HP Board Snubs Walter Hewlett

Irked by Walter Hewlett’s litigious action and the proxy fight he ignited months ago, Hewlett-Packard Co.’s Board of Directors Monday left the company co-founder out of the mix of candidates nominated for the board.

Simply, Hewlett isn’t being considered for renomination because the company feels he hasn’t played nice. In addition to setting HP in his sights over its proposed merger with Compaq Computer Corp., the son of the late co-founder Bill Hewlett filed suit last Thursday, claiming that a March 19 shareholder vote to approve the merger was unjustly influenced at the last minute.

Sam Ginn, chairman of the board’s nominating and governance committee, explained the events that led up to the board’s decision.

“The nominating committee, the full HP board and an executive session of independent directors, which included Walter Hewlett, met on March 27 to continue the discussion,” Ginn said. “Based on these deliberations and representations made by Walter Hewlett in these meetings, the HP Board unanimously determined to re-nominate him.”

“My fellow board members and I were therefore shocked when just hours later Walter Hewlett filed a spurious lawsuit against the company, continuing his assault on the integrity of the HP Board and management team. His recent actions have again violated basic principles of trust, and his ongoing adversarial relationship with the company undermines the board’s ability to effectively conduct business.”

Hewlett, a 15-year veteran of the HP board, responded late Monday morning:

“I believe that the HP Board has done HP stockholders a disservice by excluding me due to our differing points of view. Although I disagree with my fellow directors about the merits of merging with Compaq, there can be no dispute that I have been dedicated to enhancing value for HP’s stockholders. It is unfortunate that the HP Board has seemingly missed what the company’s stockholders have clearly recognized: that dissent is not disloyalty, that healthy boards need not agree on every issue and that while the management and board may run a company, the stockholders are the true owners of a company.”

The 2002 annual meeting will begin at 2 p.m. PST April 26 at the Flint Center in Cupertino, Calif. If the merger with Compaq closes before the annual meeting, HP’s shareowners will vote on the following nominees: current HP Board members: Philip M. Condit, Patricia C. Dunn, Fiorina, Ginn, Richard A. Hackborn, George A. Keyworth II and Robert E. Knowling Jr. In addition, the shareowners will vote on current Compaq Board members: Lawrence T. Babbio, Jr., Michael D. Capellas, Sanford M. Litvack, Thomas J. Perkins and Lucille S. Salhany.

Conversely, if the merger has not closed prior to the meeting, HP’s shareowners will vote on the following nominees: Condit, Dunn, Fiorina, Ginn, Hackborn, Keyworth, Knowling and Robert P. Wayman.

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