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

To: hlpinout who wrote (95568)	2/28/2002 6:41:56 PM
From: hlpinout	Read Replies (1) \| Respond to of 97611

HP's Stump Speech: Merger Will Succeed, And Here's How Feb. 27, 2002 Information Week Technology is helping HP and Compaq teams plan the merger, which won't result in an immediate discontinuation of some product lines. By Tischelle George With a vote on the Hewlett-Packard/Compaq merger just around the corner, HP CEO Carly Fiorina and other company execs held a meeting with securities analysts Wednesday to emphasize the benefits of the deal, assure IT execs that important product lines won't be immediately discontinued, and explain how technology is helping them prepare for the challenging task of bringing the two companies together. One of the charges brought by opponents of the merger is that, historically, large mergers in the computing industry don't work. But HP says that it and Compaq have dedicated 600 employees to making sure they're the exception to the rule. This group is analyzing everything from corporate culture to technologies in order to map out an integration plan for the businesses and business processes, and software is the backbone of their efforts. The integration team is using Web-based collaboration and information-management software from eRoom Technology Inc., called eRoom, to record and store data about the integration on topics ranging from corporate branding to enterprise systems to finance to HP Labs and human resources. Still, says Toni Sacconaghi Jr., senior research analyst with Sanford C. Bernstein & Co., the merger remains a giant risk: Time and again, Sacconaghi says, it's been shown that "big mergers don't always go according to plan," no matter how well the companies plan them out. HP admits there will be some short-term negatives. The vendor expects to achieve $2.5 billion in cost savings by 2004 by eliminating duplicate IT systems as well as research and development teams and other employees. But it anticipates an overall 4.9% dip in revenue pending completion of the merger, because of its commitment to supporting overlapping product lines for an unspecified amount of time. HP rejected the idea of immediately discontinuing any product lines or spinning off segments of its business--including its digital imaging business--should the deal be approved. "The fallacy is that the day after the announcement the products go away," says Duane Zitzner, president of HP computing. Zitzner says that any plans to discontinue product lines will be "well-thought-through with customers and developers in mind. We can't just stop rolling out products." Fiorina also reacted to recent claims by dissident HP board member Walter Hewlett that she and Compaq CEO Michael Capellas have ulterior motives for seeing the deal approved, because they stand to receive compensation packages worth more than $115 million. "Shareholders have every right to know every detail about employee compensation, but we can't disclose what hasn't been decided," she said. A newly formed executive compensation committee of the new board of directors will determine compensation for employees of the merged companies, Fiorina said. Fiorina said that if shareholders decide not to support the deal, HP will consider other alternatives--but she wouldn't specify what those are. Fiorina said she and her team are convinced the deal with Compaq "is the best alternative for us to achieve market leadership, improved cash flow, and accretion to shareholders."

To: hlpinout who wrote (95568)	3/1/2002 7:42:27 AM
From: hlpinout	Read Replies (1) \| Respond to of 97611

HP pay body members say Walter Hewlett gave deliberately misleading statements -------------------------------------------------------------------------------- PALO ALTO, Calif (AFX) - Two members of the Hewlett-Packard Co board of directors' Compensation Committee accused Walter Hewlett of mischaracterising the role of the compensation committee, of which he is also a member. "You have deliberately made misleading statements to the public," Phil Condit and Sam Ginn said in a open letter to Hewlett. "At a time when shareowners should expect transparent and reliable disclosure from public companies, your behavior is extremely suspect and unacceptable," they said. Condit and Ginn said Hewlett is not acknowledging that the three of them had agreed, at the last compensation committee meeting, that executive employments terms discussed at previous meetings were specifically rejected, and will not be used as a benchmark or minimum terms for any future employment arrangements following the merger. "You assert that HP is under an obligation to negotiate employment agreements when you know it is not," the two committee members said. Condit and Ginn said the three of them agreed that it is in the best interests of shareowners if the board of directors of the combined HP/Compaq determine appropriate compensation terms for the executive officers of the combined company. To that end, new market data and input from independent compensation consultants has been requested, they said. Condit and Ginn said the committee and the board have the final word on all executive compensation matters, and they added that Hewlett is fully aware that the committee has overtly rejected the executive employment terms previously discussed. Therefore, until the committee and the board approve executive employment terms, no agreements or arrangements exist. Hewlett had cited Section 5.12(c) of the Merger Agreement, saying HP was obligated to make previously discussed terms a benchmark in future negotiations. Condit and Ginn cited Section 8.5 of the Merger Agreement as negating that, claiming the former regulation does not in any way obligate HP to "consider, negotiate, offer or agree to any specific terms or consider any terms as benchmarks for future terms". jfr/an/ NNN

To: hlpinout who wrote (95568)	3/1/2002 7:49:22 AM
From: hlpinout	Read Replies (1) \| Respond to of 97611

Hewlett-Packard, Compaq Ask Suppliers to Cut Prices, Paper Says By George Hsu Taipei, March 1 (Bloomberg) -- Hewlett-Packard Co., the second-biggest computer maker seeking to take over rival Compaq Computer Corp., wants Quanta Computer Inc. and other Taiwan computer manufacturers to lower prices, Economic Daily News said. Compaq also asked the companies to lower prices so they would stand a better chance of remaining as suppliers after Hewlett- Packard's takeover, the report said, citing unidentified sources. Hewlett-Packard plans to order NT$17.5 billion ($498 million) of computers from First International Computer Inc. and at least 1 million notebook computers from Quanta this year, the paper said. Taiwan manufacturers of computers for other companies are expected to benefit as declining sales for personal computers worldwide forces companies such Hewlett-Packard and Compaq to farm out more of their production to cut costs.