GOVERNMENT

PALO ALTO, CA -- Late last week the David and Lucille Packard Foundation (which holds roughly 10% of HP’s stock) held a board meeting and subsequently announced that it would vote against the proposed merger of Hewlett-Packard and Compaq. Click the link above to view the response of Walter Hewlett and the joint HP/Compaq response. Walter Hewlett Responds to Packard Foundation Decision Mr. Hewlett Intends to Solicit Proxies if Hewlett-Packard/Compaq Merger Brought to Stockholder Vote PALO ALTO, CA --Walter B. Hewlett issued the following statement in connection with The David and Lucile Packard Foundation's announcement of its preliminary decision to vote its shares of Hewlett-Packard Company (NYSE: HWP) against the proposed merger of Hewlett- Packard and Compaq Computer Corporation (NYSE: CPQ) if the transaction is brought before Hewlett-Packard's stockholders for a vote: "I am pleased that after completing its analysis, The Packard Foundation has preliminarily decided to vote its shares against the proposed merger of Hewlett-Packard and Compaq. The Foundation's decision supports the conclusion reached by the independent stock committee of The William and Flora Hewlett Foundation and the fiduciaries of The William R. Hewlett Revocable Trust -- Hewlett-Packard can create greater value for stockholders as a stand alone company than as a company combined with Compaq. "I am confident that partnering with Compaq will not give Hewlett-Packard what it needs most to create additional stockholder value - expansion of its printer and imaging and higher-end server and services businesses. The combination would dramatically increase the Company's exposure to the unattractive PC business, while reducing stockholders' interest in the profitable printing and imaging business by over one-third. "All signals have been negative for this transaction. In the week following the announcement, stockholder value declined billions of dollars. Additionally, analysts' consensus estimates for Compaq have been reduced by 77% for 2002 EPS - meaning Hewlett-Packard would be paying over 90 times 2002 earnings for Compaq. "Since my announcement on November 6, I have spoken to a number of other significant Hewlett-Packard stockholders, and I believe there is sizable and widespread opposition to this transaction. If Hewlett-Packard and Compaq decide to put this matter to a stockholder vote, I intend to solicit proxies against the transaction." -------------------- HP and Compaq Issue Joint Statement in Response to Packard Foundation Announcement PALO ALTO, CA -- Hewlett-Packard Company (NYSE:HWP) and Compaq Computer Company (NYSE:CPQ) jointly issued the following statement: We are disappointed by the Packard Foundation's preliminary decision. Nevertheless, our responsibility to shareowners, customers and employees requires that we maintain a pragmatic view of the business and a focus on the future. Our firm commitment to this merger stems from our conviction that it will deliver the industry leadership and earnings growth our shareowners expect and our employees deserve. Over the coming weeks and months, we intend to continue communicating its merits to our broad shareowner base.