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Hewlett Closed Out From HP's Board

4/01/2002 12:27:00 PM Eastern

Cupertino, Calif. - Hewlett-Packard and Walter Hewlett traded blows during the past few days with HP's deciding not to reappoint Hewlett to its board and Hewlett filing a law suit to stop the proposed HP/Compaq merger.

The HP board of directors nominating committee said it met with Hewlett, son of HP co-founder William Hewlett and a vigorous opponent of the merger, met with him on March 19 and March 27 in order to re-establish a good working relationship, but were unsuccessful.

'The board's decision not to nominate Walter Hewlett is based on his ongoing adversarial relationship with the company, as evidenced by his recent litigation against HP, as well as concerns about his lack of candor and issues of trust,' the board stated in a written release.

Hewlett could not be reached for comment and the web site he established to fight the merger, www.votenohpcompaq.com, did not have a response to the board's decision posted.

HP shareholders went to the polls on March 19 to vote on the $21 billion deal that would have HP absorb arch rival Compaq, but the vote was too close to call and a final count is still being conducted. HP CEO Carly Fiorina has declared victory, albeit by only a few percentage points, while Hewlett said it is too close to call. Compaq's shareholders passed the deal on March 20.

On his part, Hewlett last Thursday filed a complaint in the Delaware Chancery Court concerning the process by which HP solicited votes for the approval of the proposed merger with Compaq, particularly from large institutional stockholders, including Deutsche Bank. The William R. Hewlett Revocable Trust was listed as co-complainant. Hewlett did ask that the court expedite its proceedings so as to not delay the final tally in the March 19 HP shareholder vote that will decide whether HP will merge with Compaq.

In a written release HP called the legal action baseless.

'We believe this suit is completely without merit and intend to vigorously defend it. We find it regrettable that Mr. Hewlett has chosen to resort to baseless claims without regard to the impact of his false accusations on HP's business reputation and employees. We continue our progress in planning for a successful integration of our merger with Compaq. We look forward to the receipt of the certified vote result from the HP shareowner meeting, which we expect within a few weeks.'

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