Administration July 3, 2003

HP Claims Shareholder Victory

March 19, 2002 (PLANSPONSOR.com) - The proposed merger between Compaq Computer Corp. and Hewlett-Packard Co. is one step closer to resolution with what HP executives say is the approval of their shareholders, though the formal vote tally may not be available for weeks.

Reported by

Fred Schneyer

According to a Reuters report, HP executives cited preliminary estimates from their proxy solicitor, which they said showed what CEO Carly Fiorina described as a “decisive majority” from holders of HP shares.

Fiorina had staked her future on her belief that the computer industry was consolidating and customers were looking for one-stop-shopping technology powerhouses.

Campaign

HP board member Walter Hewlett mounted a strong campaign to stop an alliance he said was a mistake that would distract the company when it most needed to focus.

After the vote, sources from HP insisted that the vote was “too close to call”, according to Reuters, after telling the news agency that employees holding company stock shares in HP’s retirement plan were ready to oppose the deal by more than a 2-to-1 margin.

The retirement plan, which holds more than 34.3 million HP shares held by Hewlett-Packard and Agilent Technologies employees, has registered more than 24.7 million votes against the merger and 9.6 million votes in support, the Hewlett source said.

The proposed $21-billion deal has been the subject of much discussion, with institutional investors, including employee pension funds, announcing their intention to join the fray.

Compaq shareholders are expected on Wednesday to second the apparent decision to back the deal, catapulting HP into a race against International Business Machines Corp. for the title of the largest US computer firm.