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HP/Compaq Vote Looms

With less than 24 hours to go, both sides of the proposed $22 billion merger between Hewlett-Packard and Compaq Computer Corp. are desperately seeking shareholders.

That's because the quest to build the No. 2 computer company may be decided by a very slim margin of votes, according to analysts.

HP shareholder votes will be tallied on March 19. Compaq investors will have their turn on March 20.

HP CEO Carly Fiorina is expected to open the HP special meeting at the Flint Center in Cupertino, Calif.

Dissident HP board member Walter Hewlett may also be there. The son of company co-founder William Hewlett is campaigning to stop the HP/Compaq marriage.

Hewlett, who is rallying against the merger online at the 'Vote No HP Compaq' Web site> has said the HP/Compaq merger has "substantial and unacceptable integration risks."

HP, in turn, has established its own 'Vote The HP Way' merger support site.

Over the weekend, both sides turned to aggressive campaigning including phone calls, mailers, and even a private plane for Hewlett. All told, opponents and proponents are spending more than $100 million to make sure they will win.

And even though the official count has yet to be made, both sides are already claiming victory.

Sources close to the Walter Hewlett camp say a majority of HP and Agilent Technologies employees who hold stock have voted against the merger.

But in the last 48 hours, four big retirement funds -- Florida State Board of Administration, Pennsylvania Public School Employees Retirement System, State Teachers Retirement System of Ohio and the Wisconsin Investment Board -- have stated their intent to vote in favor of the merger.

Gauging the voting trend has been difficult. Some 22 percent of the votes have been voiced though opponents to the merger, including Hewlett, the William R. Hewlett Revocable Trust and its trustees. Proponents to-date have about 8 percent of shareholders behind their cause, but some 10 percent more could be added with the backing of Institutional Shareholder Services.

"We're waiting for the full count," says HP spokeswoman Rebeca Robboy. "The numbers will tell the story and the story is ours."

No Hanging Chads

There will be no punch cards like in Florida - only green and white cards - but the results might not be known right away.

"The reason is that shareholders can change their minds right up to the March 19 vote," says HP spokesperson Rebeca Robboy. "In that way, we have to verify each card and take the latest submission. We also have to verify that the cards are from eligible shareholders."

HP will also introduce the Inspectors of Election from IVS Associates, a third-party firm well known for its expertise in the tabulating and certification of proxies. Three election inspectors from IVS Associates will take custody of all the proxies and ballots turned in at the meeting so they can begin the tabulating and certification process.

IVS Associates will then organize all of the proxy materials submitted and ensure that the latest dated proxy is counted for each shareowner who votes. Since shareowners received and may have submitted multiple proxies, this re-tabulation is necessary to ensure the results are valid.

If there is a review and challenge procedure, each side can challenge the initial determination of the inspectors of election. Should that be initiated, it would add additional time until the result is known, which could add a week or more.

And the beat goes on.