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To: hlpinout who wrote (95942)	3/11/2002 6:25:38 PM
From: Elwood P. Dowd	Respond to of 97611

HP Directors Warn Board May Resign By BRIAN BERGSTEIN AP Business Writer Two HP Directors Say Board Might Resign if Compaq Deal Rejected SAN JOSE, Calif. (AP) -- Two Hewlett-Packard Co. directors warned Monday that many board members and some of the company's top executives might quit if shareholders reject the $22.6 billion purchase of Compaq Computer Corp. (NYSE:CPQ - news) next week. ADVERTISEMENT If the acquisition fails, the eight HP board members who support the deal would have "personal conflicts" and "an important decision to make," Phil Condit, the chief executive and chairman of Boeing Co., said in a conference call with analysts and reporters. "Each member of the management team will also have a personal decision to make," he said. However, fellow board member Sam Ginn, the retired chairman of Vodafone AirTouch, said that if the deal dies and directors step down, they wouldn't leave HP in chaos -- nor put the boardroom solely in the hands of dissenting director Walter Hewlett. "I won't walk away and pout," Ginn said. "I will make sure if I decide to leave that I have a proper replacement before I walk out the door." This is not the first time HP directors have threatened to leave if the acquisition is blocked. Chairwoman and chief executive Carly Fiorina also would be widely expected to move on if the deal crashes. But the subject is being renewed at a critical time, with HP's March 19 shareholder vote appearing too close to call and many investors possibly on the fence. Walter Hewlett has said any implication that large numbers of directors and managers would leave is part of an attempt by HP to scare investors. He said Monday that Ginn and Condit actually affirmed his position that HP would remain stable. Ginn and Condit said they believe the integration of Compaq is being planned well and that they are confident the deal will dramatically improve the end-to-end technology "solutions" Hewlett-Packard can offer corporate customers. But while many big customers have offered glowing praise about the deal, others seem more circumspect. A Merrill Lynch survey of U.S. and European companies found that nearly half of those with HP or Compaq equipment oppose the deal. About one-quarter were in favor. Shares of Palo Alto-based HP rose 39 cents, nearly 2 percent, to $20.98 on the New York Stock Exchange, where shares of Houston-based Compaq lost 53 cents, or 4.5 percent, to $11.27. ------ On the Net: Pro-merger site: votethehpway.com Anti-merger site: votenohpcompaq.com Email this story - Most-emailed articles - Most-viewed articles

To: hlpinout who wrote (95942)	3/11/2002 6:27:11 PM
From: hlpinout	Respond to of 97611

Compaq Taps InteQ For Monitoring Services By Christina Torode CRN Bedford, Mass. - 11:05 AM EST Mon., Mar. 11, 2002 Compaq Computer Monday signed a deal with InteQ to sell the MSP's remote monitoring and performance reporting services to Compaq customers. Compaq has for some time been attempting to deliver more services to compete with IBM Global Services. Compaq service engineers will use InteQ's remote monitoring platform to detect and prevent problems within customers' IT infrastructure. InteQ's platform detects and diagnoses application and networking issues in a hosted environment of a corporate data center.

To: hlpinout who wrote (95942)	3/11/2002 6:28:27 PM
From: hlpinout	Respond to of 97611

HP Director: 20 Top Investors Like Merger But Ginn, Condit leave door open for exit if Compaq deal fails By Edward F. Moltzen CRN New York - 3:19 PM EST Mon., Mar. 11, 2002 Two Hewlett-Packard board members left open the possibility they'll quit if shareholders reject the controversial merger with Compaq Computer during a March 19 vote. One of those directors, Phil Condit, chairman and CEO of Boeing, also told analysts and reporters he counts about 20 top HP investors in their camp as supporting the $21 billion deal, which is opposed by fellow director Walter Hewlett. "I care deeply about HP and its future and its success," director Sam Ginn, retired chairman of Vodafone AirTouch, said, during a conference call. "I can't tell you honestly that I've made a decision [to leave or stay on the board] either. I'm just going to have to see how this plays out. "I understand our fiduciary responsibility," Ginn said. "I will try every way I can to live up to that. . . . A 'no' vote basically causes an inherent conflict in current board members. Board members will deal with that in their own, personal way. I can't predict how other board members will deal with that when I can't predict how I deal with that." Condit said he, too, would not be able to answer any questions regarding conflict until after the merger is approved or rejected. "I am very dedicated to the success of Hewlett-Packard," Condit said. "I will address that conflict in me if we get to that point. I just don't know." Added Ginn: "When we say we have a fiduciary responsibility, what that suggests is we don't walk away and pout. If we decide to leave the board, we do it in a professional way. We make sure there is continuity there for our successor." HP's board has been fighting tooth-and-nail with Hewlett since Hewlett publicly opposed the merger last November. "Walter is intellectually honest," Ginn said. "I think on this particular question, he's wrong. I personally like him. He's an honorable person, but he's just wrong on this position." Ginn and Condit both said that after reviewing all the strategic options available for HP's future, they still believe the Compaq merger its its best bet. Other options, such as Hewlett's suggestion of spinning off HP's printer and imaging business, do nothing to turn HP into a solutions company, they said. Both the Hewlett and Packard families and their charitable foundations have voiced opposition to the merger of HP and Compaq. Last week, both sides scored significant victories. Independent firm Institutional Shareholder Services publicized a study in which it endorsed the merger. However, CALpers, the public retirement system for California employees, last week said it would vote against the deal. "There is clearly a pattern where retirement funds, charitable funds have tended to go that way," Condit said. "Their primary responsibility is preservation of capital. Those that are looking for growth and opportunity will see it another way."

To: hlpinout who wrote (95942)	3/11/2002 6:32:10 PM
From: hlpinout	Respond to of 97611

March 11, 2002 14:57 Mobile-Handset Makers Add Multiplayer Games to Thai Models By Mongkol Jullayothin, Bangkok Post, Thailand Mar. 11--A kung fu game for mobile phones is the latest offering from Siemens and cellular operator Advanced Info Service Plc. The first game of its kind in Thailand, BattleMail Kung Fu allows users of two phones to compete by using short messaging service (SMS). The service charge of six baht a minute is three times the normal rate for SMS. However, Siemens' main goal was to show consumers that mobile phones could be used for more than making calls and sending messages, said Suwannee Singluedej, the company's assistant vice-president for mobile devices. This game is exclusive to the GSM Advance network and can be played only on Siemens C45 handsets. Atorn Techitantiwong, AIS marketing manager, said his company was also looking for further opportunities to promote new technology available on its network, in particular General Packet Radio Service (GPRS), which enabled much faster data communications. In collaboration with Compaq, the company would offer a package including a mobile phone and an iPaq personal digital assistant for 29,900 baht. Another package would offer new handsets plus two years of free Internet access to buyers of Toshiba notebook computers, he said. ----- To see more of the Bangkok Post, or to subscribe to the newspaper, go to bangkokpost.com

To: hlpinout who wrote (95942)	3/11/2002 6:34:01 PM
From: hlpinout	Read Replies (1) \| Respond to of 97611

March 11, 2002 17:37 Battle for HP-Compaq Merger Enters Final Round By Duncan Hughes, Sunday Business, London Mar. 10--NEW YORK--The bitter battle for shareholder approval to allow Hewlett-Packard's contested $25 billion purchase of Compaq Computer enters its final week with supporters of the deal sounding more confident but still uncertain of victory. They had a much-needed boost last week when Institutional Shareholder Services (ISS) reported that it believed the purchase of Compaq would strengthen Hewlett Packard's financial performance over the long run by bolstering its business units, some of which are currently not profitable. ISS's backing was necessary if the deal was to have any chance of being approved but there is no guarantee that the institutional shareholders, which control 23 percent of Hewlett- Packard's shares, will back the merger. But in a new blow on Friday, Calpers, the biggest US pension fund, said it would vote against, on grounds that it would not bring long term value to its portfolio. Ironically, the leading protagonists, Carly Fiorina, chief executive of Hewlett-Packard, and Walter Hewlett, a son of the founder, board member and major shareholder, have more in common then they would care to admit, particularly in the final days of the increasingly ill-tempered campaign. Both are talented musicians, love the classics, have advanced degrees in information science and are the children of successful parents. But for four months they have become implacable foes in a tit-for-tat round of accusations and rebuttals to analysts and in full- page advertisements in major newspapers in which the deal is either described as the saviour or nemesis of the flagging technology flagship. The latest polling, by Steven Milunovich of investment bank Merrill Lynch, revealed that 26 percent of Hewlett-Packard users were for the deal, 42 percent against and 32 percent unsure. Among Compaq users, 26 percent were for the deal, 46 percent against and 28 percent unsure. The battle has provided Fiorina with an opportunity to display the advocacy and selling skills she honed climbing the ladder at Lucent Technologies before breaking through the glass ceiling. Fiorina, 47, who embarks on a final round of meetings and speeches this week, is confident enough of success to have printed new pay cheques, designed a website and planned celebrations of the union. She says the merger will close by 1 April. Hewlett, a 57-year-old who plays 10 instruments, writes sophisticated computer code and is a 15-year veteran on the board, has expressed concern that the merger will expose the company to the weaknesses of Compaq and its increasingly low-margin PC business. His slogan has been: "A $25 billion mistake is not the HP way." Hewlett believes the merger is too dilutive for shareholders, causes an unfavourable product mix, is too risky and does not address Hewlett-Packard's strategic challenges. He claims the company should adopt a "focus and execute" strategy that spins off the lucrative printing business, selective participation in the embattled personal computer market and shores up the enterprise division with targeted moves in software and services. By doing this the company could offer $14 to $17 more value per share. According to Fiorina, the purchase would create a leader in markets ranging from PCs to imaging. It would also be a leader in the lucrative IT services industry. There would also be $2.5 billion annual costs savings by 2004. Supporters of the deal claim it would boost profits 30 percent to $5.6 billion by 2003 compared to 10 percent earnings growth for an independent Hewlett-Packard that would reach about $3.4 billion in net income next year. The combined company would have two major cash generators in the $9 billion ink-cartridge business earning $2 billion a year and computer repair business earning about $1 billion annual profits. Latest earnings research estimates that Hewlett-Packard would do better in the short term by staying alone but that long-term its product range and productivity could be enhanced. But whether it could become a computer colossus or another merger mess, such as the Compaq/Digital Equipment deal, is a big caveat given the poor track record of sector link-ups. According to Patrick McGurn, a vice-president at ISS, it was the key factor that made them endorse the deal. McGurn said: "We were looking at not only was this a good idea, but could they accomplish this, could they meet the cost savings that they were promising to meet and was this the right management team to execute the plan that was in place." The stakes are also high for Fiorina and Walter Packard. Her job and status as one of the most powerful women in the corporate world could be determined by the fate of the merger. If Hewlett loses, there is little likelihood he will be on the board. Hewlett-Packard shareholders will vote on 19 March, Compaq's the day after. US anti-trust regulators are set to approve the deal by then. -----

To: hlpinout who wrote (95942)	3/11/2002 6:37:13 PM
From: hlpinout	Respond to of 97611

Better than a soap opera. -- HP and Compaq customers left out in the cold By Scott Morrison in San Francisco Published: March 11 2002 19:48 \| Last Updated: March 11 2002 22:43 While Hewlett-Packard appears to have a fighting chance to win shareholder approval for its $23bn bid for Compaq Computer, there is less evidence the two companies have succeeded in selling their proposed merger to customers. The latest indication of customer sentiment was provided by Merrill Lynch on Monday in a poll that found more HP and Compaq customers were against the deal than in favour of it. HP and Compaq hotly contest suggestions that customers do not support the proposed merger and HP said its better-than-expected results over the past two quarters indicate customers were standing by the company. Merrill's survey of 100 chief information officers in the US and Europe found that 25 per cent of Compaq customers backed the deal, while 46 per cent were against it and 29 per cent were neutral. Among HP customers surveyed, 26 per cent were in favour of the deal, 42 per cent opposed it and 32 per cent were neutral. Steven Milunovich, technology strategist at Merrill and a supporter of the deal, said his firm's survey suggested customers were underestimating the potential of the merger and overestimating how successful the companies would be as stand-alone corporations. However, the Merrill survey is only one of several recent polls that reveal a negative customer bias towards the deal. A recent survey from Ziff Davis, the technology publishing group, found that most customers were not supportive of the merger plan. The poll of more than 1,000 senior executives, CIOs and other IT professionals, also suggested the companies have not done an adequate job of explaining the merger to clients. ComputerWorld, the trade magazine, conducted two parallel surveys that found less than 20 per cent were for the deal, about 27 per cent were against and about 54 per cent were neutral. The results of these four surveys were contrasted by findings in two other customer polls. HP has touted a survey by Technology Business Research, and another conducted for Andersen, which found more users were in favour than against. The common thread in almost all surveys was that customers appeared unsure of how the deal would affect them. "The problem for users is that HP and Compaq have been so caught up in convincing financial analysts, that they have forgotten about customers," said one industry observer. Others pointed out that HP and Compaq have been legally prevented from providing product line details until after the merger is approved by shareholders. However, HP said customers were excited about the company's ability to provide a broader range of products and services after the merger. Interex, the largest group representing HP customers, has said its board was coming out in support of the deal, which has also been endorsed by one group representing users of Compaq's high-end computers.