0001104659-11-054013.txt : 20110929 0001104659-11-054013.hdr.sgml : 20110929 20110929171943 ACCESSION NUMBER: 0001104659-11-054013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20110927 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110929 DATE AS OF CHANGE: 20110929 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEWLETT PACKARD CO CENTRAL INDEX KEY: 0000047217 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER & OFFICE EQUIPMENT [3570] IRS NUMBER: 941081436 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04423 FILM NUMBER: 111115234 BUSINESS ADDRESS: STREET 1: 3000 HANOVER ST STREET 2: MS 1050 CITY: PALO ALTO STATE: CA ZIP: 94304 BUSINESS PHONE: 6508571501 MAIL ADDRESS: STREET 1: 3000 HANOVER ST STREET 2: MS 1050 CITY: PALO ALTO STATE: CA ZIP: 94304 8-K 1 a11-27056_18k.htm 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

September 27, 2011

Date of Report (Date of Earliest Event Reported)

HEWLETT-PACKARD COMPANY

(Exact name of registrant as specified in its charter)

DELAWARE

1-4423

94-1081436

(State or other jurisdiction

of incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

3000 HANOVER STREET, PALO ALTO, CA		94304
(Address of principal executive offices)		(Zip code)

(650) 857-1501

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) As previously reported, on September 22, 2011 (the “Separation Date”), Léo Apotheker terminated as President and Chief Executive Officer of Hewlett-Packard Company (“HP”), effective immediately. In connection with that termination, on September 28, 2011, HP and Mr. Apotheker entered into a Separation and General Release Agreement (the “Separation Agreement”). The Separation Agreement confirms that Mr. Apotheker will receive the following, each of which is provided for under the terms of the Employment Agreement between HP and Mr. Apotheker dated September 29, 2010 (the “Employment Agreement”):

· A severance payment in the amount of $7.2 million payable in installments over the next 18 months;

· Accelerated vesting of the 156,000 shares of restricted stock granted to Mr. Apotheker pursuant to the terms of the Employment Agreement, such restricted stock having an aggregate value of $3,557,800 based on the per share closing price of HP common stock on the New York Stock Exchange on the Separation Date; and

· An aggregate of 424,000 of the 728,000 performance-based restricted stock units (“PRUs”) awarded to Mr. Apotheker pursuant to the terms of the Employment Agreement will remain outstanding (Mr. Apotheker has waived his rights to receive the remaining 304,000 PRUs that would have vested on October 31, 2012 pursuant to the terms of the Employment Agreement), with all continued service requirements to the vesting of the 424,000 outstanding PRUs deemed satisfied as of the Separation Date as provided under the terms of the Employment Agreement. In accordance with the terms of HP’s PRU program, whether any payouts are made in connection with such PRUs will depend on the satisfaction of annual targets of cash flow from operations as a percentage of revenue and an overall “modifier” based on HP’s total shareholder return over the applicable three-year performance period relative to the S&P 500.

In addition, the Separation Agreement provides Mr. Apotheker will receive the following benefits not specifically provided for under the Employment Agreement:

· An annual bonus of $2.4 million under the Hewlett-Packard Company 2005 Pay-for-Results Plan (the “PfR Plan”), reflecting his nearly 11 months of service with HP, payable at the time that payouts are made to other executives of HP for the fiscal year ending October 31, 2011;

· Coverage under HP’s standard relocation and housing assistance programs and reimbursement for, to the extent not covered by such programs, (i) reasonable relocation expenses, including return airfare, for Mr. Apotheker and his spouse to France or Belgium under HP’s policy regarding executive air travel, and (ii) up to an additional $300,000 for any loss Mr. Apotheker incurs on the sale of his California residence and other reasonable fees and expenses Mr. Apotheker incurs in connection with such sale;

· Payment or reimbursement for premium payments under the Consolidated Omnibus Budget Reconciliation Act of 1995, as amended, for Mr. Apotheker and his eligible dependents under HP’s group medical and dental plans to the extent such premium payments exceed premiums paid by then-current HP employees for similar coverage for a period of up to eighteen (18) months following the Separation Date;

· Payment or reimbursement for reasonable legal fees and costs of negotiating the Separation Agreement and for out-of-pocket security and other business-related expenses incurred at Mr. Apotheker’s California residence; and

· Coverage under HP’s standard expatriate tax equalization program and, in the event that Mr. Apotheker becomes a tax resident of France or Belgium after the date of the Separation Agreement, then, to the extent not covered by such program, (i) to the extent any payment made under the Separation Agreement is exempt from tax in France or Belgium, as the case may be, reimbursement for any taxes imposed by the United States (or any political subdivision thereof) on such payment in excess of the amount of tax that would have been payable if the payment were fully taxed in France or Belgium, as applicable; and (ii) to the extent any payment under the Separation Agreement is not exempt from tax in France or Belgium, as the case may be, reimbursement for any taxes imposed by the United States (or any political subdivision thereof) on such payment made after the date that Mr. Apotheker becomes so resident for which Mr. Apotheker does not obtain a tax credit in France or Belgium, as applicable.

The foregoing summary of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the Separation Agreement, which is filed hereto as Exhibit 10.1 and is incorporated herein by reference.

(c) As previously reported, on September 22, 2011, the HP Board of Directors (the “Board”) elected Margaret C. Whitman as President and Chief Executive Officer of HP, effective immediately. In connection with that election, on September 27, 2011, HP and Ms. Whitman executed an employment offer letter (the “Offer Letter”) that provides Ms. Whitman will receive the following:

· A base salary of $1 per year;

· A non-qualified option to purchase 1,900,000 shares of HP common stock under the Amended and Restated Hewlett-Packard Company 2004 Stock Incentive Plan (the “2004 Plan”) at an exercise price equal to the fair market value of a share of HP common stock on the grant date. The option, which will have an eight-year term, will vest in accordance with the vesting schedule and performance criteria described below, which criteria require that HP’s stock price increase by at least 40% over the price on the grant date of the option for the option to vest in full:

· 100,000 shares will vest, if at all, on each of the first three anniversaries of the option grant date, subject to Ms. Whitman’s continued employment;

· 800,000 shares will vest, if at all, upon the satisfaction of both of the following criteria prior to the expiration of the option: (i) Ms. Whitman’s continued employment on the first anniversary of the option grant date, and (ii) subject to Ms. Whitman’s continued employment on such date, the first date that the closing price of HP common stock on the New York Stock Exchange has met or exceeded 120% of the exercise price of the option for at least 20 consecutive trading days; and

· 800,000 shares will vest, if at all, upon the satisfaction of both of the following criteria prior to the expiration of the option: (i) Ms. Whitman’s continued employment on the second anniversary of the option grant date, and (ii) subject to Ms. Whitman’s continued employment on such date, the first date that the closing price of HP common stock on the New York Stock Exchange has met or exceeded 140% of the exercise price of the option for at least 20 consecutive trading days.

The option will be subject to substantially the same terms and conditions

as apply to options granted to other executives under the 2004 Plan except that the following terms apply upon a termination of her employment: (i) if Ms. Whitman’s employment is involuntarily terminated without cause by HP, then Ms. Whitman will forfeit all unvested shares subject to performance-based vesting, receive pro-rata accelerated vesting of all unvested shares subject to time-based vesting, and retain the right to exercise the option with respect to vested shares during the one-year period following her termination (or until the original expiration date of the option, if earlier), and (ii) any accelerated vesting of the option following Ms. Whitman’s death or disability will apply only to shares subject to time-based vesting with any unvested shares subject to performance-based vesting being forfeited.

· A target annual bonus for HP’s 2012 fiscal year of $2.4 million, with a maximum bonus opportunity equal to 2.5 times target, under the PfR Plan, subject to the satisfaction of the same performance conditions applicable to other participants in the PfR Plan;

· Severance benefits under HP’s Severance Plan for Executive Officers (the “SPEO”) in effect at her termination, which currently provides that, in the event of the involuntary termination of Ms. Whitman’s employment without cause, she will be eligible to receive a lump sum severance payment equal to 1.5 times (rather than 2.0 times, as currently provided for the CEO under the SPEO) the sum of her annual base salary plus the average of her actual bonuses paid under the PfR Plan during the preceding three years (or her actual period of employment, if less), subject to her execution of a release of claims in favor of HP;

· Perquisites at the same level as HP’s other senior executive officers; and

· Eligibility to participate in HP’s U.S. benefit plans on the same basis as other similarly situated employees.

The foregoing summary of the Offer Letter does not purport to be complete and is qualified in its entirety by reference to the Offer Letter, which is filed hereto as Exhibit 10.2 and is incorporated herein by reference.

(e) As previously reported, on September 22, 2011, HP appointed Raymond J. Lane, HP’s then-current non-executive Chairman of the Board, to serve as executive Chairman of the Board, effective immediately. In his role as executive Chairman, Mr. Lane is expected to spend significant time supporting the CEO transition, providing guidance and oversight to management, helping with the formulation and implementation of HP’s strategic plans, acting as the Board’s liaison to management and fulfilling such other duties as requested by the Board. In connection with that appointment, on September 27, 2011, the Board granted Mr. Lane a non-qualified option under the 2004 Plan to purchase 1,000,000 shares of HP common stock at an exercise price equal to the fair market value of a share of HP common stock on the grant date. The option, which will have an eight-year term, will vest in accordance with the vesting schedule and performance criteria described below, which criteria require that HP’s stock price increase by at least 40% over the price on the grant date of the option for the option to vest in full:

· One-third of 200,000 shares will vest, if at all, on each of the first three anniversaries of the option grant date, subject to Mr. Lane’s continued service as executive Chairman;

· 400,000 shares will vest, if at all, upon the satisfaction of both of the following criteria prior to the expiration of the option: (i) Mr. Lane’s continued service as executive Chairman on the first anniversary of the option grant date, and (ii) subject to Mr. Lane’s continued service as executive Chairman on such date, the first date that the closing price of HP common stock on the New York Stock

Exchange has met or exceeded 120% of the exercise price of the option for at least 20 consecutive trading days; and

· 400,000 shares will vest, if at all, upon the satisfaction of both of the following criteria prior to the expiration of the option: (i) Mr. Lane’s continued service as executive Chairman on the second anniversary of the option grant date, and (ii) subject to Mr. Lane’s continued service as executive Chairman on such date, the first date that the closing price of HP common stock on the New York Stock Exchange has met or exceeded 140% of the exercise price of the option for at least 20 consecutive trading days.

If Mr. Lane’s service as executive Chairman terminates for any reason other than his death while any portion of the option remains outstanding: (i) Mr. Lane will immediately forfeit all unvested shares subject to performance-based vesting; (ii) all unvested shares subject to time-based vesting will continue to vest during any subsequent period that Mr. Lane remains a member of the Board without being executive Chairman; (iii) Mr. Lane will forfeit all unvested shares subject to time-based vesting at the time that he ceases to be a Board member in any capacity; and (iv) Mr. Lane will retain the right to exercise the option with respect to all vested shares during any subsequent period that he remains a member of the Board in any capacity and for 30 days after he ceases to be a Board member (or until the expiration of the option, if earlier).

In the event that Mr. Lane’s service as executive Chairman terminates due to his death while any portion of the option remains outstanding: (i) the vesting of all unvested shares subject to time-based vesting will be accelerated; (ii) all unvested shares subject to performance-based vesting will be forfeited; and (iii) Mr. Lane’s estate will retain the right to exercise the option with respect to all vested shares during the one-year period following his death (or until the expiration of the option, if earlier).

Mr. Lane also will continue to receive the compensation provided to other non-employee directors of HP so long as he remains a member of the Board.

Item 9.01. Financial Statements and Exhibits.

Exhibit Number		Description
10.1		Separation and General Release Agreement, dated September 28, 2011, between HP and Léo Apotheker.
10.2		Employment offer letter, dated September 27, 2011, between HP and Margaret C. Whitman.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HEWLETT-PACKARD COMPANY


DATE: September 29, 2011	By:	/s/ Paul T. Porrini
	Name:	Paul T. Porrini
	Title:	Vice President, Deputy General Counsel and Assistant Secretary

EXHIBIT INDEX

Exhibit Number		Description
10.1		Separation and General Release Agreement, dated September 28, 2011, between HP and Léo Apotheker.
10.2		Employment offer letter, dated September 27, 2011, between HP and Margaret C. Whitman.

EX-10.1 2 a11-27056_1ex10d1.htm EX-10.1

Exhibit 10.1

SEPARATION AND GENERAL RELEASE AGREEMENT

THIS SEPARATION AND GENERAL RELEASE AGREEMENT (the “Agreement”) is entered into as of the first date on the signature page hereto, by and between Hewlett-Packard Company (the “Company”) and Léo Apotheker (“Executive”) (together, the “Parties”).

R E C I T A L S

WHEREAS, Executive is employed by the Company pursuant to the terms of the Employment Agreement between the Company and Executive, dated September 29, 2010 (the “Employment Agreement”), and

WHEREAS, the Company has decided to terminate Executive’s employment relationship with the Company in accordance with the terms of the Employment Agreement, and the Parties desire to resolve, fully and finally, all outstanding matters between them.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth hereinafter, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

AGREEMENT

1. EXECUTIVE’S SEPARATION.

a. Executive’s employment with the Company and any subsidiaries and affiliated entities terminated on September 22, 2011 (the “Separation Date”). As of the Separation Date, Executive shall no longer be a member of the Board of Directors (the “Board”) of the Company or any subsidiary or affiliated entity of the Company and Executive agrees he shall execute all documents necessary to effect such resignations. The Parties agree that, for purposes of the Employment Agreement, Executive’s termination of employment will be treated as a termination by the Company without Cause (as defined in the Employment Agreement).

b. Regardless of whether Executive signs the Waiver and Release of Claims attached as Exhibit A hereto (the “Release”), upon the Separation Date, or as soon as practicable thereafter (to the extent permitted by applicable law), Executive will receive from the Company (i) any unpaid base salary accrued up to and including the Separation Date, (ii) any unpaid, but earned annual incentive compensation for any completed fiscal year as of the Separation Date, (iii) pay for any accrued but unused vacation earned up to and including the Separation Date, (iv) benefits or compensation as provided under the terms of any employee benefit and compensation agreements or plans applicable to Executive and under which he has a vested right (including any right that vests in connection with the termination of his employment), (v) any unreimbursed business expenses to which Executive is entitled to reimbursement under the Company’s expense reimbursement policy, and (vi), as more fully provided in Section 7, rights to

indemnification Executive may have under the Company’s Articles of Incorporation, Bylaws, the Employment Agreement, or separate indemnification agreement, as applicable, including any rights Executive may have under directors and officers insurance policies.

c. Upon the Separation Date, Executive shall return to the Company all files, records, credit cards, keys, equipment, and all other Company property or documents maintained by Executive for the Company’s use or benefit.

d. The Company will provide Executive with such legal and other assistance as is necessary in order to effect a change in Executive’s status for U.S. immigration purposes and shall take such other steps as are reasonably required in order to ensure that Executive is able to lawfully remain in the United States for a reasonable transition period, with the intention of enabling Executive to remain in the United States through at least December 31, 2011.

2. CONSIDERATION. In accordance with Section 9(b) of the Employment Agreement, and in consideration of the terms, representations, promises, waivers and releases contained in this Agreement, the Company will provide Executive with the following payments and benefits, conditioned upon (i) Executive’s execution and return to the Company of the Release no earlier than the Separation Date and no later than twenty-one (21) days following the Separation Date, and (ii) Executive’s not revoking, or attempting to revoke the Release prior to the “Effective Date” (as defined in the Release):

a. A severance payment in the amount of $7,200,000, minus all tax withholdings required by law and other authorized deductions, payable in equal monthly installments (on the first business day of each month) over the 18-month period following the Separation Date. The first such installment shall be made on the first business day of the month following the sixtieth (60th) day after the Separation Date and shall be in the amount of one-ninth (1/9) of the total severance amount due to Executive, and each of the remaining sixteen (16) installments shall be in the amount of one-eighteenth (1/18) of the total severance amount due to Executive;

b. At the time other executives of the Company receive fiscal year annual incentives for the fiscal year ending October 31, 2011, Executive will be paid an annual incentive payment calculated as provided in Section 4(b) of the Employment Agreement.

c. The restricted stock awards granted to Executive pursuant to Sections 4(c)(i) and 4(d)(i) of the Employment Agreement, respectively, shall vest in full and be non-forfeitable as of the Separation Date, and such shares shall be free of sales or other restrictions and shall be freely transferable by Executive.

d. The 304,000 Performance Restricted Units (“PRUs”) awarded pursuant to Sections 4(c)(ii) of the Employment Agreement and identified therein as Grant 1 will be cancelled in consideration of the Company’s entering into this Agreement, such cancellation to be effective on the Effective Date. As provided in the Employment Agreement, the remaining PRUs awarded pursuant to Sections 4(c)(ii) and 4(d)(ii) of the

Employment Agreement will remain outstanding, and all continued service requirements to the vesting of such PRUs will be deemed satisfied as of the Separation Date. Such remaining PRUs will be payable at the end of their respective performance periods based on actual performance (subject to any discretionary adjustment that the HR/Compensation Committee of the Board makes generally to PRUs for the relevant performance period), except that for the first year of the award only, the cash flow metric for Grant 2 will be considered to have been achieved at no less than target.

e. Executive will be covered by the Company’s standard relocation and housing assistance programs, the terms of which have previously been disclosed to Executive. The Company agrees to reimburse, to the extent not covered by such programs, Executive’s reasonable expenses for relocating from California to France or Belgium, including, in compliance with US immigration rules, return air fare for Executive and his spouse to France or Belgium under HP’s policy regarding executive air travel. The Company will also reimburse Executive, to the extent not covered by such programs, for up to an additional $300,000 (over and above any amount provided under such programs) for any loss he incurs in the sale of his California residence, provided that the sale is pursuant to a bona fide arm’s length transaction, based on the difference between the purchase price set forth in the contract of sale for such residence and Executive’s initial purchase price as previously communicated to the Company and set forth in the contract of sale relating to Executive’s purchase of such residence, plus the other reasonable fees and expenses Executive incurs in connection with such sale. Upon request, Executive will provide the Company with copies of the contracts of sale relating to his purchase of his California residence and to its sale. Executive will use his reasonable good faith efforts to sell his California residence at the best price that can reasonably be obtained under the circumstances and will have, consistent with the Company’s relocation and housing assistance programs but after 180 days following the Effective Date (rather than after any other period specified in such programs), the right to sell such residence to the Company or a third party designated by the Company at the price determined in accordance with such programs plus, to the extent such price is less than Executive’s initial purchase price as described above, up to an additional $300,000 (over and above any amount provided under such programs), provided that the 30-day marketing period referred to in the policy shall be 120 days and Executive will have, consistent with the policy, 60 days thereafter to decide whether to sell the house pursuant to the policy.

f. If Executive timely elects continued group medical and dental coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will either pay directly or reimburse Executive for the COBRA premium payments for Executive and his eligible dependents under the Company’s group medical and dental plans to the extent such COBRA premium payments exceed premiums paid by then-current employees of the Company for similar coverage for the period of up to eighteen (18) months following the Separation Date (or until such earlier time as Executive ends his participation in such coverage).

g. The Company will pay directly or reimburse Executive for the reasonable legal fees and costs of negotiating this Agreement and will reimburse Executive for out-

of-pocket security and other business-related expenses incurred at his California residence upon presentation of reasonable documentation therefor.

h. Executive acknowledges and agrees that under the terms of this Agreement, and in accordance with the Employment Agreement, he is receiving consideration beyond that which he would otherwise be entitled to and which, but for the mutual covenants set forth in this Agreement, the Company would not otherwise be obligated to provide. Executive further agrees that the payments and benefits provided hereunder are in addition to any wages and accrued but unused vacation earned through the Separation Date.

3. REPRESENTATIONS. Executive and the Company make the following representations, each of which is an important consideration to the other party’s willingness to enter into this Agreement:

a. Executive understands and agrees that he has been advised to consult with an attorney of his choice concerning the legal consequences of this Agreement. Executive hereby acknowledges that prior to signing this Agreement, he had the opportunity to consult, and did consult, with an attorney of his choosing regarding the effect of each and every provision of this Agreement.

b. Executive acknowledges and agrees that he knowingly and voluntarily entered into this Agreement with complete understanding of all relevant facts, and that he was neither fraudulently induced nor coerced to enter into this Agreement.

c. Each of the Parties represent and warrant to the other that they have the capacity and authority to enter into this Agreement and be bound by its terms and that, when executed, this Agreement will constitute a valid and binding agreement of such Party enforceable against such Party in accordance with its terms.

4. CONTINUING OBLIGATIONS. Executive agrees that he will abide by the terms of Section 9(c) of the Employment Agreement and with the terms of the Agreement Regarding Confidential Information and Proprietary Developments (the “Confidential Information Agreement”) he executed in connection with his employment with the Company.

5. MUTUAL NON-DISPARAGEMENT. For the twelve (12) month period following the Separation Date, (i) Executive will not, and will cause his relatives, agents, and representatives to not, knowingly disparage or make any derogatory statements regarding the Company, its directors, or its officers, and (ii) the Company will not knowingly disparage or make any derogatory statements regarding Executive; provided, however, that the Company’s obligations under this Section 5 shall be limited to communications by its senior corporate executives having the rank of Senior Vice President or above and members of the Board; provided, further, that the foregoing restrictions shall not apply to any statements by Executive or the Company that are made truthfully in response to a subpoena or as otherwise required by applicable law or other compulsory legal process.

6. COOPERATION. Executive agrees that, upon written request of the Company, he will make himself reasonably available, taking into account his other business and personal commitments, to cooperate (a) with the Company, its subsidiaries and affiliates and any of their officers, directors, shareholders, or employees in connection with any investigation or review by the Company or any federal, state or local regulatory, quasi-regulatory or self-governing authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Company and in respect of which Executive has knowledge, and (b) with respect to transition matters (collectively, “Cooperation”). In no event shall Executive be required to provide any Cooperation if such Cooperation is adverse to Executive’s legal or business interests. In addition, Executive shall not be required to provide more than ten (10) full calendar days per year of Cooperation to the Company pursuant to this Section 6. For these purposes, Cooperation by Executive entailing five or more hours during a single day shall be treated as a full day of Cooperation. Executive’s Cooperation shall include but not be limited to being available to meet with officers or employees of the Company and/or the Company’s counsel at mutually convenient times and locations, executing accurate and truthful documents and taking such other actions as may reasonably be requested by the Company and/or the Company’s counsel to effectuate the foregoing. Executive shall be entitled to reimbursement, upon receipt by the Company of suitable documentation, for his reasonable out-of-pocket expenses for such Cooperation (including travel costs and reasonable legal fees to the extent Executive reasonably believes that separate representation is warranted and obtains the Company’s consent in writing, which consent shall not be unreasonably withheld), and Executive shall be entitled to an honorarium of $625 per hour of Cooperation. Notwithstanding the foregoing, the provisions of this Section 6 with respect to reimbursement of expenses shall in no way affect Executive’s rights to be indemnified and/or advanced expenses in accordance with the Company’s corporate documents and/or in accordance with this Agreement.

7. INDEMNIFICATION. Subject to applicable law, Executive will be provided indemnification to the maximum extent permitted by the Company’s Bylaws and Certificate of Incorporation, including coverage, if applicable, under any directors and officers insurance policies, with such indemnification determined by the Board or any of its committees in good faith based on principles consistently applied (subject to such limited exceptions as the Board may approve in cases of hardship) and on terms no less favorable than those provided to any other Company executive officer or director. The rights to indemnification conferred hereby shall include, to the extent permitted by applicable law, the right to be paid by the Company the legal fees and other costs, expenses and disbursements incurred in defending any action, suit, proceeding or investigation with respect to which Executive is entitled to indemnification in advance of its final disposition subject to receipt by the Company of an undertaking by Executive to repay such amount, or a portion thereof, if it shall ultimately be adjudicated that Executive is not entitled to be indemnified by the Company pursuant hereto or as otherwise permitted by law, but such repayment by Executive shall only be in an amount ultimately adjudicated to exceed the amount for which Executive was entitled to be indemnified. The advances to be made pursuant to such right shall be paid by the

Company to Executive promptly following receipt by the Company of invoices or other evidence reasonably satisfactory to the Company.

8. TAX MATTERS; SECTION 409A; CHANGE IN CONTROL.

a. Notwithstanding any provision of this Agreement, this Agreement shall be construed and interpreted to comply with Section 409A of the Internal Revenue Code of 1986 (the “Code”), as amended, and if necessary, any provision shall be held null and void to the extent such provision (or part thereof) fails to comply with Section 409A of the Code or regulations thereunder. For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under the Agreement shall be treated as a separate payment of compensation for purposes of applying the Section 409A of the Code deferral election rules and the exclusion from Section 409A of the Code for certain short-term deferral amounts. Any amounts payable solely on account of an involuntary separation from service within the meaning of Section 409A of the Code shall be excludible from the requirements of Section 409A of the Code, either as involuntary separation pay or as short-term deferral amounts (e.g., amounts payable under the schedule prior to March 15 of the calendar year following the calendar year of involuntary separation) to the maximum possible extent. If, as of the Separation Date, Executive is a “specified employee” as determined by the Company, then to the extent that any amount or benefit that would be paid or provided to Executive under this Agreement within six (6) months of his “separation from service” (as determined under Section 409A) constitutes an amount of deferred compensation for purposes of Section 409A and is considered for purposes of Section 409A to be owed to Executive by virtue of his separation from service, then such amount or benefit will not be paid or provided during the six-month period following the date of Executive’s separation from service and instead shall be paid or provided on the first business day that is at least seven (7) months following the date of Executive’s separation from service, except to the extent that, in the Company’s reasonable judgment, payment during such six-month period would not cause Executive to incur additional tax, interest or penalties under Section 409A. Further, any reimbursements or in-kind benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in the Agreement, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

b. Non-U.S. taxes.

(i) Executive will be covered by the Company’s standard expatriate tax equalization program (“Ex-pat Program”).

(ii) In the event that Executive becomes a tax resident of France or Belgium after the date of this Agreement, then to the extent not covered by the Ex-pat Program, the Company will reimburse Executive:

(A) to the extent any payment made under of this Agreement is exempt from tax in France or Belgium, as the case may be, for any taxes imposed by the United States (or any political subdivision thereof) on such payment made after the date that Executive becomes so resident in excess of the amount of tax that would have been payable if the payment were fully taxed in France or Belgium, as applicable); and

(B) to the extent any payment under this Agreement is not exempt from tax in France or Belgium, as the case may be], for any taxes imposed by the United States (or any political subdivision thereof) on such payment made after the date that Executive becomes so resident for which Executive does not obtain a tax credit in France or Belgium, as applicable).

In each case, the amount of tax payable by Executive, or that would have been payable had the payments hereunder been subject to tax, will be determined without regard to any income, gain, loss, deduction, or credit unrelated to this Agreement or Executive’s employment with the Company. Executive agrees that in preparing his tax returns for the United States and France and Belgium, if applicable, he will obtain the assistance of advisors with recognized expertise in the tax laws of the relevant jurisdiction, including the application of tax treaties between the United States and France or Belgium, as applicable. HP, upon reqest, may audit the relevant tax returns.

c. In the event that any portion of the severance payments or any other payment under this Agreement, or under any other agreement with Executive or plan of the Company or its affiliates (in the aggregate “Total Payments”) would, but for this Section 8(c) constitute an “excess parachute payment” for purposes of Section 280G of the Code, then either (i) the Total Payments shall be reduced by the minimum amount necessary to avoid any excise taxes under Section 4999 of the Code or (ii) Executive shall receive the full amount of the Total Payments without any reduction, whichever results in the receipt by Executive of the greatest benefit on an after-tax basis (taking into account the applicable federal, state and local income taxes and the excise taxes under Section 4999 of the Code). In the event of a reduction in the Total Payments, payments or benefits included in the Total Payments shall be reduced or eliminated by applying the following principles, in order: (1) the payment or benefit with the higher ratio of the parachute payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or benefit with a lower ratio; (2) the payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier payment date; and (3) cash payments shall be reduced prior to non-cash benefits; provided that if the foregoing order of reduction or elimination would violate Section 409A of the Code, then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments).

d. In the event of the announcement of a transaction that would constitute a change in control under the Company’s Amended and Restated 2004 Stock Incentive Plan, the Company shall immediately establish a trust that satisfies the conditions set forth in Rev. Proc. 92-64 for a “rabbi trust” (the “Trust”) with a national banking institution as trustee (the “Trustee”) and which shall provide for the Trustee to make payments from the assets of the Trust to Executive at the same time and in the same amounts as would be paid to Executive pursuant to Section 2 of this Agreement. Prior to the closing of the transaction(s) that result in such a change of control, the Company will fund the Trust with a sum equal to any amounts then owing to Executive under Section 2 of this Agreement. Any payments to Executive by the Trustee from the assets of the Trust shall, to the extent thereof, discharge the Company’s obligation to make payments to Executive hereunder.

9. ARBITRATION. The Parties agree that any and all disputes arising out of the terms of this Agreement, Executive’s employment by the Company, Executive’s service as an officer or director of the Company, or Executive’s compensation and benefits, their interpretation, and any of the matters herein released, will be subject to binding arbitration in Santa Clara, California, before the Judicial Arbitration and Mediation Services, Inc., under the American Arbitration Association’s National Rules for the Resolution of Employment Disputes, supplemented by the California Rules of Civil Procedure. The Parties agree that the prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The Parties agree to waive their right to have any dispute between them resolved in a court of law by a judge or jury. This paragraph will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to Executive’s obligations under this Agreement and the Confidential Information Agreement.

10. GOVERNING LAW. This Agreement, its Exhibit A, and all rights, duties, and remedies hereunder shall be governed by and construed and enforced in accordance with the laws of the State of California, without reference to its choice of law rules, except as preempted by federal law.

11. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors, and legal representatives of Executive upon Executive’s death, and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance,

or other disposition of Executive’s right to compensation or other benefits will be null and void.

12. AMENDMENTS. This Agreement may not be amended or modified other than by a written instrument signed by an authorized representative of the Company and Executive.

13. DESCRIPTIVE HEADINGS. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

14. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Facsimile and .pdf signatures will suffice as original signatures.

15. NOTICES. All notices hereunder shall be in writing and delivered personally or sent by United States registered or certified mail, postage prepaid and return receipt requested:

If to the Company:

Attn: Chairman of the HR/Compensation Committee
c/o Corporate Secretary
Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304

If to Executive:

at the last residential address known by the Company.

16. ENTIRE AGREEMENT. This Agreement and its Exhibit A, together with the Confidential Information Agreement (as modified herein), sets forth the entire agreement and understanding of the Parties relating to the subject matter hereof and merges and supersedes all prior discussions, agreements, and understandings of every kind and nature between the Parties hereto, and neither Party shall be bound by any term or condition other than as expressly set forth or provided for in this Agreement. For purposes of all applicable Company policies, the Company will comply with the work papers developed by the Parties in connection with this Agreement and delivered to the Executive.

17. WAIVER OF BREACH. The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

18. SEVERABILITY. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement will

continue in full force and effect without said provision; provided, however, that if the Release becomes or is so declared to be illegal, unenforceable, or void, the Company shall be relieved of its obligation to provide any of the consideration set forth in Section 2 of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the first date set forth below.

COMPANY					LÉO APOTHEKER
HEWLETT-PACKARD COMPANY


By:	/s/ Lawrence T. Babbio, Jr.				/s/ Léo Apotheker

Lawrence T. Babbio, Jr.					Date:	September 28, 2011
Chairman of the Human Resources
and Compensation Committee of the Board
of Directors of Hewlett-Packard Company

Date:				September 28, 2011


By:		/s/ Tracy Keogh
Tracy Kneogh
Executive Vice, President, Human Resources
Hwelett-Packard Company

Date:			September 28, 2011

Exhibit A

WAIVER AND RELEASE OF CLAIMS

In exchange for the consideration described in Section 2 of the Separation and General Release Agreement (the “Separation Agreement”) by and between Hewlett-Packard Company (the “Company”) and Léo Apotheker (“Executive”) (together, the “Parties”) and in accordance with the terms of the Employment Agreement (as defined in the Separation Agreement), Executive hereby agrees as follows:

1. EXECUTIVE’S RELEASE.

(a) Executive hereby forever releases and discharges the Company and its parents, affiliates, successors, and assigns, as well as each of their respective past, present, and future officers, directors, employees, agents, attorneys, and shareholders (collectively, the “Company Released Parties”), from any and all claims, charges, complaints, liens, demands, causes of action, obligations, damages, and liabilities, known or unknown, suspected or unsuspected, that Executive had, now has, or may hereafter claim to have against the Company Released Parties arising out of or relating in any way to Executive’s employment with, or resignation from, the Company, from the beginning of time to the date Executive signs this Waiver and Release of Claims (the “Executive’s Release”).

(b) Executive’s Release specifically extends to, without limitation, any and all claims or causes of action for wrongful termination, breach of an express or implied contract, including, without limitation, the Employment Agreement, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, employment discrimination, including harassment, fraud, misrepresentation, defamation, slander, infliction of emotional distress, disability, loss of future earnings, and any claims under any applicable state, federal, or local statutes and regulations, including, but not limited to, the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1963, as amended, the Fair Labor Standards Act, as amended, the Americans with Disabilities Act of 1990, as amended (the “ADA”), the Rehabilitation Act of 1973, as amended, the Age Discrimination in Employment Act, as amended (“ADEA”), as amended, the Older Workers Benefit Protection Act, as amended, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Worker Adjustment and Retraining Notification Act, as amended (the “WARN Act”), Section 806 of the Sarbanes-Oxley Act, the Family and Medical Leave Act, as amended, and the California Family Rights Act, as amended, the California Fair Employment and Housing Act, as amended, and the California Labor Code or any other federal or state laws relating to employment or employment discrimination, and any claims for attorneys’ fees and costs (other than any claims arising under the Separation Agreement for attorneys’ fees or costs); provided, however, that Executive’s Release does not waive, release or otherwise discharge (i) any claim or cause of action that cannot legally be waived by private agreement between Executive and the Company, including, but not limited to, any claim for unpaid wages, workers’ compensation benefits or unemployment benefits and any claims under Section 2802 of the California Labor Code; (ii) any rights to indemnification Executive may have under

the Company’s Articles of Incorporation, Bylaws, the Separation Agreement, or separate indemnification agreement, as applicable, including any rights Executive may have under directors and officers insurance policies and rights or claims of contribution or advancement of expenses; (iii) any vested benefits provided under the terms of any employee benefit plan applicable to Executive; (iv) any claim or cause of action to enforce any of Executive’s rights under the Separation Agreement; or (v) any claim or cause of action based on Executive’s rights as a shareholder of the Company. In addition, Executive’s Release will not release, waive or discharge any rights or claims Executive may have that arise from actions or omissions after the Effective Date (as defined in Section 3).

(c) This release extends to any claims that may be brought on Executive’s behalf by any person or agency, as well as any class or representative action under which Executive may have any rights or benefits; Executive agrees not to accept any recovery or benefits under any such claim or action, and Executive assigns any such recovery or benefits to the Company. For the purpose of implementing a full and complete release, Executive understands and agrees that this Agreement is intended to include all claims, if any, which Executive may have and which Executive does not now know or suspect to exist in his favor against the Company Released Parties and this Agreement extinguishes those claims. Accordingly, Executive expressly waives all rights afforded by Section 1542 of the Civil Code of the State of California (“Section 1542”) and any similar statute or regulation in any other applicable jurisdiction. Section 1542 states as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

(d) Executive’s Release shall not prevent Executive from filing a charge with the Equal Employment Opportunity Commission (or similar state or local agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar state or local agency); provided, however, that Executive acknowledges and agrees that any claims by Executive for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) hereby are barred.

2. ADEA WAIVER AND RELEASE. Executive understands and agrees that he is waiving his rights under the ADEA and thus:

(a) Executive has been informed and understands and agrees that he has the period of at least twenty-one (21) calendar days after receipt of this Waiver and Release of Claims to consider whether to sign it.

(b) Executive has been informed and understands and agrees that he may revoke this Waiver and Release of Claims at any time during the seven (7) calendar days after it is signed and returned to the Company, in which case none of the provisions of

this Waiver and Release of Claims and the Separation Agreement will have any effect. Executive acknowledges and agrees that if he wishes to revoke this Waiver and Release of Claims, he must do so in writing, and that such revocation must be signed by Executive and received by the General Counsel of the Company no later than the seventh (7th) day after Executive has signed the Waiver and Release of Claims. Executive acknowledges and agrees that, in the event Executive revokes the Waiver and Release of Claims, he shall have no right to receive any of the consideration described in Section 2 of the Separation Agreement.

(c) Executive agrees that prior to signing this Waiver and Release of Claims, he read and understood each and every provision of the document.

(d) Executive understands and agrees that he has been advised in this writing to consult with an attorney of his choice concerning the legal consequences of this Waiver and Release of Claims and the Separation Agreement and Executive hereby acknowledges that prior to signing this Waiver and Release of Claims he had the opportunity to consult, and did consult, with an attorney of his choosing regarding the effect of each and every provision of both this Waiver and Release of Claims and the Separation Agreement.

(e) Executive acknowledges and agrees that he knowingly and voluntarily entered into this Waiver and Release of Claims and the Separation Agreement with complete understanding of all relevant facts, and that he was neither fraudulently induced nor coerced to enter into this Waiver and Release of Claims or the Separation Agreement.

(f) Executive understands that he is not waiving, releasing or otherwise discharging any claims under the ADEA that may arise after the date he signs this Waiver and Release of Claims.

3. EFFECTIVE DATE. For purposes of this Waiver and Release of Claims, the “Effective Date” shall be the eighth (8th) calendar day following the date that Executive signs and returns this Waiver and Release of Claims to the Company, provided that Executive does not revoke or attempt to revoke his acceptance prior to such date. Executive understands and agrees that, in order to receive the consideration provided under Section 2 of the Separation Agreement, he must execute this Waiver and Release of Claims no earlier than the Separation Date (as defined in the Separation Agreement) and no later than twenty-one (21) days following the Separation Date and shall not have revoked or attempted to revoke such acceptance prior to the Effective Date.

4. MISCELLANEOUS. Executive represents and warrants that he has the full legal capacity, power and authority to execute and deliver this Waiver and Release of Claims and to perform his obligations hereunder. This Waiver and Release of Claims is binding upon and shall inure to the benefit of the Parties hereto as well as the Company Released Parties. For purposes of this Waiver and Release of Claims, a facsimile or electronic file containing Executive’s signature printed by a receiving facsimile machine or printer shall be deemed an original signature.

	*Accepted and agreed as of the date set forth below:*


	/s/ Léo Apotheker
	Léo Apotheker

	Date:	September 28, 2011

EX-10.2 3 a11-27056_1ex10d2.htm EX-10.2

Exhibit 10.2

Hewlett-Packard Company

3000 Hanover Street

Palo Alto, California 94304

September 27, 2011

Ms. Margaret C. Whitman

c/o Hewlett-Packard Company

3000 Hanover Street

Palo Alto, CA 94304

Dear Meg,

This letter constitutes HP’s conditional offer of employment for the position of President and Chief Executive Officer of Hewlett-Packard Company, reporting to the Board of Directors.

Thank you for your interest in leading the talented team at Hewlett-Packard. We are a company unlike any other. It’s a fact underscored by our leadership across customer segments; by our presence and leadership in key regions around the world and by our rich technology portfolio. As proud as we are of these capabilities, we are equally proud of the things that define our character as a company: the dedication of our people, our standards and values, and the depth of our commitment to global citizenship. Based on our conversations, this will confirm your start date was Thursday, September 22, 2011.

Our expectation is that your overall Total Rewards package will be targeted within a competitive range of the market median of HP’s peer group.

Your initial base salary will be one dollar ($1) per year. Base pay is typically reviewed annually as part of HP’s performance review cycle.

In addition to your base salary, you will be eligible to participate in the Hewlett-Packard Company 2005 Pay-for-Results Plan (PfR), as amended. For the fiscal year beginning November 1, 2011, you will be eligible for a target bonus opportunity equal to $2,400,000, with a maximum bonus opportunity equal to 2.5 times your target bonus, subject to the PfR plan’s terms and conditions. The bonus is not guaranteed and will be based on company, business unit, and individual performance.

We are pleased to offer you a non-qualified stock option to purchase 1,900,000 shares of HP stock. This option will be granted by HP’s Board of Directors. The grant date will be the date the Board meets to award these options, and the price will be the fair market value of HP stock on that date. The option will be subject to the terms of the Amended and Restated Hewlett-Packard Company 2004 Stock Incentive Plan, and the Award Agreement, and will vest as shown in Schedule A, as more fully set forth in the Award Agreement.

We will recommend to the Board that you be considered for future participation in HP’s equity incentive programs based upon your responsibilities, company performance, and prevailing market conditions.

You will be subject to HP’s executive stock ownership guidelines, except your guideline will be based on a notional base salary of $1,200,000 instead of your actual salary of $1. These guidelines are subject to review by the Human Resources and Compensation Committee of the Board of

Directors (“HRC”) from time to time, and currently require that, within five years, the CEO hold HP shares with a value of five times salary (i.e., $6 million). Shares counted toward these guidelines include any shares you hold directly or through a broker, shares held through the HP 401(k) Plan, shares held as restricted stock, shares underlying restricted stock units, and shares underlying vested but unexercised stock options (50% of the in-the-money value of such options is used for this calculation).

You will receive Company perquisites on at least the same level as the Company’s other senior executive officers, in accordance with Company policies.

Please note that the position you are being offered would qualify you as a “Section 16 officer” of HP. If you are a Section 16 officer within 90 days of your termination, severance benefits are provided under the HP Severance Plan for Executive Officers (the “Severance Plan”), as in effect at your termination. Currently under the Severance Plan, if your employment terminates as a result of a “qualifying event,” you will be eligible to receive a lump sum severance payment equal to 1.5 times your annual base salary plus the average of your actual bonuses paid under the PfR Plan during the preceding three years (or your actual period of employment, if less), subject to your execution of a release of claims in favor of HP.

Under the Severance Plan, a “qualifying event” means your involuntary termination without Cause. The Severance Plan defines the term “Cause” as a participant’s:

· Material neglect (other than as a result of illness or disability) of his or her duties or responsibilities to HP; or

· Conduct (including action or failure to act) that is not in the best interest of, or is injurious to, HP.

Under the Severance Plan, a participant is not deemed to have engaged in conduct constituting Cause except by a majority vote of the members of HP’s Board of Directors or an independent committee thereof.

Hewlett-Packard has a broadly competitive benefits program. You will be eligible to participate in HP’s U.S. benefit plans on the same basis as other similarly-situated employees:

· 401(k) — HP provides a discretionary matching contribution of up to four percent of eligible pay that you contribute, subject to three-year vesting.

· Health and welfare plans, including medical, disability and life insurance coverage as elected.

· Executive Deferred Compensation Program

· Paid time-off in accordance with the standard Hewlett-Packard Company policy, but no less than 25 days per year (first year pro-rated based on date of hire).

· Financial Counseling

Please understand your employment with the Company would be on an at-will basis, and as such, would be for an indefinite term and may be ended, with or without cause, at any time by either you or the Company, with or without previous notice.

Should you wish to accept this offer of employment, please sign this letter and the attached HP Agreement Regarding Confidential Information and Proprietary Developments.

If you accept this offer as set forth above, you will also need to meet the following conditions to be eligible for employment with HP (you will receive additional information on each following your acceptance):

Employment Background Screen. Hewlett-Packard is committed to providing a safe and productive working environment. Therefore, as part of the new hire process you will be required to successfully complete an employment background screen, which includes verification of such things as prior employment, educational background, criminal conviction and civil judgment histories.

Verification relating to export controls: This offer and your employment are conditional upon the company obtaining satisfactory verifications relating to export controls for any job related technical data required for the position for which you are being hired.

In addition, where applicable, this offer and your employment are conditional upon the Company receiving satisfactory references or background check results, and medical reports. Please note that in the event the Company is not satisfied with any of these items, the Company reserves the right to withdraw or delay this offer of employment.

Timely Completion of I-9 Form (Legal US Work Authorization). This offer is contingent upon your compliance with the Immigration Reform and Control Act of 1986. In essence, the act requires you to establish your identity and employment eligibility. If you accept this offer, you will be required to complete Section 1 of the Employment Eligibility Verification Form (I-9) and present the documents identified to your site security representative for section 2 to be completed. Additional information will be forthcoming.

Standards of Business Conduct (“SBC”). If you choose to accept this offer, you will receive our Standards of Business Conduct and U.S. Drug Policies. Adherence to these policies, including subsequent changes, is required of all employees.

By accepting this offer, you confirm that you are legally entitled to work for the Company in the position identified, and that you are not bound by any restrictive covenant, non-competition agreement, non-solicitation agreement or other circumstance that would prevent you from accepting this position or limit your effectivenes from performing your role with the Company. You agree that you either have not taken or have returned all confidential information (e.g., trade secrets, confidential business or technical information or know-how not generally known to the public) belonging to any previous employer or other third party and will not bring any such confidential information with you to the Company, nor will you use and/or disclose any such confidential information during the course and/or scope of your employment with the Company.

Further, should you decide to accept this offer of employment, please be advised that the Company’s SBC requires you to honor any agreements you have with your previous employers, including obligations regarding the disclosure or use of proprietary information (as applicable).

Hewlett-Packard is also committed to providing reasonable accommodations to employees with disabilities. If you need accommodations, please discuss them with your manager.

If you have any questions regarding this employment offer, please call Tracy Keogh at (650) 857-8021. We sincerely hope you choose to join Hewlett-Packard and look forward to hearing from you soon.

Sincerely,

/s/ Lawrence T. Babbio, Jr.

/s/ Tracy Keogh

Lawrence T. Babbio, Jr.

Tracy Keogh

Chairman of the Human Resources
and Compensation Committee of the Board
of Directors of Hewlett-Packard Company

Executive Vice President, Human Resources

Hewlett-Packard Company

cc: File

BY MY SIGNATURE BELOW, I ACCEPT THE TERMS OF EMPLOYMENT OUTLINED IN THIS LETTER.

/s/ Margaret C. Whitman		September 27, 2011
Margaret C. Whitman		Date

Schedule A
to Margaret C. Whitman Offer Letter

Overview of Sign-on Option Vesting Schedule

Option for 1,900,000 shares

Option term: 8 years

Grant date: September 27, 2011

The option is divided into three tranches of 300,000, 800,000 and 800,000 options respectively. Different vesting requirements apply to each tranche.

Tranche #1 (300,000 options) will vest 100,000 options per year on each of the first three anniversaries of the grant date, subject to continued employment.

Tranche #2 (800,000 options) will vest, if at all, upon satisfaction of both the service and performance requirements described below prior to the expiration date of the option, and subject to continued employment.

· The service requirement for Tranche #2 will be satisfied provided you are employed by HP or an affiliate on the first anniversary of the grant date.

· The performance requirement for Tranche #2 will be satisfied if the closing price of HP stock on the New York Stock Exchange meets or exceeds 120% of the exercise price for at least 20 consecutive trading days during the term of the option.

Tranche #3 (800,000 options) will vest, if at all, upon satisfaction of both the service and performance requirements described below prior to the expiration date of the option, and subject to continued employment.

· The service requirement for Tranche #3 will be satisfied provided you are employed by HP or an affiliate on the second anniversary of the grant date.

· The performance requirement for Tranche #3 will be satisfied if the closing price of HP stock on the New York Stock Exchange meets or exceeds 140% of the exercise price for at least 20 consecutive trading days during the term of the option.

HP Agreement Regarding Confidential Information and Proprietary Developments

(With Protective Covenants Relating to Post-Employment Activity)

Name : Margaret C. Whitman

1. Relationship to Employment. I desire to be employed by Hewlett-Packard Company or by one of its affiliates or subsidiaries (collectively, “HP” or the “Company”). This Agreement states important terms that will apply during and after my employment by HP. I understand, however, that nothing relating to this Agreement will be interpreted as a contract or commitment whereby HP is deemed to promise continuing employment for a specified duration.

2. Confidential Information. This Agreement concerns trade secrets, confidential business and technical information, and know-how not generally known to the public (hereinafter “Confidential Information”) which is acquired or produced by me in connection with my employment by HP. Confidential Information may include, without limitation, information regarding HP organizations, staffing, finance, structure, employee performance, compensation of others, research and development, manufacturing and marketing, files, keys, certificates, passwords and other computer information, as well as information that HP receives from others under an obligation of confidentiality. I agree to abide by HP’s Confidential Information Policy and specifically agree that with regard to HP Confidential Information:

a. to use such information only in the performance of HP duties;

b. to hold such information in confidence and trust; and

c. to use all reasonable precautions to assure that such information is not disclosed to unauthorized persons or used in an unauthorized manner, both during and after my employment with HP.

I further agree that any organizational information or staffing information learned by me in connection with my employment by HP is the Confidential Information of HP, and I agree that I will not share such information with any recruiters or any other employers, either during or subsequent to my employment with HP; further, I agree that I will not use or permit use of such as a means to recruit or solicit other HP employees away from HP (either for myself or for others).

3. Proprietary Developments. This Agreement also concerns inventions and discoveries (whether or not patentable), designs, works of authorship, mask works, improvements, data, processes, computer programs and software (hereinafter called “Proprietary Developments”) that are conceived or made by me alone or with others while I am employed by HP and that relate to the research and development or the business of HP, or that result from work performed by me for HP, or that are developed, in whole or in part, using HP’s equipment, supplies, facilities or trade secrets information. Such Proprietary Developments are the sole property of HP, and I hereby assign and transfer all rights in such Proprietary Developments to HP. I also agree that any works of authorship created by me shall be deemed to be “works made for hire.” For all Proprietary Developments, I further agree:

a. to disclose them promptly to HP;

b. to sign any assignment document to formally perfect and confirm my assignment of title to HP;

c. to assign any right of recovery for past damages to HP; and

d. to execute any other documents deemed necessary by HP to obtain, record and perfect patent, copyright, mask works and/or trade secret protection in all countries, in HP’s name and at HP’s expense.

I understand that HP may assign and/or delegate these rights. I agree that, if requested, my disclosure, assignment, execution and cooperation duties will be provided to the entity designated by HP.

In compliance with prevailing provisions of relevant state statutes,* this Agreement does not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and which was developed entirely on the employee’s own time, unless (a) the invention relates (i) to the business of the employer or (ii) to the employer’s actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by the employee for the employer.

4. Respect for Rights of Former Employers. I agree to honor any valid disclosure or use restrictions on information or intellectual property known to me and received from any former employers or any other parties prior to my employment by HP. I agree that without prior written consent of such former employers or other parties, I will not knowingly use any such information in connection with my HP work or work product, and I will not bring onto the premises of HP any such information in whatever tangible or readable form.

5. Work Product. The product of all work performed by me during and within the scope of my HP employment including, without limitation, any files, presentations, reports, documents, drawings, computer programs, devices and models, will be the sole property of HP. I understand that HP has the sole right to use, sell, license, publish or otherwise disseminate or transfer rights in such work product.

6. HP Property. I will not remove any HP property from HP premises without HP’s permission. Upon termination of my employment with HP, I will return all HP property to HP unless HP’s written permission to keep it is obtained.

7. Protective Covenants. I acknowledge that a simple agreement not to disclose or use HP’s Confidential Information or Proprietary Developments after my employment by HP ends would be inadequate, standing alone, to protect HP’s legitimate business interests because some activities by a former employee who had held a position like mine would, by their nature, compromise such Confidential Information and Proprietary Developments as well as the goodwill and customer relationships that HP will pay me to develop for the Company during my employment by HP. I recognize that activities that violate HP’s rights in this regard, whether or not intentional, are often undetectable by HP until it is too late to obtain any effective remedy, and that such activities will cause irreparable injury to HP. To prevent this kind of irreparable harm, I agree that for a period of twelve months following the termination of my employment with HP, I will abide by the following Protective Covenants:

(a) No Conflicting Business Activities. I will not provide services to a Competitor in any role or position (as an employee, consultant, or otherwise) that would involve Conflicting Business Activities (but if I am a resident of California and subject to the laws of California, the restriction in this clause (paragraph 7, subpart (a)) will apply only to Conflicting Business Activities that result in unauthorized use or disclosure of HP’s trade secrets); however, in the event my employment with HP terminates as a result of a Workforce Restructuring program or similar reduction in force, the restriction in this clause (paragraph 7, subpart (a)) will not apply;

(b) No Solicitation of Customers. I will not (in person or through assistance to others) knowingly participate in soliciting or communicating with any customer of HP in pursuit of a Competing Line of Business if I either had business-related contact with that customer or received Confidential Information about that customer in the last two years of my employment at HP (but if I am a resident of California and subject to the laws of California, the restriction in this clause (paragraph 7, subpart (b)) will apply only to solicitations or communications made with the unauthorized assistance of HP’s trade secrets);

(c) No Solicitation of HP Employees. I will not (in person or through assistance to others) knowingly participate in soliciting or communicating with an HP Employee for the purpose of persuading or helping the HP Employee to end or reduce his or her employment relationship with HP if I either worked with that HP Employee or received Confidential Information about that HP Employee in the last two years of my employment with HP; and

(d) No Solicitation of HP Suppliers. I will not (in person or through assistance to others) knowingly participate in soliciting or communicating with an HP Supplier for the purpose of persuading or helping the HP Supplier to end or modify to HP’s detriment an existing business relationship with HP if I either worked with that HP Supplier or received Confidential Information about that HP Supplier in the last two years of my employment with HP.

As used here, “Competitor” means an individual, corporation, other business entity or separately operated business unit of an entity that engages in a Competing Line of Business. “Competing Line of Business” means a business that involves a product or service offered by anyone other than HP that would replace or compete with any product or service offered or to be offered by HP with which I had material involvement while employed by HP (unless HP and its subsidiaries are no longer engaged in or planning to engage in that line of business). “Conflicting Business Activities” means job duties or other business-related activities in the United States or in any other country where the HP business units in which I work do business, or management or supervision of such job duties or business-related activities, if such job duties or business-related activities are the same as or similar to the job duties or business-related activities in which I participate or as to which I receive Confidential Information in the last two years of my employment with HP. “HP Employee” means an individual employed by or retained as a consultant to HP or its subsidiaries. “HP Supplier” means an individual, corporation, other business entity or separately operated business unit of an entity that regularly provides goods or services to HP or its subsidiaries, including without limitation any OEM, ODM or subcontractor.

8. Enforcement. I make these agreements to avoid any future dispute between myself and HP regarding specific restrictions on my post-employment conduct that will be reasonable, necessary and enforceable to protect HP’s Confidential Information and Proprietary Developments and other legitimate business interests. The Protective Covenants are ancillary to the other terms of this Agreement and my employment relationship with HP. This Agreement benefits both me and HP because, among other things, it provides finality and predictability for both me and the Company regarding enforceable boundaries on my future conduct. Accordingly, I agree that this Agreement and the restrictions in it should be enforced under common law rules favoring the enforcement of such agreements. For these reasons, I agree that I will not pursue any legal action to set aside or avoid application of the Protective Covenants.

9. Notice of Post-Employment Activities. If I accept a position with a Competitor at any time within twelve months following termination of my employment with HP, I will promptly give written notice to the senior Human Resources manager for the HP business sector in which I worked, with a copy to HP’s General Counsel, and will provide HP with the information it needs about my new position to determine whether such position would likely lead to a violation of this Agreement (except that I need not provide any information that would include the Competitor’s trade secrets).

10. Relief; Extension. I understand that if I violate this Agreement (particularly the Protective Covenants), HP will be entitled to injunctive relief by temporary restraining order, temporary injunction, and/or permanent injunction and any other legal and equitable relief allowed by law. Injunctive relief will not exclude other remedies that might apply. If I am found to have violated any restrictions in the Protective Covenants, then the time period for such restrictions will be extended by one day for each day that I am found to have violated them, up to a maximum extension equal to the time period originally prescribed for the restrictions.

11. Severability; Authority for Revision; Inure to Successors. The provisions of this Agreement will be separately construed. If any provision contained in this Agreement is determined to be void, illegal or unenforceable, in whole or in part, then the other provisions contained herein will remain in full force and effect as if the provision so determined had not been contained herein. If the restrictions provided in this Agreement are deemed unenforceable as written, the parties expressly authorize the court to revise, delete, or add to such restrictions to the extent necessary to enforce the intent of the parties and to provide HP’s goodwill, Confidential Information, Proprietary Developments and other business interests with effective protection. The title and paragraph headings in this Agreement are provided for convenience of reference only, and shall not be considered in determining its meaning, intent or applicability. This Agreement will inure to the benefit of the parties’ heirs, successors, and assigns.

12. Governing Law. This Agreement will be governed by the laws of the state in which I reside at the time of its enforcement.

Signature:	/s/ Margaret C. Whitman

Date:	September 27, 2011

*Including: California Labor Code Section 2870; Delaware Code Title 19 Section 805; Illinois 765ILCS1060/1-3, “Employees Patent Act”; Kansas Statutes Section 44-130; Minnesota Statutes 13A Section 181.78; North Carolina General Statutes Article 10A, Chapter 66, Commerce and Business, Section 66-57.1; Utah Code Sections 34-39-l through 34-39-3, “Employment Inventions Act”; Washington Rev. Code, Title 49 RCW: Labor Regulations, Chapter 49.44.140.

Rev.091410jmr/MG4-CA

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