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

To: Satish C. Shah who wrote (95007)	1/30/2002 7:26:03 PM
From: Elwood P. Dowd	Respond to of 97611

Wednesday January 30, 6:49 pm Eastern Time Hewlett, HP argue whether big mergers ever succeed (UPDATE: adds HP comments, details) NEW YORK, Jan 30 (Reuters) - Hewlett-Packard Co. (NYSE:HWP - news) and the rogue director who opposes HP's plans to merge with Compaq Computer Corp. (NYSE:CPQ - news) sparred on Wednesday over whether any big acquisition could succeed in the technology world. ADVERTISEMENT Walter Hewlett, the son of HP co-founder William Hewlett, on Wednesday issued a report called ``Large Computing Mergers Have Consistently Failed'' that detailed unfortunate combinations. Hewlett-Packard, trying to line up support before a vote expected in March on the $23.5 billion deal, responded that big deals worked when they created market leaders and stuck to expanding businesses rather than launching new ones. Compaq's purchases of Digital Equipment Corp. and Tandem Computer and Burroughs Corp.'s combination with Sperry Corp. to form Unisys Corp. (NYSE:UIS - news) didn't benefit shareholders, Hewlett said. ``HP should be creating value and solving problems, not diluting value and creating more problems. HP can do better. Investors deserve it. Wall Street expects it,'' Hewlett said in a statement. Walter Hewlett has about a 5 percent stake in HP. In the past two months, he has been arguing against the merger in regulatory filings, press releases and advertisements, saying the weak personal computer business will dilute the profits from HP's printing business. Hewlett also said HP is misleading investors when it cites ``successful'' technology mergers because the mergers it is talking about are on a much smaller scale. ??? said the maturing technology industry was ripe for consolidation and that the merger's goal, market expansion, was both favored by Wall Street and relatively straightforward, compared to trying to enter new businesses. ``Bigger is better under the right circumstances,'' HP said. The largest mergers which formed industry leading companies were successful, argued HP, which hopes to take on International Business Machines Corp. (NYSE:IBM - news) for the title of the largest computer company in the world. It cited Exxon Mobil Corp. (NYSE:XOM - news) and SBC Ameritech as good examples of success. Compaq Chief Executive Michael Capellas separately told a conference that the Digital deal had paid off handsomely after a slow start. Hewlett and other family members, including the Packards, hold an 18 percent stake in the company and say they'll vote against it. The companies are due to hear in the next two days whether European regulators have given the merger their go ahead or if they'll pursue a longer investigation.

To: Satish C. Shah who wrote (95007)	1/30/2002 8:39:03 PM
From: Elwood P. Dowd	Read Replies (2) \| Respond to of 97611

Compaq paid CEO $1.6 million in salary in 2001 SAN FRANCISCO, Jan 30 (Reuters) - Compaq Computer Corp.'s (NYSE:CPQ - news) chief executive, Michael Capellas, got a raise to $1.6 million in salary in 2001, and Compaq forgave $2.1 million in loan payments he owed, the company said in its annual filing. Capellas also received 850,000 options on Compaq stock that would have an estimated value of between $5.2 million and $13.3 million by 2011, assuming the stock rises by 5-10 percent annually over that period, and another $96,000 in additional compensation. Compaq, which lost the title of No. 1 personal computer maker to Dell Computer Corp. and posted a $785 million net loss as sales fell 20 percent to $33.6 billion last year, did not give bonuses to senior officers, the filing said. The company also does not plan to give raises in 2002, given Compaq's performance in 2001 and the general market downturn, it said. However, Hewlett-Packard Co. (NYSE:HWP - news) has said it plans to give Capellas and other senior officers raises if HP and Compaq carry out a planned merger. Capellas' salary was up from $1.23 million in 2000, when he also got a $3.8 million bonus, $24.4 million in restricted stock and 850,000 stock options. Compaq loaned Capellas $5 million to buy Compaq stock in 1999 with the expectation of forgiving the loan and accrued interest in three tranches. It forgave the first portion of that, $2.1 million, last year.