Foundation Director Decries HP's 'Personal Attacks'
PALO ALTO, CALIFORNIA, Feb 11, 2002 (Newsbytes via COMTEX) -- A prominent
director of a foundation responsible for a large portion of Hewlett-Packard
[NYSE:HWP] stock says the computer company is wrong to paint Walter Hewlett's
opposition to a merger with Compaq [NYSE:CPQ] as a misinformed and quixotic
personal mission.
In a letter to HP Chief Executive Carly Fiorina released today, venture
capitalist James Gaither, who sits on the board of the William and Flora Hewlett
Foundation, wrote that he had become "increasing troubled" by what he called a
"marketing campaign ... to discredit Walter Hewlett, as well as the Hewlett
Foundation."
Gaither, who is a partner in Sutter Hill Ventures, told Fiorina that he felt
compelled to counter her pro-merger campaign "because your sales pitch has
become so personal."
Walter Hewlett, son of HP co-founder William Hewlett, has so far done the heavy
lifting in opposition to the Compaq deal for the Hewlett families and for the
heirs of HP's other founder, David Packard.
But Gaither reminded Fiorina that Walter Hewlett's opposition represented the
view of the Hewlett Foundation board and was backed up by advice from a
committee of financial advisors independent of both HP and the Hewlett family.
In addition, Gaither pointed out, the David and Lucile Packard Foundation
reached a similar conclusion with the help of third-party analysis led by Booz
Allen & Co.
The foundation director said he was particularly troubled by reports that as
many as 36,000 HP jobs could be in jeopardy if the Compaq merger does not
proceed. That figure was attributed to Fiorina herself as her response to
employee complaints that the merger itself would lead to 15,000 job cuts.
"The fact is that 36,000 jobs will not be at risk if the acquisition of Compaq
is voted down by shareholders," Gaither wrote. "The HP board would never support
such action even if you decided to propose it."
"You seek to discredit Walter Hewlett, questioning his right to speak up as a
director and shareholder," Gaither continued, adding that it was "a strange
assertion in light of the recent events at Enron."
"A director and shareholder should speak out concerning a matter submitted for
shareholder approval if he believes the transaction is not in the best interests
of the shareholders, and indeed, that it might jeopardize the future of this
great company."
"Finally," Gaither told Fiorina, "you imply that if the shareholders do not vote
with you, there will be chaos at HP for a long time to come."
"Part of that chaos, you suggest, would come from a decision by you to step
down. That action would not result in chaos; instead, the HP Board would most
certainly move quickly to fulfill its responsibilities by establishing a strong
management team and assessing the company's strategic alternatives."
"Moreover," he wrote, "there can be little question that HP employees would
enthusiastically recommit themselves to restoring energy, cohesiveness and
innovation to capitalize on HP's opportunities and to address the challenges
facing the company."
By Steven Bonisteel
CONTACT: Carolyn Peterson, for James Gaither, 415-693-2331
Reported by Newsbytes.com, newsbytes.com .
Copyright 2002 The Washington Post Company
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