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 message from Webb Mckinney, HP's President of Business
Customer Organization, discussing integration efforts in connection with the
Merger. This message is posted on HP's internal web site.
INTEGRATION OFFICE UPDATE
MESSAGE FROM WEBB MCKINNEY
November 7, 2001
The primary goal in the first update from the Integration Planning Office was to
provide an overview of the key integration planning principles, the roles and
relationships of the different integration teams, and the legal regulations that
determine what we can and can't do and say.
This second update summarizes some of the planning activity already under way
and focuses on a key area where integration planning is set to begin.
INTEGRATION PLANNING PROGRESS
The core planning team is now nearly complete. We've made significant strides
toward establishing a comprehensive timeline that identifies our top-level
milestones and interdependencies through the regulatory and shareowner approval
phases of the proposed merger. Carly and Michael have said more than once that
they intend for the new company to hit the ground running as soon as the merger
is complete. We need to be ready to do business on Day 1. Therefore, our primary
tactical goal is to have all integration planning activities completed by the
beginning of February with our Day 1 deliverables for customers, employees and
partners in place. As we have said before, we anticipate the deal will close
during the first half of 2002.
Much of the key integration planning for the businesses and functions is under
way. In addition to building planning teams that represent both HP and Compaq,
the team leaders are ensuring that their teams' milestones, interdependencies
and financial goals are all closely aligned with corporate plans and targets.
The Integration Teams have been working hard during the past few weeks to make
sure we do all the planning necessary for the new organization to begin
executing on Day 1, after the merger closes. In order to achieve that goal,
we're working on plans that would align each of the four operating units and the
new company as a whole, around customer needs, focused business strategies and
go-to-market models that will enable us to compete aggressively and effectively
against a diversified competitor like IBM, or more focused competitors like EMC,
Sun and Dell.
INTEGRATION LEADS
One of our key integration principles is to start with the customer experience
and ensure obsessive customer focus. In line with this objective, we have begun
appointing go-to-market leads. Both the Business Customer Organization (BCO) and
the Consumer Business Organization (CBO) leads will be appointed in the next
couple of weeks. These integration leads will be tasked with ensuring our TCE
and "one face to the customer" ideologies remain in the forefront as we plan
organizational design, channel and sales programs, as well as product, service
and support offerings for the merged company.
The process we are using to build the integration team is to appoint integration
leads to mirror the organizational structure for the new HP. For example, Rich
Archuleta has been appointed by Duane Zitzner to lead the integration planning
activities for the Access Devices Business. Rich is building a balanced team
that includes both HP and Compaq members to assist him in this effort.
In addition to those folks already named as part of the Integration Office in my
first update memo [filed with the Securities and Exchange Commission by HP on a
Form 425 dated October 16, 2001 and posted on HP's internal web site], the
following new HP team members have been added and are already hard at work on
integration planning for key areas:
o Pete Karolczak -- Information Technology
o Bob Shultz -- Finance
o Jon Flaxman -- Value Capture
o Laine Meyer -- Real Estate
o Peter Van Naarden -- Communications and Branding Functional
Integration
o Wendy Citron -- Brand Integration
o Ed Yang -- Enterprise Systems
Also joining the Integration Program Management Office are: Barbara Braun, Mike
Dougherty, John Bender, Jim Arena, Bob Chin, Michael Starbird-Valentine, Tanya
Capuano and Morris West. For a complete list of Integration Office team members
please see [HP's internal web site].
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FOCUSED PRIORITIES
In addition to business and functional integration planning, we are also
devoting a considerable amount of attention and energy to the cultural aspects
of the proposed merger.
We recognize that integrating two cultures -- each with its own distinct
heritage -- is a challenge. But the success of the combined company depends on
building a strong, common culture. This is vital in order to establish the new
HP as the employer of choice, partner of choice and solutions provider of
choice.
The initial work done by the culture planning team indicates that the HP and
Compaq cultures share a number of attributes. We are guided by many of the same
beliefs, principles and values, such as innovation, teamwork, and trust,
integrity and respect for the individual.
Moreover, we are both committed to making a positive difference in the
communities where we work and live, and we are both committed to making customer
focus and customer value an essential ingredient of our value proposition. We
will continue to update you on our culture work as new information becomes
available.
MERGER COMMUNICATIONS
Communications is also a critical part of the work we're doing. A formal merger
communications team has been established to ensure effective communication to
all of our internal and external audiences. Our key stakeholders need to
understand the benefits of the proposed merger and the value we will deliver to
them. The communications team will work in close collaboration with the
Integration Planning Office.
We know the rumor mill is alive and well -- internally and externally -- so
please keep in mind that you should not consider any merger-related information
official that is not issued by Carly Fiorina, Michael Capellas or the
Integration Office. This includes organizational announcements, as well as
specific product and business details.
We had planned to communicate the next level of senior executives in the
business groups and operations organization. But we concluded that publicly
discussing the organization at that level of detail might complicate the
regulatory review process. Therefore, additional organizational announcements
are not planned until early 2002. You can read previous announcements about
leaders named on SEPTEMBER 3 and OCTOBER 12. See [HP's internal web site].
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Another appointment we made on September 3rd has not been as widely
communicated. Mike Winkler will serve as Executive Vice President, Operations,
in the new company, reporting to Michael Capellas. Mike is currently Compaq's
Executive Vice President, Global Business Units.
Mike and his team will lead our global supply chain, e-commerce and global
alliance activities. His organization will ensure the development of an
industry-leading, end-to-end supply chain across the company, including
world-class e-commerce and direct capabilities, strong customer relationship
management systems, and efficient supplier relationships. The operations
organization will be tightly aligned with each global business group to help us
execute with maximum efficiency and consistency across all of the businesses.
The continued excitement and interest around the proposed merger with Compaq is
great, and I realize that many of you are eager to begin teaming with employees
at Compaq in preparation for the new company. While I appreciate your
enthusiasm, I must remind you not to become involved in planning for the
integration or sharing information with Compaq unless you receive a specific
request from a member of the Integration Office. Please keep in mind over 99% of
HP is not working on merger-related planning. The best way to contribute to HP's
success is to stay focused on winning in the market place and delivering
outstanding business results.
If anyone other than a member of the Integration Office requests that you
participate in merger-related activities, or if you have any questions regarding
legal ramifications, please contact Joyce Norcini (telnet 857-8851).
Remember, a violation of the legal restrictions surrounding the announced merger
could impede its approval by the Securities and Exchange Commission, Federal
Trade Commission, or European Commission.
CONCLUSION
We've accomplished a lot of important work since the merger was announced in
early September. Most of the key integration teams have already started their
planning activities, and a few other important teams will get going shortly. The
major deadline -- completing our integration planning by the beginning of
February -- has been set and
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communicated, and the high-level milestones and objectives are in place.
Although we can't make all the integration planning details more visible to you,
I want to assure you that the Integration Office and the various integration
teams believe that care and thoroughness are as important as speed. I also want
to thank you again for your patience, support and encouragement in our ongoing
effort to make the new HP a leader in our industry.
--Webb
For additional information regarding the proposed HP-Compaq merger or to send
the Integration Office questions, please visit [HP's internal website].
See [HP's internal web site].
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.
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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
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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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