Message from HP Board of Directors
by: carlysconfessional (42/M/uk) 04/02/02 04:31 pm
Msg: 117355 of 117360
April 2, 2002
In recent days, the Hewlett-Packard Board of Directors met to consider the re-nomination of Walter Hewlett as a director to the board. We'd like to take a few minutes to explain the decision we made and how we made it -- as well as a few issues related to that decision.
Let us start by conveying categorically that Mr. Hewlett's allegations in his March 28 lawsuit are completely baseless and we intend to contest them vigorously. Yesterday, we filed a motion in Delaware court to dismiss the suit. The allegations that HP bought votes from Deutsche Bank or improperly coerced the firm to change its votes are false.
In addition, Mr. Hewlett's allegations that HP shareowners were misinformed about integration are without foundation.
This proxy contest has been waged in the court of public opinion for many months. There are more facts and figures about this merger in full view of shareowners than any other merger in corporate history. After considering all of the information at their disposal, shareowners have made their decision. It's time we let the votes be counted and whoever gets more votes wins. That's what real corporate democracy is all about.
Mr. Hewlett's legal action is especially regrettable because the board was trying to put this proxy contest behind us and move forward as a unified board. On March 19, immediately following the shareowner meeting, at Carly Fiorina's encouragement, Sam Ginn, chairman of the board's nominating and governance committee, met with Mr. Hewlett to reach out and re-establish a constructive working relationship. On Wednesday, March 27, the nominating committee convened all of the independent directors into executive session, including Mr. Hewlett, to continue these discussions. Based on these deliberations and representations made by Mr. Hewlett in the meetings, the HP board unanimously determined to re-nominate him.
Our decision to re-nominate Mr. Hewlett was based on several factors, including special consideration for HP employees who hold Mr. Hewlett and his father's legacy in high esteem; our desire to demonstrate our willingness to work together with the Hewlett and Packard families to be good stewards of this proud company; and our commitment to proving that this board not only tolerates different views, we embrace them.
In our board deliberations March 27, Mr. Hewlett committed to support this company's strategy and our management team and do all he could to work for the successful implementation of the merger if it is approved.
In those meetings, Mr. Hewlett expressed no concerns nor asked any questions about HP's conduct of the proxy contest or disclosures related to integration planning. He said nothing at all about the fact he was filing a lawsuit against the company the following morning. He gave no cause for concern whatsoever that would suggest we did not all share the same objective -- to find common ground and move forward together for the good of all who care about HP.
The board was shocked therefore, when just hours after these meetings, Mr. Hewlett filed a lawsuit against the company continuing his assault on the integrity of the HP board and management team. In essence, Mr. Hewlett continues to allege -- now in the courts -- that the board and management team are systematically deceiving shareowners. We will not standby and let this go unchallenged.
As a director, Mr. Hewlett has every right to disagree with this merger. But that right also carries with it the responsibility to voice his concerns openly and honestly.
Vigorous debate leads to better decisions. When the debate is over and a decision is made, there is also a time to move on.
In a speech to the Council of institutional Investors one week ago today, Mr. Hewlett spoke about the importance of transparency and accountability in the governance of corporations. He spoke about principled actions. He spoke about democracy, fiduciary responsibility and ethics in the boardroom.
But corporate democracy, transparency, accountability and fiduciary responsibility are not platitudes to dress up speeches and please crowds. They are actions to be practiced during the hard discussions that take place in the boardroom on behalf of shareowners and they are inherently based on candor between board members and management.
Mr. Hewlett's latest actions have again violated basic principles of trust and his ongoing adversarial relationship with the company now undermines the board's ability to effectively conduct business. After consulting with Columbia law school Professor John Coffee, a national corporate governance expert, on considerations related to pending and continuing litigation and its impact on our ability to have a collegial and cohesive board, the board unanimously concluded that we cannot re-nominate Mr. Hewlett to HP's board.
In related news, the board announced that five Compaq board members will join the new company's board pending legal closure of the merger.
They include: Lawrence T. Babbio, Jr., vice chairman and president of Verizon Communications, Inc.; Michael D. Capellas, chairman and chief executive officer of Compaq Computer Corporation; Sanford M. Litvack, former vice chairman of The Walt Disney Company; Thomas J. Perkins, general partner of Kleiner, Perkins, Caufield & Byers; and Lucille S. Salhany, co-president and chief executive officer of LifeFX Networks, Inc. The new board will consist of 10 independent outside directors compared to six on HP's current board.
We're excited about the experience and insights these new directors will bring as we take on the important work of building on this great company's legacy of market leadership, customer service, innovation and growth by setting the pace and being the best place to work in our industry.
-- Hewlett-Packard Board of Directors |
