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. This article is posted on
HP's internal web site.
CORVALLIS SENIOR LEADERS RESPOND TO PACKARD SURVEY
RESULTS OF LOCAL HP EMPLOYEE POLLING CALLED BIASED AND MISLEADING
Two senior leaders at HP's Corvallis, Oregon, site reacted strongly to the
results of an employee survey released February 20 by the Field Research
Corporation and commissioned by David Woodley Packard, son of HP's co-founder.
Packard has publicly stated his opposition to the proposed HP-Compaq merger,
partly based on its potential effect on employees.
"I think David Woodley has overreached what he can conclude from this survey,
given the bias that's associated with it and the ad that he ran in our
newspaper," said Greg Merten.
Merten manages many of the 4,200 HP employees at the site, along with Steve
Nigro. About 90 percent of these employees work for Imaging and Printing Systems
and Nigro sent a voicemail message to everyone on the site February 20 on behalf
of himself and Merten. The voicemail enumerated their concerns about the survey
results.
"The first and most important thing we told the employees is that we feel badly
that they were pulled into this controversy," said Nigro.
The Field Research Corporation, an independent public opinion firm, conducted a
random telephone survey of 445 HP employees living in the Corvallis area.
According to a press release from the firm, HP employees who were surveyed
"disfavor the merger 63 percent to 31 percent," with 6 percent expressing no
opinion or no comment.
THREE POINTS TO CONSIDER
In their message to Corvallis employees, Merten and Nigro raised three basic
points:
.. that the survey "is not representative of the views of the entire HP
population, focusing on only one community";
.. that survey methodology is "a critical factor" and that HP has regularly
surveyed employees across HP's geographies and job levels using reliable
polling standards and have led to different results; and
.. "given the above, we contend that there is general employee support of the
merger's strategic intent; however, we acknowledge concerns about
implementation and consequences."
"We have our own surveys that use standard survey practices, are worldwide in
nature and come up with very different results," Merten said.
"If you look at the data from the Field survey, about 50 percent of the concerns
are associated with the integration as opposed to HP's strategy," he continued.
"So there was no distinction as to whether people agreed with the strategy. And,
as everyone knows, you can get very different answers to surveys depending on
how the questions are worded."
"Part of the IPS growth strategy relies on having a strong enterprise position,"
he said. "The merger reinforces this strategy and our people realize that
printing can leverage heavily off this by bringing printing capability to the
enterprise space."
VALID EMPLOYEE CONCERNS
Merten also said he understood that employees had concerns about the integration
and its possible consequences and readily acknowledged that "these are valid
concerns."
"Unfortunately, we can't give our people a whole lot of insight into how we're
addressing their concerns because of the regulatory restraints that we have to
work under," he said. "We have a team of more than 450 people working on the
integration right now and I think a lot of people's fears will go away once we
can give them the details."
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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