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 an article relating to the Merger. The article is posted on
HP's internal web site.
REACHING RETIREES
400 FROM HP, AGILENT BRIEFED ON MERGER
Four-hundred Hewlett-Packard and Agilent Technologies retirees streamed into The
Flint Center in Cupertino, California, February 7, eager to hear more about the
benefits of the HP-Compaq merger. This second retiree event was scheduled
following a January 8 filled-to-capacity session at the HP Cupertino site that
drew more than 300 attendees.
Employees with a collective 90 years of HP experience ran the show. Chief
Financial Officer Bob Wayman (32 years) launched the two-hour event by
explaining why the members of the HP board (other than Walter Hewlett) and the
leadership team believe the merger will create a stronger company. Human
Resources Vice President Susan Bowick (24 years) and integration leader Webb
McKinney (32 years) also delivered presentations during the session. Retirees
viewed interviews conducted with several HP board members and, to cap off the
briefing, participated in a Q&A session with CEO Carly Fiorina, a relative
newcomer with two-and-a-half years with the company.
Bob told the audience that the deal is "fundamentally about strengthening the
enterprise business." The merger will significantly enhance capabilities in
areas including high-end computing, industry-standard servers, storage, services
and the sales force, he said.
Most high-tech mergers or acquisitions combine very different kinds of
businesses, the CFO went on to say. HP and Compaq, however, are combining
similar businesses, which means the two companies share an understanding of "the
same customers and how the business runs." Bob pointed out that both HP and
Compaq operate in the same approximately 160 countries in the world and that the
duplication will allow substantial cost savings for the new HP. HP has crafted a
conservative revenue forecast, he assured retirees, with revenue loss "baked
into" the analysis.
HP VALUES WILL ENDURE
HR VP Susan Bowick reassured retirees that HP remains "a great company to work
for" with the same values they remember. She chronicled some of the hard choices
HP made during FY01 to weather a difficult economic downturn. These included
implementing a workforce reduction program beginning in August 2001, and asking
employees to curtail travel and participate in a voluntary payroll savings
program.
Approximately 150 senior leaders and 1,300 employees have participated in
interviews and focus groups as part of HP's cultural integration planning, Susan
said. It is HP's intent, she said, to "honor our past, build on our past but
secure our future."
PULLING IT OFF
Integration leader Webb McKinney told retirees that both HP and Compaq planning
teams "inherently understand each others' businesses very well," which
facilitates quick, efficient decision making. The post-merger integration (PMI)
team's philosophy includes a commitment to starting with the customer
experience, ensuring that structure follows strategy and choosing the best of
what exists, or "adopt and go."
The necessity and inevitability of change sounded as a refrain in CEO Carly
Fiorina's remarks. She discussed the inexorable technology shifts taking place
such as the move to industry-standard platforms and to networked architectures,
changes that will occur "with or without this merger."
"Because this is a strong company, we are strong enough to change with the
times," she said.
After "deliberate, careful evaluation" of all the alternatives, Carly continued,
the board of directors concluded that the HP-Compaq merger was the best decision
to move HP forward.
NOT ABOUT PERSONALITIES
"I deeply regret the media soap opera that this has become," she said, "but this
is not about personalities. It's about creating shareowner value."
One retiree asked HP's CEO what she hoped her legacy would be in 10 years,
provided the merger went through. "If, in 10 years, this company is successful,
it will not be my legacy," Carly responded. "It will be because of the people of
this company."
In her closing comments, she returned to the refrain of change by quoting
Charles Darwin: "It is not the strongest or most intelligent species who survive
but those that are most adaptive to change.
"This is true also of companies," she said.
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.
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