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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (93777)	11/15/2001 11:54:34 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

WASHINGTON, Nov 15 (Reuters) - Hewlett-Packard Co. <HWP.N> and Compaq Computer Corp. <CPQ.N> said on Thursday that antitrust authorities have asked each of them for information about their proposed combination, according to a U.S. regulatory document. Additionally, HP said it was negotiating new employment agreements with top executives including Chief Executive Officers Michael Cappellas and Carly Fiorina which could lead to increases in salaries and bonuses. "Each of HP and Compaq received a request for additional information and other documentary material from the Federal Trade Commission," the companies said in their merger agreement filed with the Securities and Exchange Commission Thursday. "In practice, complying with a request for additional information or material ... can take a significant amount of time," the companies said in the filing. In September, Hewlett Packard proposed buying Compaq in an all-stock deal now worth $23.7 billion. But the deal has met strong opposition from investors, including members of HP's founding families, the Hewletts and Packards. If the companies win approval for the deal, 15,000 jobs are slated to be cut to save money. That is on top of another 15,000 jobs that are being eliminated now in the face of a slumping economy and falling profits. Separately, HP was negotiating a new employment agreement with Fiorina and other company executives, which could lead to increases in salaries and bonuses, according to the merger document. "While the terms of these agreements have not been determined, HP currently expects the employment agreements to include increases to the executives' current salaries to reflect their expanded responsibilities within the combined company, as well as the potential for a bonus that may be equal to or greater than the executives' base salaries," it said. Fiorina earned $3.7 million in fiscal 2000, including $1.8 million in bonuses for the first half of the year. She also received 1.28 million stock options but because the exercise price is at $53.81 a share, they are worthless. HP is also negotiating employment agreements with Compaq Chairman and CEO Michael Cappellas and other executives of that company though no deals have yet been struck. Cappellas earned $5 million last year, a salary of $1.2 million and a $3.8 million bonus. He also received $24.4 million in restricted stock awards and options for 850,000 common shares which are also worthless at present. Shares of Palo Alto, Calif.-based HP closed up 1 cent to $22.09 while shares of Houston-based Compaq closed up 70 cents, or 7 percent, to $10.70, on the New York Stock Exchange. ((with additional reporting by Peter Henderson in San Francisco. Jeremy Pelofsky, Washington Newsroom, 202-789-8554, fax 202-898-8383, washington.equities.newsroom@reuters.com)) REUTERS