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 March 12, 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
HP CALLS ON WALTER HEWLETT TO ADDRESS UNANSWERED QUESTIONS
PALO ALTO, Calif., March 12, 2002 -- Hewlett-Packard Company (NYSE:HWP) today
called on Walter Hewlett to address key questions he has left unanswered as
shareowners make their final decisions on the proposed merger with Compaq
Computer Corporation (NYSE:CPQ).
Despite four months of vocal opposition to the Compaq merger, Hewlett has failed
to address many critical questions. Ten key questions include:
. Without merger-driven cost savings, how SPECIFICALLY will you double
HP's margins to support your promised $14 to $17 share price increase?
. How SPECIFICALLY will merging with Compaq reduce HP's price/earnings
multiple when Compaq has had a higher P/E than HP over the prior
six-month, one-year, and three-year periods?
. How SPECIFICALLY will you "restructure the PC business for
profitability"? How many layoffs will this require?
. How SPECIFICALLY would a separated IPS business be able to capitalize
on the opportunities in digital publishing and imaging with no linkage
to HP's computing and networking businesses -- when Vyomesh Joshi,
current head of this business, and Dick Hackborn, who created this
business, say this linkage is essential?
. How SPECIFICALLY would you restore profitability to HP's
enterprise computing business without destroying its ability
to meet growing customer demand for end-to-end solutions --
the Board's stated strategic focus for the company? How many
layoffs will this require? How will HP compete in the
fastest growing NT and Linux segments of the market?
. Why SPECIFICALLY did you never raise any of the suggestions
and alternatives you are now proposing during Board
deliberations?
. What SPECIFIC assurances can you give HP shareowners that
HP's Board -- which is fully committed to the Compaq
transaction -- will not leave when members have stated they
are not decided on the issue?
. What SPECIFIC assurance can you give HP shareowners that
HP's "deep management bench" -- which is also fully
committed to the Compaq transaction -- will not leave?
. Have you met with Lew Platt to discuss reassuming the CEO
position? What SPECIFICALLY did you offer Mr. Platt? On what
authority did you have these discussions? Have you discussed
this plan in private meetings with HP shareowners?
. After selling 6 million HP shares since coming out against
the deal, what are your SPECIFIC plans for further sales to
implement your family foundation's "diversification"
strategy? What are your short-term selling plans and how
many shares do your Trust and Foundation intend to sell over
the short-term? Do you really think your short-term
financial interests don't make you different from other
shareowners?
IS THERE ANY SUBSTANCE TO WALTER HEWLETT'S CLAIMS?
One final question, if Walter Hewlett's assertions are true, why did
an entire board of directors, including six other independent Board
members, conclude that the merger with Compaq is the single best way
to create shareowner value?
Why is Phil Condit, a member of HP's board since 1998 and the chief
executive officer of Boeing, a man who managed Boeing's acquisition of
McDonnell Douglas, Hughes' Space Division and Rockwell's Defense and
Aerospace industry, a move that transformed that industry -- why is
Phil Condit so strongly in support of this merger?
Why is Sam Ginn, an HP director since 1996 and former chairman of
Vodafone, who managed the merger of Airtouch and Vodafone, and the
spin-off of Pacific Telesis from AT&T -- why is Sam Ginn so strongly
in support of this merger?
Why is Dick Hackborn, a 30-year H-P veteran, who worked along side
Bill Hewlett and Dave Packard, and built H-P's imaging and printing
business, a director since 1992 -- why is Dick Hackborn so strongly in
support of this merger?
Why is Patty Dunn, who is chairman of Barclay's Global Investors and
manages $800 billion in investors' assets, a director since 1998 --
why is Patty Dunn so strongly in support of this merger?
Why is Jay Keyworth, chairman and senior fellow of the Progress and
Freedom Foundation, former director of the White House Office of
Science and Technology, long-time friend and advisor to Dave Packard,
and a director since 1986 -- why is Jay Keyworth so strongly in
support of this merger?
Why is Bob Wayman, HP's chief financial officer for 18 years and a
member of the Board, so strongly in support of this merger?
And why is Bob Knowling, who transformed Ameritech, and was tapped to
help manage their acquisition of G.E. Information Services, a director
since 2000, so strongly in support of this merger?
Why is Institutional Shareholder Services (ISS), the country's leading
independent proxy advisor -- why are they so convinced that this
merger is a good idea -- that they said last week that this merger is
"a real winner"? Why did ISS, after spending literally months -- hours
with independent advisors, with both sides of this argument, why did
they agree the strategic logic is sound, the synergies are achievable
and the integration plan is among the best they've have seen.
Why is this board of directors pursuing this merger with such vigor?
Why has HP's management team dedicated 500,000 hours of integration
planning and now almost 900 full-time people to making this merger a
success? And why once again did ISS conclude that this represents the
best way to create shareowner value?
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.
# # #
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 profitability, 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.