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 a series of frequently asked questions and answers relating to
the Merger and is directed to HP employees. This FAQ is posted on HP's internal
web site.
1. CAN YOU PROVIDE MORE INFORMATION ON THE 15,000 WORKFORCE REDUCTIONS MENTIONED
BY THE MEDIA?
We currently estimate headcount reductions of approximately 15,000, or about 10
percent of the COMBINED workforce, will occur during the first two years after
the merger closes. This will be achieved through a combination of targeted job
reductions and attrition. The reductions will be in addition to those announced
previously by HP and Compaq. Both companies will be impacted, but at this early
stage, we cannot provide specific breakdowns for HP and Compaq. In countries
where consultation with workers' councils, trade unions and governmental
authorities is required, no decisions will be made until the consultations are
complete.
During the period between now and the closing, HP will continue to make
decisions that may involve further reductions in staffing levels in defined
areas of the company. Actions taken may include decisions that are considered
"business as usual" for HP, such as consolidations, decisions to exit particular
businesses and divestitures/outsourcing.
2. HOW WILL THIS MERGER ANNOUNCEMENT AFFECT THE WORKFORCE REDUCTION PROGRAM IN
COUNTRIES THAT ARE STILL FINALIZING THEIR PLANS AND HAVE NOT ENTERED THE
IMPLEMENTATION STAGE?
As the merger will not be final for approximately 5-8 months, the announcement
should have no effect on the planning and implementation of the current
Workforce Reduction Programs. In countries where implementation has not yet
begun, HP will continue to consult with workers' councils, trade unions and
governmental authorities as required.
3. PRIOR TO THE MERGER CLOSING, WHAT SHOULD WE FOCUS ON? HOW SHOULD WE INTERACT
WITH COMPAQ?
During this time, it is crucial that you keep doing what you've been doing,
unless the Integration Office instructs you differently. Subject to regulatory
and shareholder approvals and customary closing conditions, the transaction is
expected to close in the first half of 2002.
Employees should follow these guidelines until the deal clears government review
and the merger is complete:
o Don't share confidential information with anyone outside HP, including
Compaq;
o Write carefully. Do not create documents that discuss the transaction or
Compaq. This applies to all written materials, e-mails, bulletin boards
and
chat rooms. Remember, every such writing will need to be submitted to
the government during the merger review process;
o Don't make joint sales calls with Compaq;
o If you do not currently have a relationship with Compaq, do not form one.
If you do have an existing relationship, do not expand it; and
o Do not make statements about which products or employees will survive the
merger.
More information about the PRE-MERGER "DO'S AND DON'TS" may be found on
[HP's internal web site]
4. HOW WILL HP'S BACK-END/FRONT-END ORGANIZATIONAL STRUCTURE CHANGE?
Both HP and Compaq have recently moved to a front/back organizational model,
work that will be built on in the new organization. CEO Carly Fiorina has stated
that the new HP will continue to leverage the front/back model, with the goal of
aligning go-to-market front-end organizations with product-development back-end
organizations as much as possible.
Many employees have had questions about the organizational structure -
consisting of four primary businesses -- that has been announced. Keep in mind
that this organizational structure is not complete at this point, as we have
announced only the product (back-end) organizations at this point. Further
defining the rest of the organizational structure is a high priority for the
Integration Office, which will communicate more information to employees as
appropriate.
5. WHY DOES A MERGER OF TWO U.S. COMPANIES REQUIRE EUROPEAN APPROVAL?
While both Compaq and HP are headquartered in the United States, both companies
also have significant operations in other regions. These non-U.S. operations are
subject to local laws, including local competition laws. Therefore, while U.S.
regulatory approval governs the activities in the United States, foreign
activities remain subject to regional laws and approvals, including European
regulatory approval.
6. SOME ANALYSTS AND MEMBERS OF THE MEDIA HAVE FOCUSED ON THE DIFFICULTY OF
INTEGRATING TWO LARGE COMPANIES. WHAT WILL WE DO TO ENSURE THE INTEGRATION IS
SUCCESSFUL?
First, we have a dedicated senior management team - led by HP's Webb McKinney
and Compaq's Jeff Clarke -- working on the integration. The Integration Office
is committed to making tightly focused decisions -- guided by distinct
milestones and metrics -- with speed and clarity.
We are also looking at and learning from both HP and Compaq's past acquisitions,
as well as analyzing what worked in other large companies.
7. CARLY HAS SAID THAT HP IS IN THE "MIDDLE GAME" OF REINVENTION. HOW WILL THIS
INTEGRATION EFFORT AFFECT THE PROGRESS WE WERE MAKING WITH REINVENTION?
It won't. HP remains committed to its reinvention efforts and the strategic path
the company has outlined. As Carly pointed out in her September 3 announcement,
the merger announcement represents an ACCELERATION of our strategy and a
sizeable step forward in the journey to become a market leader - No. 1 or No. 2
- in every category in which HP competes. In the transition period before the
merger is finalized, we'll continue with our ongoing efforts to be more cost
competitive and effective in front of customers.
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FORWARD LOOKING STATEMENTS
This document contains forward-looking statements that involve risks,
uncertainties and assumptions. All statements other than statements of
historical fact are statements that could be deemed forward-looking statements.
For example, statements of expected synergies, accretion, timing of closing,
industry ranking, execution of integration plans and management and
organizational structure are all forward-looking statements. Risks,
uncertainties and assumptions include the possibility that the market for the
sale of certain products and services may not develop as expected; that
development of these products and services may not proceed as planned; that the
Compaq transaction does not close or that the companies may be required to
modify aspects of the transaction to achieve regulatory approval; or that prior
to the closing of the proposed merger, the businesses of the companies suffer
due to uncertainty; that the parties are unable to transition customers,
successfully execute their integration strategies, or achieve planned synergies;
other risks that are described from time to time in HP's Securities and Exchange
Commission reports (including but not limited to the annual report on Form 10-K
for the year ended Oct. 31, 2000, and subsequently filed reports). If any of
these risks or uncertainties materializes or any of these assumptions proves
incorrect, HP's results could differ materially from HP's expectations in these
statements. HP assumes no obligation and does not intend to update these
forward-looking statements.
Additional Information about the Merger 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 Merger. 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 Merger. 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, 650-857-1501. 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
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 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 stockholders
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 the proxy statement for
HP's 2001 Annual Meeting of Stockholders, which was filed
with the SEC on January 25, 2001. Full participant information may be found in
HP's Form 425 filed with the SEC on September 25, 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 joint proxy statement/prospectus when it
becomes available.
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 stockholders
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 the proxy statement
for Compaq's 2001 Annual Meeting of Stockholders, which was filed with the SEC
on March 12, 2001. Full participant information may be found in Compaq's Form
425 filed with the SEC on September 17, 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 joint proxy statement/prospectus when it becomes available.
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