Filed by Hewlett-Packard Company Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-6
Under the Securities Exchange Act of 1934
Subject Company: Compaq Computer Corporation
Commission File No.: 333-73454
This filing relates to a planned merger (the "Merger") between Hewlett-Packard
Company ("HP") and Compaq Computer Corporation ("Compaq") pursuant to the terms
of an Agreement and Plan of Reorganization, dated as of September 4, 2001 (the
"Merger Agreement"), by and among HP, Heloise Merger Corporation and Compaq. The
Merger Agreement is on file with the Securities and Exchange Commission as an
exhibit to the Current Report on Form 8-K, as amended, filed by Hewlett-Packard
Company on September 4, 2001, and is incorporated by reference into this filing.
The following is an article relating to the Merger. This article is posted on
HP's internal web site.
SOUTHERN WELCOME
CARLY, ANN TALK MERGER WITH ATLANTA EMPLOYEES
CEO Carly Fiorina's first visit to Hewlett-Packard's Atlanta site February 22
drew nearly 500 employees on a sunny Georgia afternoon. HP Services (HPS)
President Ann Livermore joined Carly for the session, which several hundred more
employees watched from the neighboring Alpharetta and Barrett sites.
The Atlanta-area sites are home to the company's primary data center, customer
outsourcing center and critical customer support operations. Employees come
primarily from HPS, with smaller numbers from the Business Customer
Organization.
Ann launched the coffee talk by thanking employees for a "fabulous first
quarter." She lauded the North American team in particular, drawing out the
consulting, outsourcing and customer support businesses for recognition.
A LEADING SERVICES PLAYER
The HPS leader went on to discuss what the HP-Compaq merger will mean to
employees in the services business. "The main thing that I hope you take away is
that it dramatically accelerates the implementation of our business strategy to
become one of the leading services players in the industry," she said.
The merger, Ann went on to say, will allow HPS to make progress on several
strategic initiatives it identified last summer: build scale, improve cost
structures, bolster solution-selling skills and build market presence.
HP's services business will also benefit from the merger for five key reasons,
she added:
o "Bigger is better" -- this scale is important to customers;
o Support is a "beautiful business," delivering high net profit;
o The new HP will have "unbelievable" mission-critical capabilities;
o HP will offer leading multi-technology skills; and
o HP and Compaq will benefit from complementary vertical market
capabilities.
STRENGTHENING THE COMPANY
Carly echoed Ann's thanks to employees for a successful first quarter, as well
as for their efforts and focus during the past 18 months.
In addition to benefiting services, the HP-Compaq merger will allow imaging and
printing to continue to flourish by expanding its presence in markets such as
digital publishing and digital imaging, Carly said.
In the PC business, HP will gain the direct distribution engine it needs to
compete effectively with Dell. And HP will dramatically improve its market
position in enterprise computing, she added.
"This company should lead," Carly said. "This company must lead. It is what our
legacy prepares us to do, and that is why we fight so hard."
WHAT ABOUT THE PHONE CALLS?
During the Q&A session, an employee asked Carly about the PROXY SOLICITATION
CALLS [link to article, entitled "Telephones are Ringing", featured on HP's
internal web site and filed by HP with the Securities and Exchange Commission on
February 21, 2002 pursuant to Rule 425 under the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-6 under the Securities Exchange Act of 1934]
some employee shareowners have received about the merger. She explained that
during a proxy contest, each side hires a "proxy solicitor" to handle
distribution of materials, to ensure shareowners have received the materials and
to get an indication of how they will vote.
Carly assured employees that any indication of how they would vote would be kept
confidential, but shareowners may always decline to divulge how they will vote.
"Your vote is your business and if you don't feel comfortable telling people how
you're going to vote, don't. Just vote."
POWER OF THE PORTFOLIO
To use HP's portfolio to "drive faster market leadership and greater
profitability," the company will continue to pursue opportunities to "bundle"
products and solutions, as well as continue to go to market in the consumer
space with partners who can represent the whole portfolio.
"We have to go to market in terms of the commercial and the enterprise space
with a sales motion that allows us to capture the power of the portfolio," Carly
said. "So, when we stand in front of a customer, not only are we really able to
go deep into a stand-alone products capability, but we can also go wide and say,
'And here's how the whole portfolio can help you.'"
MORE FEET ON THE STREET
In response to another employee's question, Carly said that the merger would
result in a larger sales force, allowing the company to deploy sales teams "more
deeply into accounts and more broadly geographically."
"We're not retreating back to every product gets its own sales force," she went
on to say. "We will continue to strike the balance between being able to
represent the whole portfolio, solve the customer's problem, and having
specialists. We will maintain a united face to the customer and maintain the
appropriate amount of specializing in each of our key businesses."
HP will continue to focus on and measure the company on the total customer
experience, she added.
SPEED, POWER, PASSION
Ann told employees that, through the integration planning period, the
organization must maintain customer focus. The HP and Compaq teams also are
working on understanding the differences and similarities between the two
services cultures, she said. Based on her involvement with the two
teams, Ann believes Compaq services employees "absolutely love" the HPS standard
of "speed, power and passion."
Successful mergers, Carly added, are those where companies devote the same care
and discipline to cultural integration that they lavish upon tasks such as
product line integration.
Carly closed by thanking employees for their candid questions during the
session, as well as for their hard work with customers. Acknowledging that the
next three weeks prior to the shareowner vote will be challenging at times, she
reminded employees about what the merger means for the company.
"It is about this company leading in the way it can and should and must," she
said. "It is about being realistic about what it takes to lead in an industry
that's changing because customers demand more and more and more. This is about
accelerating our strategy to win."
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements that involve risks,
uncertainties and assumptions. If any of these risks or uncertainties
materializes or any of these assumptions proves incorrect, the results of HP and
its consolidated subsidiaries could differ materially from those expressed or
implied by such forward-looking statements.
All statements other than statements of historical fact are statements that
could be deemed forward-looking statements, including any projections of
earnings, revenues, synergies, accretion or other financial items; any
statements of the plans, strategies, and objectives of management for future
operations, including the execution of integration and restructuring plans and
the anticipated timing of filings, approvals and closings relating to the Merger
or other planned acquisitions; any statements concerning proposed new products,
services, developments or industry rankings; any statements regarding future
economic conditions or performance; any statements of belief and any statements
of assumptions underlying any of the foregoing.
The risks, uncertainties and assumptions referred to above include the ability
of HP to retain and motivate key employees; the timely development, production
and acceptance of products and services and their feature sets; the challenge of
managing asset levels, including inventory; the flow of products into
third-party distribution channels; the difficulty of keeping expense growth at
modest levels while increasing revenues; the challenges of integration and
restructuring associated with the Merger or other planned acquisitions and the
challenges of achieving anticipated synergies; the possibility that the Merger
or other planned acquisitions may not close or that HP, Compaq or other parties
to planned acquisitions may be required to modify some aspects of the
acquisition transactions in order to obtain regulatory approvals; the assumption
of maintaining revenues on a combined company basis following the close of the
Merger or other planned acquisitions; and other risks that are described from
time to time in HP's Securities and Exchange Commission reports, including but
not limited to HP's annual report on Form 10-K, as amended on January 30, 2002,
for the fiscal year ended October 31, 2001 and HP's registration statement on
Form S-4 filed on February 5, 2002.
HP assumes no obligation and does not intend to update these forward-looking
statements.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
On February 5, 2002, HP filed a registration statement with the SEC containing a
definitive joint proxy statement/prospectus regarding the Merger. Investors and
security holders of HP and Compaq are urged to read the definitive joint proxy
statement/prospectus filed with the SEC on February 5, 2002 and any other
relevant materials filed by HP or Compaq with the SEC because they contain, or
will contain, important information about HP, Compaq and the Merger. The
definitive joint proxy statement/prospectus and other relevant materials (when
they become available), and any other documents filed by HP or Compaq with the
SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents
filed with the SEC by HP by contacting HP Investor Relations, 3000 Hanover
Street, Palo Alto, California 94304, 650-857-1501. Investors and security
holders may obtain free copies of the documents filed with the SEC by Compaq by
contacting Compaq Investor Relations, P.O. Box 692000, Houston, Texas
77269-2000, 800-433-2391. Investors and security holders are urged to read the
definitive joint proxy statement/prospectus and the other relevant materials
(when they become available) before making any voting or investment decision
with respect to the Merger.
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