Filed by Hewlett-Packard Company Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Compaq Computer Corporation
Commission File No.: 1-9026
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 email message to Compaq employees from Michael D. Capellas,
Compaq's Chairman of the Board and Chief Executive Officer, regarding the
Merger. The message is posted on HP's internal web site.
TO: COMPAQ GLOBAL TEAM
During the next day or two, you will see news reports about a letter that Walter
Hewlett is sending to HP shareholders urging them to vote against the proposed
Compaq/HP merger.
Compaq and HP will begin mailing our joint proxy/prospectus to shareholders on
Wednesday, and we plan an aggressive campaign to communicate with shareholders
and win their support for the merger. The special shareholder meetings will be
held on March 19 (HP) and March 20 (Compaq).
We are more convinced than ever that this merger is the best way to increase
value for employees, customers and shareholders. It will enable us to achieve
three strategic objectives:
o Expand our enterprise capabilities across products, software and solutions.
HP's strength in data center UNIX and management software together with our
strengths in industry standard servers, enterprise storage and high
performance computing will give us the richest enterprise portfolio in the
industry.
o Grow and achieve critical mass in global services. We will double the size
of our service business and extend our reach into new markets and growth
opportunities.
o Improve the economics of the PC business while driving innovation in new
markets and new categories of devices.
In his letter, Walter Hewlett quotes me as saying that the PC business is a
"rotten business."
He took those words from the transcript of an employee broadcast that I did with
Carly Fiorina, HP's Chairman and CEO, in California on Dec. 4. Here is what I
said:
"If you think of the world of the PC business as the standard, all-beige box,
then I think it is a rotten business. If you think of what the next generation
[of access will be], this is all about creating the next generation of consumer
Internet experience. The combination of where the Internet will be is that
intersection point between the Internet, distributed and very, very rich
content, starting with music, extending out into [audio] and video . . . Think
of what we can do in the future."
The fact is that the PC business is a strategic business, with significant
opportunities for growth and profitability. I'm proud of the progress we've made
in our PC business under difficult circumstances. I'm proud of the outstanding
record of innovation that our PC team continues to build. And I'm proud that
this will continue to be a strategic business in the combined company.
This merger is about the future of computing -- not the past. It is about
building on the complementary strengths of two great companies. It is about
industry leadership. It is about creating significant value for customers based
on a rich portfolio of technology and a clear understanding of customer needs.
We remain confident that shareholders will see the compelling value in this
combination and will vote to support the merger.
Michael
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 will be sent to the security holders
of HP and Compaq on or about February 6, 2002 seeking their approval of the
proposed transaction. 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.
HP, Carleton S. Fiorina, HP's Chairman of the Board and Chief Executive Officer,
Robert P. Wayman, HP's Executive Vice President, Finance and Administration and
Chief Financial Officer, and certain of HP's other executive officers and
directors may be deemed to be participants in the solicitation of proxies from
the shareowners of HP and Compaq in favor of the Merger. The other executive
officers and directors of HP who may be participants in the solicitation of
proxies in connection with the Merger have not been determined as of the date of
this filing. A description of the interests of Ms. Fiorina, Mr. Wayman and HP's
other executive officers and directors in HP is set forth in HP's annual report
on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October
31, 2001. Investors and security holders may obtain more detailed information
regarding the direct and indirect interests of Ms. Fiorina, Mr. Wayman and HP's
other executive officers and directors in the Merger by reading the definitive
joint proxy statement/prospectus filed with the SEC on January 5, 2002.
Pursuant to an engagement letter dated July 25, 2001, HP retained Goldman, Sachs
& Co. ("Goldman Sachs") to act as its financial advisor in connection with the
Merger. In connection with the engagement of Goldman Sachs as financial advisor,
HP anticipates that employees of Goldman Sachs may communicate in person, by
telephone or otherwise with certain institutions, brokers or other persons who
are shareowners for the purpose of assisting in the solicitation of proxies in
favor of the Merger. Although Goldman Sachs does not admit that it or any of its
directors, officers, employees or affiliates is a "participant," as defined in
Schedule 14A under the Securities and Exchange Act of 1934, as amended, or that
Schedule 14A requires the disclosure of certain information concerning them in
connection with the Merger, Gene Sykes (Managing Director), Matthew L'Heureux
(Managing Director), George Lee (Vice President) and Jean Manas (Vice
President), in each case of Goldman Sachs, may assist HP in the solicitation of
proxies in favor of the Merger.
Compaq and Michael D. Capellas, Compaq's Chairman and Chief Executive Officer,
and certain of Compaq's other executive officers and directors may be deemed to
be participants in the solicitation of proxies from the shareowners of Compaq
and HP in favor of the Merger. The other executive officers and directors of
Compaq who may be participants in the solicitation of proxies in connection with
the Merger have not been determined as of the date of this filing. A description
of the interests of Mr. Capellas and Compaq's other executive officers and
directors in Compaq is set forth in Compaq's annual report on Form 10-K for the
year ended December 31, 2001. Investors and security holders may obtain more
detailed information regarding the direct and indirect interests of Mr. Capellas
and Compaq's other executive officers and directors in the Merger by reading the
definitive joint proxy statement/prospectus filed with the SEC on February 5,
2002.
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