACK BOTH THE WHITE AND THE GREEN PROXY CARD/VOTING
INSTRUCTION CARD?
A: NO. Both the WHITE proxy card or voting instruction card, as provided by
HP, and the green proxy card or voting instruction card, as provided by the
dissident group, allow you to declare how you want to vote on the merger.
If you submit both a WHITE proxy card or voting instruction card and a
green proxy card or voting instruction card, only your latest-dated card
will be counted. For example, if you sign, date and return a WHITE proxy
card after you have submitted a green proxy card, the later-dated WHITE
proxy card will automatically revoke the green proxy card.
Each WHITE proxy card or voting instruction card urges you to vote "FOR" a
proposal to approve the issuance of shares of HP common stock in connection
with the HP/Compaq merger. The dissident group asks you to vote "against"
the proposal using the green proxy card or voting instruction card.
THE HP BOARD OF DIRECTORS RECOMMENDS THAT YOU DISCARD ANY GREEN PROXY CARDS OR
VOTING INSTRUCTION CARDS. THE HP BOARD OF DIRECTORS RECOMMENDS THAT YOU SIGN,
DATE AND RETURN EACH WHITE PROXY CARD OR VOTING INSTRUCTION CARD TO VOTE "FOR"
THE PROPOSAL NOTED ABOVE.
Q: CAN I VOTE ONLINE?
A: No. HP shareowners can vote either in person at the special meeting
Tuesday, March 19 or by proxy. If you plan to vote by proxy, please sign,
date and return your WHITE proxy or voting instruction card as soon as
possible.
Q: WHAT IF I HAVE QUESTIONS ABOUT THE MATERIALS I RECEIVED IN THE MAIL OR I
HAVEN'T YET RECEIVED MY PROXY AND VOTING INFORMATION IN THE MAIL?
A: Most questions about the shareowner vote are addressed in the FAQs on
VotetheHPway.com. However, if you did not receive proxy materials or need
more information you can call toll-free 1-877-750-5836. You may also
request additional copies of the HP proxy materials by sending an e-mail to
info@innisfreema.com.
OTHER VOICES: WHAT OTHERS HAVE TO SAY ON THE HP/COMPAQ MERGER:
INDUSTRY LEADERS AND OBSERVERS COMMENT ON MERGER
"Well, I think HP is a good company and Compaq is a good company but there seems
little question that together they really have the potential to be a great
company.
"We are looking at technology companies to try to provide more integrated
solutions and an HP would be more valuable to us with Compaq included than it
would be if it sort of was a more narrowly defined or stripped down company just
focusing on one or two things.
"But if you're not moving forward, if you're not trying to move to where the
market's going, I think there's a real risk of being left behind. Wayne Gretzky,
the great hockey player, always used to say: `It's important not to go where the
puck is, but go where the puck's going.' And I think that's what this merger is
all about... trying to position the company to be an important part of the
future, not simply an important part of the past." (Steve Case, Chairman of the
Board, AOL Time Warner)
"This deal of Compaq and Hewlett-Packard I think makes a lot of sense to our
company. We are big users of the products of both companies and -- and we think
that really, as one looks to the future, size and scale are really important and
that rather than our watching both of these companies go and become niche
players, they end up with a size and a balance sheet that makes sense for us to
invest with them in the future. And we can partner with them together, I think,
much better than we could do with either of them separately." (Sanford I. Weill,
Chairman and CEO, Citigroup)
"Working with the two companies together, we can improve a lot of things for the
benefit of our joint customers there's no doubt about that. And we work very
well with both companies. So I believe it will only get better." (Hasso
Plattner, Co-Chairman and CEO, SAP AG)
"We don't believe that this deal can, you know, tacitly be characterized in a
sound bite. We believe that this deal really requires that you look and see
where each company came from, what the skill sets of each company are and how
they fit together or how they overlap.
"We focused about 15 analysts directly on this. We really spent about 60 days
analyzing this deal.
"HP and Compaq are making their move, they're making it now because they believe
that there have been some fundamental shifts in the marketplace, and by bringing
these companies together, they believe that there's a significant amount of
complementary technology -- which we believe as well -- and that they can speed
to market a set of solutions around real customer business problems, and -- and
deliver on those solutions faster than they would have been able to do with
organic growth." (Crawford Del Prete, Senior Vice President, IDC)
EMPLOYEES
"My response [in the Corvallis phone survey regarding the merger] was `strongly
favor'... Hang in there. I sense that we are heading over the red-tape hump. I
am looking forward to what may come next as we merge into a great new company."
(Ron R. Anderson, Corvallis)
"I felt compelled to explicitly share my support for the effort and strategic
direction that you, the management team and the board are illustrating and
pursuing... I'm ready to dig in and tackle the integration of the HP/Compaq
workstation businesses, when the merger is approved." (Jim Zafarana, Ft.
Collins)
"I just wanted you to know that I hope the merger vote is positive. I then
expect this great company to become THE leader in all endeavors." (Phil Aranda)
"... After reading your [Goldman Sachs] speech, I was reminded of why I wanted
to join HP five years ago; because I wanted to work somewhere with good ethics,
a strong value system, global opportunities and in an [environment] that was
challenging, fast moving and has the potential to change the world. I still want
to help make HP the best place to work, with a world-class customer focus,
delivering world-class solutions. I still want to feel proud to say that, `I
work for HP.' Your speech set things out with a clarity that made me realize
that I am no longer an undecided. I am a definite `yes to the merger' person.
Thank you for all your work and dedication." (Fiona Alder, Loveland)
ANALYSTS AND MEDIA*
"Jay Stevens, an analyst with Buckingham Research, said he believes the deal
will be approved. `I'm for the merger,' Stevens said. `I think it will go
through.'" ("Deal is Our Best Course," Therese Poletti, San Jose Mercury News,
Feb. 28, 2002)
"H-P executives should trump [Q1] earnings numbers for the next few weeks
because they reached them under the same duress they'll experience integrating
two huge companies, Dr. Hasan Pirkul, dean of the University of Texas at Dallas'
School of Management, said in an interview Monday. `The earnings are the
evidence that they can use to convince people that they can make this merger
work,' he said." ("H-P Stresses `Focus'; Execs stay positive, assure analysts
that merger is wise," Crayton Harrison, The Dallas Morning News, Feb. 28, 2002)
______________________
* Permission to use quotations for inclusion in this document was neither sought
nor obtained.
ANALYSTS REACT* TO HP SECURITY ANALYST MEETING:
"We believe these efforts [integration planning] -- which total over
half-a-million man-hours so far -- are a key factor that set this deal apart
from many others which have failed." (Joel Wagonfield, Banc of America
Securities, First Call Report, Feb. 28, 2002)
"Integration plans appear to be progressing smoothly, and we believe the
companies would be well-positioned to deliver on the promises of management
shortly after the deal is complete." (George Elling, Deutsche Banc Alex. Brown,
First Call Report, Feb. 28, 2002)
"If Hewlett Packard and Compaq shareholders approve the deal on March 19-20, HP
shares could decline 5-10% near-term as the spread closes, but we see potential
for a 50%+ move in the shares over a twelve month time frame as the company
realizes the cost synergies associated with the deal." (Richard Gardner, Salomon
Smith Barney, First Call Report, Feb. 28, 2002)
"Our conclusion: IPS can stand alone, but stand-alone may be sub-optimal... we
are increasingly sympathetic to the view (argued passionately by Mr. Joshi) that
IPS longer term growth and margin opportunities are best optimized if leveraged
under the same roof as HP." (Richard Chu, SG Cowen, First Call Report, Feb. 28,
2002)
IMPORTANT INFORMATION ABOUT THE SHAREOWNER VOTE:
A special meeting of HP shareowners will be held on Tuesday, March 19 to vote on
the HP/Compaq merger. HP shareowners can vote in person or by proxy. If you are
an HP shareowner, watch your mail for HP's WHITE proxy or voting instruction
card and detailed information about the merger. IF YOU PLAN TO VOTE BY PROXY,
PLEASE SIGN, DATE AND RETURN YOUR WHITE PROXY OR VOTING INSTRUCTION CARD AS SOON
AS POSSIBLE.
The HP board of directors recommends that you vote "FOR" the proposal to approve
the issuance of shares of HP common stock in connection with the merger.
HP SHAREOWNERS ARE ENCOURAGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS
PREPARED BY HP AND COMPAQ. THE JOINT PROXY STATEMENT/PROSPECTUS CONTAINS
IMPORTANT INFORMATION ABOUT THE MERGER THAT HP SHAREOWNERS SHOULD CONSIDER IN
EVALUATING THE MERGER.
For additional information regarding the HP special meeting of shareowners for
the HP/Compaq merger, please see the Shareowner FAQs available at
www.VotetheHPway.com, which include information about how to obtain proxy
materials (including the joint proxy statement/prospectus) if you have not yet
received them.
______________________
* Permission to use quotations for inclusion in this document was neither sought
nor obtained.
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.