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
On September 4, 2001, Hewlett-Packard Company sent an email message to
all of its employees. The text of the email message follows.
Dear HP colleague,
Today is a historic day for our industry. Today is an important day for HP's
customers. And today is an exciting day for you, as a member of this team and
this company.
The people of HP and the people of Compaq are joining forces--we've agreed to
merge our two companies to create an even more capable organization to serve
our customers. We believe that by joining with Compaq we can provide them
more choice, more freedom, and more flexibility so that they can make the
most out of their past, current, and future technology investments.
For our employees, I think it's a rare chance to be part of an
industry-changing team--a company with the reach and capability and expertise
to fundamentally change how technology transforms business and daily life. We
have an opportunity to create a world where technology works for people-not
the other way around.
A significant leap forward in achieving our strategy
This merger greatly accelerates our journey--our journey to reinvent HP, our
journey to offer not just great products but great solutions, our journey to
become a more customer-focused organization, and our journey to transform
ourselves into an indisputable market leader.
From the beginning, we have had the ambition to be #1 or #2 in every market
in which we compete. What's new with this era, is that we also have an
opportunity to lead the industry and our customers to a new model of
computing--a model of computing based on industry-standard, market-unifying
technologies and architectures.
As I have said time and time again, this is a company with a big culture, a
big brand, a big legacy, and big ambitions. Today's news certainly delivers
on every dimension. With this one move, we:
- Extend our lead as the #1 leader in imaging and printing--with more
opportunities and even more experience in competing along the full
spectrum of solutions. Compaq brings not only its customer base, but
specifically also deep expertise in competing in highly competitive
markets.
- Extend our lead as the #1 consumer IT solutions company in the world.
- Catapult HP into the #1 small- and medium-business IT solutions company.
- And, for the first time in a very long time, IBM will have a competitor
that's strong enough, bold enough, and talented enough to take them
head-on in the enterprise space.
Our structure:
The new organization--the end state five to eight months from now
Let me talk about what I envision our company will look like five to eight
months from now; it customarily takes this amount of time to gain approval to
merge two companies of this size. (I will circle back to this point in a
moment, in that I want to be certain that HP stays our course during this
time.)
Our goal has been--and in the new organization will continue to be--to
structure in a way that enables us to both deliver superior customer
experiences, as well as superior products and solutions. Both HP and Compaq
have moved to a front/back organizational model. When we merge the two
companies after we gain approval on the merger, we will build on our shared
front/back structures-but we will evolve the model. We will have four primary
businesses in the company-and our goal is to have at least 80% of the
"front/back motions" contained within any given organization. By putting the
key processes and the key decisions under a single leader in each unit, we
will achieve more accountability and crisper decision-making. That said, the
20% of the front/back processes and efforts that will be shared between
organizations requires and that we maintain a high commitment to
collaboration.
The four main units of the new HP will be:
- IT Infrastructure: By combining the server, storage, and software
capabilities of Compaq and HP, we can offer you an even more compelling
solution-servers (from industry standard servers to high-end,
fault-tolerant systems) that are designed to specifically address the
evolving nature of an always-on Internet infrastructure. Management
software that allows our customers to optimize, manage, and monitor
their entire network. Storage solutions that allow them to manage 10
times the data without adding to the payroll. And the services and
support expertise to help them design, build, and keep it running.
This will be a $23 billion business, lead by Peter Blackmore, currently
Executive Vice President of Sales and Services at Compaq.
- Services: Let's spend a little more time on services. We will have
deeper and broader capabilities in consulting, outsourcing, and support--to
help you strategize and manage your infrastructure. With more than 65,000
professionals around the globe in the new HP Services organization, we
want to be the partner of choice in architecting the enterprise. By
combining forces, we become a top-tier services provider--offering a true
choice in how large companies strategize and implement IT projects. As a
new kind of industry leader that values partnerships, we plan to be the
partner of choice for consultants and systems integrators as well--
PricewaterhouseCoopers, Accenture, and KPMG. This $15 billion business
will be led by Ann Livermore.
- Access Devices (PCs, handhelds, and new kinds of Internet-access
devices): By combining two strong businesses into one, we plan to offer
our customers a broader range of PCs, handhelds, and other Internet-
enabled devices--via the channel that best meets their needs (directly
from us, from our partners, or from retailers around the globe).
Products that "simply work better together." Devices that will enable
people to work the way they want to work in the office, at home, or
on the move. This $29 billion business will be led by Duane Zitzner.
- Imaging and Printing: We remain committed to one of our core
strengths--our expertise in recording, sharing, storing, and printing
information, memories, documents, and ideas. In fact, in the next several
weeks, you'll see us make some announcements on this front that will
prove our commitment and leadership in this area--and improve the ways
customers can use information to empower their organization and enhance
their relationships with their customers. This $20 billion business will
be led by Vyomesh Joshi ("VJ").
I will serve as Chairman and CEO. And Michael Capellas will join the new HP
as President. The CFO of the combined company will be Robert Wayman. I will
name the additional executive leaders in upcoming communications with you.
The integration team: Drawing on the best strengths of both organizations
As exciting as all this news is, I also want you to know that I realize the
challenges of integrating these two great companies: We are both in the
middle of our own reinvention efforts. We both must continue to run our
businesses, while planning for integration. We both do business in highly
competitive market segments that will be unforgiving of missteps or slowed
decision making or response times.
We will tackle the challenge of integrating this organization with
discipline, decisiveness and focus.
That's why I've asked Webb McKinney to head up the integration effort along
with Jeff Clarke, Compaq's Chief Financial Officer. They will lead an
integration office responsible for planning the integration--allowing our line
managers within HP to focus on running the business, with minimal distraction.
We already have several things working in our favor:
- We have a comprehensive integration plan.
- We've already done much of the strategic work required to make smart
decisions about how to evolve our solutions sets in the combined company--
and our goal will be to provide roadmaps to our customers to make their
transition a smooth one.
- We have the top managers selected and retention contracts in place--so
we can retain key talent.
- We've hired outside experts with deep experience in integration efforts
of this scale.
What this means for you: Stay focused.
As I said, this merger is a game-changing move in our industry.
Our competitors are going to use every chance they can to discredit it:
They'll say we'll lose focus, they'll say we won't be able to execute,
they'll say we won't be able to make the tough decisions fast enough.
I believe we will prove them wrong.
Despite today's very exciting news, it's vitally important that, until your
manager tells you otherwise, stay focused. Focused on what you're doing now.
Focused on running the business. Focused on serving customers and beating the
competition. We must continue to meet our financial commitments, so that we
can reap the benefits of this merger long term.
As I said in the beginning of this communication with you: This is a historic
day. There is much to celebrate. Congratulations, HP. It's great to be part
of this team.
Warm regards,
/s/ Carly
Carly
Additional Information and Where to Find It:
HP and Compaq intend to file with the SEC a joint proxy statement/prospectus and
other relevant materials in connection with the transaction. The joint proxy
statement/prospectus will be mailed to the stockholders of HP and Compaq.
Investors and security holders of HP and Compaq are urged to read the joint
proxy statement/prospectus and the other relevant materials when they become
available because they will contain important information about HP, Compaq and
the transaction. The 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, 650-857-5020. 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
joint proxy statement/prospectus and the other relevant materials when they
become available before making any voting or investment decision.
HP and its executive officers and directors may be deemed to be participants in
the solicitation of proxies from the stockholders of HP and Compaq in favor of
the transaction. A list of the names of HP's executive officers and directors,
and a description of their respective interests in HP, are set forth in the
proxy statement for HP's 2001 Annual Meeting of Stockholders, which was filed
with the SEC on January 25, 2001. Investors and security holders may obtain
additional information regarding the interests of HP's executive officers and
directors in the transaction by reading the joint proxy statement/prospectus
when it becomes available.
Compaq and its executive officers and directors may be deemed to be participants
in the solicitation of proxies from the stockholders of Compaq and HP in favor
of the transaction. A list of the names of Compaq's executive officers and
directors, and a description of their respective interests in Compaq, are set
forth in the proxy statement for Compaq's 2001 Annual Meeting of Stockholders,
which was filed with the SEC on March 12, 2001. Investors and security holders
may obtain additional information regarding the interests of Compaq's executive
officers and directors in the transaction by reading the joint proxy
statement/prospectus when it becomes available.