³ a Study on Market Potential of Hp Computer: with Reference To

A Project on

³͞A Study on Market Potential Of hp computer: With Reference to Business to Business and Business to Customer market͟

Submitted in partial fulfillment of the requirement of

Master of Business Administration, Distance Education

Guru Jambheshwar University of Science & Technology, Hisar

Research Supervisor: Submitted by : NAME: Ms. Sonali Saxena NAME: Soumya Nath Mondal DESIGNATION: Lecturer Enrolment no - 08061148633 Specialization- Marketing

Session 2008-10 Directorate of Distance Education Guru Jambheswar University of Science & Technology Hisar (India)

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CERTIFICATE

This is to certify that Mr. SOUMYA NATH MONDAL Enrolment No.08061148633 has proceeded under by supervision his Research Project Report on ͞A Study on Market Potential Of hp computer:With Reference to Business to Business and Business to Customer market͟ in the specialization area Marketing.

The work embodied in this report is original and is of the standard expected of an MBA student and has not been submitted in part or full to this or any other university for the award of any degree or diploma. He/she has completed all requirements of guidelines for Research Project Report and the work is fit for evaluation.

Signature of Supervisor/Guide (with SEAL)

NAME SONALI SAXENA DESIGNATION LECTURER ORGANIA TION NSB SCHOOL OF BUSINESS

Centre NSB SCHOOL OF BUSINESS Forwarded by Head/Director of Study (with signature, Name & SEAL)

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DECLARATION

This is to certify that the Project Report entitled͞A Study on Market Potential Of hp computer: With Reference to Business to Business and Business to Customer market͟ is an original work and has not been submitted is part or full to this or any other university/institution the award of any degree or diploma.

Signature of candidate

NAME: SOUMYA NATH MONDAL ENROLMENT NO.:08061148633 SPECILIZATION: MARKETING SESSION:JULY2008-10

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Index

S. no. Content Page no. 1 Title of the Project 5

2 Introduction and Rationale of The Topic 6

3 (a)Industry Profile 10

(b)Company Profile 18

3 Literature Review And Problem Formulation 50

4 Objectives 51

5 Research Design 52

6 Theoretical Framework 57

7 Data Analysis And Interpretation 74

8 Findings 108

9 Recommendations 111

Conclusion 114

9 Bibliography 116

10 Appendix 118

a. Questionnaire

b. List of Companies 119

c. Raw Data 120

d. Annual Report 125

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Title of the Project:

͞A Study on Market Potential Of hp computer: With Reference to Business to Business and Business to Customer market͟

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INTRODUCTION AND RATIONALE OF THE TOPIC

Every business moto is profit maximization.

Study of market potential is not just important in the short-term. Sufficient profit must be maintained in order to ensure the survival of the business in the long-term as well.

Even a profitable business may fail if it does not have adequate market knowledge as they fall due.

Therefore, when business make investment decision they must not only consider the financial outlay involved with acquiring the new machine or the new building, etc, but must also take account of the additional current assets that are usually involved with any expansion of activity.

Increased production tends to engender a need to hold additional stocks of raw materials and work in progress. An increased sale usually means that the level of profit will increase. A general increase in the firm¶s scale of operations tends to imply a need for greater levels of cash.

The Study of market potential assumes great importance because shortage of funds is perhaps the biggest possible cause of failure of many business units in recent times. There it is of great importance on the part of management to pay particular attention to the planning and control for market.

The goal of Study of market potential is to ensure that the firm is able to continue its operations and that it has sufficient money flow to satisfy both maturing short-term debt and upcoming operational expenses.

Thus the Study of market potential is a formidable one, since it depends upon several variables such as character of the business, the lengths of the merchandising cycle, rapidity of

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turnover, scale of operations, volume and terms of purchase & sales and seasonal and other variations.

The goal of Study of market potential is to ensure that the firm is able to continue its operation and that it has sufficient cash flow to satisfy both maturing short term debt and upcoming operational expenses.

If there is anything that the Indian computer hardware industry has to offer to the various Indian and Multinational Hardware Manufacturing companies, it is growth. Recent MAIT study, conducted jointly with Big Five firm Ernst & Young, concluded that the Indian hardware industry had the potential to reach a size of $62 billion by 2010.

For a country whose economy is so heavily dependent on agriculture, a vibrant hardware industry has the potential to generate three million jobs, especially for Indians who come from economically underprivileged sections, who aren·t very highly educated.

So, in the words of Deshpande, the hardware industry can be some sort of a panacea for India·s unemployment problem. Also, with the size of the contract manufacturing industry expected to be over $500 billion by the year 2010, Indian firms could grab a significant chunk of the pie in a manner pretty similar to India·s emergence as a key player in the global BPO stakes. And, with a potentially huge market in embedded systems emerging, Indian firms with the right mix of hardware and software can be big players here. For the record, of all the high-end processors produced in the world, only 6 percent are used in PCs and the remaining 94 percent are used in entertainment electronics, non-PC devices, communication products and embedded electronics.

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The hardware revolution is also essential for the continued high growth of the software industry. As Vinnie Mehta, director of MAIT, puts it: ´India can lose out on the software advantage it has already built up, and the future potential, if it does not concentrate on the hardware front. For example, the estimated domestic hardware requirement by 2008 to meet the software target of $87 billion is $160 million.µ

With such given potential, the major players in the market like Hewlett Packard, Sony, Lenovo, Dell etc can expect to gain a lot. At the same time, the competition is bound to grow and get intense. Therefore these manufacturers have to take measures to counter competition efficiently.

In order to establish the brand in the minds of the consumer, the manufacturers should ensure that the consumers have a positive perception about the product, product features, quality level, look, design and appearance etc.

This study revolves around studying the various perceptions prospective customers of Hewlett Packard Laptop hold against the brand, its quality, price, correlation between the price and quality etc. The study conducted in Bangalore intends to throw light on the above mentioned parameters such that Hewlett Packard can make necessary decisions based on the findings and suggestions.

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Categories:

Terms sometimes used for subtypes of laptop computers include:

Ultra portables:

Laptops with screens typically less than 12 inches diagonally and a weight of less than 1.7kg. Their keyboards are usually not full-size. Their primary audience is usually business travelers, who need small, light laptops. Ultraportables are often very expensive, have extended battery and/or battery life, house power-saving CPUs and almost always have integrated graphics.

Thin-and-lights:

Laptops usually weighing in between 1.8kg and 2.8kg with a screen size of between 12 and 14 inches diagonally. Examples of this variety: the Sony VAIO FJ, Apple MacBook and Dell XPS M1210.

Medium-sized laptops:

These usually have screens of 14 ² 15.4 inches diagonally and a weight of around 3-3.5kg. They usually sacrifice a little computing power for smaller dimensions and longer battery life, although the length and width are usually determined by the screen size.

Desktop replacement computers:

Powerful laptops meant to be mainly used in a fixed location and infrequently carried out due to their weight and size; the latter provides more space for powerful components and a big screen, usually measuring 17-20 inches. Desktop replacements tend to have limited battery life, rarely exceeding three hours, because the hardware is not optimized for efficient power usage.

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INDUSTRY PROFILE

The laptop, also known as a notebook PC, is no longer a luxury item as against the `wow' effect it had a few years ago. Much like other commodities, it is being displayed on the shelves of big supermarkets and retail shops, moving from the exclusive confines o f exotic showrooms.

Earlier, when the word `laptop' was uttered, one could visualise only executives carrying it. Today all segments, including students and households, are buying these `notebooks'. For people on the move, the laptop has become an indispensable tool. What with overcrowded roads and traffic snarls, the average travelling time in metros such as Mumbai and Bangalore has only gone up. Here, the laptop is a cool tool that helps professionals to keep working and thus save time.

This also helps companies to keep their employees more productive. Industry sources say that desktops which was the "symbol of corporate vanity till the other day are slowly becoming passé with notebooks now the mainstream."

The numbers too capture the growing appeal of the laptop. In the first half of the current financial year, Indians bought nearly 153,000 notebooks, compared to 36,000 units in the same period two years ago, said a recently released performance review of MAIT. It added that the momentum in the Indian notebook market is finally in sync with the global trend, where for the first time in 2005 notebook sales surpassed desktops sales.

This performance was led by the small and medium enterprises (SME) which, in turn, is supplemented by bulk purchases by lar ge enterprises. Consumption by small enterprises grew 118 percent accounting for 17 Page | 10

percent of the total notebook sales to the business segment; sales to medium-sized enterprises grew by 136 percent accounting for 21 percent, MAIT said.

Compared to the first-half of the last fiscal year, sales to large enterprises grew by 102 percent accounting for 61 percent of the total sales in the business segment.

During the period, the desktop personal computer (PC) market grossed 2.34 million units registering a growth of 36 percent over the previous year. During April-September 2005, the ratio of desktop-to- notebook sales declined to 15 from 22 a year ago.

"Clearly, notebooks are competing with desktops with convenience and productivity scoring high", said MAIT adding that notebook sales have also found their way into homes. In first half of 2005 -06, about 16,000 notebooks were sold to the household segment accounting for 13 percent of the total market.

"Notebook sales recorded a high growth of 94 per cent and also found their way into homes. In the first half of 2005-06, about 16,000 notebooks were sold to the household segment accounting for 13 per cent of the total market," MAIT has said, releasing the findings of Industry Performance Review conducted jointly with IMRB.

Piyush Pushkal, Senior Analyst, Computing Products & Channels Research, IDC India, has said in a release, "The momentum in the Indian notebook PC market is in sync with the worldwide trend of acceptance in the

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small and medium-size business segment, supplemented by bulk purchases by large enterprises. Clearly, notebook PCs are providing tough competition to the desktop segment due to the attributes of convenience and productivity."

Hewlett-Packard continues to lead this category with a market share of 42 per cent in unit shipments. Lenovo and Acer are at second and third slots with market shares of 18 per cent and 15 per cent, respectively (market share in terms of unit shipments). HP, along with Lenovo, Acer and Toshiba, grew rapidly in this space mainly due to falling price points, according to IDC.Data for Lenovo includes shipments for IBM PCD (including Desktop and Notebook PCs but excluding x86 Servers and Personal Workstations) starting Q2 of 2005. This reflects the legal status of the companies, which merged during the second quarter of 2005, says IDC.

Spurs that helped:

So what's driving this sudden awareness of notebooks? After all neither notebooks nor laptops are new to the Indian IT users, and just like the desktops, computer makers were trying hard for years to push sales of notebooks too.

Affordability, the increasing demand for mobile computing in a fast growing economy, the growth of wireless telephony in India and adoption of technologies such as wireless, are some of the key reasons for the increase in laptop sales.

"One of the biggest factor pushing sales for notebooks is the affordability factor or reduction in prices" says Rajiev Grover, country category manager, Hewlett-Packard India. "India's personal computer market is undergoing a major transition as premium notebook computers

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are being brought to the mainstream, with almost half the prices, compared with a year ago."

On average, the prices of entry-level notebook computers now range between $800 to a little over $1000 compared to $1500 to over $2000 that prevailed about 12 to 18 months back. Moreover, notebooks now cost only around $200 more than a high-end desktop personal computer, which is also driving many desktop buyers to opt for notebooks.

The Government's step to deregulate the wireless spectrum and de - license wireless technologies such as 802.11b and 802.11g standards has helped too. And the price competitiveness of laptops vis -à-vis desktops has also played a major role, says Dinesh Pai, General Manager, Dell India.

Another important development was the coming in of the zero -duty regime in April last year ³ this has made laptops more accessible for the common man. The Indian customer is benefiting from the latest technology at the lowest price possible. Educational institutions and corporations are opting for laptops with wireless in a big way, says Pai.

However, according to Vinnie Mehta, the executive director of MAIT, another key driver has been the growth of newer professions, that not only require different working styles but also mobile devices for anytime- anywhere computing.

"For instance many type the IT-enabled workers or back office workers like medical transcription workers) need not work out of an old fashioned office anymore. Similarly many financial and marketing sector professionals need to be one the move always," says Mehta.

"The progression actually came from mobile phones, where people in Indiastarted to engage in mobility as a part of their business," he added.

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Falling prices:

Rajendra Kumar, Executive Vice-President, HCL Infosystems Ltd, the domestic PC manufacturer, says the starting price for a laptop now is around Rs 35,000 and it goes up to Rs 1.75 lakh, appealing to a wide spectrum of customers.With laptops being brought into the mainstream at almost half the prices as compared to a year ago, India's computer market is seeing exponential growth. A year ago, an entry -level laptop was at about Rs 45,000. Now it is available for under Rs 30,000. Next year, the laptop market is set for a larger pie of the household share as well, up from 12 per cent in 2005, says Rajiev Grover, Country Category Manager, Consumer Portables, Hewlett-Packard (HP).

India is a price-sensitive market, thus cost is certainly a key buying parameter. Zenith has launched Intel Centrino notebooks priced at Rs 39,990 with DVD combo optical drives, says Devita Saraf, Executive Director, Zenith Computers. Low-cost offerings will be a good catch for first- time laptop users, as a desktop replacement. But, any decision to buy notebooks should be made after considering various parameters.

In August 2004, Zenith launched laptops with the `Power of Seven'. Zenith has 450 dedicated retail stores and plans to grow to 1,000 stores by the end of 2006, says Saraf. Laptops vs desktops

Laptops will not take away the desktop PC. The usage of the two depends on the user profile. Both will co -exist with their own benefits. A desktop has a higher probability of upgrades to increase its life with low maintenance costs, whereas laptop maintenance is higher than the desktop PC's. Even though laptops allow more mobility, they invite more physical security-related issues compared to desktops, he says.While the trend towards mobility will continue to grow, "we believe the PC will never die."

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The future of the PC, as we know it, is in smaller, more compact, lighter designs. The notebook of today is probably the best example of what the home PC will look like in the future, except that it will not cost as much. The other factor at play here is the effect of convergence and information appliances, says Dinesh Pai, General Manager, Dell India.

And all this means that its party time for notebook vendors. But yet another important trend that is emerging from this shift is that while the multinationals notebook vendors are experiencing burgeoning sales, local notebook makers' cash registers aren't really ringing that loud.

"We don't expect notebook sales to matc h our desktops for quite some time," says Raj Saraf, chairman and MD, Zenith Computers, a biggish local personal computer manufacturer that claims to sell "MNC computers and local prices."

And the reason why MNC brand names are outselling local ones is that "we have been scoring one up on the utility factor," said the local spokesperson of Fujitsu PC Asia Pacific. "They (MNC brands) are growing and gaining the choice of the user not just because of the narrowing of the prices between desktop and notebooks but also because we have amalgamated next generation technologies like bluetooth and Wi -Fi with mobile computing to bring more utility to notebooks."

But it is also true that MNCV brands have been more aggressive sellers. "The last couple of years have seen intense price wars, with leading brands including Acer, HP and IBM forever racing to slash the price of their notebooks," says Mehta of MAIT.

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The PC of tomorrow will cease to be a be-all-do-all machine. The home PC would probably morph into a hub for `intelligent' home devices performing very specialised tasks. Add to this the capability brought on by the Internet and you have a laptop-like machine connecting various points around the house with the added element of mobility. However, this will take place over a few decades considering the high -low mix of technology around the world and within boundaries, he says.

Adoption of broadband, wireless and gaming are likely to drive demand for mobility products. Many customers may switch from desktops to notebooks due to better price propositions and the inherent advantages of mobility products, he says. Increasing consumer awareness, combined with the availability of wireless hotspots in educational institutions, offices and hotels, will create an increasingly favourable environment for notebooks, he says.

Spotlight on security:

As more computer users transition to sleek notebooks/ultra sleek notebooks and access networks from remote locations and public wireless networks, user and system security have beco me a top priority. There will be more demands from customers to protect their data, access, and network, he says.

HP plans:

HP is looking at the media and entertainment space in a big way. To address this market requirement, "we recently launched our premium range of Pavilion notebooks. Priced between Rs 50,000 and Rs 70,000, the HP Pavilion notebooks come with a remote control , a neon backlit keyboard and a quick play option (entertainment-related software) to help users switch straight to, say, a movie, without waiting for the laptop to boot up." The

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downside is that the battery offers a low two-and-a-half-hours to three hours backup, says Grover of HP.

The threat of the unorganised sector is miniscule. Laptops are a high - involvement product and the consumer places a lot of emphasis on after - sales service and brand, which the unorganised market is unable to offer. With price cuts boosting the laptop market, companies do not see local PC assemblers as a threat.

Choose with care

DINESH Pai, General Manager, Dell India, offers some insight into making the right choice.It is critical to understand one's own specific needs while choosing a notebook. The priorities for mobile computing are weight, wireless performance and battery life. Weight is undoubtedly the most critical factor. One should also pay attention to the average run time of the notebook's battery as also built -in wireless functions.

Moreover, the processor, the memory capacity, scalability in a networked environment, the quality and size of display, the optical drives and pointing devices, power consumption, costs of usage, maintenance and a host of other factors determined by the specific set of needs of each customer should also to be taken into account while choosing a laptop.

As more computer users transition to sleek notebooks and access networks from remote locations and public wireless networks, user and system security will become a top priority, he says.

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COMPANY PROFILE

ABOUT HEWLETT PACKARD

The Hewlett-Packard Company (NYSE: HPQ), commonly known as HP, is currently the world's largest information technology corporation and is known worldwide for its printers and personal computers. Headquartered in Palo Alto, California, United States, it has a global presence in the fields of computing, printing, and digital imaging, and also provides software and services. The company which once catered to engineering and medical markets now markets to households with products such as cameras and ink cartridges found in grocery and department stores.

HP posted US$91.7 billion in annual revenue in 2006 compared to US$91.4 for IBM, making it the world's largest technology vendor in terms of sales. HP is now the No. 1 ranking company in worldwide personal computer shipments, surpassing rival Dell, market research firms Gartner and IDC reported in October 2006; per Gartner [2], the gap between HP and Dell widened substantially at the end of 2006, with HP taking a near 3.5% market share lead.

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Company History:

Bill Hewlett and Dave Packard both graduated from Stanford University in 1934. The company originated in a garage in nearby Palo Alto while they were post-grad students at Stanford during the Great Depression.

The partnership was formalized on January 1, 1939 with an investment of US$538.[1] Bill won the coin toss and named their electronics manufacturing enterprise the "Hewlett-Packard Company."

Of the many projects they worked on, their first financially successful product was a precision audio oscillator, the Model 200A. Their innovation was the use of a small light bulb as a temperature dependent resistor in a critical portion of the circuit. This allowed them to sell the Model 200A for $54.40 when competitors were selling less stable oscillators for over $200. The Model 200 series of generators continued until at least 1972 as the 200AB, still tube-based but improved in design through the years. At 33 years, it was perhaps the longest-selling basic electronic design of all time.

One of the company's earliest customers was The Walt Disney Company, who bought eight Model 200B oscillators (at $71.50 each) for use in certifying the Fantasound surround sound systems installed in theaters for the movie Fantasia.

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Focus:

The company was originally rather unfocused, working on a wide range of electronic products for industry and even agriculture. Eventually they elected to focus on high-quality electronic test and measurement equipment. Throughout the 1940s to well into the 1990s the company focused on making signal generators, voltmeters, oscilloscopes, counters, and other test equipment. Their distinguishing feature was pushing the limits of measurement range and accuracy. For instance, almost every HP voltmeter or signal generator has one or more extra clicks of its knobs than its competitors. HP volt- or ammeters would measure down and up an extra 10 to 100 times the units of other meters. Although there were good reasons why competing meters stopped at 1 volt full scale, HP engineers figured out ways of extending the range of their equipment by a considerable amount. They also focused on extreme accuracy and stability, leading to a wide range of very accurate, precise, and stable frequency counters, voltmeters, thermometers, and time standards.

The Sixties and the Seventies:

HP is recognized as the symbolic founder of Silicon Valley, although it did not actively investigate semiconductor devices until a few years after the "Traitorous Eight" had abandoned William Shockley to create Fairchild Semiconductor in 1957. Hewlett-Packard's HP Associates division, established around 1960, developed semiconductor devices primarily for internal use. Instruments and calculators were some of the products using these devices.

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HP experimented with using Digital Equipment Corporation minicomputers with its instruments. But after deciding that it would be easier to buy another small design team than deal with DEC, HP entered the computer market in 1966 with the HP 2100 / HP 1000 series of minicomputers. A simple accumulator-based design, with registers arranged somewhat similarly to the Intel x86 architecture still used today, it would last 20 years and several attempts to replace it. It would give birth to the HP 9800 and HP 250 series of desktop and business computers, which predated the PCs by nearly a decade. The HP 3000 was an advanced stack based design for business computing server later redesigned with RISC technology that has only recently been retired from the market.

The HP 2640 series of smart and intelligent terminals introduced forms-based interfaces to ASCII terminals, and screen labeled function keys now commonly used on gas pumps and bank ATMs. Although scoffed at in the formative days of computing, HP would eventually surpass even IBM as the world's largest technology vendor in sales.

HP is acknowledged by Wired magazine as the producer of the world's first personal computer, in 1968, the Hewlett-Packard 9100A.[2] HP called it a desktop calculator because, as Bill Hewlett said, "If we had called it a computer, it would have been rejected by our customers' computer gurus because it didn't look like an IBM. We therefore decided to call it a calculator, and all such nonsense disappeared." An engineering triumph at the time, the logic circuit was produced without any integrated circuits; the assembly of the CPU having been entirely executed in discrete components. With CRT readout, magnetic card storage, and printer the price was around $5000.

alphanumeric, programmable, expandable in 1979 (the HP-41C), and the first symbolic and graphing calculator HP-28C. Like their scientific and business calculators, their oscilloscopes, logic analyzers, and other measurement instruments have a reputation for sturdiness and usability (the latter products are now part of spin-off Agilent's product line). The company's design philosophy in this period was summarized as "design for the guy at the next bench".

The Eighties and Beyond:

In 1984, HP introduced both inkjet and laser printers for the desktop. Along with its scanner product line, these have later been developed into successful multifunction products, the most significant being single-unit printer/scanner/copier/fax machines. The print mechanisms in HP's tremendously popular LaserJet line of laser printers depend almost entirely on Canon's components (print engines), which in turn use technology developed by Xerox. HP develops the hardware, firmware, and software that convert data into dots for the mechanism to print.

In the 1990s, HP expanded their computer product line, which initially had been targeted at university, research, and business customers, to reach consumers. Later in the decade HP opened hpshopping.com as an independent subsidiary to sell online, direct to consumers; t he store was rebranded "HP Home & Home Office Store" in 2005.

HP also grew through acquisitions, buying Apollo Computer in 1989, Convex Computer in 1995, and Compaq in 2002. Compaq itself had bought Tandem Computers in 1997 (which had been started by ex-HP employees), and Digital Equipment Corporation in 1998. Following this strategy HP

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became a major player in desktops, laptops, and servers for many different markets.

In 1987, the Palo Alto garage where Hewlett and Packard started their business was designated as a California State historical landmark.

In 1999, all of the businesses not related to computers, storage, and imaging were spun off from HP to form Agilent. Agilent's spin-off was the largest initial public offering in the history of Silicon Valley. The spin-off created an $8 billion company with about 30,000 employees, manufacturing scientific instruments, semiconductors, optical networking devices, and electronic test equipment for telecom and wireless R&D and production. Also in July 1999, HP appointed Carly Fiorina as CEO. Fiorina was the first woman ever to serve as CEO of a company included in the Dow Jones Industrial Average. Fiorina was forced to resign on February 9, 2005.

TECHNOLOGY AND PRODUCTS

HP has a successful line of laptops,printers, scanners, digital cameras, calculators, PDAs, servers, workstations, and home -small business computers. HP today promotes itself as not just being a hardware and software company, but also one that offers a full range of services to architect, implement and support today's IT infrastructure.

Laptops:

Pavilion Media Center dv2630ea Entertainment - Core 2 Duo T5250 / 1.5 GHz - Centrino Duo - RAM 2 GB - HDD 160 GB - DVD±RW (+R double layer) / DVD-RAM - GF 8400M GS - WLAN : Bluetooth, 802.11a/b/g - Vista Home Premium - 14.1< Widescreen TFT 1280 x 800 ( WXGA )

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HP TX1150EA Laptop Main Specifications ʹ ͻ AMD Turion 64 X2 Dual Core TL-60 ͻ 1.8GHz HyperTransport ͻ 1MB Cache ͻ 2048MB RAM ͻ 160GB Hard Drive ͻ Genuine Windows Vista Home Premium ͻ Digital TV Tuner ͻ 128MB NVIDIA GeForce GO 6150 Graphics ͻ Dual Layer DVD ReWriter MultiDrive ͻ Wireless Enabled ͻ 12.1Ǝ HD Brightview Touchscreen ͻ Fingerprint Reader

Imaging and Printing Group:

According to HP's 2005 U.S. SEC 10-K filing, HP's Imaging and Printing Group is "the leading imaging and printing systems provider in the world for printer hardware, printing supplies and scanning devices, providing solutions across customer segments from individual consumers to small and medium businesses to large enterprises." This division is currently headed by Vyomesh Joshi.

Products and technology associated with the Imaging and Printing Group include:

y Inkjet and LaserJet printers, consumables and related products. y the Indigo Digital Press. y the HP Web Jetadmin printer management software.

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y the HP Output Management suite of software, including HP Output Server. y the LightScribe optical recording technology that laser-etches labels on disks.

Personal Systems Group:

HP's Personal Systems Group is "one of the leading vendors of personal computers ("PCs") in the world based on unit volume shipped and annual revenue."

Personal Systems Group products/technology include:

y Consumer PCs including the HP Pavilion, Compaq Presario and VoodooPC series.

y Workstations for Unix, Windows and Linux systems. y Handheld Computing including iPAQ Pocket PC handheld computing devices y Digital Entertainment including DVD+RW drives, HP Movie Writer and HP Digital Entertainment Center. HP resold the Apple iPod from HP until November 2005.

Technology Solutions Group:

In HP's financial reporting, HP groups its Enterprise Storage and Servers, HP Services and Software under Technology Solutions Group.

HP's Enterprise Storage and Servers Group has product/technology including:

y the ProLiant entry line of x86 based servers (from Compaq) y the BladeSystem x86 based blade servers y the Integrity line using the Itanium processor architecture (with Intel) running on several operating systems including HP-UX (a UNIX implementation) Page | 26

y the HP AlphaServer productline using the Alpha processor (from DEC) and running on both: o Tru64 operating system (from DEC) o The OpenVMS large-scale, highly available server operating system (from DEC) y the NonStop high-reliability architecture and operating system (from Tandem Computers) y MIPs based Nonstop fault-tolerant server products y the PA-RISC processor architecture y the HP 9000 "Superdome" line of Servers and workstations y the StorageWorks product line, which includes business class and enterprise class data storage and protection products.

y the ProCurve family of network switches, wireless access points, and routers.

HP's Software division has products/technologies:

y the OpenView family of management software y the OpenCall family of telecom software

HP Labs:

HP Labs (or HP Laboratories) is the research arm of HP. Founded in 1966, HP Labs' function is to deliver breakthrough technologies and to create business opportunities that go beyond HP's current strategies. An example of recent HP Lab technology includes the Memory spot chip.

Partnerships:

HP is a supporter of FOSS and Linux. Some HP employees, such as Linux CTO and former Debian Project Leader Bdale Garbee actively contribute and have Open Source job responsibilities. Many others Page | 27

participate in the Open Source community as volunteers. HP is also known in the (GNU/)Linux community for releasing drivers for many of their printers under the GNU GPL.

Hewlett-Packard also works extensively with Microsoft and uses technology from most major software and hardware vendors.

Until November 2005, HP offered a re-branded version of the Apple iPod. Hewlett-Packard partners with many application software companies, for example SAP AG.

Sponsorships:

HP has many sponsorships. One well known sponsorship is Walt Disney World's EPCOT Park's Mission: Space. Others can be found on Hewlett-Packards Website [3] From 1995 to 1999 they were the shirt sponsor of English Premier League club Tottenham Hotspur.

Product Legacy:

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Culture:

The founders, known to friends and employees alike as Bill and Dave, developed a unique management style that has come to be known as the HP Way. In Bill's words, the HP Way is "a core ideology . . . [that] includes a deep respect for the individual, a dedication to affordable quality and reliability, a commitment to community responsibility, and a view that the company exists to make technical contributions for the adv ancement and welfare of humanity."[6]

The HP Alumni Association maintains a tribute to Bill and Dave's version of the HP Way, circa 1992.

Trivia:

Bill Hewlett and Dave Packard tossed a coin to de cide whether the company they founded would be called Hewlett-Packard or Packard-Hewlett. Packard lost.

HP spun off a small company, Dynec, to specialize in digital equipment. The name was picked so that the HP logo "hp" could be turned upside down to be the logo "dy" of the new company. Eventually Dynec changed to Dymec, then was folded back into HP.

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Just about every HP product in the test equipment line was labeled with three to five digits followed by the letter "A". Improved versions went to suffixes "B" through "D". A small handful of products somehow got bizarre model numbers, such as the "H201-20" microwave signal generator.

Steve Wozniak originally designed the Apple I computer while working at HP, but they turned down his offer of licensing the design to HP.

HP products were usually very rugged, with clean styling, top notch components, and with conservative specifications, so customers were usually pleasantly surprised when the equipment looked and worked better than expected. There were a few missteps, however:

y In the 1960s they briefly went to painting their equipment a light lavender color. y In the early 1970s they started a line of "lower cost" test equipment with atrociously ugly and flimsy plastic cases. The cases also got a bad case of 1970s colors, coming out in dark shag rug green and burnt orange. y On test equipment made in the 1980s a common problem was flimsy knobs that easily broke off. y A very few innovative but malfunctioning products, such as the original HP 3000 computers, had to be recalled for extensive reworking.

Management:

y Chairman of the Board, CEO, and President: Mark Hurd (March 29, 2005 - current, appointed Chairman September 22, 2006)

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History:

y Co-founder and CEO: David Packard (CEO: 1964²1969) y Co-founder and CEO: William Hewlett (CEO: 1969²1978) y CEO: John A. Young (1978³October 31, 1992) y CEO: Lewis Platt (November 1, 1992³July 18, 1999) y Chairman and CEO: Carly Fiorina (July 19, 1999³February 9, 2005, appointed chairman in 2000) y Interim CEO: Robert Wayman (February 10, 2005³March 28, 2005) y CEO: Mark Hurd (CEO: April 1, 2005³; Chairman: September 22, 2006³) y Chairman: Patricia C. Dunn (February 2005³September 22, 2006).

Diversity:

Hewlett-Packard received a 100% rating on the Corporate Equality Index released by the Human Rights Campaign starting in 2003, the second year of the report. In addition, the company was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.

Hewlett-Packard is also involved in the NEPAD e-school program to provide all schools in Africa with computers and internet access.

Ad Campaigns:

Hewlett-Packard has used a number of innovative commercials to sell its products.

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The Computer is Personal Again:

In May 2006, the company launched a new campaign designed to bring back the fact that the PC (Personal Computer) is a personal product. The campaign utilized viral marketing, sophisticated visuals, and its own web site.[8] Some of the ads featured well-known personalities - Pharrell, Mark Burnett, Mark Cuban, Jay-Z, Shaun White, and Santa Claus (voiced by Tim Allen, who plays him in The Santa Clause film trilogy). Rather than show a bunch of talking heads, each advertisement showed a neck -down view in which the endorser, aided greatly by graphics, visually showed how they used HP products. All these personalities weren't paid millions o f dollars but brought a deal with HP to sponsor their or a selected charity group.

Two months after having created The Computer Is Personal Again, Dell followed up with its own campaign entitled "Purely You", which seems to piggyback off the HP idea.

You + HP: digital photography:

A television ad campaign for Hewlett-Packard's digital photography (titled "You + HP: digital photography") has been noted for its simple special effects and choice of music. It won "Campaign of the Year" from Adweek magazine in 2004.[9]

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Songs used in "You + HP" Campaign:

y "Picture Book" by The Kinks y "Out of the Picture" by The Robins y "Pictures of You" by The Cure y "The Rainbow" by The Apples in Stereo y "Across the Universe" by The Beatles

Competitors:

Major competitors of HP in the computer business include Apple Inc., Dell, Gateway, Lenovo (Purchased IBM's Non-server Personal Computer Business), Sony and Toshiba. Major competitors of HP in the server business include Sun Microsystems, IBM and Dell. Major competitors of HP in the printer business include Brother, Canon, Epson, Lexmark and Dell (who rebrands and repackages Lexmark products). Upon acquiring Voodoo PC, HP and its newest subdivision will compete in the enthusiast market against Falcon Northwest, Alienware (A division of Dell), WidowPC and other manufacturers.

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So mor about hp

Hewlett-Packard Company

Type Public (NYSE: HPQ)

Dow Jones Indust ial Average Component

Industry Computer Systems

Computer Peripherals

Computer Software

IT consulting

IT Services

Founded Palo Alto, California (1939)

Founder(s) Bill Hewlett

David Packard

Headquarters 3000 Hanover Street,[1] Palo Alto, California, USA

Area served Worldwide

Key people Raymond Lan

(Chairman)

Léo Apotheker

(President and CEO)

Page|34 Products Computer Monitors

Digital Cameras

Enterprise Software

Indigo Digital Press

Mobile Phones

Networking

Personal Computers andLaptops

Personal Digital Assistants

Printers

Scanners

Servers

Storage

Televisions

Telecommunications hardware and software

List of HP products

Revenue $126.033 billion (2010)

Operating income $11.479 billion (2010)

Net income $8.761 billion (2010)

Total assets $124.503 billion (2010)

Total equity $40.449 billion (2010)

Employees 310,000 (after 3Comacquisition)(2009)

Subsidiaries Compaq

Snapfish

HP Labs

ProCurve

HP Enterprise Services

VoodooPC

Palm, Inc.

HP CDS Page|35 List of acquisitions by HP

Website HP.com

Hewlett-Packard Company (NYSE: HPQ), commonly referred to as HP, is an American multinational information technology corporation headquartered in Palo Alto, California, USA. The company was founded in a one-car garage in Palo Alto by Bill Hewlett and Dave Packard, and is now one of the world's largest information technology companies, operating in nearly every country. HP specializes in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services. Major product lines include personal computing devices, enterprise servers, related storage devices, as well as a diverse range of printers and other imaging products. HP markets its products to households, small- to medium-sized businesses and enterprises directly as well as via online distribution, consumer-electronics and office-supply retailers, software partners and major technology vendors.

HP's posted net revenue in 2009 was $115 billion, with approximately $40 billion coming from services. In 2006, the intense competition between HP and IBM tipped in HP's favor, with HP posting revenue of US$91.7 billion, compared to $91.4 billion for IBM; the gap between the companies widened to $21 billion in 2009. In 2007, HP's revenue was $104 billion, making HP the first IT company in history to report revenues exceeding $100 billion. In 2008 HP retained its global leadership position in inkjet, laser, large format and multi-function printers market, and its leadership position in the hardware industry.[ Also HP became #2 globally in IT services as reported by IDC & Gartner.

Major company changes include a spin-off of part of its business as Agilent Technologies in 1999, its merger with Compaq in 2002, and the acquisition of EDS in 2008, which led to combined revenues of $118.4 billion in 2008 and a Fortune 500 ranking of 9 in 2009. In November 2009, HP announced the acquisition of 3Com; with the deal closing on April 12, 2010. On April 28, 2010, HP announced the buyout ofPalm for $1.2 billion. On September 2, 2010 won its bidding war for 3PAR with a $33 a share offer ($2.07 billion) which Dell declined to match.

On August 6, 2010 CEO Mark Hurd resigned. Cathie Lesjak assumed the role of interim CEO, and on September 30, 2010, Léo Apotheker became HP's new permanent CEO and Ray Lane, Managing Partner at Kleiner Perkins Caufield & Byers, was elected to the position of non-executive Chairman. Both appointments were effective November 1, 2010. Company history

Further information: List of Hewlett-Packard executive leadership

Page | 36

Founding

Bill Hewlett and Dave Packard graduated in electrical engineering from Stanford University in 1935. The company originated in a garage in nearby Palo Alto during a fellowship they had with a past professor, Frederick Terman at Stanford during the Great Depression. Terman was considered a mentor to them in forming Hewlett-Packard. In 1939, Packard and Hewlett established Hewlett-Packard (HP) in Packard's garage with an initial capital investment of US$538. Hewlett and Packard tossed a coin to decide whether the company they founded would be called Hewlett-Packard or Packard-Hewlett Packard won the coin toss but named their electronics manufacturing enterprise the "Hewlett-Packard Company". HP incorporated on August 18, 1947, and went public on November 6, 1957.

Of the many projects they worked on, their very first financially successful product was a precision audio oscillator, the Model HP200A. Their innovation was the use of a small light bulb as a temperature dependent resistor in a critical portion of the circuit. This allowed them to sell the Model 200A for $54.40 when competitors were selling less stable oscillators for over $200. The Model 200 series of generators continued until at least 1972 as the 200AB, still tube-based but improved in design through the years. At 33 years, it was perhaps the longest-selling basic electronic design of all time.

One of the company's earliest customers was The Walt Disney Company, which bought eight Model 200B oscillators (at $71.50 each) for use in certifying the Fantasound surround sound systems installed in theaters for the movie Fantasia. Early years

From the 1940s until well into the 1990s the company concentrated on making electronic test equipment: signal generators, voltmeters, oscilloscopes, frequency counters,thermometers, time standards, wave analyzers, and many other instruments. A distinguishing feature was pushing the limits of measurement range and accuracy; many HP instruments were more sensitive, accurate, and precise than other comparable equipment.

Following the pattern set by the company's first product, the 200A, test instruments were labelled with three to five digits followed by the letter "A". Improved versions went to suffixes "B" through "E". As the product range grew wider HP started using product designators starting with a letter for accessories, supplies, software, and components. The 1960s

HP is recognized as the symbolic founder of Silicon Valley, although it did not actively investigate semiconductor devices until a few years after the "Traitorous Eight" had abandonedWilliam Shockley to create Fairchild Semiconductor in 1957. Hewlett-Packard's HP Associates division, established around Page | 37

1960, developed semiconductor devices primarily for internal use. Instruments and calculators were some of the products using these devices.

HP partnered in the 1960s with Sony and the Yokogawa Electric companies in Japan to develop several high-quality products. The products were not a huge success, as there were high costs in building HP- looking products in Japan. HP and Yokogawa formed a joint venture (Yokogawa-Hewlett-Packard) in 1963 to market HP products in Japan. HP bought Yokogawa Electric's share of Hewlett-Packard Japan in 1999.

HP spun off a small company, Dynac, to specialize in digital equipment. The name was picked so that the HP logo "hp" could be turned upside down to be a reverse reflect image of the logo "dy" of the new company. Eventually Dynac changed to Dymec, then was folded back into HP in 1959. HP experimented with using Digital Equipment Corporation minicomputers with its instruments, but after deciding that it would be easier to build another small design team than deal with DEC, HP entered the computer market in 1966 with the HP 2100 / HP 1000 series of minicomputers. These had a simple accumulator-based design, with registers arranged somewhat similarly to the Intel x86 architecture still used today. The series was produced for 20 years, in spite of several attempts to replace it, and was a forerunner of the HP 9800 and HP 250 series of desktop and business computers. The 1970s

The HP 3000 was an advanced stack-based design for a business computing server, later redesigned with RISC technology, that has only recently been retired from the market. The HP 2640 series of smart and intelligent terminals introduced forms-based interfaces to ASCII terminals, and also introduced screen labeled function keys, now commonly used on gas pumps and bank ATMs. The HP 2640 series included one of the first bit mapped graphics displays that when combined with the HP 2100 21MX F-Series microcoded Scientific Instruction Set enabled the first commercial WYSIWYG Presentation Program, BRUNO that later became the program HP-Draw on the HP 3000. Although scoffed at in the formative days of computing, HP would eventually surpass even IBM as the world's largest technology vendor, in terms of sales.

"The new Hewlett-Packard 9100A personal computer is ready, willing, and able ... to relieve you of waiting to get on the big computer."

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HP is identified by Wired magazine as the producer of the world's first marketed, mass-produced personal computer, the Hewlett-Packard 9100A, introduced in 1968. HP called it a desktop calculator, because, as Bill Hewlett said, "If we had called it a computer, it would have been rejected by our customers' computer gurus because it didn't look like an IBM. We therefore decided to call it a calculator, and all such nonsense disappeared." An engineering triumph at the time, the logic circuit was produced without any integrated circuits; the assembly of the CPU having been entirely executed in discrete components. With CRT display, magnetic-card storage, and printer, the price was around $5000. The machine's keyboard was a cross between that of a scientific calculator and an adding machine. There was no alphabetic keyboard.

Steve Wozniak, co-founder of Apple, originally designed the Apple I computer while working at HP and offered it to them under their right of first refusal to his work, but they did not take it up as the company wanted to stay in scientific, business, and industrial markets.[citation needed]

The company earned global respect for a variety of products. They introduced the world's first handheld scientific electronic calculator in 1972 (the HP-35), the first handheld programmable in 1974 (the HP-65), the first alphanumeric, programmable, expandable in 1979 (the HP-41C), and the first symbolic and graphing calculator, the HP-28C. Like their scientific and business calculators, their oscilloscopes, logic analyzers, and other measurement instruments have a reputation for sturdiness and usability (the latter products are now part of spin-off Agilent's product line). The company's design philosophy in this period was summarized as "design for the guy at the next bench".

The 98x5 series of technical desktop computers started in 1975 with the 9815, and the cheaper 80 series, again of technical computers, started in 1979 with the 85. These machines used a version of the BASIC programming language which was available immediately after they were switched on, and used a proprietary magnetic tape for storage. HP computers were similar in capabilities to the much later IBM Personal Computer, although the limitations of available technology forced prices to be high. The 1980s

The garage in Palo Alto where Hewlett and Packard began their company

Page | 39

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Page|40

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stockholder approval and regulatory clearance from the European gommission and other non-U.S. jurisdictions and is subject to the satisfaction or waiver of the other closing conditions specified in the Page|41 merger agreement." The agreement was finalized on August 26, 2008, and it was publicly announced that EDS would be re-branded "EDS an HP company." As of September 23, 2009, EDS is known as HP Enterprise Services.

On November 11, 2009, 3Com and Hewlett-Packard announced that Hewlett-Packard would be acquiring 3Com for $2.7 billion in cash. The acquisition is one of the biggest in size among a series of takeovers and acquisitions by technology giants to push their way to become one-stop shops. Since the beginning of the financial crisis in 2007, tech giants have constantly felt the pressure to expand beyond their current market niches. Dell purchased Perot Systems recently to invade into the technology consulting business area previously dominated by IBM. Hewlett-Packard's latest move marked its incursion into enterprise networking gear market dominated by Cisco. The 010s

On April 28, 2010, Palm, Inc. and Hewlett-Packard announced that HP would be acquiring Palm for 1.2 billion in cash and debt the deal officially closed on July 1, 2010. In the months leading up to the buyout it was rumored that Palm was going to be purchased by either HTC, Dell, RIM or HP. The addition of Palm handsets to the HP product line provides some overlap with the current iPAQ mobile products but will significantly increase their mobile presence as those devices have not been selling well. The addition of Palm brings HP a library of valuable patents as well the mobile operating platform known as webOS. On July 1, 2010, the acquisition of Palm was final. On September 2, 2010 won its bidding war for 3PARwith a $33 a share offer ($2.07 billion) which Dell declined to match.

On August 6, 2010 CEO Mark Hurd resigned amid controversy and CFO Cathie Lesjak assumed the role of interim CEO. On September 30, 2010, Léo Apotheker was named as HP's new CEO and President.

Apotheker¶s appointment sparked a strong reaction from Oracle chief executive Larry Ellison, who complained that Apotheker had been in charge of SAP when one of its subsidiaries was systematically stealing software from Oracle. SAP accepted that its subsidiary, which has now closed, illegally accessed Oracle intellectual property. Facilities

The a sign marking the entrance to the HP corporate headquarters in Palo Alto, California

Page | 42

HP's global operations are directed from its headquarters in Palo Alto, California, USA. Its U.S. operations are directed from its facility inunincorporated Harris County, Texas. Its Latin America offices in unincorporated Miami-Dade County, Florida, U.S., near Miami. Its Europe offices in Meyrin, Switzerland, near Geneva. Its Asia-Pacific offices are in Singapore.[39][40][41][42][43][44][45] It also has large operations inBoise, Idaho, Roseville, California, San Diego, California, and Plano, Texas (the former headquarters of EDS, which HP acquired). In the UK, HP is based at a large site in Bracknell, Berkshire with offices in various UK locations, including a landmark office tower in London, 88 Wood Street. Its recent acquisition of 3Com will expand its employee base to Marlborough, Massachusetts.[46] Products and organizational structure

HP has successful lines of printers, scanners, digital cameras, calculators, PDAs, servers, workstation computers, and computers for home and small business use; many of the computers came from the 2002 merger with Compaq. HP today promotes itself as supplying not just hardware and software, but also a full range of services to design, implement, and support IT infrastructure.

HP's Imaging and Printing Group (IPG) is "the leading imaging and printing systems provider in the world for printer hardware, printing supplies and scanning devices, providing solutions across customer segments from individual consumers to small and medium businesses to large enterprises." Products and technology associated with IPG include Inkjet and LaserJet printers, consumables and related products, Officejet all-in- one multifunction printer/scanner/faxes, Large Format Printers, Indigo Digital Press, HP Web Jetadmin printer management software, HP Output Management suite of software, LightScribe optical recording technology, HP Photosmart digital cameras and photo printers, HP SPaM, and Snapfish by HP, a photo sharing and photo products service. On December 23, 2008, HP released iPrint Photo for iPhone a free downloadable software application that allows the printing of 4" x 6" photos.

HP's Personal Systems Group (PSG) claims to be "one of the leading vendors of personal computers ("PCs") in the world based on unit volume shipped and annual revenue." PSG includes business PCs and accessories, consumer PCs and accessories, (e.g., HP Pavilion, Compaq Presario, VoodooPC), handheld computing (e.g., iPAQ Pocket PC), and digital "connected" entertainment (e.g., HP MediaSmart TVs, HP MediaSmart Servers, HP MediaVaults, DVD+RW drives). HP resold the Apple iPod until November 2005.

HP Enterprise Business (EB) incorporates Technical services, Enterprise Services (formerly known as EDS), HP Software Division, and Enterprise Servers, Storage and Networking Group (ESSN). The Enterprise Servers, Storage and Networking Group (ESSN) oversees "back end" products like storage and servers. HP's networking business unit ProCurve is responsible for the family of network switches, wireless access points, and routers. They are currently a business unit of ESSN.

HP Software Division is the company's enterprise software unit. For years, HP has produced and marketed its brand of enterprise management software, HP OpenView. From September 2005 through 2010, HP purchased a total of 15 software companies between as part of a publicized, deliberate strategy to augment

Page | 43

its software offerings for large business customers. The division markets its software in four categories: HP IT Management Software (also known as business technology optimization software), HP Information Management Software, business intelligence solutions, and communications and media software and solutions.

An HP camera with an SDIO interface

HP's Office of Strategy and Technology has four main functions: (1) steering the company's $3.6 billion research and development investment, (2) fostering the development of the company's global technical community, (3) leading the company's strategy and corporate development efforts, and (4) performing worldwide corporate marketing activities. Under this office is HP Labs, the research arm of HP. Founded in 1966, HP Labs's function is to deliver new technologies and to create business opportunities that go beyond HP's current strategies. An example of recent HP Lab technology includes the Memory spot chip. HP IdeaLab further provides a web forum on early-state innovations to encourage open feedback from consumers and the development community.

HP also offers managed services where they provide complete IT-support solutions for other companies and organisations. Some examples of these are: A large activity is HP offering "Professional Support" and desktop "Premier Support" for Microsoft in the EMEA marketplace. This is done from the Clonskeagh office in Dublin, Sofia and Israel. Support is offered on the line of Microsoft operation systems, Exchange, Sharepoint and some office-applications. But HP also offers outsourced services for companies like Bank of Ireland, some UK banks, the U.S. defense forces, etc. Culture

The founders, known to friends and employees alike as Bill and Dave, developed a unique management style that came to be known as The HP Way. In Bill's words, the HP Way is "a core ideology ... which includes a deep respect for the individual, a dedication to affordable quality and reliability, a commitment to community responsibility, and a view that the company exists to make technical contributions for the advancement and welfare of humanity." The following are the tenets of The HP Way:

1. We have trust and respect for individuals. Page | 44

2. We focus on a high level of achievement and contribution. 3. We conduct our business with uncompromising integrity. 4. We achieve our common objectives through teamwork. 5. We encourage flexibility and innovation. Corporate social responsibility

In July 2007, the company announced that it had met its target, set in 2004, to recycle one billion pounds of electronics, toner and ink cartridges. It has set a new goal of recycling a further two billion pounds of hardware by the end of 2010. In 2006, the company recovered 187 million pounds of electronics, 73 percent more than its closest competitor.

In 2008, HP released its supply chain emissions data ± an industry first.

In September 2009, Newsweek ranked HP #1 on its 2009 Green Rankings of America's 500 largest corporations. According to environmentalleader.com, "Hewlett-Packard earned its number one position due to its greenhouse gas (GHG) emission reduction programs, and was the first major IT company to report GHG emissions associated with its supply chain, according to the ranking. In addition, HP has made an effort to remove toxic substances from its products, though Greenpeace has targeted the company for not doing better."

HP took the top spot on xorporate Responsibility Magazine's 100 Best Corporate Citizens List for 2010. The list is cited by PR Week as one of America's most important business rankings. HP beat out other Russell 1000 Index companies because of its leadership in seven categories including environment, climate changes and corporate philanthropy. In 2009, HP was ranked fifth.

Fortune magazine named HP one of the World¶s Most Admired Companies in 2010, placing it No. 2 in the computer industry and No. 32 overall in its list of the top 50. This year in the computer industry HP was ranked No. 1 in social responsibility, long-term investment, global competitiveness, and use of corporate assets.

In April 2010, HP released its latest Global Responsibility report covering accomplishments during 2009. The report claims that in 2009, HP decreased its total energy use by 9 percent compared with 2008. HP recovered a total of 118,000 tonnes of electronic products and supplies for recycling in 2009, including 61 million print cartridges.

In an April 2010 San Francisco xhronicle article, HP was one of 12 companies commended for "designing products to be safe from the start, following the principles of green chemistry." The commendations came from Environment California, an environmental advocacy group, who praised select companies in the Golden State and the Bay Area for their efforts to keep our planet clean and green.

In May 2010, HP was named one of the World¶s Most Ethical Companies by Ethisphere Institute. This is the second year in a row HP has made the list. Ethisphere reviewed, researched and analyzed thousands

Page | 45

of nominations in more than 100 countries and 35 industries to create the 2010 list. HP was one of only 100 companies to earn the distinction of top winner and was the only computer hardware vendor to be recognized. Ethisphere honors firms that promote ethical business standards and practices by going beyond legal minimums, introducing innovative ideas that benefit the public.

HP is listed in Greenpeace¶s Guide to Greener Electronics that ranks electronics manufacturers according to their policies on toxic chemicals, recycling and climate change. In October 2010, HP secured the 4th place (out of 18) in this ranking (climbing up 4 places) with an increased score of 5.5 (up from 4.9). This improvement was mainly caused by the progress in bringing products that are free from PVC and BFRs onto the market and a new commitment to phase out beryllium and compounds by July 2011. Moreover, HP aims to complete its phase out of toxic vinyl plastic (PVC) and brominated flame retardands (BFRs) in 2011. Greenpeace gives HP credit for having many PVC and BFR-free products on the market, including a desktop PC with PVC-free power supply, several series of notebooks, another desktop and two LCD monitors. It has also recently launched the first PVC free printer. Brand and legacy

According to a Business Week Study, HP is currently the world's 11th most valuable brand. Since its creation, the HP Logo has remained largely the same. Because of its extreme simplicity, the logo is recognized all over the world.

A Hewlett-Packard sponsored Porsche 997 GT3 Cup

The company sponsors the HP Pavilion at San Jose, home to the NHL's San Jose Sharks.

HP has many sponsorships. One well known sponsorship is of Walt Disney World's EpcotPark's Mission: SPACE. Others can be found on Hewlett-Packard's website. From 1995 to 1999 they were the shirt sponsor of Premier League club Tottenham Hotspur. They also sponsored the BMW Williams Formula 1 team until 2006 (a sponsorship formerly held by Compaq), and as of 2010 sponsor Renault F1. Hewlett-

Page | 46

Packard also has the naming rights arrangement for the HP Pavilion at San Jose, home of the San Jose Sharks NHL hockey team.

Agilent Technologies, not HP, retains the direct product legacy of the original company founded in 1939. Agilent's current portfolio of electronic instruments are descended from HP's very earliest products. HP entered the computer business only after its instrumentation competencies were well-established. When Agilent was spun off, items in the Corporate Archives were split-up along product lines, with Agilent retaining almost all of the original HP archives - only where there was duplication of material, was HP given early Test and Measurement material. Both companies retained an original 200A Audio Oscillator.

After the acquisition of Compaq in 2002, HP has maintained the "Compaq Presario" brand on low-end home desktops and laptops, the "HP Compaq" brand on business desktops and laptops, and the "HP ProLiant" brand on Intel-architecture servers. (The "HP Pavilion" brand is used on home entertainment laptops and all home desktops.)

HP uses DEC's "StorageWorks" brand on storage systems; Tandem's "NonStop" servers are now branded as "HP Integrity NonStop". Controversy

Main article: Hewlett-Packard spying scandal

On September 5, 2006, Newsweek revealed that HP's general counsel, at the behest of chairwoman Patricia Dunn, contracted a team of independent security experts to investigate board members and several journalists in order to identify the source of an information leak. In turn, those security experts recruited private investigators who used a spying technique known as pretexting. The pretexting involved investigators impersonating HP board members and nine journalists (including reporters for CNET, the New York Times and the Wall Street Journal) in order to obtain their phone records. The information leaked related to HP's long-term strategy and was published as part of a CNET article in January 2006. Most HP employees accused of criminal acts have since been acquitted.

Hewlett-Packard has also been at the center of a fiasco in recent years. In November 2007, Hewlett- Packard released a BIOS update covering a wide range of laptops with the intent to speed up the computer fan as well as have it run constantly, whether the computer was on or off The reason was to prevent the overheating of defective NVIDIA graphics processing units (GPUs) that had been shipped to many of the original equipment manufacturers, including Hewlett-Packard, Dell, and Apple. In July 2008, HP revealed an extension to the initial one-year warranty covering a few of the affected computers, but leaving many more without the protection, despite research showing that these computers were also affected. Since this point, several websites have been documenting the issue, most notably www.hplies.com, a forums dedicated to what they refer to as Hewlett-Packard's "multi-million dollar cover up" of the issue. There have been several small claims lawsuits filed in several states, as well as suits being filed in other countries. Hewlett-Packard also faced a class action lawsuit in 2009 over their i7 processor computers. The Page | 47

complainants stated that their systems locked up within 30 minutes of powering on, consistently. Even after being replaced with newer i7 systems, the lockups continued.

SWOT Analysis of aluminium industry in India

It will help the company to the strength and weaknesses present in it. It help in determining the future actions plan, get rid of the problem and weaknesses. A company producing computer in India can found out its characteristics by the help of this. Because any industry is totally depend upon its country for the production. And in India the following analysis helps to determine the company structure and life.

This helps hp to grow fast and capture larger market share.

It can be by going out by following steps, which are:

Strengths

*Good customer relation

*Huge investmentof funds in the expansion project

*Good inventory is maintained

* Weaknesses

*Some technical faults

*High cost product

*Do not have balance performance

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Opportunities

*Growing economy: Rapid growth in building, construction, transportation and packaging sectors

Threats

*Over capacity in China leading to cheap price

*Uncertain regulatory environment

*Price volatility at the London Metal Exchange (LME)

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REVIEW OF LITERATURE AND PROBLEM STATEMENT

This report highlights that¶s steps which is very important to customer research study of hp computer in India. This report will be briefly explained about market of computer. Which is very important to every level of organization.

The students who are the main user of computer they are happy to use new hp pravelion laptop.The many news Indian paper(The times of India, The Dainik Bhaskar ) declared that ph computer market in India is Biggest than others computer. The 70% market share occupied in hp computer in the Indian market.

For more success of hp this research will very help, no management can succeed without the uses of marketing research. Identification of problem of customer of hp is the very important step to the research. It will be very help full to understand to customers need and satisfaction.

This report has also presented various frameworks for analyzing certain problems in the field of marketing, which were also effectively used in this research work.

Lot of teknik like pie and bar chat help to understand the market condition very quickly. I have very elaborately examined the various issues in designing the marketing strategies for various companies, tactical marketing and also the hurdles that arises in the administrative side of marketing which were all very much useful in analyzing the various problems of this research study and finally it also putting forth various feasible recommendations and suggestions for this research work.

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OBJECTIVE OF THE PROJECT:

Main Objectives; To find out the attributes that enhance the customer value by pr oviding betterser vice to them and know how to motivate the more people towards IT. TheProject requir ed carrying out the comparative study of prices across Brands andModels also to carry out another comparative study of Margins of Dealers andWholesalers. This would be done by finding out the Market Operating Price atwhich they are making deals and the volume of discounts offer ed by them. Then apart from studying the dealers a study of consumer buying behaviors wasalso required for the specific brands. This was done by making comparativestudy of HP along with other brands, in ter ms of consumer preference. Alsodealer¶s perspectives about the brand are also to be considered along with thisthe effect of prices on brand preference of the models. In the research we also tried to study consumer behavior for all the brands andalso the dealer ¶s per ception about the market of Home PCs, Laptops, Printers,PSC, Scanner, and TFT. For this Segmentation, Targeting and Positioning ofvarious brands on recall, believability, association, final purchase. Other Objectives: To know the brand recall by customers. To know the reason why people prefer HP (Hewlett-Packard) brand. To increase the sales volume. To give the customer satisfaction and also get the references from them. To know which factor is important for customer befor e buying any IT product. To illicit suggestion for better positioning for HP product. The Hewlett-Packard Company (NYSE: HPQ, NASDAQ: HPQ), commonly known asHP, is one of the world's largest information technology corporations. Headquartered in Palo Alto, y To check the income, Improvement in customer¶s service. y To keep alive the goodwill & confidence created amongst suppliers, customers & other govt. agencies. Page | 51

RESEARCH DESIGN

Title of the Study:

´A study on the Consumer Perception with reference to HP laptopsµ

Statement of the problem:

Hp is one of the leading PC manufactures in the world and is one of the leading seller of Computer Hardware in India. It is currently facing cut throat competition from PC manufactures in the market. So to tackle this problem we have taken a survey on customer perception towards the laptops manufactured by Hewlett Packard. It also studies the buyers profile in the demographic and psychographic. The study applied is descriptive in nature and it also tends to find the customers view about the important aspects of the product and to determine the competition market share of HP.

Scope of the Study:

The aim of the study is to provide the Management of Hewlett Packard India with the information which would help it understand the perceptions customers in Bangalore have about the Laptops manufactured by Hewlett Packard, any negative

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perception about their product, the reasons for such perceptions and recommendations and suggestions to overcome these problems.

Research Objectives:

y To study the level of awareness of Hewlett Packard Laptops. y Find customer perceptions about the quality, price and design of their products. y Reasons for dissatisfaction / negative perception about any aspect of HP Laptops. y To assess the demographics of the prospective customers of Hewlett Packard Laptops. y To offer subjective recommendations based on the above study.

Limitations of the study:

y The study is limited to the users of laptops within Bangalore city only, y All the responses of the respondents are assumed to be true, y Sample size selected has to be restricted due to time and budget constraints. y Respondents were either vague or incomplete at times which makes the answers of the interpretation difficult.

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Research Methodology:

Sources of Data Collection:

y Primary Data y Secondary Data

Primary Data:

Primary Data for this research has been exclusively collected from the following sources

y Questionnaire conducted with a sample size of 100 respondents.

y Information collected from the employees working in the authorized dealer·s

stores of Hewlett Packard.

y Informal interview was conducted with the Marketing Head of Hewlett

Packard.

Secondary Data:

Information for the purpose of the study was collected from the newspapers, magazines, company journals, company reports, standard textbooks, and appropriate information from the Internet has been acquired wherever necessary.

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Research Approach:

The study was conducted using survey method.

Survey approach:

Surveys are the best suited for descriptive research, company advised me to undertake the survey to learn the brand awareness and customer satisfaction.

Research Instrument:

The information was gathered using structured questionnaire .

Questionnaire:

A Questionnaire consists of a set of questions presented to respondents, in order to get their feedback regarding the product.

Place of study:

The study was conducted in various areas of Bangalore city only, with the help of 100 respondents to carry on the survey, an extensive field work was undertaken.

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Sampling Design:

y Types of universe: The universe in the study is an infinite number of items taken into account

y Sampling unit: The sampling unit is limited to the users of laptop computers within Bangalore city.

y Sampling size: Number of respondents taken into consideration is 100.

y Sampling technique: The Sampling technique used in the study is conducted among the users of the HP laptop.

Plan of Analysis:

The objectives are drafted and a projective quantitative questionnaire is constructed for the research. The data thus obtained is tabulated through the construction of tables and graphs and finally the findings are interpreted.

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THEORETICAL FRAMEWORK

Introduction to Marketing:

Evolution of Marketing:

Marketing has evolved from the time man existed on earth. Following are the phases of development of marketing

Barter system

Production Orientation

Sales Orientation

Marketing Orientation

Consumer Orientation

Management Orientation

Social Orientation

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Barter system: The goods are exchanged against goods without any other medium of exchange like money.

Production orientation: This was the stage where producers, instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit.

Sales orientation: This stage witness major changes in all the spheres of economic life. The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs.

Marketing orientation: Customer·s importance was satisfied but only as a means of disposing of goods produced competition become more stiffer.

Consumer orientation: Under this stage only such products are bought forward to the markets which are capable of satisfying of taste and expectation of consumer satisfaction.

Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning, promotion and distribution.

Social orientation: The companies are not only cares for consumers but also for social welfare. Thus, social welfare becomes the added dimension to the companies.

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Definition of Marketing:

Philip Kotler

The marketing guru has said ´Marketing is a social and managerial process by which individuals and group obtain what they need and want through creating, offering and changing products of value with othersµ.

American marketing association

Addressed ´marketing is the performance of business activities that direct the flow of goods and services from producer to consumer to userµ.

Cundiff and still

´Marketing is the business process by which products are matched with market and through which transfers of ownership are affectedµ.

In the words of Hansen

´Marketing is the process of discovering and translating consumers needs and wants into product and services and specifications, creating demand for these products and services and then in term expanding demand.

By all these definitions we can derive that marketing is compressive term that includes all resource and set of activities necessary to direct and facilitate flow of goods and services from producer to consumer in the process of distribution.

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Objectives of Marketing:

At the end of all marketing activities is the satisfaction of human wants and derive profits from them.

The following are the most significant objectives of marketing.

y Intelligent and effective application of modern marketing: Today economic changing growth rate, relatively high inflation, high interest rates, rapid technological change and new aggressive rivals challenge marketing firm to adopt and respond to change for survival and prosperity.

y To develop the market field: Marketing is the most dynamic field where change rules the roost. Change is continuing pre occupation among marketers.

y To develop and implement guiding policies for better results: Innovative marketing guiding policies and their effective implementation to assure better results.

y To find sources for further information concerning the market problems: The world of business in moving on the basis of countless decisions, marketing decisions are more complex and intricate having impinging impact on the very fortune of a company.

y To take appropriate and opportune action in the course of working. The marketing information system designed by the marketing organization helps in identifying the problem, investigating analyzing it and interpreting the problem for the final decision.

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Functions of Marketing:

Marketing involves certain activities to make the goods from producers to consumers. It consist of operations and an operation may be performed several times either by a producer, middleman, till the commodity finally reaches in the hand of consumers.

1. Functions of exchange

Exchange implies the transfer of goods and services money or money·s worth. Exchange brings about change in the ownership of goods. It is a two-way process invading two separate but supporting activities viz, buying and selling.

y Selling: Selling is the sum total of all those activities that push the commodities to the buyers or consumers at a profitable price. It is the process that involves personal and impersonal efforts made in persuading the prospective customers to buy a commodity or service.

y Product planning and development: Product ² planning is the planning or forecasting what consumers want in terms of quantity, quality, time, place, price, where as, product development refers to making available such goods to meet the requirement of consumers as demanded by them.

y Demand Creation: It includes such special efforts to induce and persuade the prospective users to purchase the products of the seller only.

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y Negotiation: Negotiation as to terms of quality, quantity, price of the product time and mode of transport payment etc« are to be made with prospective buyers.

y Contractual: Once the terms and conditions are settled between buyers and sellers a final contract would be entered into, where legally, ownership of goods passes on from seller to buyer.

y Buying: Buying is another function of exchange that refers to all such activities involves in the assembling of goods under a single ownership and control. Its immediate purpose is to bring commodities together where they are wanted for use in production for final consumption.

This buying function has following four elements:

y Planning Assortments: Buyers are to study their own market condition in order know the types quantity and quality of goods that are required by final users.

y Contractual: It is clothed with the selection of various sources of supply, keeping in touch with them, to get the goods quickly reasonably and regularly.

y Negotiation: Buyers and sellers negotiate the terms and condition of price quantity, quality and time of delivery, transport & payment.

y Contractual: It is the last phase that binds the parties of exchange by means of a contract where the titles to the goods more from seller to buyers.

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2. Functions of Physical supply

These are the functions that are related with creation of place an d time utilities, they are:

y Transportation: Transportation is the physical means to move the goods and people from a place to another. It is essential spoke in the wheel of market. It is responsible for the creation of time utility

y Storage: Storage is equally important that is creates time utility. The products are to be preserved from time of production to the time of consumption. It is the base of consumers to get the goods as and when required.

3. Facilitating Functions

These are the function that facilitates the process of exchange.

y Financing: Finance is the base for all marketing activities. It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing.

y Risk-bearing: Market risk are inherent so long the process of exchange continues many risks are involved in marketing which brings about changes in ownership, place etc«

y Market information: The much desired success of marketing depends on correct and timely decisions. These decisions are based on market

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information. It includes all facts, estimates, opinion, views, regarding the market

y Standardization: Standardization helps on tackle certain major problems of marketing. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm.

4P·s of Marketing:

In popular usage, "marketing" is the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning which recognizes that marketing is customer centered. Products are often developed to meet the desires of groups of customers or even, in some cases, for specific customers. E. Jerome McCarthy divided marketing into four general sets of activities. His typology has become so universally recognized that his four activity sets, the Four Ps, have passed into the language.

The four Ps are:

y Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants. y Pricing: This refers to the process of setting a price for a product, including discounts. The price need not be monetary - it can simply be what is exchanged for the product or service, e.g. time, or attention. y Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company. y Physical distribution refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or Page | 64

service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc.

These four elements are often referred to as the marketing mix. A marketer can use these variables to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model.

Services marketing must account for the unique nature of services. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions.

As a counter to this, Morgan, in Riding the Waves of Change (Jossey- Bass, 1988), adds "Perhaps the most significant criticism of the 4 Ps approach, which you should be aware of, is that it unconsciously emphasizes the inside²out view (looking from the company outwards), whereas the essence of marketing should be the outside ²in approach". Even so, having made this important caveat, the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity, as well as a framework within which these can be used.

Market:

A market is a social arrangement that allows buyers and sellers to discover information and carry out a voluntary exchange of goods or services. It is one of the two key institutions that organize trade, along with the right to own property. Allowing markets to arrive at a Pareto efficient outcome is one of the key components of capitalism.

In everyday usage, the word "market" may refer to the location where goods are traded, sometimes known as a marketplace, or to a street market.

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Functions of a Market:

The function of a market requires, at a minimum, that both parties expect to become better off as a result of the transaction. Markets generally rely on price adjustments to provide information to parties engaging in a transaction, so that each may accurately gauge the subsequent change of their welfare. In less sophisticated markets, such as those involving barter, individual buyers and sellers must engage in a more lengthy process of haggling in order to gain the same information. Markets are efficient when the price of a goods or services attracts exactly as much demand as the market can currently supply. The chief function of a market, then, is to adjust prices to accommodate fluctuations in supply and demand in order to achieve allocative efficiency. An economic system in which goods and services are exchanged by market functions is called a market economy. An alternative economic system in which non-market forces (often government mandates) determine prices are called planned economies or command economies. The attempt to combine socialist ideals with the incentive system of a market is known as market socialism.

Types of Market:

Although many markets exist in the traditional sense--such as a flea market--there are various other types of them and various organizational structures to assist their functions.

A market can be organized as an auction, as a shopping center, as a complex institution such as a stock market, and as an informal discussion between two individuals.

In economics, a market that runs under laissez-faire policies is a free market. It is "free" in the sense that the government makes no attempt to intervene through taxes, subsidies, minimum wages, price ceilings, etc.

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Markets may be distorted by a seller or sellers with monopoly power, or a buyer with monopsony power. Also, the level of organization or negotiation power of buyers, markedly affects the functioning of the market. Markets where price negotiations do not arrive at efficient outcomes for both sides are said to experience market failure.

Most markets are regulated by state wide laws and regulations. While barter markets exist, most markets use currency or some other form of money.

Markets of varying types can spontan eously arise whenever a party has interest in goods or services that some other party can provide. Hence there can be a market for cigarettes in correctional facilities, another for chewing gum in a playground, and yet another for contracts for the future delivery of a commodity. There can be black markets, where a good is exchanged illegally and virtual markets, such as eBay in which buyers and sellers do not physically interact.

PERCEPTION:

Meaning of Perception:

´Perception is the process of electing, organizing and interpreting or attaching meaning to events happening in environmentµ.

Perception is something more than sensation. It co-relates , integrates comprehends the various sensation and information received from different organs of the body by means of which a person develops his sensitivity to various things and objects. Perception is determined by both physiological and psychological factors. This is because perception is developed based on previous experience (learning), feeling and motives. Whereas sensation only activates the sensory organs of the body. Simply

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stated, activation of the ears to hear what another person is saying is sensation and the inference of what is heard is perception.

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Selective Attention:

There is a tendency among people to consciously see and hear only certain aspects of the advertising message which is being communicated.

EXTERNAL FACTORS INTERNAL FACTORS

P Selective Exposure Selective Attention E

R Intensity and size Reception, comprehension C and Retention

Position P

T Perceptual vigilance Contrast I Expectation O

N Novelty

Repetition Subliminal Perception

Movement

Perception is a selective process. Usually, people are able to sense and receive only limited information from the environment and hence are characteristically selective. During this process of selection, certain as pects Page | 69

of stimuli are screened out and others admitted. These aspects of the stimuli which are admitted remain and fall within the threshold of the person, while those which are screened out fall out or below the threshold limit.

EXTERNAL AND INTERNAL FACTORS

The manner in which either a production or service is perceived will depend upon both internal and external factors. This is to say that both external reality and internal reality are intertwined. As human being we carry all of our experience in our mind and have our own selfish interests, needs, motives, and expectations into the way which we could like ¶reality· to exist in the world.

EXTERNAL FACTORS INFLUENCING ATTENTION

Intensity and size: The brighter the sound (intensity) or more louder the sound , the more likely the person·s attention is drawn to it. For instance, advertisers use this characteristic to draw the attention of the readers or viewers. Large sized advertisement in a newspaper or magazine will be noticed and also read more often than a small insertion given although the increase in size may not be linear.

y Position: The position of display of the product or advertisement also is determining factors of attracting the attention. An advertisement placed next to a compatible editorial column of magazines, and newspaper is thought to attract more readership response.

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y Contrast: Human beings have the ability to adapt to sound, odors, pain, bright lights, neon signs and movements. That is, human beings are able to use sensory organs to adapt themselves to various stimuli. This is where contrast will help in the perception process.

y Novelty : It has been observed by marketers that anything which is different from what are normally expect tend to attract attention like an unusual bottle shape or a perfume strips in a magazine and so on.

y Repetition: Advertisements are repeated more often to enable consumers for brand recall as well as stimulate them and create a strong desire for interest in the purchase of the product.

y Movement: Advertisers have also started using billboards or hoardings with movement. Mobile vans etc. so as to inject a feeling of movement into it. Many marketers are finding out smarter ways to reach out too to the consumer by organizing some movementful activities like holdings free trails. Demonstrations, exhibitions, mobile vans etc. such exercise could also result in creating excitement and reinforce top of mind recall.

INTERNAL FACTORS:

Customers may not receive the messages passively. Usually customers may take the message given to them by the marketers and then use it so that is may fit into their own internal world and then try to work out in their mind about clues to determine the brands capability. Marketers are interested in knowing what is the impact of their usage of marketing mix elements on the minds of the consumers. The marketer has to constantly understand ´what is going on in the consumers mind thereµ.

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Selective Exposure:

Through selective exposure people try to avoid coming into contact with or avoid any message that may go against or be contradictory to the strongly held beliefs and attitudes. A person·s beliefs very strongly influence his perception about people or things. Because of this, a fact is conceived not on what it is but on what a person believes it to be. Thus the individual normally puts a censorship on the stimulus (inputs) to avoid disturbance of this existing beliefs and value. This is also known as maintains of cognitive consistency.

y Selective Reception, Comprehension and Retention: There is a natural tendency among people to notice the sti muli such that the information received will fit into his or his existing mindset. People are selective in their tendency to receive certain information and retain it in such a way that will support their preconceptions.

y Perceptual Vigilance Or Defence: Perceptual defence refers to the individual being vigilant and screening out of those stimuli or elements which create conflict or may give rise to a threatening situation. The consumers may subconsciously screen out the stimulus which is found to be psychological threatening, even if the exposure has taken place. They may even perceive other factors to be present, which may not be a part of the stimulus situation.

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y Expectation: Expectation affects what a person perceives. Expectation refers to the state of anticipation of a particular behavior from a person. Even in marketing, people often perceive what they expect to perceive rather than the message they actually receive.

y Subliminal Perception: Subliminal perception is used to describe something that is below the level of perception. People can get stimulated below their conscious awareness level. Such persons can perceive stimuli without being consciously aware that they are doing so.

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DATA ANALYSIS & INTERPRETATION

Table 1

No of respondents aware of HP range of Laptops

Percentage No of Variables of Respondents Respondents

Yes 83 83%

No 17 17%

Total 100 100%

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Graph 1

Respondant's awareness about P Laptops

90 83 80 70 60 50 Yes 40 No 30 17 20 10

Percentage of Percentage Respondants 0 Variables

Source : Field Survey

Concept

This question is asked in the very beginning of the questionnaire in order to assess if the respondent is aware of Hewlett Packard·s Range of Laptops. This also helps us to understand the responses better as individuals who are aware about Hewlett Packard laptops would be able to form better and accurate perceptions. This would also thereby help us to analyze and give recommendations accurately.

Analysis

The above graph shows that a majority 83% of the respondents are aware of Hewlett Packard·s Range of Laptops. The remaining 17% are unaware of Hewlett Packard·s Range of Laptops.

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Interpretation

From the graph it is clear that a majority of respondents are aware of Hewlett Packard·s range of laptops. This is a favorable condition as the number of people who are unaware of their range of laptops are 17%.

Table 2

No of Respondents owning a Hewlett Packard Laptop

Percentage No of of Variables Respondents Respondents

Yes 26 26%

No 74 74%

Total 100 100%

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Graph 2

Respondents O nership of P ptop

80% 74% s t 70% 60% 50% esponden

R Yes 40% of 26% No e

} 30% |

t 20%

en {

r 10% e

P 0%

y y

V ri zles

Source: Field Survey

Concept

This question intends to find out whether the respondents own or previously owned a Hewlett Packard laptop. This question allows us to know, how many among the respondents are using a Hewlett Packard Laptop now or previously.

Analysis

From the graph we come to know that 26% of the respondents are not using HP laptops. The remaining 74% of respondents do not own a HP Laptop.

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Interpretation

A majority of the respondents were not owning a Hewlett Laptop. This could also include a majority of users not owning a laptop at all. The remaining 26% of respondents have used a Hewlett Packard Laptop. This includes both, the people who currently own a HP laptop and also those who have used it in the past.

Table 3

Respondents responses to whether HP Manufactures the best range of laptops

Percentage No of of Variables Respondents Respondents

Strongly Agree 12 12%

Agree 56 56%

Disagree 21 21%

Strongly Disagree 4 4%

Don·t Know / Can't Say 7 7%

Total 100 100%

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Graph 3

Responses to hether P m nufactures Best aptops

60% 56% 50% Strongly Agree s of t 40% Agree age t 30% Disagree 21%

cen Strongly Disagree r

esponden 20%

e 12% ~ R P 7% Don¶t Kno / Can't Say 10% 4% 0% Variables

Source: Field Survey

Concept

This question was asked in the form of a statement as to whether the respondents would agree that Hewlett Packard manufactures the best range of laptops. This question was asked to measure the level to which the respondents perceived that the laptops manufactured by Hewlett Packard was the best available in the market.

Analysis

From the graph it can be observed that 12% of the respondents strongly agree that Hewlett Packard manufactures the best range of laptops. 56% of the respondents agree with the statement. 21% of the respondents perceive that HP doesn·t manufacture the best range of laptops. Another 4% of the respondents strongly disagree that HP manufacture the best range of laptops. 7% of the

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respondents do not have any perceptions as they don·t know or cannot tell their opinion about whether HP Laptops manufactures the best range of laptops in the market.

Interpretation

The responses got for this question has been favorable to an extent to Hewlett Packard. A majority of respondents fall in the category of ´Strongly Agreeµ and ´Agreeµ. Which in turn means that they hold a positive perception about HP·s ability to manufacture the best range of laptops. At the same time, more than 30% of the respondents question the ability of HP to manufacture the best ra nge of laptop. Among these, 21% of the people disagree with the statement. Another 4% strongly disagree with the statement.

Table 4

Respondents perception about the prices quoted for Hewlett Packard Laptops

Percentage No of of Variables Respondents Respondents

High Priced 18 18%

Same as Competition 53 53%

Value for Money 21 21%

Low Priced 8 8%

Total 100 100%

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Graph 4

Respondents perception about the pricing of ewlett Packard Laptops

60% 53%

50%

40% Hi P i ed

Same as ompetition 30%

21% 18% Val e for Money 20%

Low Pri ed Respondents

Percentage of Percentage 8% 10% 0% Variables

Source: Field Survey

Concept

The question asks the respondents what they perceive the price of Hewlett Packard laptop is. This question will help us understand what the customers feel about the price of the laptop when compared to other laptops available in the market.

Analysis

From the graph, we can see that 18% of the respondents feel that Hewlett Packard Laptops are highly priced. 53% of the respondents feel that the pricing of Hewlett Packard Laptops are the same as the prices quoted on competing brands. Out of the remaining respondents, 21% of them feel that they are value for money. The remaining 8% feel that Hewlett Packard·s laptops are low priced. Page | 81

Interpretation

From the graph we can infer that majority of respondents feel that the pricing of Hewlett Packard Laptops are the same as the competing laptops. This might work against the interests of HP if customers don·t find any difference in the product offering of HP laptops. 18% of the respondents who feel that HP laptops are high priced are also a cause for concern. These respondents feel that they do not derive an equal or more than equal level of satisfaction from the laptops for the money they pay for it.

It is important for HP to increase the percentage of people who feel that HP laptops are value for money as only 21% of customers feel that they are value for money laptops. The remaining 8% feel that Hewlett Packard laptops are low priced, which means that they find the competing laptop prices more than the prices quoted for Hewlett Packard laptops.

Table 5

Respondent·s perception about the quality of

Hewlett Packard Laptops

Percentage No of of Variables Respondents Respondents

High Quality 39 39%

Medium Quality 58 58%

Low Quality 3 3%

Total 100 100%

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Graph 5

Respondents perception about the Quality of ewlett Packard Laptops

70% 58% 60%

50%

39% Hi Q ality

40% Medi m Q ality 30%

Low Q ality 20% Respondents Percentage of Percentage 10% 3% 0% Variables

Source: Field Survey

Concept

This question tries to find out the respondents perceptions about the quality level of Hewlett Packard Laptops. Quality plays a key role in helping the customers to choose a laptop.

Therefore this question would asses the level of quality which the respondents would like to assign for the Hewlett Packard range of laptops.

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Analysis

From the graph we can say that 39% people feel that Hewlett Packard laptops are of high quality and a majority of 58% people perceive Hewlett Packard laptops as a medium quality laptop. The remaining mere 3% people perceive it as a maker of low quality laptops.

Interpretation

From the table and graph, we can interpret that the responses given by the respondents regarding their perceptions about Hewlett Packard Laptops are neither too favorable to HP nor too unfavorable to HP. 58% of the respondents feel that Hewlett Packard manufactures laptops which are of medium quality. 39% of people feel that Hewlett Packard are of high quality. Only 3% people perceive Hewlett Packard as a maker of low quality laptops.

In competition, it is necessary for Hewlett Packard to ensure that a majority of customers feel that it makes high quality laptops.

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Table 6

Respondent·s Ranks to Various Brands

Sony HP IBM Compaq Acer Dell Toshiba Vaio

Rank 1 10 32 14 4 1 17 13

Rank 2 29 21 11 12 1 17 5

Rank 3 20 15 17 13 2 18 8

Rank 4 16 11 24 14 5 16 5

Rank 5 8 3 15 28 15 11 9

Rank 6 3 6 5 12 39 9 17

Rank 7 4 2 4 8 28 4 38

Graph 6

Respondent's Ranks to various brands

100 90 Rank 7 80 Rank 6 70 60 Rank 5 50 Rank 4 40 Rank 3 30 Rank 2 20 10 Rank 1 0 Percentage of Respondants of Percentage

P o H BM cer ell I A D y V ompaq oshiba on C T S Brands

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Source: Field Survey

Concept

This question was asked with the intention of finding out how the respondents rank the quality of the Hewlett Packard laptop against other major brands available in the market. This would help us understand the customer perceptions about Hewlett Packard laptops in a much better way than if we had studied the quality of HP in independence.

Analysis

From the graph we can make out that the brand which scores the highest in rank 1 is Sony Vaio. The next brand is Hewlett Packard which come the highest in the second rank. The brand which most people perceive as rank 3 is also Hewlett Packard. A majority of people feel IBM is the brand which comes fourth in terms of quality. Compaq comes fifth in terms of quality. Acer comes sixth in terms of quality and the brand with the least rank is Toshiba.

Interpretation

From the graph, we can make various observations. Though Hewlett Packard has performed extremely well in this question, there are certain important observations which is of concern. Firstly, a majority of the customers feel that Sony Vaio is a better brand than Hewlett Packard. Therefore Sony Vaio qualifies as one of the major competitor for Hewlett Packard. But Hewlett Packard leads in the rank two and rank three positions which infact out numbers Sony Vaio.

Page | 86

Table 7

Exlusivity of HP laptops

Percentage No of of Variables Respondents Respondents

Strongly Agree 11 11%

Agree 54 54%

Disagree 20 20%

Strongly Disagree 8 8%

Don·t Know / Can't Say 7 7%

Total 100 100%

Graph 7

Respondents perception about the Exclusivity of ewlett Packard's Range of Laptops

60% 54% 50% Strongly Agree 40% Agree 30% Disagree 20% 20% Strongly Disagree

Respondents 11% Percentage of Percentage 8% Don¶t Know / an't Say 10% 7% 0% Variables

Page | 87

Source: Field Survey

Concept

This question was asked to find out the respondent·s perception about whether Hewlett Packard·s range of laptops are exclusive or not. This would helpful in our analysis as the brands that have a exclusive range of laptops would benefit in the long run.

Analysis

From the graph, we can analyze that 11% of the people strongly agree that HP laptops are exclusive in terms of quality and features when compared to the laptops of the competition. Another 54% of the respondents agree that HP laptops are exclusive. Apart from these people, another 20% of the people disagree with the fact that HP manufactures exclusive range of laptops. Another 8% people strongly disagree with the fact that HP manufactures exclusive range of laptops. 7% of the respondents do not have perception about this as they are unaware and cannot tell their response.

Interpretation

From the graph, we can interpret that 11% of the people strongly agree that HP Laptops are exclusive. These segment of people might be those who have used the laptops and are very happy with the performance. Another 54% of the respondents also agree with this statement. These are again people who have either used the laptop in the past or are currently using it. Apart from the above two responses, the rest didn·t have a positive response to the question. 20% of people disagree with the statement. These could be people could be users of HP Laptops who are not satisfied with the product or people who use a different range of laptop and are happy with its performance.

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Table 8

Awareness about product features

Percentage No of of Variables Respondents Respondents

Lightscribe Tech 17 17%

Quick Play 40 40%

Brightview Screen 43 43%

Total 100 100%

Graph 8

Respondents awareness about the product features available exclusively on P aptops

50% 43% 40%

40% s of t

30% Lightscribe Technology age t

uick Play 20% 17% cen Brightview Screen r esponden e R P 10%

0% Variables

Source: Field Survey

Page | 89

Concept

This question checks how many people are aware of the some of the most well known features of Hewlett Packard. This question asks the respondents their awareness of respondents about three major features of HP Laptops being Lightscribe Technology for labeling discs by etching on them, Quickplay o ption which allows the user to access multimedia without switching the computer on, and Brightview screen which provides extra contrast and brightness to the LCD screen.

Analysis

From the 100 respondents who were surveyed, only 17% people were aware of Lightscribe technology, 40% were aware of Quickplay feature and 43% of the respondents were aware of Brightview Screen.

Interpretation

From the graph, we can infer that a majority of people are unaware of the exclusive features available on Hewlett Packard Laptops. This is not a good sign for Hewlett Packard which invests millions of dollars in developing new technology. From the above graph, we notice that only 17% people are aware of Lightscribe technology, which is pioneered by HP. Also a 40% of the respondents are aware of Quickplay and 43% of the respondents aware of Brightview screen which is again not a good sign for Hewlett Packard. This could be because of people·s lack of proper knowledge about HP Laptops, Poor advertising and communication from Hewlett Packard in educating the people about its product features etc.

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Table 9

Respondent·s perception about the style and appearance of Hewlett Packard Laptops

Percentage No of of Variables Respondents Respondents

V.Good 20 20%

Good 62 62%

Bad 7 7%

Very Bad 8 8%

Don·t Know / Can't Say 3 3%

Total 100 100%

Page | 91

Graph 9

Respondents perceptions about the style and appearance of P aptops

70% 62% 60% V.Good s of t

50% Good 40% age t Bad 30%

cen 20% Very Bad r esponden

e 20% R P 7% 8% Don¶t Know / Can't Say 10% 3% 0% Variables

Source: Field Survey

Concept

The style and appearance is one of the most important feature which a prospective buyer of Hewlett Packard Laptop will look for in a laptop before making a purchase. This question intends to analyze the respondents perception about what they feel about the style and appearance of Hewlett Packard Laptops. The options range from Very good to Very bad. This question will help us to understand customer perception about Hewlett Packard laptops in a better way.

Analysis

From the graph, we can see that 20% of the respondents feel that the style and appearance of the laptop is very good. A majority of 62% of respondents feel that the style and appearance of the laptop is good, though not very good. 7% of the respondents feel the it is bad, another 8% feel it is very bad and 3% of the people have reserved their response as they don·t know or cannot say.

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Interpretation

From the graph we can infer that majority of respondents have a positive image about the style and performance of Hewlett Packard Laptops. Almost 80% of the respondents feel that the style and design is either very good or good. This also explains why Hewlett Packard is also one of the leading brands in laptop market in India and the world.

Table 10

Respondent·s perception about the relationship between the price and quality of Hewlett Packard Laptops

Percentage No of of Variables Respondents Respondents

High Quality, Low 11 11% Price

High Quality, High 28 28% Price

High Quality, Value 44 44% for Money

Low Quality, High 17 17% Price

Low Qulaity, Low 0 0% Price

Total 100 100%

Page | 93

Graph 10

Respondents perceptions about the relationship between the price and quality of P aptops

50% 44% High uality, Low Price

40% s of t High uality, High Price 28% 30% age t

High uality, Value for 20% 17% cen Money r

esponden 11% e R P 10% Low uality, High Price 0% 0% Low ulaity, Low Price Variables

Source: Field Survey

Concept

This question is asked in order to find out respondent·s perception about the relationship between the price and quality of Hewlett Packard laptops. It is very important to understand the relationship between the two as customers tend to relate the two of these before they make a purchase.

Analysis

From the graph, we can see that 11% of the people feel of High quality and low price, 28% feel it·s of high quality, high price. A majority of 44% feel that HP laptops are value for money and have high quality. Another 17% feel Hewlett Packard Laptops are having low quality and high price. None of the respondents felt that HP Laptops are of low quality and low price.

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Interpretation

From the graph we can find that a majority 44% of them feel that HP laptops are of high quality and value for money laptops. This is very favorable to the customer as they generally expect laptops to be of this kind while making a purchase. 28% of people feel that HP Laptops are of high quality and high price. This could be attractive to niche customers who look for high quality and do not bother about the price. 17% people feel that HP laptops are of low quality, but highly priced. This is unfavourable to the company. Overall we can infer that respondents have a positive image about Hewlett Packard Laptops in terms of their perceived relationship between quality and price.

Table 11

Respondent·s opinion about the Ad campaigns of

Hewlett Packard Laptops

Percentage No of of Variables Respondents Respondents

Good 24 24%

Average 55 55%

Not Good 8 8%

Haven·t Seen / Not Noticed 13 13%

Total 100 100%

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Graph 11

Respondents opinion about the Advertising Ca paigns of P laptops

60% 55%

ood 50% 40% Average 30% 24% Not Good 20% 13% Respondents

Percentage of Percentage 8% 10% Haven¶t Seen / Not

Noti ed 0% Variables

Source: Field Survey

Concept

Advertising is one of the major tools which a company can use inorder to increase the sale of their product. This question here tries to find out the respondents opinion about the advertising campaigns of HP laptops. This would help us understand what is the reach and level of acceptance of the ad campaigns in the print and television media.

Analysis

From the graph we can notice that 24% of the people feel that the ad campaigns of Hewlett Packard laptops are good. A majority 55% feel the ads are average and not good. 8% of the respondents feel the ads are not good and 13% of the people haven·t seen or not have noticed the ads.

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Interpretation

From the above graph and analysis, we can infer that a majority of people feel that the advertising campaign of Hewlett Packard Laptops are average. Which means that they do not think they are very good. 24% people feel that the ad campaigns are good which is favourable to HP. The remaining 8% of the people feel that they are not good and 13% of the people haven·t seen or not noticed the ads. This could mean that almost 20% of the people are either not satisfied with the ads or that the ads are not catchy enough for them to take notice. HP has to do a further analysis to find the specific profile of this 20% respondents and check if they are prospective customers or not.

Table 12

Factors which would induce a customer to buy a

HP Laptop

Percentage No of of Variables Respondents Respondents

Brand Name 14 14%

Quality 43 43%

Price 23 23%

After Sale Service 17 17%

Don·t Know / Can't Say 2 2%

Other 1 1%

Total 100 100%

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Graph 12

Factors which would induce a customer to buy a P aptop

50% 43% Brand Name

40% s of

uality 30% Price age 23% t 20% 17% After Sale Service cen 14% r esponden

e Don¶t Know / Can't Say R P 10% 2% 1% Other 0% Variables

Source: Field Survey

Concept

This question tries to find out the parameters which would induce the customer to buy a HP Laptop. This would give a clear understanding of what the customer look for in a laptop and would therefore help Hewlett Packard with the information which could help them increase the sales of their laptops.

Analysis

From the graph, we can see that 14% people feel brand name is the most important parameter in choosing a HP Laptop. A majority 43% feel quality alone is the most important parameter which would help them decide. 23% feel it is price, and 17% feel its after sales service. 2% people don·t know or cannot say and 1% have other reasons.

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Interpretation

From the graph, it is clear that majority of customer feel quality is the most important aspect which would induce them to buy a Hewlett Packard Laptop. After quality, feel give price of the laptop and the after sales service provided the most important. One interesting observation here is that people say the brand name is not the most important thing which would induce them to buy. 1% people had other reasons like free gifts, exchange offer, combo offers etc which would induce them to buy a Hewlett Packard laptop.

Table 13

Respondent·s Choice of brand while buying a new laptop.

Percentage No of of Variables Respondents Respondents

IBM 15 15%

Sony Vaio 31 31%

Compaq 5 5%

Hewlett Packard 26 26%

Dell 14 14%

Acer 1 1%

Other 8 8%

Total 100 100%

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Graph 13

Respondent's hoice of Brand while buying a new laptop

35% 31% IBM 30% 26% Sony Vaio s of t

25% Compaq 20% age t 15% 14% Hewlett Packard 15%

cen Dell r

esponden 8% e 10% R P 5% Acer 5% 1% Other 0% Variables

Source: Field Survey

Concept

This question intends to ask the final question to the respondent·s as to which brand they would like to buy if they were to buy a new laptop. Even though a customer might rank a brand higher in individual parameters like quality and price, his final choice of laptop might differ. Therefore this would give a clear picture of choice of laptop as against the competitors.

Analysis

From the graph we can find out that 15% people prefer to buy IBM laptops, as against 31% for Sony Vaio, 5% for Compaq and 26% for Hewlett Packard. Apart from that, 14% people feel that they would like to purchase a Dell Laptop. 1% people want to buy an Acer laptop and 8% people would prefer other brands

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Interpretation

We can hereby infer that majority of people prefer to buy Sony Vaio range of Laptops. This is followed by Hewlett Packard. We can therefore conclude that Sony Vaio is one of the major competitor for HP Laptops. IBM with 16% of the people·s choice also is a strong competitor for HP range of Laptops.

Table 14

Gender of the Respondents

Percentage No of of Variables Respondents Respondents

Male 64 64%

Female 36 36%

Total 100 100%

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Graph 14

Gender of Respondents

70% 64% 60% 50% 40% 36% Male 30% Female 20% 10%

Percentage of Percentage Respondents 0% Variables

Source: Field Survey

Concept

The reason behind asking this question is to get to know the gender of the respondents.

Analysis

From the graph we can see that 64% of the respondents who were surveyed are male and 36% of them are female.

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Interpretation

We can see that a majority of users of HP laptops are Male when compared to females.

Table 15

Age Group of the Respondents

Percentage No of of Variables Respondents Respondents

15-20 18 18%

21-25 58 58%

26-35 12 12%

36-45 7 7%

> 45 5 5%

Total 100 100%

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Graph 15

Age Group of Respondents

70% s t 58% 60% 50% 15-20 21-25 esponden 40% R 26-35 of

30% 18% 36-45 age t 20% 12% > 45 7% cen 10% 5% r e

P 0% Variables

Source: Field Survey

Concept

This question intends to find out the age group of respondents. The age group is also one of the factors which would help us assess the perceptions about the customers have about Hewlett Packard in a better way.

Analysis

From the graph we can note that 18% of the respondents fall in the 15-20 Age Category. 58% of the respondents age between 21-25. Apart from them, 12% fall in the age category 26 ² 35. 7% of the respondents are in the age group of 36 ² 45. The remaining 5% are above the age group of 45. Page | 104

Interpretation

We can hereby conclude that a majority of users of laptops are in the age group of 21-25 when compared to other age groups

Table 16

Occupation of the respondents

Percentage No of of Variables Respondents Respondents

Student 65 65%

Working Professional 22 22%

Business 7 7%

Teaching Academic 6 6%

Total 100 100%

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Graph 16

Occupation of the Respondents

70% 65% s t 60%

50% Student

esponden 40%

R Working Professional

Business 30% 22% Teaching Academic age

t 20% 7% 6% cen 10% r e

P 0% Variables

Source: Field Survey

Concept

This question intends to find out occupation of the respondents. This will help us to segment the customers as the occupation of the respondents would give us a clear picture of what purpose a laptop is being used by the respondents.

Analysis

From the above graph we notice that 65% of the respondents are students and 22% of the respondents are working professionals. The remaining 7% are business men and 6% of them being in academic and teaching professions.

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Interpretation

From the graph, we can infer that majority of users of laptops are students, which in this case are students studying business management compared to other types of users. The next type of users is primarily working professionals.

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FINDINGS

y It is known that globally Hewlett Packard is a leading brand in the PC and Laptop business having a unassailable market share. The sales of Hewlett Packard laptops are a whisker higher than IBM as on 2006. It is seen from the analysis that a majority of people are aware of Hewlett Packard·s range of laptop. This can be attributed the global presence of the brand, availability across major cities in the country, product range and their quality levels. Also as we saw from the survey, majority of people found the ads good and around average. This also has led to better awareness of the brand in the minds of the consumer.

y Hewlett Packard is perceived as a maker of the best range of laptops by the people. A majority of the respondents agreed that Hewlett Packard makes the best range of laptop. The people·s perception about Hewlett Packard laptop·s performance is based on various factors like quality, price and service provided. Also, since HP is a market leader people have a good perception about the brand.

y Quality plays a very important role when customers form perceptions about a brand. In the case of Hewlett Packard laptops, a majority of people don·t look at Hewlett Packard laptops as having the best quality. Majority of people feel it has medium quality. This could be because they feel its not as great as another brand, unsatisfied with the performance, faced technical problem with the laptop etc.

y Majority of people feel that in terms of quality Sony Vaio is better than Hewlett Packard laptops. When asked to assign ranks to seven well know brands in the market, Sony Vaio got maximum number of Rank 1. Followed Page | 108

by this Hewlett Packard secured maximum number of Rank 2 and Rank 3. This put together is more than the rank obtained by Sony Vaio in Rank 2 and Rank 3.

y The main competitor for Hewlett Packard in terms of Quality is Sony Vaio. As majority of people ranked Sony Vaio higher than HP in terms of quality. This is closely followed by brands like Dell, IBM and Compaq etc.

y People agree that Hewlett Packard Laptops include a lot of features which are exclusive to its laptops alone. But at the same time people were not aware of the major technologies and product features which are exclusively available on Hewlett Packard Laptops like Lightscribe, Quickplay and Brightview screens. This could be because HP hasn·t communicated these technologies to the customers through their adversitements, POPs etc well.

y The advantage Hewlett Packard has is its product·s style and appearance. People feel that the design, style and appearance of the laptops are good. The new laptop ranges launched by HP like DV9000 and DV6000 series are testimonies for these. Again, this is a reinforcement of the fact that Hewlett Packard Laptops are considered as the manufacturer of the best range of laptops.

y Hewlett Packard even though has a very good presence in the minds of the people, the advertising campaigns were not very much appreciated by the people. They feel that that the advertising campaigns are average. A lot of respondents feel that HP ads are filled with a lot of words and pictures and is difficult to read.

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y When asked about which brand to buy, most of the people preferred Sony Vaio over Hewlett Packard Laptop. This is also a reinforcement of the previous finding that people perceive Sony Vaio as a better quality laptop in comparison to Hewlett Packard.

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RECOMMENDATIONS

y In today·s cut throat competition, the quality levels between companies are bridging and the gap closing in. Therefore companies have to maintain their levels of quality to the highest order. In the case of Hewlett Packard, since people feel that Hewlett Packard laptops are of medium quality, it should take enough steps to ensure that people feel its of high quality. The reality could be that Hewlett Packard could be a manufacturer of high quality laptops. But it is necessary to ensure that people perceive the brand in the same way. This could be done through communication through advertisement, better customer service, training the salesmen to communicate about the quality to the customer at the time of purchase etc.

y Hewlett Packard·s advertising campaign has been seen as average and not very attractive. The advertising campaigns of Hewlett Packard are characterized by international ads, with a lot of words and pictures. People responded that the ads are difficult to understand and lack Indian taste. Therefore it has to improve the ads, try to ad an Indian touch and make it more attractive.

y A lot of customers feel that the pricing of laptops of Hewlett Packard as the same as competition. In a country like India, it is important to price lesser than the competition to survive and to cater to a larger category of people.

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y Hewlett Packard has been setting industry standard features which are exclusive to its range or laptops. But even then, the awareness about their product features is not very high. This again is due to lack of proper communication. Hewlett Packard should give more importance to these product features and increase awareness about them as it will help them to get more sales.

y Customers have a very good perception about the style and appearance of the laptops. Hewlett Packard should ensure that they use it to their advantage. And also Hewlett Packard should ensure that their future products also maintain the same look and design. To convince customers that their laptop designs are the best, they can use the various awards and recognitions that they have received for their laptops on their advertisements.

y From the current project survey, we could clearly make out that there exists severe competition in the market. This can be proved with reference to two distinct points. Firstly when asked about which brand ranks the highest in terms of quality, most of the respondents chose Sony Vaio. Secondly, when asked about the brand they would like to buy in the future, majority of customers again chose Sony Vaio. This clearly shows that Sony Vaio is a clear competitor atleast in the minds of the consumer for HP. It has to tackle this competition well inorder to derive long term results.

It can tackle competition, by cutting costs, increasing market share, reducing price below the competition etc.

y From the survey we found that the majority of users of laptops are students. These students are primarily students of management, art, interior design etc where a laptop is of much use. Also the second largest users of laptops

Page | 112

are working professionals primarily from computer field. Therefore Hewlett Packard should focus on these group of customers

y The major users of laptops are in the age group of 21-35 years of age. These groups of customers include students, working professionals, businessmen, housewives etc. Hewlett Packard has to focus on these group of customers and possibly create a separate product line for each of these customers to help satisfy their needs in a better way.

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CONCLUSION

Hewlett Packard today is a technology company operating in more than 170 countries. This phenomenal growth was achieved over the years with a lot of hard work, determination, calculated risks and year after year of splendid performance.

In our survey we found that customers are satisfied and feel that Hewlett Packard is a maker of quality laptops. Such positive perceptions about Hewlett Packard could not have been built without the support and work of each and every employee of Hewlett Packard. And with all their efforts put together, Hewlett Packard is helping explore how technology and services can help people and companies address their problems and challenges, and realize their possibilities, aspirations and dreams. HP applies new thinking and ideas to create more simple, valuable and trusted experiences with technology, continuously improving the way our customers live and work.

Hewlett Packard has become synonymous with Laptops and Personal Computers India today and with the industry bound to grow more and more for the years to come, the things only look brighter. Along with HP, the opportunities and the space to operate will be available to other manufacturers of laptops as well. Thus, there are a lot of opportunities to harbor clean and healthy competition among the PC Manufacturers.

Page | 114

BIBILIOGAPHY

Books:

y C.R. Kothari (1998), Research Methodology (2nd edition) Vishwa

Prakashan, 4835/24, Ansari Road, Durgaganj, New Delhi ² 110002.

y S.L. Gupta (1999), Marketing Research, Am Excel Publishers Pvt. Ltd., A-

45, Naraina, Phase-1, New Delhi ² 110028.

y Philip Kotler & Gary Armstrong (2005), Principles of Marketing (4th

Indian Edition) Pearson Education, Inc, Indian Branch, 482, F.I.E

Patparganj, Delhi 110092, India

Websites:

y www.google.co.in

y www.wikipedia.org

y http://www.hp.com/hpinfo/

y http://welcome.hp.com/country/in/en/prodserv.html

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Others:

Business line-smart buy-April 21,2010

Business line-smart buy April 28, 2010

Hindustan times- ³BRUNCH´-April 25,2010

Marketing Research-4th edition-Naresh k. malhotra.

Marketing Research- TATA Megraw-Hill

Marketing research- G. C. Beri

Marketing Reasearch-3rd edition-paul hague

Page | 116

APPENDIX

Page | 117

QUESTIONNAIRE

1) Project name ͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙

͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙.

2) Location ͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙

3) Customers Name & Mo.No͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙. ͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙.

4) E-mail ID-͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙..

5) Age͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙.

6) Preference of the hp model͙͙͙͙͙͙͙͙͙͙͙͙͙͙

7) Before they use the hp product͙͙͙͙͙͙͙͙͙͙͙͙

(a) Yes (b) No 8) Where from they collect the news about hp computer (a) friends (b) Newspaper (c) Others

9) Computers name which are in use͙͙͙͙͙͙͙͙͙͙ ͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙͙.

10) When will he/she buy the new computer͙͙͙͙͙͙͙ (A) Within 1 month (B) Within 3 months (C) After 6 months

Page | 118

LIST OF THE COMPANIES SURVEYED

1. hp India.

2. Dell India.

3. Samsung India.

4. Toshiba India.

5. Sony India.

6. Lenove India.

Page | 119

RAW DATA

Page | 120

INDIAN COMPUTER(HP) INDUSTRY

Import Liberalisation and Development of Indian Computer Industry:

The Indian computer industry has come a long way since its total reliance on imports from a few multinationals in the 1960s. However, the current round of import liberalisation is producing an increasing number of features redolent of that earlier period. This article investigates the relationship between import liberalisation and development of industrial production, exports and technological capabilities. It concludes that import liberalism cannot be regarded as the optimum strategy for any country wishing to develop local production capabilities, and that some measure of import protection has to be in place for this development to lake place. However, the case is made fora reactive government policy which can apply varying degrees of protection or liberalisation as the circumstances of external change and industrial development demand. Therefore, both the timing and phasing ofpolicx changes will be important. Technical change and other factors are shown to have mediated some outcomes and to have constrained policy choices.

1 Introduction THIS article considers the impact of import liberalisation on India's computer industry. This industry is chosen because of its increasing importance to the Indian economy, because of the long history of both industry and related government policies, and because of the different types of policy it has been subject to during that history. Broadly speaking, six historical phases can be delineated.

(i)Multinational imports (1950s-1972). Th e government felt confident to alter policy and first computer was introduced into India in severely restrict imports in order to encourage 1956 for use at the Indian Statistical Institute. indigenous production. As a result, IBM Multinational corporations (MNCs) were decided to pull out of India. Productionrelated allowed virtually free rein in the Indian capabilities including design and computer market with the result that the manufacture were built up within the country market was supplied with outdated equipment but these remained confined to one public that was all imported. Because India had no sector firm (Electronics Corporation of India local base of computing skills, the Indian - EC1L). government had little choice but to agree to (in) Private sector competition (1978-1983/ this situation. 84). Import protection was maintained but (ii) Public sector production (1972-1978). industrial licensing was liberalised, with As familiarity with the use and maintenance several private sector firms being granted of computers grew and as skills developed licences for the manufacture and sale of in complementary areas of electronics, the small computers. EClL's market share fell

Page | 121

to 10 per cent by 1980, but overall demand bureaucracy and excise duty. was boosted by an increase ia government Nevertheless, policy was not completely and public sector purchasing. liberalised. Licences were required for i mport (iv) Liberalising supply, boosting demand of some types of computer, particularly those (1983/84-1987). Slight import liberalisation under Rs 0.15m (US$5,000), and overall in 1983 was succeeded by the true emergence import tariffs were still quite high. of India into the computer age through Government/public sector purchasing also three events. Firstly, the arrival in India of continued to form the major part ot demand, IBM-compatible personal computers with a number of very large investments (PCs),' and secondly, the arrival of Rajiv from 1993-94. Hardware exports were also Gandhi as prime minister, with his great promoted through the initiation of the interest in computers. Thirdly, the 1984 New Electronics and Hardware Technology Park Computer Policy, which signalled a (EHTP) scheme. substantial liberalisation of import policy on This article will focus on the impacts complete computers, computer kits and associated with policy liberalisation in the components (though policy was never period since liberalisation of computer completely liberal). industry licensing in 1978. Amongst other (v) Reversing import liberalisation (1987- things, it will seek to ask whether the 1990). Most computer industry-related policy computer industry is in danger of going "full remained stable during this period. However, circle' back to the state that prevailed in the import policy did changebecause of concerns 1960s. about the impact of earlier liberalisations, Section II analyses the production and some backlash from local firms adversely export performance of this industry over the affected by liberalisation, and changes in the past 15 or so years. Section HI looks in detail political economy of the state. As a result, at the different types of firms operating in there was a steady reversal of some earlier the Indian computer industry and discusses import liberalisations, so that policy at the their capabilities. Section IV draws detailed end of this period was a compromise between conclusions about the relationship between the relative extremes of mid-1970s policy and industrial development. protectionism and mid-1980s liberalisation. Firstly, though, one needs to consider the (vi) Renewed liberalisation (1991-1995). indicators of industrial performance used to Following the crisis of 1991, computer measure the impact of policy and other industry policy was subject to a familiar set changes. of liberalisations: raised foreign equity limits MEASURING INDUSTRIAL PERFORMANCE with automatic approval; Exim scrips and Many industrial development commentators rely easier-to-obtain advance licences followed on quantitative indicators, and two by partial rupee flotation and then used here will be level of overall production convertibility; automatic approval for many and level of exports. However, it is always types of technology transfer; removal of M-82 Economic and Political Weekly August 26, licences for all new, expanding and merging 1995useful to look behind such measures at units; industrial registration largely removed; more qualitative data. Lall (1987) identifies locational constraints removed; new 'technologicdl capability' as a crucial companies exempted from the requirement determinani of industrialisation, yet one fcr steadily increasing levels of local which is ignored by many quantitativelyoriented component use (the phased manufacturing researchers. Although this indicator programme); reduced control of companies does not lend itself to outright measurement, covered under the Monopolies and Restricted some kind of scale can be drawn up for the Trade Practices (MRTP) Act; increasing use technological capability of producers, as of unlicensed (Open General Licence-OGL) shown in Table 1. import; and reductions in import duty, import Following Lall (1987), one may define

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technological capability as the general Indian computer industry growth has been ability to undertake the broad range of dependent on a number of factors including tasks outl ined in the table, and technological industrial licensing, overall demand, access development as growth in the capability as to inputs, marketing, prices, technological defined by movement up the categories lag, technological standardisation, and and regardless of whether or not the final attitudes towards computers in the private stage is attained. sector. Market share is determined by the These capabilities are actually embodied relative attributes of price, technological in ihe skills and experience of individual lag, quality, accessibility and desirability workers, often seen as the most critical of either imports or domestically-produced resource for information technology (IT) computers. industries [O'Connor 1985. Kumar 19881. Import liberalisation has had a partial In this case, technological development will impact on some of these factors. To be the accumulation of increasingly skilled summarise this impact, while import workers. liberalisation of kits, peripherals and II components has favoured the growth in local Quantitative Changes computer production, any liberalisation of in Hardware ProductionTable 2 . shows the rapidimports of complete computers has reduced growth ol the market share of local producers, as computer production in India over recent suggested by the figures above. years. The strength of local production can The rise and fall of market share also be measured relative to imports of corresponds to changes in import policy compute)s. Table 3 shows the proportion ol The market share for local production the Indian market taken by local producers dropped following liberalisation in the mid- as opposed to imports. 1980s but rose from the late 1980s as import In the early 1980s, local producers duties and the threshold tor minimum serviced llie major part of the local market configuration of imports were raised. With and growth rates were moderate In the Indian firms unable to address a large market mid 1980s, local production grew rapidlv and so achieve large-scale economies, hui imports grew even faster so that the large continuing tariff protection allowed them to growth in denumd was at first inel largely compete with imports and achieve increasing by imports, which took the major share of import substitution until the liberalisations the market in 1985. In 19X7. there were falls of the 1990s. in both imports and production growth as. Of course, import policy has not been the government investments and foreign only instrument o!" the Indian government exchange were diverted into higher priority to affect the industry. For example, areas because of the drought. government helped to engineer the strong There were similar problems 'vitl: growth in India s computer industry through government spending, foreign exchange its demand policies. Policies on foreign and industrial growth in the 1990s. But, investmen* and collaboration have also been by the mid-1990s, thanks particularly to a key. with most 'local production in the rally in government IT investments, the 1990s involving multinationals. local industry was stiil crowing in volume In other ways, loo, a lot of computer terms and once again growing strongly in production within India has not been as value terms. Given the rise in OGL imports, 'local' as it might appear. Figures from Gol local production was slipping againstoverall (1987b), IDC (1987) and Shekhar (1988) imports but, compared with the mid-1980s suggest that the import content of Indian it had re-asserted itself as the prime source computers fell by more than 20 per cent of computers for Indian consumers, making between 1982 and 1984, but then rose by up the majority of domestic consumption. over 40 per cent between 1984 and 1987.

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By this point, about 80 per cent of the cost of computer, the microcomputer, remained (including duties) of components and protected, so that companies wishing to materials for Indian computers was made up respond to demand had to produce them from direct imports. Much of the remaining locally and they therefore sought components 20 per cent of components were bought from for these PCs A number of factors led to Indian suppliers but themselves had a high the growth in local demand for components import content. There was some recovery being met largelv from imports. after 1987,' with the component industry Firstly, import liberalisation allowed registering a much higher growth rate and i datively quick and cheap access to imported with the overall import content falling to components. around 60 per cent in the early 1990s There were also technical factcs , [Tandon e't al 1991. Raman 1993], before particularly the emergence of the IBMcompatible rising again. PC as a copyable global Some explanation for this rise and fall of standard, which Jaikumar and Krishna imports can be found in government policy TAHI.I: 1: S.'AI.H OP PRODCCI* TKCHNOLOGICAI. which, in 1984, helped fuel a large increase CAI'AHIIJIY in demand for computers. Coupled with (I) Choice and use import liberalisation of complete computers, - Choosing ihe technology this led to a large proportion of that demand - Setting the environment for use of the being met by imports. However, one type technology

Annual Report: Page | 124

Hewlett-Packard Company

Chairman of the Board 3000 Hanover Street

L´eo Apotheker Palo Alto, CA 94304

President and Chief Executive Officer www.hp.com

To our Stockholders:

We are pleased to invite you to attend the annual meeting of stockholders of Hewlett-Packard

Company to be held on March 23, 2011 at 2:00 p.m., local time, at the Sheraton National Hotel,

900 South Orme Street, Arlington, Virginia.

Details regarding admission to the meeting and the business to be conducted are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.

Report. The notice contains instructions on how to access those documents over the Internet. The notice also contains instructions on how each of those stockholders can receive a paper copy of our proxy materials, including this proxy statement, our 2010 Annual Report and a form of proxy card or voting instruction card. All stockholders who do not receive a notice, including stockholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail unless they have previously requested delivery of proxy materials electronically.

Continuing to employ this distribution process will conserve natural resources and reduce the costs of printing and distributing our proxy materials.

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Your vote is important. Regardless of whether you plan to attend the annual meeting, we hope you will vote as soon as possible. You may vote by proxy over the Internet or by telephone, or, if you received paper copies of the proxy materials by mail, you can also vote by mail by following the instructions on the proxy card or voting instruction card. Voting over the Internet, by telephone or by written proxy or voting instruction card will ensure your representation at the annual meeting regardless of whether you attend in person.

Thank you for your ongoing support of, and continued interest in, Hewlett-Packard Company.

Sincerely,

Raymond J. Lane L´eo Apotheker

Chairman of the Board President and Chief Executive Officer2011 ANNUAL MEETING OF STOCKHOLDERS

NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Time and Date 2:00 p.m., local time, on Wednesday, March 23, 2011

Place Sheraton National Hotel, 900 South Orme Street, Arlington, Virginia

Items of Business (1) To elect directors

(2) To ratify the appointment of the independent registered public accounting firm for the fiscal year ending October 31, 2011

(3) To conduct an advisory vote on executive compensation

(4) To conduct an advisory vote on the frequency of holding future advisory votes on executive compensation

(5) To approve the Hewlett-Packard Company 2011 Employee Stock Purchase Plan

(6) To approve an amendment to the Hewlett-Packard Company 2005 Pay-for-Results

Plan to extend the term of the plan

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(7) To consider such other business as may properly come before the meeting

Adjournments and Any action on the items of business described above may be considered at the annual

Postponements meeting at the time and on the date specified above or at any time and date to which the annual meeting may be properly adjourned or postponed.

Record Date You are entitled to vote only if you were an HP stockholder as of the close of business on January 24, 2011.

Meeting Admission You are entitled to attend the annual meeting only if you were an HP stockholder as of the close of business on January 24, 2011 or hold a valid proxy for the annual meeting.

You should be prepared to present photo identification for admittance. In addition, if you are a stockholder of record or hold your shares through the Hewlett-Packard

Company 401(k) Plan or the Hewlett-Packard Company 2000 Employee Stock Purchase

Plan, also known as the Share Ownership Plan, your ownership as of the record date will be verified prior to admittance into the meeting. If you are not a stockholder of record but hold shares through a broker, trustee or nominee, you must provide proof of beneficial ownership as of the record date, such as your most recent account statement prior to January 24, 2011 or similar evidence of ownership. If you do not provide photo identification and comply with the other procedures outlined above, you will not be admitted to the annual meeting.

The annual meeting will begin promptly at 2:00 p.m., local time. Check-in will begin at

12:30 p.m., local time, and you should allow ample time for the check-in procedures.

Voting Your vote is very important. Whether or not you plan to attend the annual meeting, we hope you will vote as soon as possible. You may vote your shares via a toll-free telephone number or over the Internet. If you received a paper copy of a proxy or voting instruction card by mail, you may submit your proxy or voting instruction card for the annual meeting by completing, signing, dating and returning your proxy or

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voting instruction card in the pre-addressed envelope provided. For specific instructions on how to vote your shares, please refer to the section entitled Questions and AnswersͶVoting Information beginning on page 4 of this proxy statement.

By order of the Board of Directors,

MICHAEL J. HOLSTON

Executive Vice President, General Counsel and Secretary

This notice of annual meeting and proxy statement and form of proxy are being distributed and made available on or about February 1, 2011.QUESTIONS AND ANSWERS

Proxy Materials

1. Why am I receiving these materials?

The Hewlett-Packard Company Board of Directors (the ͚͚Board͛͛) has made these materials available to you over the Internet or delivered paper copies of these materials to you by mail in connection with HP͛s annual meeting of stockholders, which will take place on Wednesday, March 23,

2011. As a stockholder, you are invited to attend the annual meeting and vote on the items of business described in this proxy statement. This proxy statement includes information that we are required to provide to you under the rules of the U.S. Securities and Exchange Commission and that is designed to assist you in voting your shares.

2. What is included in the proxy materials?

The proxy materials include:

ͻ Our proxy statement for the annual meeting of stockholders; and

ͻ Our 2010 Annual Report, which includes our Annual Report on Form 10-K for the fiscal year ended October 31, 2010.

If you received a paper copy of these materials by mail, the proxy materials also include a proxy card or a voting instruction card for the annual meeting.

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3. What information is contained in this proxy statement?

The information in this proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, the Board and Board committees, the compensation of HP͛s directors and certain executive officers for fiscal 2010 and other required information.

4. Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials?

This year, we are pleased to be again using the U.S. Securities and Exchange Commission rule that allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to many of our stockholders a notice about the Internet availability of the proxy materials instead of a paper copy of the proxy materials. All stockholders receiving the notice will have the ability to access the proxy materials over the Internet and request to receive a paper copy of the proxy materials by mail.

Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the notice. In addition, the notice contains instructions on how you may request to access proxy materials in printed form by mail or electronically on an ongoing basis.

5. Why didn͛t I receive a notice in the mail about the Internet availability of the proxy materials?

We are providing some of our stockholders, including stockholders who have previously requested to receive paper copies of the proxy materials and some of our stockholders who are living outside of the United States, with paper copies of the proxy materials instead of a notice about the Internet availability of the proxy materials.

In addition, we are providing notice of the availability of the proxy materials by e-mail to those stockholders who have previously elected delivery of the proxy materials electronically. Those stockholders should have received an e-mail containing a link to the website where those materials are available and a link to the proxy voting website.

26. How can I access the proxy materials over the Internet? Page | 129

Your notice about the Internet availability of the proxy materials, proxy card or voting instruction card will contain instructions on how to:

ͻ View our proxy materials for the annual meeting on the Internet; and

ͻ Instruct us to send our future proxy materials to you electronically by e-mail.

Our proxy materials are also available on our website at www.hp.com/investor/stockholdermeeting2011.

Your notice of Internet availability of proxy materials, proxy card or voting instruction card will contain instructions on how you may request to access proxy materials electronically on an ongoing basis. Choosing to access your future proxy materials electronically will help us conserve natural resources and reduce the costs of distributing our proxy materials. If you choose to access future proxy materials electronically, you will receive an e-mail with instructions containing a link to the website where those materials are available and a link to the proxy voting website. Your election to access proxy materials by e-mail will remain in effect until you terminate it.

7. How may I obtain a paper copy of the proxy materials?

Stockholders receiving a notice about the Internet availability of the proxy materials will find instructions about how to obtain a paper copy of the proxy materials on their notice. Stockholders receiving notice of the availability of the proxy materials by e-mail will find instructions about how to obtain a paper copy of the proxy materials as part of that e-mail. All stockholders who do not receive a notice or an e-mail will receive a paper copy of the proxy materials by mail.

8. I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

If you share an address with another stockholder, you may receive only one set of proxy materials unless you have provided contrary instructions. If you wish to receive a separate set of proxy materials now, please request the additional copy by contacting Innisfree M&A Incorporated (͚͚Innisfree͛͛) at:

(877) 750-5838 (U.S. and Canada)

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(412) 232-3651 (International)

E-mail: [email protected]

A separate set of proxy materials will be sent promptly following receipt of your request.

If you are a stockholder of record and wish to receive a separate set of proxy materials in the future, please contact HP͛s transfer agent. See Question 27 below.

If you are the beneficial owner of shares held through a broker, trustee or other nominee and you wish to receive a separate set of proxy materials in the future, please call Broadridge Financial

Solutions, Inc. at:

(800) 542-1061

All stockholders also may write to us at the address below to request a separate copy of these materials:

Hewlett-Packard Company

Attn: Investor Relations

3000 Hanover Street

Palo Alto, California 94304

39. What should I do if I receive more than one notice or e-mail about the Internet availability of the proxy materials or more than one paper copy of the proxy materials?

You may receive more than one notice, more than one e-mail or more than one paper copy of the proxy materials, including multiple paper copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate notice, a separate e-mail or a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you may receive more than one notice, more than one e-mail or more than one proxy card. To vote all of your shares by proxy, you must complete, sign, date and return each proxy card and voting instruction card that you receive and vote over the Internet the shares represented by each notice and e-mail that you receive (unless you have requested and received Page | 131

a proxy card or voting instruction card for the shares represented by one or more of those notices or e-mails).

10. How may I obtain a copy of HP͛s 2010 Form 10-K and other financial information?

Stockholders may request a free copy of our 2010 Annual Report, which includes our 2010

Form 10-K, from:

Hewlett-Packard Company

Attn: Investor Relations

3000 Hanover Street

Palo Alto, California 94304

(866) 869-5335 www.hp.com/investor/informationrequest

Alternatively, stockholders can access the 2010 Annual Report, which includes our 2010 Form 10-K and other financial information, on HP͛s Investor Relations website at: www.hp.com/investor/home

HP also will furnish any exhibit to the 2010 Form 10-K if specifically requested.

Voting Information

11. What items of business will be voted on at the annual meeting?

The items of business scheduled to be voted on at the annual meeting are:

ͻ The election of directors;

ͻ The ratification of the appointment of HP͛s independent registered public accounting firm for the 2011 fiscal year;

ͻ The advisory vote on executive compensation;

ͻ The advisory vote on the frequency of holding future advisory votes on executive compensation;

ͻ The approval of the Hewlett-Packard Company 2011 Employee Stock Purchase Plan; and

ͻ The approval of an amendment to the Hewlett-Packard Company 2005 Pay-for-Results Plan to extend the term of the plan.

We also will consider any other business that properly comes before the annual meeting. See Page | 132

Question 23 below.

412. How does the Board recommend that I vote?

Our Board recommends that you vote your shares FOR each of the nominees for election to the

Board, FOR the ratification of the appointment of HP͛s independent registered public accounting firm,

FOR the approval of the compensation of HP͛s named executive officers, FOR the approval of an annual advisory vote on executive compensation, FOR the approval of the Hewlett-Packard Company

2011 Employee Stock Purchase Plan, and FOR the approval of an amendment to the Hewlett- Packard

Company 2005 Pay-for-Results Plan to extend the term of the plan.

13. What is the difference between holding shares as a stockholder of record and as a beneficial owner?

Most HP stockholders hold their shares through a broker, trustee or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

ͻ Stockholder of RecordͶIf your shares are registered directly in your name with HP͛s transfer agent, you are considered, with respect to those shares, the ͚͚stockholder of record.͛͛ As the stockholder of record, you have the right to grant your voting proxy directly to HP or to a third party, or to vote in person at the meeting.

ͻ Beneficial OwnerͶIf your shares are held in a brokerage account, by a trustee or by another nominee, you are considered the ͚͚beneficial owner͛͛ of those shares. As the beneficial owner of those shares, you have the right to direct your broker, trustee or nominee how to vote and you also are invited to attend the annual meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the meeting unless you obtain a ͚͚legal proxy͛͛ from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting.

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14. What shares can I vote?

Each holder of shares of HP common stock issued and outstanding as of the close of business on

January 24, 2011, the record date for the annual meeting, is entitled to cast one vote per share on all items being voted upon at the annual meeting. You may vote all shares owned by you as of this time, including (1) shares held directly in your name as the stockholder of record, including shares purchased through HP͛s Dividend Reinvestment Plan and HP͛s employee stock purchase plans and shares held through HP͛s Direct Registration Service, and (2) shares held for you as the beneficial owner through a broker, trustee or other nominee. On the record date, HP had approximately 2,174,546,309 shares of common stock issued and outstanding.

15. How can I vote my shares in person at the annual meeting?

Shares held in your name as the stockholder of record may be voted in person at the annual meeting. Shares for which you are the beneficial owner but not the stockholder of record may be voted in person at the annual meeting only if you obtain a legal proxy from the broker, trustee or nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the annual meeting, we recommend that you also vote by proxy as described below so that your vote will be counted if you later decide not to attend the meeting.

516. How can I vote my shares without attending the annual meeting?

Whether you hold shares directly as the stockholder of record or through a broker, trustee or other nominee as the beneficial owner, you may direct how your shares are voted without attending the annual meeting. There are three ways to vote by proxy:

ͻ By InternetͶStockholders who have received a notice of the availability of the proxy materials by mail may submit proxies over the Internet by following the instructions on the notice.

Stockholders who have received notice of the availability of the proxy materials by e-mail may submit proxies over the Internet by following the instructions included in the e-mail. Page | 134

Stockholders who have received a paper copy of a proxy card or voting instruction card by mail may submit proxies over the Internet by following the instructions on the proxy card or voting instruction card.

ͻ By TelephoneͶStockholders of record who live in the United States or Canada may submit proxies by telephone by calling 1-866-209-1711 and following the instructions. Stockholders of record who have received a notice of availability of the proxy materials by mail must have the control number that appears on their notice available when voting. Stockholders of record who received notice of the availability of the proxy materials by e-mail must have the control number included in the e-mail available when voting. Stockholders of record who have received a proxy card by mail must have the control number that appears on their proxy card available when voting. Most stockholders who are beneficial owners of their shares living in the United States or Canada and who have received a voting instruction card by mail may vote by phone by calling the number specified on the voting instruction card provided by their broker, trustee or nominee. Those stockholders should check the voting instruction card for telephone voting availability.

ͻ By MailͶStockholders who have received a paper copy of a proxy card or voting instruction card by mail may submit proxies by completing, signing and dating their proxy card or voting instruction card and mailing it in the accompanying pre-addressed envelope.

17. What is the deadline for voting my shares?

If you hold shares as the stockholder of record, or through the Hewlett-Packard Company 2000

Employee Stock Purchase Plan (the ͚͚Share Ownership Plan͛͛), your vote by proxy must be received before the polls close at the annual meeting.

If you hold shares in the Hewlett-Packard Company 401(k) Plan (the ͚͚HP 401(k) Plan͛͛), your voting instructions must be received by 11:59 p.m., Eastern time, on March 20, 2011 for the trustee to vote your shares.

If you are the beneficial owner of shares held through a broker, trustee or other nominee, please

Page | 135

follow the voting instructions provided by your broker, trustee or nominee.

18. May I change my vote?

You may change your vote at any time prior to the vote at the annual meeting, except that any change to your voting instructions for the HP 401(k) Plan must be provided by 11:59 p.m., Eastern time, on March 20, 2011 as described above. If you are the stockholder of record, you may change your vote by granting a new proxy bearing a later date (which automatically revokes the earlier proxy), by providing a written notice of revocation to the Corporate Secretary at the address below in Question 30 prior to your shares being voted, or by attending the annual meeting and voting in person. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically make that request. For shares you hold beneficially in the name of a broker, trustee or other nominee, you may change your vote by submitting new voting instructions to your broker, trustee or nominee, or, if

6you have obtained a legal proxy from your broker or nominee giving you the right to vote your shares, by attending the meeting and voting in person.

19. Is my vote confidential?

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed, either within HP or to third parties, except: (1) as necessary to meet applicable legal requirements; (2) to allow for the tabulation of votes and certification of the vote; and (3) to facilitate a successful proxy solicitation.

Occasionally, stockholders provide on their proxy card written comments, which are then forwarded to

HP management.

20. How are votes counted?

In the election of directors, you may vote ͚͚FOR,͛͛ ͚͚AGAINST͛͛ or ͚͚ABSTAIN͛͛ with respect to

Page | 136

each of the nominees. If you elect to abstain in the election of directors, the abstention will not impact the election of directors. In tabulating the voting results for the election of directors, only ͚͚FOR͛͛ and

͚͚AGAINST͛͛ votes are counted. You also may cumulate your votes as described in Question 22.

With respect to Proposal No. 4, the advisory vote on the frequency of holding future advisory votes on executive compensation, you may vote ͚͚1 YEAR,͛͛ ͚͚2 YEARS,͛͛ ͚͚3 YEARS͛͛ or ͚͚ABSTAIN.͛͛ If you abstain from voting on Proposal No. 4, the abstention will not have an effect on the outcome of the vote.

For the other items of business, you may vote ͚͚FOR,͛͛ ͚͚AGAINST͛͛ or ͚͚ABSTAIN.͛͛ If you elect to abstain, the abstention will have the same effect as an ͚͚AGAINST͛͛ vote.

If you are the beneficial owner of shares held in the name of a broker, trustee or other nominee and do not provide that broker, trustee or other nominee with voting instructions, your shares may constitute ͚͚broker non-votes.͛͛ Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. In tabulating the voting results for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal. Thus, broker non-votes will not affect the outcome of any matter being voted on at the meeting, assuming that a quorum is obtained.

Abstentions have the same effect as votes against the matter except in the election of directors, as described above.

If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If you vote by proxy card or voting instruction card and sign the card without giving specific instructions, your shares will be voted in accordance with the recommendations of the

Board (FOR all of HP͛s nominees to the Board, FOR ratification of the appointment of HP͛s independent registered public accounting firm, FOR the approval of the compensation of HP͛s named executive officers, FOR the approval of an annual advisory vote on executive compensation, FOR the Page | 137

Hewlett-Packard Company 2011 Employee Stock Purchase Plan and FOR the approval of an amendment to the Hewlett-Packard Company 2005 Pay-for-Results Plan to extend the term of the plan).

For any shares you hold in the HP 401(k) Plan, if your voting instructions are not received by

11:59 p.m., Eastern time, on March 20, 2011, your shares will be voted in proportion to the way the shares held by the other HP 401(k) Plan participants are voted, except as may be otherwise required by law.

721. What is the voting requirement to approve each of the proposals?

In the election of directors, each director will be elected by the vote of the majority of votes cast with respect to that director nominee. A majority of votes cast means that the number of votes cast for a nominee͛s election must exceed the number of votes cast against such nominee͛s election. Each nominee receiving more votes for his or her election than votes against his or her election will be elected. Approval of each of the other proposals requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on that proposal at the annual meeting.

22. Is cumulative voting permitted for the election of directors?

In the election of directors, you may elect to cumulate your vote. Cumulative voting will allow you to allocate among the director nominees, as you see fit, the total number of votes equal to the number of director positions to be filled multiplied by the number of shares you hold. For example, if you own

100 shares of stock and there are 13 directors to be elected at the annual meeting, you may allocate

1,300 ͚͚FOR͛͛ votes (13 times 100) among as few or as many of the 13 nominees to be voted on at the annual meeting as you choose. You may not cumulate your votes against a nominee.

If you are a stockholder of record and choose to cumulate your votes, you will need to submit a proxy card or, if you vote in person at the annual meeting, submit a ballot and make an explicit Page | 138

statement of your intent to cumulate your votes, either by so indicating in writing on the proxy card or by indicating in writing on your ballot when voting at the annual meeting. If you hold shares beneficially through a broker, trustee or other nominee and wish to cumulate votes, you should contact your broker, trustee or nominee.

If you vote by proxy card or voting instruction card and sign your card with no further instructions,

L´eo Apotheker, Michael J. Holston and Paul T. Porrini, as proxy holders, may cumulate and cast your votes in favor of the election of some or all of the applicable nominees in their sole discretion, except that none of your votes will be cast for any nominee as to whom you vote against or abstain from voting.

Cumulative voting applies only to the election of directors.

23. What happens if additional matters are presented at the annual meeting?

Other than the six items of business described in this proxy statement, we are not aware of any other business to be acted upon at the annual meeting. If you grant a proxy, the persons named as proxy holders, L´eo Apotheker, Michael J. Holston and Paul T. Porrini, will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any reason any of our nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board.

24. Who will serve as inspector of elections?

The inspector of elections will be a representative from an independent firm, IVS Associates, Inc.

25. Who will bear the cost of soliciting votes for the annual meeting?

HP is making this solicitation and will pay the entire cost of preparing, assembling, printing, mailing and distributing the notices and these proxy materials and soliciting votes. In addition to the mailing of the notices and these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communication by our directors, officers and employees, who will

Page | 139

not receive any additional compensation for such solicitation activities. We also have hired Innisfree to assist us in the distribution of proxy materials and the solicitation of votes described above. We will pay

8Innisfree a base fee of $20,000 plus customary costs and expenses for these services. HP has agreed to indemnify Innisfree against certain liabilities arising out of or in connection with its agreement. We also will reimburse brokerage houses and other custodians, nominees and fiduciaries for forwarding proxy and solicitation materials to stockholders.

26. Where can I find the voting results of the annual meeting?

We intend to announce preliminary voting results at the annual meeting and publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days of the annual meeting.

27. What if I have questions for HP͛s transfer agent?

Please contact HP͛s transfer agent, at the phone number or address listed below, with questions concerning stock certificates, dividend checks, transfer of ownership or other matters pertaining to your stock account.

Please note that on February 12, 2011, Wells Fargo Bank, N.A. will begin providing transfer agent services to HP, and Computershare Trust Company, N.A. will cease serving as HP͛s transfer agent. For questions relating to transactions executed or other events occurring prior to February 12, 2011, please contact Computershare as follows:

Computershare Trust Company, N.A.

Shareholder Services

250 Royall Street

Canton, Massachusetts 02021

(800) 286-5977 (U.S. and Canada) Page | 140

(312) 360-5138 (International)

For questions relating to transactions executed or other events occurring on or after February 12, 2011, please contact Wells Fargo as follows:

Wells Fargo Bank, N.A.

Shareowner Services

161 North Concord Exchange

South St. Paul, MN 55075

(800) 286-5977 (U.S. and Canada)

(651) 450-4064 (International)

A dividend reinvestment and stock purchase program is also available through HP͛s transfer agent.

For information about this program, please contact HP͛s transfer agent as follows:

For inquiries prior to February 12, 2011: For inquiries on or after February 12, 2011:

Computershare Trust Company, N.A. Wells Fargo Bank, N.A.

Dividend Reinvestment Services Shareowner Services

250 Royall Street 161 North Concord Exchange

Canton, Massachusetts 02021 South St. Paul, MN 55075

(800) 286-5977 (U.S. and Canada) (800) 286-5977 (U.S. and Canada)

(312) 360-5138 (International) (651) 450-4064 (International)

9Annual Meeting Information

28. How can I attend the annual meeting?

You are entitled to attend the annual meeting only if you were an HP stockholder or joint holder as of the close of business on January 24, 2011 or if you hold a valid proxy for the annual meeting. You must present photo identification for admittance. If you are a stockholder of record or hold your shares through the HP 401(k) Plan or the Share Ownership Plan, your name will be verified against the list of

Page | 141

stockholders of record or plan participants on the record date prior to your admission to the annual meeting. If you are not a stockholder of record but hold shares through a broker, trustee or nominee, you must provide proof of beneficial ownership on the record date, such as your most recent account statement prior to January 24, 2011 or other similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined above, you will not be admitted to the annual meeting.

The meeting will begin promptly at 2:00 p.m., local time. Check-in will begin at 12:30 p.m., local time, and you should allow ample time for the check-in procedures.

29. How many shares must be present or represented to conduct business at the annual meeting?

The quorum requirement for holding the annual meeting and transacting business is that holders of a majority of shares of HP common stock entitled to vote must be present in person or represented by proxy. Both abstentions and broker non-votes described previously in Question 21 are counted for the purpose of determining the presence of a quorum.

Stockholder Proposals, Director Nominations and Related Bylaw Provisions

30. What is the deadline to propose actions for consideration at next year͛s annual meeting of stockholders?

You may submit proposals for consideration at future stockholder meetings. For a stockholder proposal to be considered for inclusion in HP͛s proxy statement for the annual meeting next year, the

Corporate Secretary must receive the written proposal at our principal executive offices no later than

October 4, 2011. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company sponsored proxy materials. Proposals should be addressed to:

Corporate Secretary Page | 142

Hewlett-Packard Company

3000 Hanover Street

Palo Alto, California 94304

Fax: (650) 857-4837

For a stockholder proposal that is not intended to be included in HP͛s proxy statement under

Rule 14a-8, the stockholder must provide the information required by HP͛s Bylaws and give timely notice to the Corporate Secretary in accordance with HP͛s Bylaws, which, in general, require that the notice be received by the Corporate Secretary:

ͻ not earlier than the close of business on November 23, 2011, and

ͻ not later than the close of business on December 26, 2011.

If the date of the stockholder meeting is moved more than 30 days before or 60 days after the anniversary of the HP annual meeting for the prior year, then notice of a stockholder proposal that is not intended to be included in HP͛s proxy statement under Rule 14a-8 must be received no earlier than

10the close of business 120 days prior to the meeting and not later than the close of business on the later of the following two dates:

ͻ 90 days prior to the meeting; and

ͻ 10 days after public announcement of the meeting date.

31. How may I recommend or nominate individuals to serve as directors?

You may propose director candidates for consideration by the Board͛s Nominating and

Governance Committee. Any such recommendations should include the nominee͛s name and qualifications for Board membership and should be directed to the Corporate Secretary at the address of our principal executive offices set forth in Question 30 above.

In addition, HP͛s Bylaws permit stockholders to nominate directors for election at an annual stockholder meeting. To nominate a director, the stockholder must deliver the information required by

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HP͛s Bylaws.

32. What is the deadline to propose or nominate individuals to serve as directors?

A stockholder may send a proposed director candidate͛s name and information to the Board at any time. Generally, such proposed candidates are considered at the first or second Board meeting prior to the issuance of the proxy statement for HP͛s annual meeting.

To nominate an individual for election at an annual stockholder meeting, the stockholder must give timely notice to the Corporate Secretary in accordance with HP͛s Bylaws, which, in general, require that the notice be received by the Corporate Secretary between the close of business on November 23,

2011 and the close of business on December 26, 2011, unless the annual meeting is moved by more than 30 days before or 60 days after the anniversary of the prior year͛s annual meeting, in which case the deadline will be as described in Question 30.

33. How may I obtain a copy of HP͛s Bylaw provisions regarding stockholder proposals and director nominations?

You may contact the Corporate Secretary at our principal executive offices for a copy of the relevant Bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates. HP͛s Bylaws also are available on HP͛s website at www.hp.com/hpinfo/investor/ bylaws.

Further Questions

34. Who can help answer my questions?

If you have any questions about the annual meeting or how to vote or revoke your proxy, you should contact HP͛s proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20 th

Floor

Page | 144

New York, New York 10022

Stockholders: (877) 750-5838 (U.S. and Canada)

(412) 232-3651 (International)

Banks and brokers (call collect):

(212) 750-5833

11CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

HP is committed to maintaining the highest standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving our stockholders well and maintaining HP͛s integrity in the marketplace. HP maintains a code of business conduct and ethics for directors, officers (including HP͛s principal executive officer, principal financial officer and principal accounting officer) and employees, known as our Standards of Business Conduct. HP also has adopted Corporate Governance Guidelines, which, in conjunction with the Certificate of Incorporation,

Bylaws and Board committee charters, form the framework for the governance of HP. All of these documents are available at www.hp.com/investor/corpgovernance/highlights. HP will post on this website any amendments to the Standards of Business Conduct or waivers of the Standards of Business

Conduct for directors and executive officers. Stockholders may request free printed copies of the

Standards of Business Conduct, the Corporate Governance Guidelines and the Board committee charters from:

Hewlett-Packard Company

Attention: Investor Relations

3000 Hanover Street

Palo Alto, California 94304

(866) 869-5335 www.hp.com/investor/home

Page | 145

Board Leadership Structure

The Board is currently led by a non-executive Chairman, Raymond J. Lane, who is an independent director. While the position of Chairman and Chief Executive Officer may be held by the same person, as discussed below, the Board͛s current preferred governance structure is to have an independent director serve as Chairman. The Board recognizes that there is no single, generally accepted approach to providing Board leadership, and the Board͛s leadership structure may vary in the future as circumstances warrant. In cases where the Board determines it is in the best interests of HP͛s stockholders to combine the positions of Chairman and CEO, the independent directors will designate a lead independent director.

The Chairman oversees the planning of the annual Board calendar, and, with the CEO, in consultation with the other directors, schedules and sets the agenda for meetings of the Board and leads the discussion at such meetings. The Chairman also presides at executive sessions, serves as a liaison between the CEO and the independent directors, sees that directors receive appropriate and timely information, assists the Chairmen of the Board committees in preparing agendas for the respective committee meetings, chairs HP͛s annual meetings of stockholders, is available in appropriate circumstances to speak on behalf of the Board, and performs such other functions and responsibilities as set forth in HP͛s Corporate Governance Guidelines or as requested by the Board from time to time.

The Chairman also encourages direct dialogue between all directors and management and provides leadership to the Board in its oversight function.

Board Structure and Committee Composition

As of the date of this proxy statement, the Board has 17 directors and the following six standing committees: (1) Audit; (2) Finance and Investment; (3) HR and Compensation; (4) Nominating and

Governance; (5) Public Policy; and (6) Technology. The current committee membership, the number of Page | 146

meetings during the last fiscal year and the function of each of the standing committees are described below. Each of the standing committees operates under a written charter adopted by the Board. All of the committee charters are available on HP͛s website at www.hp.com/investor/board_charters. The

12Board and each of the committees has the authority to retain, terminate and receive appropriate funding from HP for outside advisors as the Board and each committee deems necessary.

During fiscal 2010, the Board held 34 meetings, including 17 executive sessions. Each director serving during fiscal 2010 attended at least 75% of the aggregate of all Board and applicable committee meetings held during the period that he or she served as a director.

Directors are encouraged to attend annual meetings of HP stockholders. Nine of the eleven then-current directors attended the last annual meeting of stockholders.

Nominating

Finance and HR and and Public

Name of Director Audit Investment Compensation Governance Policy Technology

Non-Employee Directors:

Marc L. Andreessen Chair

Lawrence T. Babbio, Jr. Member Chair Member

Sari M. Baldauf Member Member Member

Shumeet Banerji

(1)

Rajiv L. Gupta Member Member Member

John H. Hammergren Chair Member

Joel Z. Hyatt

(2)

Member Member Chair

John R. Joyce

Page | 147

(2)

Member Member

Raymond J. Lane

(3)

Gary M. Reiner

(1)

Patricia F. Russo

(1)

Robert L. Ryan

(2)

Chair Member Member

Lucille S. Salhany

(2)

Member Member Chair

Dominique Senequier

(1)

G. Kennedy Thompson Member Member Member

Margaret C. Whitman

(1)

Employee Director:

L´eo Apotheker

(3)

Number of Meetings in Fiscal 2010 14 18 11 7 4 7

(1) Mr. Banerji, Mr. Reiner, Ms. Russo, Ms. Senequier and Ms. Whitman were elected to the Board effective on January 21,

2011.

(2) Mr. Hyatt, Mr. Joyce, Mr. Ryan and Ms. Salhany are not standing for election at the annual meeting. Page | 148

(3) Mr. Lane and Mr. Apotheker were elected to the Board effective on November 1, 2010.

Audit Committee

HP has a separately designated standing Audit Committee established in accordance with

Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the ͚͚Exchange Act͛͛). The

Audit Committee assists the Board in fulfilling its responsibilities for generally overseeing HP͛s financial reporting processes and the audit of HP͛s financial statements, including the integrity of HP͛s financial statements, HP͛s compliance with legal and regulatory requirements, the qualifications and independence of the independent registered public accounting firm and any relationships or services between the firm and HP or individuals in financial reporting oversight roles at HP which may bear on the firm͛s independence, the performance of HP͛s internal audit function and the independent registered public accounting firm, and risk assessment and risk management. Among other things, the

Audit Committee prepares the Audit Committee report for inclusion in the annual proxy statement;

13annually reviews its charter and performance; appoints, evaluates and determines the compensation of the independent registered public accounting firm; sets clear hiring policies for employees or former employees of the independent registered public accounting firm and monitors compliance therewith; reviews and approves the scope of the annual audit, the audit fee and the financial statements; reviews

HP͛s disclosure controls and procedures, internal controls, information security policies, internal audit function, and corporate policies with respect to financial information and earnings guidance; reviews regulatory and accounting initiatives and off-balance sheet structures; oversees HP͛s compliance programs with respect to legal and regulatory requirements; oversees investigations into complaints concerning financial matters; and reviews other risks that may have a significant impact on HP͛s financial statements. The Audit Committee works closely with management as well as the independent

Page | 149

registered public accounting firm.

The Board determined that each of Mr. Ryan, chair of the Audit Committee, and Audit

Committee members Ms. Baldauf, Mr. Joyce, Ms. Salhany and Mr. Thompson is independent within the meaning of the New York Stock Exchange (͚͚NYSE͛͛) standards of independence for directors and audit committee members and satisfied the NYSE financial literacy requirements. The Board also determined that each of Mr. Ryan, Ms. Baldauf, Mr. Joyce and Mr. Thompson is an ͚͚audit committee financial expert͛͛ as defined by SEC rules.

The report of the Audit Committee is included on page 77.

Finance and Investment Committee

The Finance and Investment Committee provides oversight to the finance and investment functions of HP. The Finance and Investment Committee reviews or oversees significant treasury matters such as capital structure, derivative policy, global liquidity, investment policy, borrowings, currency exposure, dividend policy, share issuances and repurchases, and capital spending; oversees HP͛s loans and loan guarantees of third-party debt and obligations; reviews HP Financial Services͛ capitalization and operations, including residual and credit management, risk concentration, and return on invested capital; and reviews the activities of HP͛s Investor Relations department. The Finance and Investment

Committee also assists the Board in evaluating investment, acquisition, enterprise services, joint venture and divestiture transactions in which HP engages as part of its business strategy from time to time; reports to the Board and makes recommendations to the Board as to scope, direction, quality, investment levels and execution of such transactions; evaluates and revises HP͛s approval policies with respect to such transactions; oversees HP͛s integration planning and execution and the financial results of such transactions after integration; evaluates the execution, financial results and integration of HP͛s completed transactions; and oversees and approves HP͛s strategic alliances. Page | 150

HR and Compensation Committee

The HR and Compensation Committee discharges the Board͛s responsibilities relating to the compensation of HP͛s executives and directors; reviews and approves the Compensation Discussion and

Analysis required by the SEC for inclusion in the annual proxy statement and takes other related actions; provides general oversight of HP͛s total rewards compensation structure; reviews and provides guidance on HP͛s human resources programs; and retains, approves the terms of the retention of and oversees the activities of the committee͛s compensation consultants and other compensation experts.

Other specific duties and responsibilities of the HR and Compensation Committee include reviewing senior management selection and overseeing succession planning, including reviewing the leadership development process; reviewing and approving objectives relevant to executive officer compensation, evaluating performance and determining the compensation of executive officers in accordance with those objectives; approving severance arrangements and other applicable agreements for executive officers; overseeing HP͛s equity and incentive compensation plans; overseeing non-equity based benefit plans and approving any changes to such plans involving a material financial commitment by HP;

14monitoring workforce management programs; establishing compensation policies and practices for service on the Board and its committees, including annually reviewing the appropriate level of director compensation and recommending to the Board any changes to that compensation; developing stock ownership guidelines for directors and executive officers and monitoring compliance with such guidelines; and annually evaluating its performance and its charter.

The HR and Compensation Committee may create a subcommittee consisting of one or more of its members and may delegate any of its duties and responsibilities to such subcommittee, unless

Page | 151

otherwise prohibited by applicable laws or listing standards. In addition, the HR and Compensation

Committee may delegate any of its duties and responsibilities, including the administration of equity incentive or employee benefit plans, to one or more of its members, to one or more other directors, or to one or more other persons, unless otherwise prohibited by applicable laws or listing standards.

Nominating and Governance Committee

The Nominating and Governance Committee identifies and recommends candidates to be nominated for election as directors at HP͛s annual meeting, consistent with criteria approved by the

Board; develops and regularly reviews corporate governance principles, including HP͛s Corporate

Governance Guidelines and related policies, for approval by the Board; oversees the organization of the Board to discharge the Board͛s duties and responsibilities properly and efficiently; and sees that proper attention is given and effective responses are made to stockholder concerns regarding corporate governance matters. Other specific duties and responsibilities of the Nominating and Governance

Committee include: annually assessing the size and composition of the Board in consultation with the

Chairman, including developing and reviewing director qualifications for approval by the Board; identifying and recruiting new directors and considering candidates proposed by stockholders; recommending assignments of directors to committees to ensure that committee membership complies with applicable laws and listing standards; conducting a preliminary review of director independence and financial literacy and expertise of Audit Committee members; and overseeing director orientation and continuing education. The Nominating and Governance Committee also reviews proposed changes to HP͛s Certificate of Incorporation, Bylaws, Board committee charters and Corporate Governance

Guidelines and related policies; assesses and makes recommendations regarding stockholder rights plans or other stockholder protections, as appropriate; establishes policies and procedures for the review and approval of related person transactions and conflicts of interest, including the review and

Page | 152

approval of all potential ͚͚related person transactions͛͛ as defined under SEC rules; reviews and approves the designation of any employee directors or executive officers for purposes of Section 16 of the Exchange Act (the ͚͚Section 16 officers͛͛) standing for election for outside for-profit boards of directors; reviews stockholder proposals in conjunction with the CEO and recommends Board responses; working with the Chairman, oversees the self-evaluation of the Board and its committees; oversees the annual evaluation of the CEO conducted by the Chairman and the HR and Compensation

Committee, with input from all Board members; and reviews requests for indemnification under HP͛s

Bylaws.

Public Policy Committee

The Public Policy Committee assists the Board in fulfilling its responsibilities for generally overseeing HP͛s policies and processes relating to HP͛s public policy, government affairs and global citizenship activities. In so doing, the Public Policy Committee may identify, evaluate and monitor the social, political and environmental trends, issues, concerns, legislative proposals and regulatory developments, domestic and foreign, which could significantly affect the business and affairs of HP, including relating to its performance, customers, stockholders and employees. In addition, from time to time, the Public Policy Committee may report and make recommendations to the Board relating to activities, policies and programs with respect to matters of local, national and international public

15policy affecting HP͛s business, including trade policy and major legislative and regulatory developments; relations with regulators, governmental agencies, public interest groups, other stakeholders and countries in which HP does business; HP͛s policies with respect to corporate social responsibility and global corporate citizenship; and general guidelines for charitable and political contributions, volunteerism and pro bono outreach to community service and charitable organizations and activities.

Page | 153

The Public Policy Committee also oversees HP͛s policies relating to, and the manner in which HP conducts, its government affairs activities.

Technology Committee

The Technology Committee assesses HP͛s technology development strategies and the scope and quality of HP͛s intellectual property. The Technology Committee makes recommendations to the Board as to scope, direction, quality, investment levels and execution of HP͛s technology strategies; oversees the execution of technology strategies formulated by management; provides guidance on technology as it may pertain to, among other things, market entry and exit, investments, mergers, acquisitions and divestitures, new business divisions and spin-offs, research and development investments, and key competitor and partnership strategies; and reviews and makes recommendations on proposed investment, acquisition, joint venture and divestiture transactions with a value of at least $200 million that involve technology prior to any review by other Board Committees or the Board pursuant to HP͛s

M&A approval policies.

Board Risk Oversight

The Board, with the assistance of the Audit Committee and other Board committees as discussed below, reviews and oversees our enterprise risk management (͚͚ERM͛͛) program, which is an enterprise-wide program designed to enable effective and efficient identification and management of critical enterprise risks and to facilitate the incorporation of risk considerations into decision making.

The ERM program was established to clearly define risk management roles and responsibilities, bring together senior management to discuss risk, promote visibility and constructive dialogue around risk at the senior management and Board levels, and facilitate and drive appropriate risk response strategies.

Under the ERM program, management develops a holistic portfolio of HP enterprise risks by

Page | 154

facilitating business and function risk assessments, performing targeted risk assessments, and incorporating information regarding specific categories of risk gathered from various internal HP organizations. Management then develops risk response plans for risks categorized as needing management focus and response and monitors other identified risk focus areas. Management provides regular reports on the risk portfolio and risk response and monitoring efforts to senior management and to the Audit Committee.

The Audit Committee oversees management͛s implementation of the ERM program, including reviewing HP͛s enterprise risk portfolio and evaluating management͛s approach to addressing identified risks. While the Audit Committee has primary oversight responsibility for the risk assessment and management process, various other committees of the Board also have responsibility for oversight of risk management. For example, the HR and Compensation Committee considers the risks associated with our compensation policies and practices as discussed below. In addition, the Finance and

Investment Committee is responsible for overseeing financial risks. Further, the Nominating and

Governance Committee oversees risks associated with HP͛s governance structure and processes. The

Board is kept informed of its committees͛ risk oversight and related activities primarily through reports of the committee Chairmen to the full Board. In addition, the Audit Committee escalates issues relating to risk oversight to the full Board as appropriate to provide that the Board is appropriately informed of developments that could affect HP͛s risk profile or other aspects of HP͛s business. The

Board also considers specific risk topics in connection with strategic planning and other matters.

16Compensation Risk Assessment

From time to time, HP and the HR and Compensation Committee have reviewed the potential risks associated with the structure and design of its various compensation plans. During fiscal 2010, HP undertook a more comprehensive review of its material compensation plans and programs for all

Page | 155

employees and determined that none of its compensation policies and practices is reasonably likely to have a material adverse effect on the company. In conducting this assessment, HP inventoried its material plans and programs, with particular emphasis on incentive compensation plans, including sales compensation, and presented a summary of its findings to the HR and Compensation Committee.

Overall, HP believes that its programs generally contain a balance of fixed and variable features, as well as complementary metrics, reasonable goals and linear payout curves, all of which operate to mitigate risk and reduce the likelihood of employees engaging in excessive risk-taking behavior with respect to the compensation-related aspects of their jobs. In addition, the material plans and programs operate within a strong governance and review structure that serves and supports risk mitigation.

Director Independence

HP͛s Corporate Governance Guidelines provide that a substantial majority of the Board will consist of independent directors and that the Board can include no more than three directors who are not independent directors. These standards are available on our website at www.hp.com/investor/director_standards. HP͛s director independence standards reflect the NYSE corporate governance listing standards. In addition, each member of the Audit Committee meets the heightened independence standards required for audit committee members under the applicable listing standards.

Under HP͛s Corporate Governance Guidelines, a director will not be considered independent in the following circumstances:

(1) The director is, or has been within the last three years, an employee of HP, or an immediate family member of the director is, or has been within the last three years, an executive officer of HP.

(2) The director has been employed as an executive officer of HP, its subsidiaries or affiliates

Page | 156

within the last five years.

(3) The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 in direct compensation from HP, other than compensation for Board service, compensation received by a director͛s immediate family member for service as a non-executive employee of HP, and pension or other forms of deferred compensation for prior service with HP that is not contingent on continued service.

(4) (A) The director or an immediate family member is a current partner of the firm that is HP͛s internal or external auditor; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm͛s audit, assurance or tax compliance (but not tax planning) practice; or

(D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on HP͛s audit within that time.

(5) The director or an immediate family member is, or has been in the past three years, employed as an executive officer of another company where any of HP͛s present executive officers at the same time serves or has served on that company͛s compensation committee.

(6) The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, HP for property

17or services in an amount which, in any of the last three fiscal years, exceeds the greater of

$1 million, or 2% of such other company͛s consolidated gross revenues.

(7) The director is affiliated with a charitable organization that receives significant contributions from HP.

(8) The director has a personal services contract with HP or an executive officer of HP.

For these purposes, an ͚͚immediate family member͛͛ includes a person͛s spouse, parents, step-parents, children, step-children, siblings, mother and father-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than tenants or employees) who shares the director͛s Page | 157

home.

In determining independence, the Board reviews whether directors have any material relationship with HP. An independent director must not have any material relationship with HP, either directly or as a partner, stockholder or officer of an organization that has a relationship with HP, or any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In assessing the materiality of a director͛s relationship to HP, the Board considers the issues from the director͛s standpoint and from the perspective of the persons or organizations with which the director has an affiliation and is guided by the standards set forth above.

In making its independence determinations, the Board considered transactions occurring since the beginning of 2007 between HP and entities associated with the independent directors or their immediate family members. The Board͛s independence determinations included reviewing the following transactions:

ͻ Each of Mr. Andreessen, Mr. Banerji, Mr. Hammergren, Mr. Hyatt and Ms. Senequier is an executive officer of a company with which HP enters into transactions for the purchase and sale of goods and services in the ordinary course of its business. The amount that HP paid in each of the last three fiscal years to each of these companies, and the amount received in each fiscal year by HP from each company, did not, in any of the previous three fiscal years, exceed the greater of $1 million or 2% of such other company͛s consolidated gross revenues.

ͻ Mr. Andreessen, Mr. Babbio, Ms. Baldauf, Mr. Gupta, Mr. Lane, Ms. Russo, Mr. Ryan,

Ms. Senequier and Mr. Thompson, or one of their immediate family members, each is a non-employee director, trustee or advisory board member of another company that did business with HP at some time during the past three fiscal years. These business relationships were as a supplier or purchaser of goods or services in the ordinary course of business.

ͻ Each of Mr. Andreessen, Mr. Banerji, Mr. Hyatt, Ms. Salhany and Ms. Whitman, or one of their Page | 158

immediate family members, serves as a non-employee director, trustee or advisory board member for one or more charitable institutions to which HP has made charitable contributions during the previous three fiscal years. Contributions by HP (including employee matching contributions and discretionary contributions by HP) to each charitable institution other than

Stanford Hospital and Clinics did not exceed $100,000 in any of the previous three fiscal years.

During fiscal 2010, contributions by HP (including employee matching contributions and discretionary contributions by HP) to Stanford Hospital and Clinics totaled approximately

$7,509,000. No such contributions were made to Stanford Hospital and Clinics during fiscal 2009 or fiscal 2008. Mr. Andreessen and Mr. Hyatt are members of the board of directors of Stanford

Hospital and Clinics.

As a result of this review, the Board has determined that each current non-employee director and each of the non-employee director nominees standing for election, including Mr. Andreessen,

Mr. Babbio, Ms. Baldauf, Mr. Banerji, Mr. Gupta, Mr. Hammergren, Mr. Hyatt, Mr. Joyce, Mr. Lane,

Mr. Reiner, Ms. Russo, Mr. Ryan, Ms. Senequier, Ms. Salhany, Mr. Thompson and Ms. Whitman, and

18each of the members of each standing Board committee, has no material relationship with HP (either directly or as a partner, stockholder or officer of an organization that has a relationship with HP) and is independent within the meaning of HP͛s director independence standards. Mr. Apotheker is not independent because of his status as President and Chief Executive Officer of HP.

Executive Sessions

During fiscal 2010, the independent directors met in executive session 17 times. Those sessions were scheduled and chaired by the lead independent director. Beginning in fiscal 2011, the sessions are scheduled and chaired by the Chairman. Any independent director may request that an additional executive session be scheduled.

Director Nominees

Stockholder Recommendations Page | 159

The policy of the Nominating and Governance Committee is to consider properly submitted stockholder recommendations of candidates for membership on the Board as described below under

͚͚Identifying and Evaluating Candidates for Directors.͛͛ In evaluating such recommendations, the

Nominating and Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board and to address the membership criteria set forth below under ͚͚Proposals to be

Voted onͶElection of DirectorsͶDirector Nominee Experience and Qualifications.͛͛ Any stockholder recommendations proposed for consideration by the Nominating and Governance Committee should include the candidate͛s name and qualifications for Board membership and should be addressed to:

Corporate Secretary

Hewlett-Packard Company

3000 Hanover Street

Palo Alto, California 94304

Fax: (650) 857-4837

Stockholder Nominations

In addition, HP͛s Bylaws permit stockholders to nominate directors for consideration at an annual stockholder meeting and to solicit proxies in favor of such nominees. For a description of the process for nominating directors in accordance with HP͛s Bylaws, see ͚͚Questions and AnswersͶStockholder

Proposals, Director Nominations and Related Bylaw ProvisionsͶHow may I recommend or nominate individuals to serve as directors?͛͛

Identifying and Evaluating Candidates for Directors

The Nominating and Governance Committee uses a variety of methods for identifying and evaluating nominees for director. The Nominating and Governance Committee, with the input of the

Chairman, regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise Page | 160

arise, the Nominating and Governance Committee considers various potential candidates for director.

Candidates may come to the attention of the Nominating and Governance Committee through current

Board members, professional search firms, stockholders or other persons. Identified candidates are evaluated at regular or special meetings of the Nominating and Governance Committee and may be considered at any point during the year. As described above, the Nominating and Governance

Committee considers properly submitted stockholder recommendations for candidates for the Board to be included in HP͛s proxy statement. Following verification of the stockholder status of people proposing candidates, recommendations are considered together by the Nominating and Governance

Committee at a regularly scheduled meeting, which is generally the first or second meeting prior to the

19issuance of the proxy statement for HP͛s annual meeting. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials are forwarded to the Nominating and Governance Committee. The Nominating and Governance Committee also reviews materials provided by professional search firms and other parties in connection with a nominee who is not proposed by a stockholder. In evaluating such nominations, the Nominating and Governance

Committee seeks to achieve a balance of knowledge, experience and capability on the Board.

HP engages a professional search firm on an ongoing basis to identify and assist the Nominating and Governance Committee in identifying, evaluating and conducting due diligence on potential director nominees. Two of the seven directors who joined the Board since the last annual meeting of stockholders, Mr. Apotheker and Mr. Lane, were identified by the professional search firm. The other five directors, Mr. Banerji, Mr. Reiner, Ms. Russo, Ms. Senequier and Ms. Whitman, were identified by an ad hoc committee of directors consisting of the Chief Executive Officer and three non-employee Page | 161

directors, which was formed in November 2010 to assist in the identification of new director candidates and to facilitate the process of evaluating those candidates as potential directors.

Board Policy Regarding Voting for Directors

HP has implemented a majority vote standard in the election of directors. In addition, HP has adopted a policy whereby any incumbent director nominee who receives a greater number of votes

͚͚against͛͛ his or her election than votes ͚͚for͛͛ such election will tender his or her resignation for consideration by the Nominating and Governance Committee. The Nominating and Governance

Committee will recommend to the Board the action to be taken with respect to such offer of resignation.

Communications with the Board

Individuals may communicate with the Board by contacting:

Secretary to the Board of Directors

3000 Hanover Street, MS 1050

Palo Alto, California 94304 e-mail: [email protected]

All directors have access to this correspondence. In accordance with instructions from the Board, the Secretary to the Board reviews all correspondence, organizes the communications for review by the

Board and posts communications to the full Board or individual directors, as appropriate. HP͛s independent directors have requested that certain items that are unrelated to the Board͛s duties, such as spam, junk mail, mass mailings, solicitations, resumes and job inquiries, not be posted.

Communications that are intended specifically for the Chairman, the independent directors or non-management directors should be sent to the e-mail address or street address noted above, to the attention of the Chairman.

20DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES

Page | 162

Employee directors do not receive any separate compensation for their Board activities. In fiscal

2010, non-employee directors received the compensation described below.

Each non-employee director serving during fiscal 2010 was entitled to receive an annual cash retainer of $100,000 but could elect to receive an equivalent amount of securities in lieu of the cash retainer. Each non-employee director was also entitled to receive an annual equity retainer of $150,000, which was increased to $175,000 effective in March 2010. The equity retainer is paid at the election of the director either entirely in restricted stock units or half in restricted stock units and half in stock options. Under special circumstances, the securities portion of the annual retainer may be paid in cash, but no such exceptions were made during fiscal 2010. The number of shares subject to the restricted stock unit awards is determined based on the fair market value of HP common stock on the grant date, and the number of shares subject to the stock option awards is determined based on a Black-Scholes option valuation model. Non-employee directors are entitled to receive dividend equivalent units with respect to unvested restricted stock units. The restricted stock units and stock options generally vest after one year from the date of grant. Non-employee directors may elect to defer any portion of their annual retainer.

In addition to the annual retainer, non-employee directors who served as chairs of standing committees during fiscal 2010 received a retainer for such service in the amount of $20,000 for the chair of the Audit Committee, $15,000 for the chair of the HR and Compensation Committee, and

$10,000 for the chair of the other Board committees. In addition, the director who served as lead independent director during fiscal 2010 received an additional retainer of $75,000 per year. Each non-employee director also received $2,000 for designated Board meetings attended in excess of six per year and $2,000 for each committee meeting attended in excess of six per year.

Non-employee directors are reimbursed for their expenses in connection with attending Board Page | 163

meetings (including expenses related to spouses when spouses are invited to attend Board events), and non-employee directors may use the company aircraft for travel to and from HP events. Each non-employee director also is eligible to contribute up to $100,000 worth of HP products each year to a school or qualified charity by paying 25% of the list price of those products, with HP contributing the remaining cost.

On September 30, 2010, the Board elected Mr. Lane to serve as a director of HP and designated

Mr. Lane as non-executive Chairman of the Board effective November 1, 2010, the first day of HP͛s

2011 fiscal year. In connection therewith, the Board approved an equity retainer that was awarded to

Mr. Lane following the end of fiscal 2010 consisting of 45,000 restricted stock units, one-third of which will vest on the first anniversary of the date of grant and two-thirds of which will vest on the third anniversary of the date of grant, with any unvested units to be forfeited in the event that Mr. Lane͛s service as non-executive Chairman terminates prior to the full vesting of the award. No other compensation will be paid to Mr. Lane for his service on the Board from November 1, 2010 until the annual meeting. If Mr. Lane is re-elected to the Board at that meeting, his compensation for service as a director and as non-executive Chairman thereafter will be established as part of the Board͛s regular annual review of director compensation.

21Fiscal 2010 Non-Employee Director Compensation

The following table provides information on compensation for non-employee directors who served during fiscal 2010:

Fees Earned or Option All Other

Paid in Cash

(1)

Stock Awards

Page | 164

(2)

Awards

(2)

Compensation

(3)

Total

Name ($) ($) ($) ($) ($)

Marc L. Andreessen ...... 36,000 389,633 Ͷ 8,677 434,310

Lawrence T. Babbio, Jr. . . . . 203,333 87,540 87,250 Ͷ 378,123

Sari M. Baldauf ...... 168,000 87,540 87,250 Ͷ 342,790

Rajiv L. Gupta ...... 156,000 175,027 Ͷ 29,926 360,953

John H. Hammergren . . . . . 82,000 137,533 137,094 29,981 386,608

Joel Z. Hyatt ...... 90,667 275,012 Ͷ 19,723 385,402

John R. Joyce ...... 146,000 175,027 Ͷ Ͷ 321,027

Robert L. Ryan

(4)

255,333 175,027 Ͷ 28,389 458,749 ......

Lucille S. Salhany ...... 184,000 87,540 87,250 16,113 374,903

G. Kennedy Thompson . . . . . 96,000 275,012 Ͷ Ͷ 371,012

(1) For purposes of determining director compensation, the term of office for directors begins in

March and ends the following February, which does not coincide with HP͛s November through

October fiscal year. Cash amounts included in the table above represent the portion of the annual retainers, committee chair fees, lead independent director fees and additional meeting fees earned with respect to service during HP͛s 2010 fiscal year. See ͚͚Additional Information about Fees Earned or Paid in Cash in Fiscal 2010͛͛ below.

(2) Represents the grant date fair value of stock options and stock awards granted in fiscal 2010 calculated in accordance with applicable financial accounting standards relating to share based Page | 165

payment awards. For awards of restricted stock units, that amount is calculated by multiplying the closing price of HP͛s common stock on the date of grant by the number of units awarded.

For option awards, that number is calculated by multiplying the Black-Scholes value determined as of the date of grant by the number of options awarded. See ͚͚Additional Information about

Non-Employee Director Equity Awards͛͛ below.

(3) Amounts in this column represent the cost to HP of product donations made on behalf of non-employee directors as described above.

(4) Mr. Ryan elected to defer the stock award that he received as his equity retainer for the March

2010 through February 2011 Board term. That deferred compensation will be paid in the form of restricted stock units.

22Additional Information about Fees Earned or Paid in Cash in Fiscal 2010

The following table provides additional information about fees earned or paid in cash to non-employee directors in fiscal 2010:

Committee

Chair/Lead

Annual Independent Additional

Retainers Page | 166

(1)(2)

Director Fees

(3)

Meeting Fees

(4)

Total

Name ($) ($) ($) ($)

Marc L. Andreessen ...... Ͷ 10,000 26,000 36,000

Lawrence T. Babbio, Jr...... 100,000 13,333 90,000 203,333

Sari M. Baldauf ...... 100,000 Ͷ 68,000 168,000

Rajiv L. Gupta ...... 100,000 Ͷ 56,000 156,000

John H. Hammergren ...... Ͷ 10,000 72,000 82,000

Joel Z. Hyatt ...... Ͷ 6,667 84,000 90,667

John R. Joyce ...... 100,000 Ͷ 46,000 146,000

Robert L. Ryan ...... 100,000 93,333 62,000 255,333

Lucille S. Salhany ...... 100,000 10,000 74,000 184,000

G. Kennedy Thompson ...... Ͷ Ͷ 96,000 96,000

(1) The term of office for directors begins in March and ends the following February, which does not coincide with HP͛s November through October fiscal year. The dollar amounts shown include cash annual retainers earned for service during the last four months of the March 2009 through

February 2010 Board term and cash annual retainers earned for service during the first eight months of the March 2010 through February 2011 Board term.

(2) Excludes $100,000 to be paid in equity in lieu of cash for each of Mr. Andreessen,

Mr. Hammergren, Mr. Hyatt and Mr. Thompson.

(3) Committee chair and lead independent director fees are calculated based on service during each

Board term. The dollar amounts shown include such fees earned for service during the last four months of the March 2009 through February 2010 Board term and fees earned for service during Page | 167

the first eight months of the March 2010 through February 2011 Board term.

(4) Additional meeting fees are calculated based on the number of designated Board meetings and the number of committee meetings attended during each Board term. The dollar amounts shown include additional meeting fees earned for meetings attended during the last four months of the

March 2009 through February 2010 Board term and additional meeting fees earned for meetings attended during the first eight months of the March 2010 through February 2011 Board term.

23Additional Information about Non-Employee Director Equity Awards

The following table provides additional information about non-employee director equity awards, including the stock awards and option awards made to non-employee directors during fiscal 2010, the grant date fair value of each of those awards and the number of stock awards and option awards outstanding as of the end of fiscal 2010:

Grant Date

Fair Value of

Stock and

Option Option

Awards Awards Stock Awards

Stock Awards Granted Granted Outstanding at Option Awards

Granted During During During Fiscal Year Outstanding at

Fiscal 2010 Fiscal 2010 Fiscal 2010

(1)

End

(2)

Fiscal Year End

Name (#) (#) ($) (#) (#)

Marc L. Andreessen ...... 7,507 Ͷ 389,633 7,544 Ͷ

Lawrence T. Babbio, Jr...... 1,632 5,976 174,790 1,639 69,919 Page | 168

Sari M. Baldauf ...... 1,632 5,976 174,790 1,639 18,708

Rajiv L. Gupta ...... 3,263 Ͷ 175,027 3,276 6,177

John H. Hammergren ...... 2,564 9,390 274,627 2,574 45,780

Joel Z. Hyatt ...... 5,127 Ͷ 275,012 5,147 Ͷ

John R. Joyce ...... 3,263 Ͷ 175,027 3,276 Ͷ

Robert L. Ryan

(3)

Ͷ 3,263 Ͷ 175,027 3,276 ......

Lucille S. Salhany ...... 1,632 5,976 174,790 1,639 42,605

G. Kennedy Thompson ...... 5,127 Ͷ 275,012 5,147 8,364

(1) Represents the grant date fair value of stock options and stock awards granted in fiscal 2010 calculated in accordance with applicable financial accounting standards. For awards of restricted stock units, that number is calculated by multiplying the closing price of HP͛s common stock on the date of grant by the number of units awarded. For option awards, that amount is calculated by multiplying the Black-Scholes value determined as of the date of grant by the number of options awarded.

(2) Includes dividend equivalent units paid with respect to outstanding awards of restricted stock units during fiscal 2010.

(3) Mr. Ryan elected to defer the stock award that he received as his equity retainer for the March

2010 through February 2011 Board term. That deferred compensation will be paid in the form of restricted stock units.

Non-Employee Director Stock Ownership Guidelines

Under HP͛s stock ownership guidelines, non-employee directors are required to accumulate within five years of election to the Board shares of HP common stock equal in value to at least five times the amount of their annual cash retainer. Shares counted toward these guidelines include any shares held by the director directly or indirectly, including deferred vested awards. Page | 169

All non-employee directors with more than five years of service have met HP͛s stock ownership guidelines. See ͚͚Common Stock Ownership of Certain Beneficial Owners and Management.͛͛

24PROPOSALS TO BE VOTED ON

PROPOSAL NO. 1

ELECTION OF DIRECTORS

HP͛s Bylaws fix the current number of directors at 17. Directors Joel Z. Hyatt, John R. Joyce,

Robert L. Ryan and Lucille S. Salhany are not nominees for election at the meeting. On the recommendation of the Nominating and Governance Committee, the Board has nominated the 13 persons named below for election as directors this year, each to serve for a one-year term or until the director͛s successor is elected and qualified. The Board has also reduced the number of directors to 13 effective immediately prior to the commencement of the meeting.

Director Nominee Experience and Qualifications

The Board annually reviews the appropriate skills and characteristics required of directors in the context of the current composition of the Board, our operating requirements and the long-term interests of our stockholders. The Board believes that its members should possess a variety of skills, professional experience, and backgrounds in order to effectively oversee our business. In addition, the

Board believes that each director should possess certain attributes, as reflected in the Board͛s membership criteria described below.

HP͛s Corporate Governance Guidelines contain the current Board membership criteria that apply to nominees recommended for a position on the Board. Under those criteria, members of the Board should have the highest professional and personal ethics and values, consistent with longstanding HP values and standards. They should have broad experience at the policy-making level in business, government, education, technology or public service. They should be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and

Page | 170

practical wisdom based on experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Each director must represent the interests of all stockholders of HP. Although the

Board uses these and other criteria as appropriate to evaluate potential nominees, it has no stated minimum criteria for nominees.

The Board believes that all the nominees named below are highly qualified and have the skills and experience required for effective service on the Board. The nominees͛ individual biographies below contain information about their experience, qualifications and skills that led the Board to nominate them.

All of the nominees have indicated to HP that they will be available to serve as directors. In the event that any nominee should become unavailable, the proxy holders, L´eo Apotheker, Michael J.

Holston and Paul T. Porrini, will vote for a nominee or nominees designated by the Board.

All of the nominees except Mr. Apotheker, Mr. Banerji, Mr. Lane, Mr. Reiner, Ms. Russo,

Ms. Senequier and Ms. Whitman have served as directors since the last annual meeting. Mr. Apotheker and Mr. Lane were elected by the Board to serve as directors effective November 1, 2010, and

Mr. Banerji, Mr. Reiner, Ms. Russo, Ms. Senequier and Ms. Whitman were elected by the Board to serve as directors effective January 21, 2011.

There are no family relationships among our executive officers and directors.

25Our Board recommends a vote FOR the election to the Board of the each of the following nominees.

Marc L. Andreessen Mr. Andreessen is co-founder and a general partner of Andreessen

Director since 2009 Horowitz, a venture capital firm founded in July 2009, and

Age 39 co-founder and Chairman of Ning, Inc., an online platform founded in 2004 for people to create their own social networks.

From 1999 to July 2007, Mr. Andreessen served as Chairman of

Opsware, Inc., a software company that he co-founded. From Page | 171

March 1999 to September 1999, Mr. Andreessen served as Chief

Technology Officer of America Online, Inc., a software company.

Mr. Andreessen co-founded Netscape Communications

Corporation, a software company, and served in various positions, including Chief Technology Officer and Executive Vice President of

Products from 1994 to 1999. Mr. Andreessen also is a director of eBay Inc. and several private companies.

Mr. Andreessen brings to the Board extensive experience as an

Internet entrepreneur. Mr. Andreessen also is a recognized industry expert and visionary in the IT industry. In addition, he has extensive leadership, consumer industry and technical expertise through his positions at Netscape, America Online and Opsware and his service on the boards of public and private technology companies. He has also gained valuable experience serving on the boards of both public and private companies.

L´eo Apotheker Mr. Apotheker has served as HP͛s President and Chief Executive

Director since 2010 Officer and as a member of the Board since November 2010.

Age 57 Mr. Apotheker served as Chief Executive Officer of SAP AG, a software company, from June 2009 until February 2010 after having served as co-Chief Executive Officer of SAP from April

2008 to May 2009. Previously, Mr. Apotheker served as worldwide

Chairman of Customer Solutions and Operations for SAP from

2002 until April 2008. Mr. Apotheker occupied various other positions at SAP since joining the company in 1995, including

Chairman of SAP EMEA from 1999 to 2002; Chairman of SAP for the South-West Europe Region from 1997 to 1999; and CEO of

SAP France and SAP Belgium from 1995 to 1997. Mr. Apotheker Page | 172

also is Vice Chairman of the supervisory board of Schneider

Electric SA.

Mr. Apotheker brings to the Board significant expertise in global business and technology and extensive management and operating experience. During his more than 20 years at SAP, he was a driving force in making it the largest business software applications company in the world. During his tenure at SAP, Mr. Apotheker also transformed research and development and technology platforms, expanded business models and customer segments, and developed a strong track record of driving technological innovation, building customer relationships and managing worldclass teams. In addition, because of his vast international experience, Mr. Apotheker is able to provide valuable leadership as HP continues to expand globally, particularly in high-growth emerging markets.

26Lawrence T. Babbio, Jr. Mr. Babbio has served as a Senior Advisor to Warburg Pincus, a

Director since 2002 private equity firm, since June 2007. Previously, Mr. Babbio served

Age 66 as Vice Chairman and President of Verizon Communications, Inc., a telecommunications company, from 2000 until his retirement in

April 2007. Mr. Babbio also served as Vice Chairman of Bell

Atlantic Corporation, a telecommunications company, from 1995 until the formation of Verizon through the merger of Bell Atlantic and GTE Corporation, another telecommunications company, in

2000; as Executive Vice President and Chief Operating Officer of

Bell Atlantic from 1994 to 1995; and Chairman, Chief Executive

Officer and President of Bell Atlantic Enterprises

International, Inc. from 1991 to 1994.

Page | 173

Mr. Babbio brings to the Board strong business skills and experience, executive leadership expertise, and extensive knowledge of financial and operational matters, having spent more than

40 years in the telecommunications industry. Mr. Babbio also brings to the Board recent experience in venture capital investing with a focus on the technology, media and telecommunications industries.

Sari M. Baldauf Ms. Baldauf served as Executive Vice President and General

Director since 2006 Manager of the Networks business group of Nokia Corporation, a

Age 55 communications company, from 1998 until February 2005. She previously held various positions at Nokia since joining the company in 1983, including Executive Vice President of Nokia,

Asia-Pacific from 1997 to 1998 and President of Nokia Cellular

Systems from 1988 to 1996. Ms. Baldauf also was a member of the

Executive Board of Nokia from 1994 until January 2005.

Ms. Baldauf also is a director of Daimler AG and three companies headquartered in Finland.

Ms. Baldauf brings to the Board valuable business and leadership experience, including extensive operational and management experience at Nokia, a technology-driven company. In addition,

Ms. Baldauf͛s knowledge of global business from both a consumer and an enterprise market perspective and her experience in large, emerging markets such as China and India have provided her with insight regarding building operations in diverse cultural environments as well as the importance of innovation. Ms. Baldauf also has a high level of understanding of the board͛s role and responsibilities based on her service on other public company Page | 174

boards. In addition, because of her service on the boards of several other international companies, Ms. Baldauf is able to provide insight regarding operating and governing a business in a diverse range of geographies.

27Shumeet Banerji Mr. Banerji has served as Chief Executive Officer of Booz &

Director since 2011 Company, a consulting company, since July 2008. Previously,

Age 51 Mr. Banerji served in multiple roles at Booz Allen Hamilton, a consulting company and predecessor to Booz & Company, while based in offices in North America, Asia and Europe, including

President of the Worldwide Commercial Business from

February 2008 to July 2008, Managing Director, Europe from

February 2007 to February 2008 and Managing Director, United

Kingdom from 2003 to March 2007. Earlier in his career, he was a member of the faculty at the University of Chicago Graduate

School of Business.

Mr. Banerji brings to the Board a robust understanding of the issues facing companies and governments in both mature and emerging markets around the world through his nearly two decades of work with Booz & Company. In particular, Mr. Banerji brings valuable experience in addressing issues ranging from corporate strategy, organizational structure, governance, transformational change, operational performance improvement and merger integration.

Rajiv L. Gupta Mr. Gupta has served as Chairman of Avantor Performance

Director since 2009 Materials, a manufacturer of chemistries and materials, since

Age 65 August 2010 and as Senior Advisor to New Mountain

Capital, LLC, a private equity firm, since July 2009. Previously, Page | 175

Mr. Gupta served as Chairman and Chief Executive Officer of

Rohm and Haas Company, a worldwide producer of specialty materials, from 1999 to April 2009. Mr. Gupta occupied various other positions at Rohm and Haas since joining the company in

1971, including Vice-Chairman from 1998 to 1999; Director of the

Electronic Materials business from 1996 to 1999; and

Vice-President and Regional Director of the Asia-Pacific Region from 1993 to 1998. Mr. Gupta also is a director of Tyco

International Ltd., The Vanguard Group and several private companies.

Mr. Gupta brings to the Board extensive experience in executive leadership at a large global company, international management experience, and venture capital investment experience. From his nearly ten years as Chairman and Chief Executive Officer of Rohm and Haas, Mr. Gupta has a strong operational and strategic background with significant experience in manufacturing and sales.

He also brings public company governance experience as a member or chair of boards and board committees of other public and private companies.

John H. Hammergren Mr. Hammergren has served as Chairman of McKesson

Director since 2005 Corporation, a healthcare services and information technology

Age 51 company, since 2002 and as President and Chief Executive Officer of McKesson since 2001. Mr. Hammergren joined McKesson in

1996 and held a number of management positions before becoming

President and Chief Executive Officer. Mr. Hammergren also is a director of Nadro, S.A. de C.V. (Mexico).

28Mr. Hammergren brings to the Board nearly 30 years of business Page | 176

and leadership experience in the healthcare industry. As a

Chairman and Chief Executive Officer of a large global company,

Mr. Hammergren brings a wealth of complex management, worldwide operational and financial expertise. He also brings in-depth knowledge of the opportunities and challenges facing global companies.

Raymond J. Lane Mr. Lane has served as HP͛s non-executive Chairman since

Director since 2010 November 2010. Mr. Lane has served as Managing Partner of

Age 63 Kleiner Perkins Caufield & Byers, a private equity firm, since 2000.

Prior to joining Kleiner Perkins, Mr. Lane was President and Chief

Operating Officer and a director of Oracle Corporation, a software company. Before joining Oracle in 1992, Mr. Lane was a senior partner of Booz Allen Hamilton, a consulting company. Prior to

Booz Allen Hamilton, Mr. Lane served as a division vice president with Electronic Data Systems Corporation, an IT services company that HP acquired in August 2008. Mr. Lane also is a director of

Quest Software, Inc. and several private companies.

Mr. Lane brings to the Board significant experience as an earlystage venture capital investor, principally in the information technology industry, through his position as Managing Partner of

Kleiner Perkins. In addition, having served as President and Chief

Operating Officer of Oracle, Mr. Lane has experience in worldwide operations, management and the development of corporate strategy. He has also gained valuable experience serving in board leadership roles for many public and private companies.

Gary M. Reiner Mr. Reiner has served as Special Advisor at General Atlantic, a

Director since 2011 private equity firm, since September 2010. Previously, Mr. Reiner

Page | 177

Age 56 served as the Senior Vice President and Chief Information Officer at General Electric Company, a technology, media and financial services company, from 1996 until March 2010. Mr. Reiner previously held other executive positions with GE since joining the company in 1991. Earlier in his career, Mr. Reiner was a partner at Boston Consulting Group where he focused on strategic and process issues for technology businesses.

Mr. Reiner brings to the Board deep insight into how IT can help global companies succeed through his many years of experience as

Chief Information Officer at GE. From his other positions at GE and his prior experience with Boston Consulting Group, he also brings decades of experience driving corporate strategy, information technology and best practices across complex organizations. In addition, Mr. Reiner brings recent experience in private equity investing focusing on the IT industry.

Patricia F. Russo Ms. Russo served as Chief Executive Officer of Alcatel-Lucent, a

Director since 2011 communications company, from December 2006 to September

Age 58 2008. Previously, she served as Chairman of Lucent

Technologies Inc., a communications company, from 2003 to

November 2006 and Chief Executive Officer and President of

Lucent from 2002 to November 2006. Ms. Russo also is a director of General Motors Company, Merck & Co., Inc. and Alcoa Inc.

29Ms. Russo brings to the Board extensive global business experience, a broad understanding of the technology industry, strong management skills and operational expertise through her positions with Alcatel-Lucent and Lucent Technologies. In those positions, she dealt with a wide range of issues including mergers Page | 178

and acquisitions and business restructurings as she led Lucent͛s recovery through a severe industry downturn and later a merger with Alcatel. Ms. Russo also brings public company governance experience as a member of boards and board committees of other public companies.

Dominique Senequier Ms. Senequier has served as Chairman and Chief Executive Officer

Director since 2011 of AXA Private Equity, a private equity firm, since founding the

Age 57 firm and joining AXA Investment Managers in 1996. Earlier in her career, she worked at the Commission Fran¸caise des Assurances and at the French insurance group GAN. Ms. Senequier also is an observer of the supervisory board of Schneider Electric SA.

Ms. Senequier brings to the Board broad international perspective, strong financial acumen and a keen focus on long-term performance through her experience as Chairman and Chief

Executive Officer of AXA Private Equity. She also brings extensive experience in investing in the IT industry. In addition,

Ms. Senequier brings international public company governance experience as a member of the Schneider Electric supervisory board.

G. Kennedy Thompson Mr. Thompson has served as Senior Advisor to Aquiline Capital

Director since 2006 Partners LLC, a private equity firm, since May 2009. Previously,

Age 60 Mr. Thompson served as Chairman of Wachovia Corporation, a financial services company, from 2003 until June 2008.

Mr. Thompson also served as Chief Executive Officer of Wachovia, formerly First Union Corporation, from 2000 until June 2008 and as President from 1999 until June 2008. Previously, Mr. Thompson served as Chairman of First Union for a portion of 2001; Vice Page | 179

Chairman of First Union from 1998 to 1999; and Executive Vice

President of First Union from 1996 to 1998.

Mr. Thompson brings to the Board broad business skills and experience, executive leadership expertise, organizational and operational management skills, and knowledge of complex global business and financial matters, having served as Chairman, Chief

Executive Officer and President of a global financial services company. Mr. Thompson also brings to the Board recent experience in venture capital investing focusing on the financial services industry.

30Margaret C. Whitman Ms. Whitman served as President and Chief Executive Officer of

Director since 2011 eBay Inc., an ecommerce and payments company, from 1998 to

Age 54 March 2008. Prior to joining eBay, Ms. Whitman held executivelevel positions at Hasbro Inc., a toy company, FTD, Inc., a floral products company, The Stride Rite Corporation, a footwear company, The Walt Disney Company, an entertainment company, and Bain & Company, a consulting company. She also served as a director of The Procter & Gamble Company from 2003 to 2008 and DreamWorks Animation SKG, Inc. from 2005 to 2008, having resigned from both boards of directors in preparation for her 2010

California gubernatorial bid.

Ms. Whitman brings to the Board unique experience in developing transformative business models, building global brands and driving sustained growth and expansion through her ten years as President and Chief Executive Officer of eBay. From her previous executive positions with other large public companies, she also brings strong operational and strategic expertise. In addition, Ms. Whitman

Page | 180

brings public company governance experience having previously served as a member of boards and board committees of other public companies.

Vote Required

Each director nominee who receives more ͚͚FOR͛͛ votes than ͚͚AGAINST͛͛ votes representing shares of HP common stock present in person or represented by proxy and entitled to be voted at the annual meeting will be elected.

If you sign your proxy or voting instruction card but do not give instructions with respect to voting for directors, your shares will be voted for the 13 persons recommended by the Board. If you wish to give specific instructions with respect to voting for directors, you may do so by indicating your instructions on your proxy or voting instruction card.

You may cumulate your votes in favor of one or more of the director nominees. If you wish to cumulate your votes, you will need to indicate explicitly your intent to cumulate your votes among the

13 persons who will be voted upon at the annual meeting. See ͚͚Questions and AnswersͶVoting

InformationͶIs cumulative voting permitted for the election of directors?͛͛ for further information about how to cumulate your votes. L´eo Apotheker, Michael J. Holston and Paul T. Porrini, as proxy holders, reserve the right to cumulate votes and cast such votes in favor of the election of some or all of the applicable nominees in their sole discretion, except that a stockholder͛s votes will not be cast for a nominee as to whom such stockholder instructs that such votes be cast ͚͚AGAINST͛͛ or ͚͚ABSTAIN.͛͛

If an incumbent director nominee receives a greater number of votes against his or her election than votes for such election, he or she is required to tender his or her resignation for consideration by the Nominating and Governance Committee in accordance with Section V of HP͛s Corporate

Governance Guidelines and as described under ͚͚Corporate Governance Principles and Board

MattersͶBoard Policy Regarding Voting for Directors.͛͛ Page | 181

31PROPOSAL NO. 2

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board has appointed Ernst & Young LLP as the independent registered public accounting firm to audit HP͛s consolidated financial statements for the fiscal year ending October 31, 2011. During fiscal 2010, Ernst & Young LLP served as HP͛s independent registered public accounting firm and also provided certain tax and other audit-related services. See

͚͚Principal Accountant Fees and Services͛͛ on page 76. Representatives of Ernst & Young LLP are expected to attend the annual meeting, where they will be available to respond to appropriate questions and, if they desire, to make a statement.

Vote Required

Ratification of the appointment of Ernst & Young LLP as HP͛s independent registered public accounting firm for the 2011 fiscal year requires the affirmative vote of a majority of the shares of HP common stock present in person or represented by proxy and entitled to be voted at the meeting. If the appointment is not ratified, the Board will consider whether it should select another independent registered public accounting firm.

Recommendation of the Board of Directors

Our Board recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as

HP͛s independent registered public accounting firm for the 2011 fiscal year.

32PROPOSAL NO. 3

ADVISORY VOTE ON EXECUTIVE COMPENSATION

The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the

͚͚Dodd-Frank Act͛͛) enables HP stockholders to vote to approve, on an advisory or non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with SEC rules.

HP has a ͚͚pay-for-performance͛͛ philosophy that forms the foundation of all decisions regarding

Page | 182

compensation of HP͛s named executive officers. This compensation philosophy, and the program structure approved by the HR and Compensation Committee, is central to HP͛s ability to attract, retain and motivate individuals who can achieve superior financial results. This approach, which has been used consistently over the years, has resulted in HP͛s ability to attract and retain the executive talent necessary to guide HP during a period of tremendous growth and transformation. Please refer to

͚͚Executive CompensationͶCompensation Discussion and AnalysisͶExecutive Summary͛͛ for an overview of the compensation of HP͛s named executive officers.

We are asking for stockholder approval of the compensation of our named executive officers as disclosed in this proxy statement in accordance with SEC rules, which disclosures include the disclosures under ͚͚Executive CompensationͶCompensation Discussion and Analysis,͛͛ the compensation tables and the narrative discussion following the compensation tables. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and practices described in this proxy statement.

This vote is advisory and therefore not binding on HP, the HR and Compensation Committee of the Board, or the Board. The Board and the HR and Compensation Committee value the opinions of

HP stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider those stockholders͛ concerns, and the HR and Compensation Committee will evaluate whether any actions are necessary to address those concerns.

Vote Required

Recommendation of the Board of Directors

Page | 183

Our Board recommends a vote FOR the approval of the compensation of HP͛s named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC.

33PROPOSAL NO. 4

ADVISORY VOTE ON THE FREQUENCY OF HOLDING FUTURE ADVISORY VOTES

ON EXECUTIVE COMPENSATION

The Dodd-Frank Act also enables HP stockholders to vote, on an advisory or non-binding basis, on how frequently they would like to cast an advisory vote on the compensation of HP͛s named executive officers. By voting on this proposal, stockholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two, or three years.

After careful consideration of the frequency alternatives, the Board believes that conducting advisory vote on executive compensation on an annual basis is appropriate for HP and its stockholders at this time.

Vote Required

The affirmative vote of a majority of the shares of HP common stock present in person or represented by proxy and entitled to be voted on the proposal at the annual meeting is required for advisory approval of this proposal. The Board will carefully consider the outcome of the vote when making future decisions regarding the frequency of advisory votes on executive compensation. However, because this vote is advisory and not binding, the Board may decide that it is in the best interests of

HP and its stockholders to hold an advisory vote more or less frequently than the alternative that has been selected by our stockholders.

Recommendation of the Board of Directors

Our Board recommends a vote for the approval of an ANNUAL advisory vote on the compensation of HP͛s named executive officers.

Page | 184

34PROPOSAL NO. 5

APPROVAL OF THE HEWLETT-PACKARD COMPANY

2011 EMPLOYEE STOCK PURCHASE PLAN

On November 17, 2010, the HR and Compensation Committee of the Board adopted the HewlettPackard Company 2011 Employee Stock Purchase Plan (the ͚͚2011 ESPP͛͛) and reserved 100,000,000 shares of HP common stock for issuance thereunder. The 2011 ESPP will be effective May 1, 2011, subject to HP stockholder approval within 12 months of Board approval.

HP stockholders are being asked to approve the 2011 ESPP and the Board͛s reservation of shares under the 2011 ESPP for the purpose of qualifying such shares for special tax treatment under

Section 423 of the Internal Revenue Code of 1986, as amended (the ͚͚Code͛͛). The 2011 ESPP is intended to replace HP͛s 2000 Employee Stock Purchase Plan (also known as the ͚͚Share Ownership

Plan͛͛ or ͚͚SOP͛͛), which expired on November 1, 2010. At the time of expiration, approximately

30,426,564 shares of common stock were reserved for issuance under the SOP.

Summary of the 2011 ESPP

The principal features of the 2011 ESPP are summarized below. The following summary of the

2011 ESPP does not purport to be a complete description of all of the provisions of the 2011 ESPP. It is qualified in its entirety by reference to the complete text of the 2011 ESPP, which has been filed with the SEC as Annex A to this proxy statement. Any HP stockholder who wishes to obtain a copy of the

2011 ESPP may do so upon written request to the Secretary at HP͛s principal executive offices.

General. The purpose of the 2011 ESPP is to provide employees of HP and its designated subsidiaries and affiliates with an opportunity to purchase HP common stock and, therefore, to have an additional incentive to contribute to the prosperity of HP.

Administration. The 2011 ESPP is administered by a committee (the ͚͚Administrative Committee͛͛) appointed by the Board. The Administrative Committee has full power to interpret the 2011 ESPP, and the decisions of the Board and the Administrative Committee are final and binding upon all Page | 185

participants.

Eligibility. Any employee of HP or any HP subsidiary or affiliate designated by the Administrative

Committee who is regularly employed for at least 20 hours per week and more than five months in a calendar year on an Entry Date (as defined below) is eligible to participate in the 2011 ESPP during the Offering Period (as defined below) beginning on that Entry Date, subject to administrative rules established by the Administrative Committee. However, no employee is eligible to participate in the

2011 ESPP to the extent that, immediately after the grant, that employee would have owned 5% of either the voting power or the value of HP͛s common stock, and no employee͛s rights to purchase HP͛s common stock pursuant to the 2011 ESPP may accrue at a rate that exceeds $25,000 per calendar year.

Eligible employees become participants in the 2011 ESPP by filing with HP an enrollment agreement authorizing payroll deductions on a date set by the Administrative Committee prior to the applicable

Entry Date. As of October 31, 2010, approximately 250,000 HP employees, including 12 executive officers, were eligible to participate in the 2011 ESPP.

Participation in an Offering. The 2011 ESPP is implemented by offering periods lasting for six months (an ͚͚Offering Period͛͛). If stockholders approve the 2011 ESPP, the first six-month Offering

Period will begin on May 1, 2011. Common stock is purchased under the 2011 ESPP every six months on the last trading day of each Offering Period (a ͚͚Purchase Date͛͛), unless the participant becomes ineligible, withdraws or terminates employment earlier. The Entry Date is the first trading day of the

Offering Period. To participate in the 2011 ESPP, each eligible employee must authorize contributions pursuant to the 2011 ESPP, which will generally be collected through payroll deductions. Such payroll

35deductions may not exceed 10% of a participant͛s eligible compensation and are also subject to the limitations discussed above. A participant may increase or decrease his or her rate of contribution through payroll deductions at any time, but at no time may such rate of contribution exceed 10%. Each

Page | 186

participant who has elected to participate is automatically granted an option to purchase shares of common stock on his or her Entry Date. The option expires at the end of the Offering Period, upon termination of employment, or if the employee becomes ineligible, whichever is earlier, but is exercised at the end of each Offering Period to the extent of the contributions accumulated during such Offering

Period. The number of shares that may be purchased by an employee in any Offering Period, subject to the limitations discussed above, may not exceed 5,000 shares of common stock.

Purchase Price; Shares Purchased. Shares of common stock may be purchased under the 2011

ESPP at a price not less than 95% of the fair market value of the common stock on the last trading day of the Offering Period; however, the Administrative Committee has the discretion to adjust the purchase price in the future so long as it is not less than 85% of the fair market value of the common stock on the last trading day of the Offering Period. On December 31, 2010, the closing price per share of HP common stock was $42.10. The number of whole shares of HP common stock a participant purchases in each Offering Period is determined by dividing the total amount of the participant͛s contributions during that Offering Period by the purchase price, subject to the 5,000 share limit.

Termination of Employment. Termination of a participant͛s employment for any reason, including death, immediately cancels his or her option and participation in the 2011 ESPP. In such event, the contributions credited to the participant͛s account will be returned without interest to him or her or, in the case of death, to the person or persons entitled to those contributions.

Adjustments upon Changes in Capitalization, Merger or Sale of Assets. In the event that HP common stock is changed by reason of any stock split, stock dividend, combination, recapitalization or other similar changes in HP͛s capital structure effected without the receipt of consideration, appropriate proportional adjustments may be made in the number of shares of stock subject to the

2011 ESPP, the number of shares of stock to be purchased pursuant to an option and the price per

Page | 187

share of common stock covered by an option. Any such adjustment will be made by the Board, whose determination shall be conclusive and binding. In the event of a proposed sale of all or substantially all of the assets of HP or the merger or consolidation of HP with another company, the Board may determine that each option will be assumed by, or an equivalent option substituted by, the successor company or its affiliates, that the Purchase Date will be accelerated, or that all outstanding options will terminate and accumulated payroll deductions will be refunded.

Amendment and Termination of the Plan. The Board may terminate or amend the 2011 ESPP at any time, except that it may not increase the number of shares subject to the 2011 ESPP other than as described in the 2011 ESPP. The 2011 ESPP will continue until May 1, 2021, unless otherwise terminated by the Board.

Withdrawal. Generally, a participant may withdraw from the 2011 ESPP during an Offering

Period prior to the change enrollment deadline established by the Administrative Committee. The

Administrative Committee may establish rules limiting the frequency with which participants may withdraw and re-enroll in the plan and may establish a waiting period for participants wishing to re-enroll.

New Plan Benefits. Because benefits under the 2011 ESPP will depend on employees͛ elections to participate and the fair market value of HP common stock at various future dates, it is not possible to determine the benefits that will be received by executive officers and other employees if the 2011 ESPP is approved by the stockholders. Non-employee directors are not eligible to participate in the 2011

ESPP.

36U.S. Federal Income Tax Consequences

If HP stockholders approve this proposal, the 2011 ESPP, and the right of participants to make

Page | 188

purchases thereunder, should qualify under the provisions of Sections 421 and 423 of the Code. Under these provisions, no income will be taxable to a participant until the shares purchased under the 2011

ESPP are sold or otherwise disposed of. Upon sale or other disposition of the shares, the participant will generally be subject to tax and the amount of the tax will depend upon the holding period. If the shares are sold or otherwise disposed of more than two years from the applicable Entry Date and more than one year from the date of transfer of the shares to the participant, then the participant generally will recognize ordinary income measured as the lesser of (i) the excess of the amount received upon such sale or disposition over the purchase price, or (ii) an amount equal to 5% of the fair market value of the shares as of the Entry Date. Any additional gain should be treated as long-term capital gain. If the shares are sold or otherwise disposed of before the expiration of this holding period, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on the holding period. HP is not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent ordinary income is recognized by participants upon a sale or disposition of shares prior to the expiration of the holding period(s) described above. In all other cases, no deduction is allowed to HP.

The foregoing is only a summary of the effect of U.S. federal income taxation upon participants and HP with respect to the 2011 ESPP based on the U.S. Federal income tax laws in effect as of the date of this proxy statement. It is not intended to be exhaustive and does not discuss the tax

Page | 189

consequences arising in the context of the employee͛s death or the income tax laws of any municipality, state or foreign country in which the employee͛s income or gain may be taxable or the gift, estate, or any tax law other than U.S. federal income tax law. Because individual circumstances may vary, HP advises all recipients to consult their own tax advisor concerning the tax implications of participation in the 2011 ESPP.

Vote Required

Approval of the 2011 ESPP requires the affirmative vote of a majority of the shares of HP common stock present in person or represented by proxy and entitled to be voted on the proposal at the annual meeting.

Recommendation of the Board of Directors

Our Board recommends a vote FOR the approval of the Hewlett-Packard Company 2011 Employee

Stock Purchase Plan.

37PROPOSAL NO. 6

APPROVAL OF AN AMENDMENT TO THE HEWLETT-PACKARD COMPANY

2005 PAY-FOR-RESULTS PLAN TO EXTEND THE TERM OF THE PLAN

The Hewlett-Packard Company 2005 Pay-for-Results Plan (the ͚͚PfR Plan͛͛) was approved by stockholders in March of 2006. The PfR Plan provides a non-exclusive framework that can satisfy the standards of Section 162(m) of the Code. Under the PfR Plan, the HR and Compensation Committee of the Board (the ͚͚Committee͛͛) may designate performance measures and a bonus formula with respect to a performance period for each PfR Plan participant. Utilizing those criteria and other factors that the Committee determines appropriate, the Committee uses the PfR Plan to reward accomplishments achieved or recognized during the performance period. The Board believes that the

PfR Plan benefits stockholders because it creates a strong incentive for executives to meet or exceed specified financial goals. Stockholders are being asked to approve an amendment to the PfR Plan to

Page | 190

remove the expiration date so that the PfR Plan will continue until terminated by the Committee and to fulfill the requirements to qualify the amounts paid pursuant to the PfR Plan for a United States federal income tax deduction by HP. Other than the removal of the plan expiration, all terms of the

PfR Plan remain unchanged.

The Board believes that it is in the best interest of HP and its stockholders to provide for a stockholder-approved plan under which bonuses qualify for deductibility by HP for United States federal income tax purposes, to the maximum extent permitted. Accordingly, the PfR Plan is structured such that payments under it can qualify as ͚͚performance-based͛͛ compensation within the meaning of

Section 162(m) of the Code. In general, Section 162(m) of the Code places a limit of $1 million on the deductibility for federal income tax purposes of the compensation paid to ͚͚covered employees,͛͛ generally defined as the four highest-paid officers employed by the company on the last day of its taxable year other than the chief financial officer. However, compensation that qualifies as

͚͚performance-based͛͛ under Section 162(m) is not subject to the $1 million limitation. One of the requirements of ͚͚performance-based͛͛ compensation for purposes of Section 162(m) of the Code is that the material terms of the performance goal under which compensation may be paid be disclosed to, and approved by, the company͛s stockholders every five years. Therefore, we are seeking stockholder approval of the material terms of the PfR Plan which permit continued qualification under

Section 162(m). For purposes of Section 162(m), the material terms include (i) the employees eligible to receive compensation, (ii) a description of the business criteria on which the performance goal is based and (iii) the maximum amount of compensation that can be paid to an employee under the performance goal. Each of these aspects of the PfR Plan is discussed below, and stockholder approval of the amendment to the PfR Plan will be deemed to constitute approval of each of these aspects of the PfR Plan for purposes of the approval requirements of Section 162(m) of the Code.

Summary of the PfR Plan Page | 191

The principal features of the PfR Plan are summarized below. The following summary of the PfR

Plan does not purport to be a complete description of all of the provisions of the PfR Plan. It is qualified in its entirety by reference to the complete text of the PfR Plan, which has been filed with the

SEC as Annex B to this proxy statement. Any HP stockholder who wishes to obtain a copy of the PfR

Plan may do so upon written request to the Secretary at HP͛s principal executive offices.

Administration. The Committee has complete authority to: (i) select from the eligible participants the individuals to whom awards under the PfR Plan may from time to time be paid, (ii) determine the performance periods and performance goals upon which payment of awards under the PfR Plan will be based, and (iii) make any other determination and take any other action that the Committee deems necessary or desirable to discharge its duties under the PfR Plan. The Committee may delegate various functions to a ͚͚Plan Committee͛͛ to act on certain compensation and benefits matters. The Plan

Committee will have the responsibility for general administration and interpretation of the PfR Plan,

38except to the extent inconsistent with Section 162(m) of the Code. The Plan Committee is composed of

HP͛s Executive Vice President of Human Resources, General Counsel, Controller and Treasurer. The

Plan Committee may further delegate its administrative tasks to other HP employees as it deems appropriate.

Participation and Eligibility. Each Section 16 officer is eligible to participate in the PfR Plan. HP͛s non-employee directors are not entitled to participate in the PfR Plan. As of December 31, 2010, HP had 12 Section 16 officers who were eligible to participate in the PfR Plan in fiscal 2011.

If a person ceases to be a Section 16 officer or becomes a Section 16 officer during a performance period, such participant may receive a prorated bonus under the PfR Plan.

A participant generally will forfeit any bonus for a performance period during which such participant is involuntarily terminated by HP or terminates his or her employment with HP for any reason, although the Committee may determine that the forfeiture does not apply in cases of Page | 192

termination due to death, workforce reduction, disability, retirement or in connection with certain mutual separation agreements, but only to the extent that the applicable performance goals are met.

Adjustments may also be made if a participant is on a leave of absence approved by HP or is on non-pay status.

Awards under the PfR Plan are subject to repayment in the event of a significant restatement of financial results. In the event of such a restatement, the Board will review all bonuses that were paid to

Section 16 officers on the basis of having met or exceeded specific performance targets for performance periods beginning after December 31, 2005 for the restatement period. If such bonuses would have been lower had they been calculated based on such restated results, the Board will, to the extent permitted by governing law, seek to recoup all such bonuses paid to Section 16 officers whose fraud or misconduct resulted in such restatement.

PfR Plan Operation. Within the earlier of (i) 90 days after commencement of a performance period, or (ii) the expiration of 25% of the performance period, the Committee will designate or approve:

ͻ the performance period (the PfR Plan defines ͚͚performance period͛͛ to mean HP͛s fiscal year or such other period that the Committee may establish);

ͻ the employees (designated by position or name) who will be participants in the PfR Plan for the performance period;

ͻ the performance measures and targeted performance goals for those measures during the performance period;

ͻ the bonus formula applicable to each participant for the performance period (which can be set on an individual or group basis);

ͻ the target bonus opportunity for each participant;

ͻ the weighting of each performance measure; and

Page | 193

ͻ the eligible earnings that the participant accrues during the performance period.

When the Committee establishes a bonus program, the Committee first determines the length of the performance period in which a bonus program applies. The Committee also determines the performance measures, and associated weighting and targeted goals, for the applicable performance period. For the 2011 fiscal year performance period, the Committee selected non-GAAP net profit

(before bonus) to determine overall plan funding. For individual participants, the Committee will make bonus awards based on performance measures that include business-owned net profit and revenue, as well as achievement against certain strategic objectives, customer satisfaction and employee development metrics.

39Business Criteria and Maximum Amount of Compensation Payable under the PfR Plan. The performance measures for any performance period will be any one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either HP as a whole or to a region, business unit, affiliate or business segment, either individually, alternatively or in any combination, and measured either on an absolute basis or relative to a pre-established target, to a previous period͛s results or to a designated comparison group, in each case as specified by the

Committee: (i) cash flow (including operating cash flow or free cash flow), (ii) revenue (on an absolute basis or adjusted for currency effects), (iii) gross margin, (iv) operating expenses or operating expenses as a percentage of revenue, (v) earnings (which may include earnings before interest and taxes, earnings before taxes and net earnings, and may be determined in accordance with United States

Generally Accepted Accounting Principles (͚͚GAAP͛͛) or adjusted to exclude any or all non-GAAP items), (vi) earnings per share (on a GAAP or non-GAAP basis), (vii) growth in any of the foregoing

Page | 194

measures, (viii) stock price, (ix) return on equity or average stockholders͛ equity, (x) total stockholder return, (xi) growth in stockholder value relative to the moving average of the S&P 500 Index or another index, (xii) return on capital, (xiii) return on assets or net assets, (xiv) return on investment,

(xv) economic value added, (xvi) operating profit, controllable operating profit, or net operating profit,

(xvii) operating margin, (xviii) cash conversion cycle, (xix) market share, (xx) contract awards or backlog, (xxi) overhead or other expense reduction, (xxii) credit rating, (xxiii) strategic plan development and implementation, (xxiv) succession plan development and implementation,

(xxv) improvement in workforce diversity, (xxvi) customer indicators, (xxvii) new product invention or innovation, (xxviii) attainment of research and development milestones, (xxix) improvements in productivity, (xxx) attainment of objective operating goals and (xxxi) employee metrics.

The PfR Plan further provides that the Committee may appropriately adjust any evaluation of performance under a performance measure to exclude any of the following events that occurs during a performance period: (A) the effects of currency fluctuations, (B) any or all items that are excluded from the calculation of non-GAAP earnings as reflected in any HP press release and Form 8-K filing relating to an earnings announcement, (C) asset write-downs, (D) litigation or claim judgments or settlements, (E) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (F) accruals for reorganization and restructuring programs, and (G) any other extraordinary or non-operational items.

The maximum bonus that any one participant may be paid under the PfR Plan in any one fiscal year is $10 million.

Committee Certification and Determination of Awards. After the conclusion of each performance period, the Committee will determine and certify the extent to which the targeted goals for the performance measures applicable to the performance period were achieved. The Committee will also

Page | 195

certify the bonus amount for each participant for the performance period based upon bonus formula for such participant as previously established by the Committee. The Committee has the authority to reduce or eliminate to zero the amount of any bonus payable under the PfR Plan to any participant; however, the Committee cannot increase the bonus amounts payable under the PfR Plan in excess of the maximum that a participant would receive based on the bonus formula established for the participant at the beginning of the performance period.

Non-Exclusivity. Nothing contained in the PfR Plan prevents the Board from adopting other or additional compensation arrangements that provide for bonuses or other forms of compensation for

HP͛s officers or other employees regardless of stockholders approval of the PfR Plan. Such other arrangements may or may not qualify for deductibility under Section 162(m) of the Code and may be either applicable only for specific officers or employees, or may be generally applicable. However, for payments under the PfR to qualify as performance-based compensation under Section 162(m), any such other or additional compensation arrangements may not be designed to provide PfR Plan participants

40all or part of the compensation they would receive under the PfR Plan regardless of whether the performance goal is attained.

Amendment and Termination of the PfR Plan. The Committee may amend, suspend or terminate the PfR Plan at any time as it may deem proper and in the best interests of HP; provided that no amendment, suspension or termination may be made that would increase the amount of compensation payable pursuant to a bonus awarded under the PfR Plan or cause amounts payable under the PfR

Plan to fail to qualify as performance-based compensation under Section 162(m) of the Code.

Administrative changes or changes required by law may be made by the Plan Committee. To the extent required under applicable law, amendments to the PfR Plan will be subject to stockholder approval.

New Plan Benefits. Information about the range of possible amounts that could have been paid Page | 196

under the PfR Plan for fiscal 2010 is set forth in the ͚͚Grants of Plan-Based Awards in Fiscal 2010͛͛ table under ͚͚Executive Compensation.͛͛

U.S. Federal Income Tax Consequences

All amounts paid pursuant to the PfR Plan constitute taxable income to the employee when received. If a participant elects to defer a portion of the bonus, the participant may be entitled to defer the recognition of income. Generally, and subject to Section 162(m) of the Code, HP will be entitled to a federal income tax deduction when amounts paid under the PfR Plan are included in employee income. Subject to stockholder approval of the PfR Plan, the failure of any aspect of the PfR Plan to satisfy Section 162(m) shall not void any action taken by the Committee under the PfR Plan.

As stated above, the PfR Plan is being submitted for stockholders approval at the annual meeting so that payments under the PfR Plan can qualify for deductibility by HP under Section 162(m) of the

Code. However, stockholder approval of the PfR Plan is only one of several requirements under

Section 162(m) of the Code that must be satisfied for amounts payable under the PfR Plan to qualify for the ͚͚performance-based͛͛ compensation exemption under Section 162(m) of the Code, and submission of the PfR Plan to stockholder approval should not be viewed as a guarantee that all amounts paid under the PfR Plan will in practice be deductible by HP.

The foregoing is only a summary of the effect of U.S. federal income taxation upon participants and HP with respect to amounts paid pursuant to the PfR Plan. It is not intended to be exhaustive and it does not discuss the tax consequences arising in the context of the employee͛s death or the income tax laws of any municipality, state or foreign country in which the employee͛s income or gain may be taxable. Because individual circumstances may vary, HP advises all recipients to consult their own tax advisor concerning the tax implications of participation in the PfR Plan.

Vote Required

Approval of the amendment to the PfR Plan requires the affirmative vote of a majority of the shares of common stock present or represented by proxy and entitled to vote on this proposal at the annual meeting. Page | 197

Recommendation of the Board of Directors

Our Board recommends a vote FOR the approval of the amendment of the Hewlett-Packard

Company 2005 Pay-for-Results Plan.

41COMMON STOCK OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of December 31, 2010 concerning beneficial ownership by:

ͻ holders of more than 5% of HP͛s common stock,

ͻ HP directors and nominees,

ͻ each of the named executive officers listed in the Summary Compensation Table on page 62, and

ͻ all directors and HP executive officers as a group.

The information provided in the table is based on HP͛s records, information filed with the SEC and information provided to HP, except where otherwise noted.

The number of shares beneficially owned by each entity or individual is determined under SEC rules, and the information is not necessarily indicative of beneficial ownership for any other purpose.

Under such rules, beneficial ownership includes any shares as to which the entity or individual has sole or shared voting power or investment power and also any shares that the entity or individual has the right to acquire as of March 1, 2011 (60 days after December 31, 2010) through the exercise of any stock options, through the vesting of restricted stock units (͚͚RSUs͛͛) payable in shares, or upon the exercise of other rights. Beneficial ownership excludes options or other rights vesting after March 1,

2011 and any RSUs vesting on or before March 1, 2011 that may be payable in cash or shares at HP͛s election. Unless otherwise indicated, each person has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares set forth in the following table.

BENEFICIAL OWNERSHIP TABLE

Shares of Percent of

Page | 198

Common Stock Common Stock

Name of Beneficial Owner Beneficially Owned Outstanding

Blackrock, Inc.

(1)

%149,051,919 6.9 ......

Marc L. Andreessen ...... 2,397 *

L´eo Apotheker ...... 159,550 *

Lawrence T. Babbio, Jr.

(2)

* 102,957 ......

Sari M. Baldauf

(3)

* 31,314 ......

Shumeet Banerji ...... 0

Rajiv L. Gupta

(4)

* 15,461 ......

John H. Hammergren

(5)

* 50,847 ......

Joel Z. Hyatt

(6)

* 16,985 ......

John R. Joyce

(7)

* 10,772 ......

Raymond J. Lane ...... 0 Page | 199

Gary M. Reiner ...... 0

Patricia F. Russo ...... 0

Robert L. Ryan

(8)

* 20,532 ......

Lucille S. Salhany

(9)

* 73,370 ......

Dominique Senequier ...... 0

G. Kennedy Thompson

(10)

* 24,984 ......

Margaret C. Whitman

(11)

* 66 ......

Catherine A. Lesjak

(12)

* 185,869 ......

R. Todd Bradley

(13)

* 386,995 ......

Ann M. Livermore

(14)

* 1,908,231 ......

Vyomesh I. Joshi

(15)

* 1,780,640 ...... Page | 200

All current executive officers and directors as a group (28 persons)

(16)

* 6,721,165 . .

* Represents holdings of less than 1%.

42(1) Based on a Schedule 13G filed with the SEC on January 29, 2010 by Blackrock, Inc. The

Schedule 13G contained information as of January 29, 2010 and may not reflect current holdings of HP common stock. The address for Blackrock, Inc. is 40 East 52nd Street, New York, New York

10022.

(2) Includes 63,943 shares that Mr. Babbio has the right to acquire by exercise of stock options.

(3) Includes 12,732 shares that Ms. Baldauf has the right to acquire by exercise of stock options.

(4) Includes 6,177 shares that Mr. Gupta has the right to acquire by exercise of stock options.

(5) Includes 14,457 shares that Mr. Hammergren holds indirectly through a trust and 36,390 shares that Mr. Hammergren has the right to acquire by exercise of stock options.

(6) Includes an aggregate of 200 shares that Mr. Hyatt holds indirectly through two trusts.

(7) Represents shares held by Mr. Joyce indirectly through a trust.

(8) Represents shares held by Mr. Ryan indirectly through a trust.

(9) Includes 36,629 shares that Ms. Salhany has the right to acquire by exercise of stock options.

(10) Includes 8,364 shares that Mr. Thompson has the right to acquire by exercise of stock options.

(11) Represents shares held by Ms. Whitman indirectly through a trust.

(12) Includes 306 shares held by Ms. Lesjak͛s spouse and 38,280 shares held indirectly by Ms. Lesjak with her spouse, and 141,250 shares that Ms. Lesjak has the right to acquire by exercise of stock options.

(13) Includes 290,000 shares that Mr. Bradley has the right to acquire by exercise of stock options.

(14) Includes 4,011 shares held by Ms. Livermore in the HP 401(k) plan, 56,176 shares that

Ms. Livermore holds indirectly through a trust with her spouse, and 1,826,200 shares that

Ms. Livermore has the right to acquire by exercise of stock options.

Page | 201

(15) Includes an aggregate of 10,008 shares that Mr. Joshi holds indirectly through two living trusts, an aggregate of 160,000 shares that Mr. Joshi holds indirectly through four grantor retained annuity trusts, and 1,465,000 shares that Mr. Joshi has the right to acquire by exercise of stock options.

(16) Includes 5,229,685 shares that executive officers and directors have the right to acquire.

43SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act, requires our directors, executive officers and holders of more than 10% of HP common stock to file reports with the SEC regarding their ownership and changes in ownership of our securities. HP believes that, during fiscal 2010, its directors, executive officers and

10% stockholders complied with all Section 16(a) filing requirements. In making these statements, HP has relied upon an examination of the copies of Forms 3, 4, and 5, and amendments thereto, and the written representations of its directors, executive officers and 10% stockholders.

TRANSACTIONS WITH RELATED PERSONS

Related Person Transaction Policies and Procedures

HP has adopted a written policy for approval of transactions between HP and its directors, director nominees, executive officers, beneficial owners of more than 5% of HP͛s common stock, and their respective immediate family members where the amount involved in the transaction exceeds or is expected to exceed $100,000 in a single calendar year.

The policy provides that the Nominating and Governance Committee reviews certain transactions subject to the policy and decides whether or not to approve or ratify those transactions. In doing so, the Nominating and Governance Committee determines whether the transaction is in the best interests of HP. In making that determination, the Nominating and Governance Committee takes into account, among other factors it deems appropriate:

ͻ The extent of the related person͛s interest in the transaction;

ͻ Whether the transaction is on terms generally available to an unaffiliated third party under the Page | 202

same or similar circumstances;

ͻ The benefits to HP;

ͻ The impact or potential impact on a director͛s independence in the event the related party is a director, an immediately family member of a director or an entity in which a director is a partner, stockholder or executive officer;

ͻ The availability of other sources for comparable products or services; and

ͻ The terms of the transaction.

The Nominating and Governance Committee has delegated authority to the chair of the

Nominating and Governance Committee to pre-approve or ratify transactions where the aggregate amount involved is expected to be less than $1 million. A summary of any new transactions pre-approved by the chair is provided to the full Nominating and Governance Committee for its review at each of the committee͛s regularly scheduled meetings.

The Nominating and Governance Committee has adopted standing pre-approvals under the policy for limited transactions with related persons. Pre-approved transactions include:

1. Compensation of executive officers that is excluded from reporting under SEC rules where

HP͛s HR and Compensation Committee approved (or recommended that the Board approve) such compensation;

2. Director compensation;

3. Transactions valued at less than $1 million or 2% of the other company͛s consolidated gross revenues, where the related person has an interest only as an employee (other than executive officer), director or beneficial holder of less than 10% of the other company͛s shares;

444. Charitable contributions of less than $1 million or 2% of the charity͛s annual receipts, where the related person has an interest only as an employee (other than executive officer) or director; and

5. Transactions where all stockholders receive proportional benefits.

A summary of new transactions covered by the standing pre-approvals described in paragraphs 3

Page | 203

and 4 above is provided to the Nominating and Governance Committee for its review in connection with the committee͛s regularly scheduled meetings.

Fiscal 2010 Related Person Transactions

HP enters into commercial transactions with many entities for which its executive officers or directors serve as directors and/or executive officers in the ordinary course of its business. All of those transactions were pre-approved transactions as defined above except for transactions with Current

Media LLC, McKesson Corporation, Ning, Inc. and Silver Lake. In fiscal 2010, Mr. Hyatt was Vice

Chairman of Current Media, Mr. Hammergren was Chairman and Chief Executive Officer of

McKesson, and Mr. Andreessen was Chairman of Ning. In addition, Mr. Joyce was a managing director of Silver Lake for a portion of fiscal 2010. HP considers these transactions to be arm͛s-length and does not believe that any of Mr. Hyatt, Mr. Hammergren, Mr. Andreessen and Mr. Joyce has a material direct or indirect interest in any of such commercial transactions.

Kimberly M. Bocian, the spouse of Peter J. Bocian, an executive officer of HP, was employed by

HP during fiscal 2010. She was paid a base salary of $209,000 and received bonuses totaling $147,750 with respect to her employment with HP during fiscal 2010. Ms. Bocian also participated in HP͛s equity award and benefit programs in fiscal 2010 and received an award of 1,000 performance-based restricted units during fiscal 2010.

45EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

As one of the world͛s leading technology companies, Hewlett-Packard͛s mission is to invent technologies and deliver services that drive business value, create social benefit and improve the lives of

Page | 204

customersͶwith a focus on positively impacting the greatest number of people possible. To fulfill this mission, the HR and Compensation Committee (the ͚͚Committee͛͛) of the Board of Directors (the

͚͚Board͛͛) believes that HP must recruit and retain executive talent from among the most capable and highest performing executives within any industry. Because the labor market for this type of executive talent is limited, the Committee spends a significant amount of time understanding the market for executive talent and the economic factors that affect HP͛s short- and long-term performance within this context.

Compensation and benefits for employees at all levels of HP, including for the named executive officers listed in the Summary Compensation Table on page 62 (the ͚͚NEOs͛͛), are determined in the context of HP͛s Total Rewards Program. The Total Rewards Program includes base pay, annual variable pay, long-term incentive pay, benefits and perquisites. Overall, the Total Rewards Program aims to foster a high-performance culture at all levels and to provide an opportunity for employees to earn significant rewards if HP achieves strong financial results.

HP͛s ͚͚pay-for-performance͛͛ philosophy forms the foundation of all of the Committee͛s decisions regarding compensation. Like most companies, HP uses a combination of fixed and variable compensation programs to reward and incentivize strong performance, and to align the interests of

HP͛s executives with its stockholders. This compensation philosophy, and the program structure approved by the Committee, is central to HP͛s ability to attract, retain and motivate individuals who can achieve the superior financial results that HP stockholders expect.

Each year the Committee, along with HP management, establishes performance targets for shortand long-term incentive plans that require the achievement of significant financial results. At the end of each year, the Committee determines compensation by assessing performance against these financial targets, as well as in light of HP͛s performance relative to its peers on other financial and non- financial

Page | 205

factors and unusual or extraordinary events. While the Committee believes that financial performance should be the most significant driver of compensation, other factors that drive long-term value for stockholders are also taken into account by the Committee, including improvements in market share, successful product launches, achievement of strategic objectives and customer satisfaction. Ultimately, the amount of compensation awarded to HP͛s executives is determined based on HP͛s performance and what the Committee believes is in the best interests of stockholders. This approach has been used consistently over the years and has resulted in HP͛s ability to attract and retain a talented executive team throughout a period of tremendous growth and transformation.

Performance during fiscal 2010, and for the three year period ending with fiscal 2010, was consistently solid and demonstrated improved earnings and operational discipline year-over-year throughout a period of significant financial turmoil. Under the compensation structure established in

2008, the Committee believes that the payouts made in fiscal 2010 reflect an appropriate level of compensation for a talented team of HP executives.

Other aspects of our compensation program are intended to further align our executives͛ interest with stockholders. These include:

ͻ Stock ownership guidelines that more closely align executives͛ interests with those of stockholders;

ͻ A ͚͚clawback͛͛ policy that permits the Board to recover bonuses from senior executives whose fraud or misconduct resulted in a significant restatement of financial results;

46ͻ No tax gross-ups on income associated with the personal use of corporate aircraft or on payments made in connection with a change of control; and

ͻ No special or supplemental pension, health or death benefits for executives.

The following pages of this Compensation Discussion and Analysis (this ͚͚CD&A͛͛) include the following:

Page | 206

ͻ An overview of HP͛s Total Rewards Program, including our policy on pay positioning and pay for performance, which appears under ͚͚HP Total Rewards Program͛͛ and ͚͚Executive Officer

Compensation Within Total Rewards͛͛;

ͻ A description of the roles of those responsible for overseeing and implementing the compensation plan, which appears under ͚͚Oversight and Authority Over Executive

Compensation͛͛;

ͻ A description of how we develop our competitive compensation structure, including how we use external data, which appears under ͚͚Use of Comparative Compensation Data͛͛ and ͚͚Analysis of

HP͛s Process for Setting and Awarding Executive Compensation͛͛;

ͻ A discussion of the impact of this analysis on the compensation of the named executive officers, which appears under ͚͚Analysis of the Elements of Executive CompensationͶBase Pay,͛͛

͚͚ͶAnnual Incentive Pay͛͛ and ͚͚ͶLong Term Incentive Pay͛͛;

ͻ A summary of the other elements of executive officer compensation under HP͛s Total Rewards

Program, which appears under ͚͚Analysis of the Elements of Executive CompensationͶBenefits,͛͛

͚͚ͶPerquisites,͛͛ ͚͚ͶSeverance Plan for Executive Officers͛͛ and ͚͚ͶBenefits in the Event of a

Change of Control͛͛; and

ͻ An outline of some other aspects of HP͛s Total Rewards Program, which appears under ͚͚Stock

Ownership Guidelines,͛͛ ͚͚Accounting and Tax Effects,͛͛ ͚͚Policy on Recovery of Bonus in Event of

Financial Restatement͛͛ and ͚͚Approval Process for Equity Grants.͛͛

The compensation tables appear immediately following this CD&A.

HP͛s Total Rewards Program

Compensation and benefits for employees at all levels of HP, including the NEOs, are determined in the context of HP͛s Total Rewards Program. The Total Rewards Program includes base pay, annual variable pay, long-term incentive pay, benefits and perquisites. Overall, the Total Rewards Program aims to foster a high-performance culture at all levels and to provide an opportunity for employees to earn significant rewards when HP achieves strong financial results.

Page | 207

While the elements of the Total Rewards Program are intended to motivate and encourage employees at all levels of HP to drive performance, there is a different emphasis on certain elements of the Total Rewards Program based on an employee͛s position and ability to impact HP͛s financial results. Within the Total Rewards Program, the percentage of performance-based pay, or at-risk pay, increases with job responsibility. Among HP͛s peer group companies, HP executives have a higher percentage of performance-based pay, which generally means smaller bonuses and lower overall compensation in years of low performance and higher bonuses and long-term incentive payouts in years of exceptional performance, reflective of the performance achieved.

Executive Officer Compensation Within Total Rewards

As one of the world͛s leading technology companies with multiple business units of significant size and complexity, the Committee generally targets the total compensation of HP͛s executive officers to be at or near the 75 th

percentile of pay for comparable positions at its peer group companies. The

Committee believes this level of pay is necessary to provide appropriate retention and incentives to

HP͛s executive officers and that it is appropriate given HP͛s size and complexity. It also generally corresponds to HP͛s percentile ranking of revenue within its peer group companies. In the case of

47NEOs who head significant business segments, the Committee has determined that in certain cases, setting and paying target compensation at or above this range, up to approximately the 90 th

percentile, is justified due to the fact that some business segments are of a similar size or even exceed the size of several of HP͛s peer group companies.

At the NEO level, there is the greatest emphasis on linking pay to performance so as to align the Page | 208

interests of the NEOs directly with those of stockholders. Accordingly, compensation is structured so that approximately 80% to 90% of NEO target compensation is performance based depending upon

HP͛s financial results, with the remaining 10% to 20% comprising base pay and benefits. The

Committee believes that this percentage of performance-based pay is appropriate for application to the

NEOs.

Within the portion of pay representing performance-based pay, approximately 10% to 30% is tied to achievement of annual incentive goals and 70% to 90% is tied to achievement of financial goals over a longer period of time. This mix of short- and long-term incentives provides sufficient rewards in the short-term to motivate near-term performance, while at the same time providing significant incentives to keep HP͛s executives focused on longer-term corporate goals that drive stockholder value. This also mitigates the risk of NEOs focusing solely on short-term or solely on long-term goals. It is also consistent with the practice of HP͛s peer group companies.

HP͛s incentive compensation programs are also designed to provide payments based on a combination of both individual business unit and aggregate HP financial results. This type of program design motivates business units across HP͛s varied portfolio to work together to achieve greater returns for stockholders. Under this compensation structure, when business segment or company results do not meet expectations, the total compensation of HP͛s NEOs may be below target market position in comparison to HP͛s peer group companies. Similarly, when superior results are achieved, the NEOs may receive significant above-market rewards. Furthermore, in any one year, because HP is comprised of a number of independent business units, NEOs in high-performing business units may receive significantly more compensation than NEOs in business units that did not perform as well.

Oversight and Authority Over Executive Compensation

Role of the HR and Compensation Committee and its Advisors Page | 209

The Committee oversees and provides strategic direction to management regarding HP͛s Total

Rewards Program generally. It makes recommendations regarding the CEO͛s compensation to the independent members of the Board, and it approves the compensation of the remaining Section 16 officers. Each Committee member is an independent non-employee director with significant experience in managing employee-related issues and making executive compensation decisions. The Committee employs its own independent compensation consultant, as well as its own independent counsel.

During fiscal 2010, the Committee selected a new independent compensation consultant,

Compensation Advisory Partners LLC (͚͚CAP͛͛), to replace Frederick W. Cook & Co., Inc. The

Committee͛s independent counsel, Sonnenschein, Nath & Rosenthal, LLP, remained the same, although the firm was renamed SNR Denton US LLP following its combination with another firm.

CAP provides analyses and recommendations that inform the Committee͛s decisions; evaluates market data and competitive position benchmarking compiled by management͛s consultants; provides updates on market trends and the regulatory environment as it relates to executive compensation; and reviews various proposals presented to the Committee by management related to executive compensation. The Committee͛s independent counsel advises on legal matters that come before the

Committee, including proxy statements and Committee resolutions. Neither CAP nor the independent counsel performs other services for HP, and neither will do so without the prior consent of the

Committee chair.

48The Committee met 11 times in fiscal 2010, including 8 times in executive session. The

Committee͛s independent advisors participated in most of the Committee͛s meetings and, when requested by the Committee chair, in the preparatory meetings and the executive sessions.

Role of Management and the Chief Executive Officer in Setting Executive Compensation

On an annual basis, management considers market competitiveness, business results, experience and individual performance in evaluating NEO compensation. The Executive Vice President, Human Page | 210

Resources and other members of HP͛s Human Resources department, together with members of the

Finance and Legal departments, work with the CEO to design and develop compensation programs, to recommend changes to existing plans and programs applicable to NEOs and other senior executives, to recommend financial and other targets to be achieved under those programs, to prepare analyses of financial data, peer comparisons and other briefing materials to assist the Committee in making its decisions, and, ultimately, to implement the decisions of the Committee.

The Executive Vice President, Human Resources has engaged Mercer LLC as management͛s compensation consultant. Mercer provides information and analyses that inform management͛s recommendations. During fiscal 2010, Mercer gathered market and performance data on HP͛s peer group companies and analyzed the compensation of HP͛s Section 16 officers against that data. Mercer provides other consulting services to HP as well.

Prior to his resignation, Mr. Hurd was actively engaged in setting compensation for other executives through a variety of means, including recommending for Committee approval the financial performance goals and the annual variable pay amounts for his executive team. He worked closely with other members of executive management in analyzing relevant market data to determine base salary and annual target bonus opportunities for senior management and to develop targets for the short- and long-term incentive plan. Ms. Lesjak, while serving as interim CEO, met with the Committee and made recommendations regarding, among other things, annual bonus awards for the Section 16 officers, other than herself, for fiscal 2010. Since assuming office, Mr. Apotheker has been active in reviewing compensation program designs, as well as in proposing new metrics and targets for 2011 executive compensation programs.

Page | 211

Use of Comparative Compensation Data

Each year, the Committee reviews the compensation of HP͛s Section 16 officers and compares it to that of HP͛s peer group companies. This process starts with the selection of an appropriate group of peer companies for comparison purposes. Since 2008, the Committee has used a ͚͚rules based͛͛ method for determining the executive compensation peer group, with certain adjustments made from time to time based on external market factors (for example, in fiscal 2009, the market capitalization levels were reduced to reflect general market trends, but those levels were restored in 2010 when markets recovered).

Under this approach, the peer group companies are determined using six screening levels:

(1) current market capitalization greater than $25 billion (up from $17 billion in fiscal 2009);

(2) revenue in excess of $15 billion for technology companies (up from $10 billion in fiscal 2009) and

$50 billion for companies in other industries; (3) inclusion in the S&P 500 Index, the Dow Jones 30

Index and/or the Dow Jones Global Titans Index; (4) inclusion in industry specific categories of information technology, industrials, materials, telecommunications services, consumer discretionary and consumer staples; (5) the global scope and complexity of the company͛s business; and (6) in the case of companies used for comparison of CEO pay, a lack of anomalous pay practices (typically companies with a founder as CEO). The Committee believes that use of this methodology continues to produce the appropriate peer group for comparison, as well as a group that is large and diverse enough so that the addition or elimination of any one company does not alter the overall analysis.

49Under this six-level screening approach, the peer group used by the Committee during fiscal 2010 for executive compensation comparison purposes included 16 of the 20 companies included in the prior year͛s peer group, as well as two new companies. In addition, one company was retained in the peer

Page | 212

group for year-over-year consistency, even though its market capitalization did not exceed the

$25 billion threshold at the time that the peer group was determined. The full list of companies is as follows:

Company Name Revenue ($ in billions)*

Chevron ...... 171.64

General Electric ...... 156.78

Hewlett-Packard Company ...... 126.03

AT&T ...... 123.02

Ford Motor Company...... 118.31

Verizon ...... 107.81

IBM ...... 95.76

Procter & Gamble ...... 78.94

Boeing ...... 68.28

Apple ...... 65.23

Microsoft ...... 62.48

Johnson & Johnson ...... 61.90

United Technologies ...... 52.92

Dell ...... 52.90

Cisco Systems ...... 40.04

Intel ...... 35.13

Oracle ...... 26.82

Google ...... 23.65

EMC...... 14.03

* Represents fiscal 2009 reported revenue, except fiscal 2010 reported revenue is provided for Apple, Dell, Cisco Systems, Microsoft, Oracle, Procter & Gamble and HP. The companies new to the peer group are Chevron, which replaced ConocoPhillips, and Ford

Motor Company. EMC was retained for year-over-year consistency. United Parcel Service, Page | 213

Dow Chemical and Texas Instruments no longer met the screening criteria.

Following its determination of the executive compensation peer group, management presents the

Committee with its analysis of executive officer pay. This analysis is then discussed and reviewed by the

Committee with its independent advisors. The Committee finds comparative data useful in setting and adjusting executive compensation. In general, the aim is to set target compensation levels at or near the

75 th

percentile and, in certain situations, at or near the 90 th

percentile, with an opportunity to earn greater rewards for the achievement of superior business results.

Analysis of HP͛s Process for Setting and Awarding Executive Compensation

A broad range of facts and circumstances is considered in setting executive compensation. Among the factors considered for HP͛s executives generally, and for the NEOs in particular, are business results, market competitiveness, internal equity, past practice, experience and individual performance.

The weight given each factor may differ from year to year and may differ among individual NEOs in any given year. For example, when HP recruits externally, market competitiveness and experience as well as the circumstances unique to a particular candidate may weigh more heavily in the compensation analysis. In contrast, when determining year-over-year compensation for current NEOs, business results, peer company metrics, and internal equity generally factor more heavily in the analysis.

50Because such a large percentage of NEO pay is performance based, the Committee spends significant time determining the appropriate financial targets for HP͛s short- and long-term incentive pay plans. In general, management makes the initial recommendation for the financial targets, and

Page | 214

these recommendations are reviewed and discussed by the Committee and its independent advisors.

The major factor used in setting targets for the current fiscal year are business results from the most recently completed fiscal year; other factors taken into account include the general business climate, global market conditions, conditions or goals specific to a particular business segment, strategic initiatives and succession planning goals. Targets are set by the Committee within the first 90 days of the fiscal year.

Following the close of the fiscal year, the Committee reviews actual financial results against the targets set by the Committee under HP͛s incentive compensation plans for that year, and payouts under the plans are generally determined by reference to performance against the established financial targets. The total incentive compensation payments approved by the Committee may be more or less than the amounts determined solely by performance against targets due to a range of other factors, such as the quality of earnings, the number and size of strategic acquisitions, improvement in market share, the economic conditions in which the performance was delivered, and unusual or extraordinary events. In reviewing fiscal 2010 performance at its November meeting, the Committee reviewed the financial results and recommendations as presented by the CFO and the CEO, reviewed the individual performance of the NEOs as reported by the CFO and the CEO, and determined their incentive compensation for that fiscal year.

In setting incentive compensation for NEOs, the Committee generally does not consider the effect of past changes in stock price, or expected payouts or earnings under other plans. In addition, incentive compensation decisions are made without regard to length of service or prior awards. For example,

NEOs with longer service at HP or who are eligible for retirement do not receive greater or lesser awards, or larger or smaller target amounts, in a given year than do NEOs with shorter service.

Analysis of Elements of Executive Compensation Page | 215

Under HP͛s Total Rewards Program, executive compensation consists of the following elements: base pay, annual incentive pay, long-term incentive pay, benefits and perquisites.

Base Pay

Consistent with HP͛s philosophy of tying pay to performance, HP executives receive a relatively small percentage of their overall compensation in the form of base pay. Consistent with the practice of

HP͛s peer group companies, the NEOs are paid an amount in the form of base pay sufficient to attract qualified executive talent and maintain a stable management team. The Committee aims to have executive base salaries be at or near the market median for comparable positions and to comprise 10% to 20% of their overall compensation, which is also consistent with the practice of HP͛s peer companies.

In fiscal 2009, HP implemented base pay reductions at graduated rates (where permitted by local law) as part of several cost-savings initiatives. As of July 1, 2010, the Committee restored base pay for all the NEOs to their pre-reduced levels and provided additional increases to the NEOs other than the then-current CEO (Ms. Lesjak) to bring them up to then-current market rates. No other adjustments to

NEO base pay were made during fiscal 2010. In connection with an overall review of Section 16 officer compensation at the beginning of fiscal 2011, the Committee increased Ms. Lesjak͛s base salary to

$825,000 effective November 1, 2010 in recognition of her past performance and expected future contributions to the company.

51Annual Incentive Pay

The NEOs are eligible to receive annual incentive pay under the Hewlett-Packard Company 2005

Pay-for-Results Plan (͚͚the PfR Plan͛͛). In the discretion of the Committee, HP executives may receive additional annual incentive pay outside the PfR Plan. Annual incentive pay under the PfR Plan is awarded based on achievement against the key financial metrics of revenue and net profit, each of Page | 216

which is equally weighted under the plan for performance from threshold to target. For performance above target, additional funding is driven by performance on net profit. These metrics address both

͚͚top line͛͛ (revenue) and ͚͚bottom line͛͛ (net profit) corporate financial goals, both of which we believe are critical to driving long-term value.

The combination of these two metrics limits the ability of an executive to be rewarded for taking excessive risk on behalf of HP by, for example, seeking revenue-enhancing opportunities at the expense of profitability, since performance is required on both metrics to achieve payout under the PfR Plan.

At the beginning of each fiscal year, PfR Plan revenue and net profit targets are set for each of

HP͛s business units. For PfR Plan participants in most business units, including Mr. Bradley, Mr. Joshi and Ms. Livermore, payouts are determined based 50% on the performance of their respective business units and 50% on HP͛s overall performance. For PfR participants in corporate functions (e.g., finance, human resources), including the CEO and CFO, payouts under the plan are made based 100% on HP͛s overall performance, which is determined by aggregating the performance of all eight business units.

The targeted short-term bonus percentages for the NEOs for fiscal 2010 remained unchanged since fiscal 2007, with the CEO͛s target at 200% of base pay, and at 125% of base pay for the remaining

NEOs.

The fiscal 2010 targets were recommended by management and set by the Committee at its meeting in November 2009. As in prior years, the 2010 targets were set primarily based on expected improvement over prior year achievements.

At its November 2010 meeting, the Committee reviewed and certified HP͛s annual performance against the targets under the PfR Plan for fiscal 2010. Most business units achieved financial performance above threshold, with some performing above target. In fiscal 2010, HP achieved solid financial results in a recovering global economic environment, delivering revenue of $126 billion and

GAAP diluted earnings per share of $3.69. In addition, over the past three years, HP͛s performance was at the 79

Page | 217

percentile of the peer group with respect to revenue growth and at the 68 th

percentile of the peer group with respect to EPS growth. Against the S&P 500, HP͛s performance on revenue was at the 74 th

percentile and at the 85 th

percentile on EPS growth over the same three-year period. This level of consistent performance formed the basis of the Committee͛s fiscal 2010 compensation decisions. In addition, the Committee also considered that the aggregate amount approved to pay fiscal 2010 bonuses for all HP employees was lower as a percentage of pre-tax earnings (before bonus) than bonuses paid in fiscal 2009. As a result, a larger proportion of the earnings delivered benefited stockholders than compared to last fiscal year.

In addition to approving PfR Plan awards, the Committee approved discretionary cash awards to the NEOs based on the quality of their financial performance in fiscal 2010 and their contributions to business results, which the Committee believed were not fully rewarded through the payouts under the

PfR Plan. These awards are included in the ͚͚Bonus͛͛ column of the Summary Compensation Table. In making this determination, the Committee considered HP͛s solid and consistent performance relative to its competitors and the S&P 500, over both a one-year and three-year period. In making these awards, the Committee gave considerable weight to HP͛s three-year performance due to the fact that in periods of significant market volatility (as has been the case over the past three years), companies that perform Page | 218

poorly in one year, followed by a year of recovery, often appear, on a relative basis, to have had exceptional one-year performance, when in fact, their financial performance is simply recovering to

52prior-year levels. This was the case with several companies in HP͛s peer group, where in some cases companies in the top ranks were simply re-gaining ground lost in prior years. By comparison, HP͛s performance over this period, and its financial position at the end of this period, has improved substantially from where it was three years ago, which cannot be said for all others in the peer group.

The Committee also took into account the significant disruption caused by the departure of Mr. Hurd and the fact that the subsequent decline in the value of HP shares, which affected HP͛s Total

Shareholder Return (͚͚TSR͛͛) and the number of shares released to the NEOs following the end of the three-year performance period applicable to the fiscal 2008 PRU grants, was unrelated to the performance of the NEOs. Furthermore, in determining the amounts of the discretionary cash awards, particularly in the case of Ms. Lesjak, the Committee took into account the exceptional service of the

NEOs during the period following Mr. Hurd͛s departure.

With respect to the variations among NEOs, the Committee took into consideration the relative contributions of each to the overall performance and other quantitative and qualitative factors, including year-over-year growth in revenue, margin and market share, as well as operational discipline demonstrated in management of channel and owned inventory. These factors resulted in higher discretionary bonuses for certain NEOs, as well as increased discretionary funding of bonuses for other eligible employees in these business units, rewarding solid financial performance in those units.

Long-Term Incentive Pay

In general, HP aims to set a total long-term incentive compensation target amount for its senior executives to be at or near the 75 th

percentile of the long-term incentives paid by its peer group Page | 219

companies. In the case of the NEOs who head significant business segments, the Committee also compares compensation data for these positions against the pay for CEOs of smaller companies, as the size and complexity of certain of those business segments are similar in size and complexity to several of HP͛s peer group companies. Thus, the long-term target incentives for the NEOs who head these significant business segments are determined based on a blend of peer positions with similar titles at peer group companies and CEO positions among smaller companies, using the 75 th

percentile for peer-company positions and the median for CEO positions at smaller companies as competitive reference points.

At the beginning of fiscal 2010, the Committee established a total long-term incentive target amount for each NEO. Of that amount, 80% was awarded in the form of performance-based restricted units, with the remaining 20% awarded in the form of restricted stock units with time-based vesting.

This same mix of performance-based and time-based awards has been granted by the Committee for the past several years and reflects HP͛s primary emphasis on performance driven compensation, with the time-based awards providing a measure of retention value, which is also an important component of the overall executive compensation arrangement.

Performance-Based Restricted Units

Performance-based restricted units (͚͚PRUs͛͛) were first awarded to eligible employees in fiscal

2008. Implementation of this program represented an important step taken by HP to drive a high-performance culture. It was also consistent with the direction being taken by some of HP͛s peer group companies. Fiscal 2010 was the third year that long-term incentive awards were granted to the

NEOs under the PRU Program.

Page | 220

Under the PRU Program, a target number of PRUs is awarded with respect to a three-year performance period. The performance metrics of the PRU Program are (a) annual targets based on cash flow from operations as a percentage of revenue based on a goal set for each of the three years, and (b) an overall ͚͚modifier͛͛ based on HP͛s TSR relative to the S&P 500 over the three-year

53performance period. Depending on performance during the period, participants may receive shares at the end of the period ranging from zero to two times the units awarded.

The metric of ͚͚cash flow from operations as a percentage of revenue͛͛ has been used for more than five years as a financial metric in HP͛s long-term incentive programs, and HP believes that it continues to be a key metric that both drives and demonstrates improved financial performance within the company. It is also a complementary metric to the revenue and net profit metrics used under the

PfR Plan. Furthermore, the use of a cash flow metric in a long-term incentive plan prevents executives from being rewarded for taking excessive risk because payouts under the plan are based on rolling three-year performance periods. In determining achievement on this metric for purposes of certifying performance, the Committee has the discretion to make adjustments to cash flow, as permitted under the Amended and Restated Hewlett-Packard Company 2004 Stock Incentive Plan (the ͚͚2004 Plan͛͛), for items such as asset write-downs, litigation claims or settlements, the effect of changes in tax laws or accounting principles, and similar types of extraordinary events. These adjustments may be different from adjustments taken or described in the company͛s financial statements for GAAP reporting purposes.

The TSR metric is based on HP͛s stock performance relative to the S&P 500 over the three-year performance period. This metric operates to reduce payouts under the program if HP͛s stock performance is below the median of S&P 500 companies for the three-year period, and it eliminates

Page | 221

payouts entirely if HP͛s relative TSR performance is in the bottom quartile. As a result, even if annual cash flow goals are achieved or exceeded in each of the three years of the performance period, there may be no or limited payouts if HP͛s stock performance is below the median compared to the S&P 500 companies. The use of the TSR metric also limits the ability of participants to be rewarded for shortterm risk-taking.

Under the PRU Program, cash flow goals are set at the beginning of each fiscal year, and performance is reviewed at the end of that year. The percentage to be applied to each participant͛s target award ranges from zero to 150%, based upon the extent to which the annual performance goals are achieved. If HP does not achieve a threshold level of cash flow performance for the year, the amount earned for one-third of the award is zero. If HP achieves a threshold level of cash flow performance for the year, a percentage is applied to one-third of a participant͛s target award for the period to determine the number of units earned during that year. For example, if an NEO received an award of 60,000 PRUs and cash flow goals were achieved at 150% in the first year, at 100% in the second year and at 90% in the third year, at the end of the three-year performance period, the participant would be credited with 68,000 PRUs ((20,000 150%) + (20,000 100%) +

(20,000 90%) = 68,000) before application of the TSR modifier described below.

At the end of the three-year performance period, the total units credited, if any, are adjusted by applying a modifier based on HP͛s TSR (including reinvestment of dividends) relative to the TSR of

S&P 500 companies for the three-year period. If HP͛s TSR is in the bottom quartile of the S&P 500, the modifier will be zero, and no shares will be released with respect to that three-year performance period. If HP͛s TSR is at the median of the S&P 500, the modifier will be 100%, and the number of shares released will equal the number of units credited earned during the period with respect to annual cash flow performance. If HP͛s TSR is at or above the 75

Page | 222

percentile of S&P 500 companies for the period, the maximum modifier of 133% will apply, and the number of shares released will equal 133% of the number of units credited during the period.

To achieve the maximum payout (200% of the initial PRU award), HP must achieve the maximum cash flow goals for each of the three years, and HP͛s TSR must meet or exceed the 75 th

percentile of the TSRs of S&P 500 companies for that period. Award values will reflect changes in stock price (both increases and decreases) over the three-year period because awards are denominated in stock units payable in shares, which further aligns the value executives realize with that of other stockholders. For

54example, if a participant was credited with 68,000 PRUs at the end of the performance period and

HP͛s TSR for that three-year period was at the 80 th

percentile of the S&P 500, a total of 90,440 shares of HP common stock would be released to the participant for that period (68,000 133% = 90,440).

The Committee set the PRU cash flow goals for fiscal 2010 in the first 90 days of the fiscal year.

As in prior fiscal years, goals were set primarily to require that future performance exceed prior-year performance in order to achieve above-target payout amounts.

At its November 2010 meeting, the Committee reviewed HP͛s actual cash flow from operations as a percentage of revenue, and, taking into account certain permitted adjustments, certified performance at approximately 90% of target. Accordingly, PRU Program participants were credited with approximately 90% of one-third of the units attributable to the third year of the fiscal 2008 grant, the second year of the fiscal 2009 grant and the first year of the fiscal 2010 grant. HP͛s TSR performance Page | 223

over the three-year performance period of the fiscal 2008 grant was at the 40 th

percentile, which resulted in a TSR modifier of 86%. That percentage was applied to the units credited based on cash flow performance during the three-year period to determine the total number of shares released under the fiscal 2008 grant. As a result, an executive who received a fiscal 2008 grant of 60,000 PRUs had

58,690 shares released to him in November 2010 with respect to the three-year performance period ending October 31, 2010.

Whether any units credited under the fiscal 2009 and 2010 grants will be paid out in shares at the end of any three-year performance period will depend on future cash flow results and HP͛s TSR during those periods, neither of which is determinable until the end of those periods.

Grants of Restricted Stock Units

As described above, a portion of an executive͛s target long-term incentive amount is delivered in the form of PRUs, and the remaining value is awarded in grants of time-based restricted stock units.

These awards have restrictions that lapse as to one-half of the number of units on the first and second anniversaries of the date of grant.

For more information on PRUs and grants of restricted stock units to the NEOs during fiscal

2010, see ͚͚Executive CompensationͶGrants of Plan-Based Awards in Fiscal 2010.͛͛

Grants of Special Incremental Performance-Based Unit Awards for Fiscal 2011 Through Fiscal 2013

At its July 2010 meeting, the Committee approved awards of special incremental performancebased units (the ͚͚Incremental Awards͛͛) for Ms. Lesjak, Mr. Bradley and certain other Section 16 officers. The units subject to the awards will be earned, if at all, upon achievement on the metrics of

EPS and relative TSR over the two- and three-year periods covered by the award. Under the terms of the awards, 40% of the units will be earned if HP meets its EPS goal for the two-year period covering fiscal 2011 and fiscal 2012 and if its relative TSR for the same period is at or above the 50

Page | 224

percentile; and the remaining 60% of the units will be earned if HP meets its EPS goal for fiscal 2013 and HP͛s relative TSR is at or above the 50 th

percentile for the entire three-year period of the award.

Under the Incremental Awards, 40% of the units are subject to performance during the first two-year period, and an EPS goal is set for each fiscal year during that period. At the end of that two-year period (referred to as ͚͚segment 1͛͛ below), if HP͛s relative TSR is at or above the

50 th

percentile, units credited based on EPS performance are banked. The remaining 60% of the units are earned based on EPS achievement during the third year of the award and relative TSR over the entire three-year period of the award (referred to as ͚͚segment 2͛͛ below).

55The chart below illustrates operation of the award, using an award of 20,000 units as an example.

Total Target Segment 1 Units: 8,000 Total Target Segment 2 Units: 12,000

(EPS Units: 6,000; TSR Units: 2,000) (EPS Units: 9,000; TSR Units: 3,000)

Units Units Units

Banked Banked Banked for EPS for EPS for Relative Units Banked Totals Units

Performance Performance TSR over Units Banked for Relative TSR Released at

During During initial for EPS During over End of

Months Months 24-Month Months 36-Month 3-Year

Performance Levels 1 - 12 13 - 24 period 25 - 36 Period Period

Below 50 th percentile 0 0 0 0 0 0 Page | 225

At 50 th percentile (Min) 1,500 1,500 1,000 4,500 1,500 10,000

75 th percentile (Target) 3,000 3,000 2,000 9,000 3,000 20,000

90 th percentile (Max) 6,000 6,000 4,000 18,000 6,000 40,000

Any units banked due to EPS performance during segment 1 or segment 2 will be cancelled if

TSR performance is below the 50 th

percentile for that segment. However, units may be earned based on TSR performance during the period even if no units are earned or banked based on EPS performance during that segment.

For example, assume that during segment 1, EPS performance is achieved at the 75 th

and

90 th

percentiles with TSR at the 50 th

percentile. In this case, 10,000 units will be banked and earned for that period (3,000 + 6,000 + 1,000). During segment 2, if EPS performance is at the 75 th

percentile but

TSR performance is below the 50 Page | 226

percentile, the 9,000 units banked based on EPS performance will be cancelled due to TSR performance below the 50 th

percentile. Under this scenario, a total of 10,000 units would have been earned, and the participant in this example would receive a release of 10,000 shares.

The fiscal 2011 targets were set by the Committee at its January 2011 meeting and will require achievement of significant financial performance by HP during the period if any payout is to be received at all. These awards were granted by the Committee in consideration of the significant achievement by the recipients and their criticality to the organization over the next several years.

Benefits

HP does not provide its executives or the NEOs with special or supplemental pension or health benefits. HP͛s NEOs receive health and welfare benefits (including retiree medical benefits, if the eligibility conditions are met) under the same programs and subject to the same eligibility requirements that apply to HP employees generally.

Benefits under all U.S. pension plans were frozen effective December 31, 2007. No NEO or any other HP employee accrued a benefit under any HP U.S. defined benefit pension plan during fiscal

2010.

The NEOs, along with other HP executives who earn base pay or an annual bonus in excess of certain federal tax law limits, are eligible to participate in the HP Executive Deferred Compensation

Plan (the ͚͚EDCP͛͛). This plan is maintained to permit executives to defer some of their compensation in order to defer taxation on such amounts. This is a standard benefit plan offered by most of HP͛s peer companies. It permits deferral of base pay in excess of the amount taken into account under the qualified HP 401(k) Plan and up to 95% of the annual incentive bonus payable under the PfR Plan. In addition, HP makes a matching contribution to the plan on a portion of base pay contributions in Page | 227

excess of Internal Revenue Service (͚͚IRS͛͛) limits, in the same percentage as those executives are eligible to receive under the HP 401(k) Plan. This permits these executives and all employees to receive a 401(k)-type matching contribution on a portion of base-pay deferrals in excess of IRS limits. Amounts deferred or matched under the EDCP are credited with investment earnings based on investment options selected by the participant from among mutual and proprietary funds available to employees under the HP 401(k) Plan. No amounts earn above-market returns.

56Consistent with its practice of not providing any special or supplemental executive benefit programs, including arrangements that would otherwise provide special benefits to the family of a deceased executive, in 2010 the Committee adopted a policy that, unless approved by HP͛s stockholders pursuant to an advisory vote, HP will not enter into a new plan, program or agreement or modify an existing plan, program or agreement with a Section 16 officer that provides for payments, grants or awards following the death of the officer in the form of unearned salary or unearned bonuses, accelerated vesting or the continuation in force of unvested equity grants, awards of ungranted equity, perquisites, and other payments or awards made in lieu of compensation, except to the extent that such payments, grants or awards are provided or made available to HP employees generally.

Perquisites

Consistent with the practices of many of its peer companies, HP provides a small number of perquisites to its senior executives including the NEOs for the reasons described below.

HP͛s NEOs are provided reimbursement of up to $18,000 per year for a financial counseling services to assist them in obtaining professional advice on managing the compensation they receive.

This reimbursement is also provided because it is common among the peer group companies.

Due to HP͛s global presence, HP maintains a certain number of corporate aircraft. Personal use of these aircraft by the CEO and his direct reports (members of the Executive Council, or ͚͚EC

Page | 228

members,͛͛ which includes all of the other NEOs) is permitted, subject to availability. The CEO may use HP aircraft for personal purposes in his own discretion and, at times, is advised to use HP aircraft for personal travel for security reasons. EC members may use HP aircraft for personal purposes, if available and approved by the CEO. The CEO and EC members are taxed on the value of this usage according to IRS rules. There is no tax gross-up on the income attributable to this value.

Following a global risk-management review commissioned by the Audit Committee of the Board, security systems were installed at the personal residences of some of HP͛s executives, including the

NEOs. These protections are provided due to the range of security issues that may be encountered by key executives of any large, multinational corporation.

Severance Plan for Executive Officers

HP͛s Section 16 officers (including all of the NEOs) are covered by a severance plan to provide a level of transition assistance in the event of an involuntary termination of employment and to keep executives focused on HP͛s business rather than their personal circumstances. Under the HP Severance

Plan for Executive Officers, participants who incur an involuntary termination, not for cause, and who execute a full release of claims following such termination, are eligible to receive severance benefits in an amount determined as a multiple of base pay and the average of the actual annual bonuses paid in the preceding three years. In the case of the CEO, the benefit is calculated as two times the sum of base pay plus average annualized bonus paid during the preceding three years; in the case of the other

NEOs, the multiplier is 1.5 instead of two. In all cases, this benefit will not exceed 2.99 times the sum of the executive͛s base pay plus target bonus as in effect immediately prior to the termination of employment.

Although the majority of compensation for HP executives is performance-based and largely contingent upon achievement of aggressive financial goals, the Committee continues to believe that the Page | 229

HP Severance Plan for Executive Officers provides important protection to the Section 16 officers and is appropriate for attraction and retention of executive talent. In addition, we find it more equitable to offer severance benefits based on a standard formula for the Section 16 officers because severance often serves as a bridge when employment is involuntarily terminated, and should therefore not be affected by other, longer-term accumulations. As a result, and consistent with the practice of the peer

57companies, other compensation decisions are not generally based on the existence of this severance protection.

Benefits in the Event of a Change in Control

HP did not have separate change-in-control agreements with its NEOs in fiscal 2010. Under HP͛s equity plans, however, the Board has the discretion to accelerate vesting of all stock and stock option awards upon a change in control, but accelerated vesting is not automatic. This allows the Board to decide to vest equity if it determines that accelerated vesting is appropriate under the facts and circumstances of a given transaction. This is a common equity plan feature at many of the peer group companies. As a result, the NEOs could become fully vested in their outstanding equity awards upon a change in control if the Board affirmatively acts to accelerate vesting.

In addition, while in fiscal 2010 none of the NEOs was covered by an agreement that was expressly tied to a change in control of HP, an involuntary termination of employment following a change in control of HP could qualify as ͚͚involuntary termination, not for cause͛͛ within the meaning of the HP

Severance Plan for Executive Officers. This event would trigger the same level of benefits as though the termination occurred absent a change in control.

As discussed below, on December 15, 2010, HP entered into a letter agreement with Ms. Lesjak relating to her employment with HP. That letter agreement includes, among other things, certain protections for Ms. Lesjak in the event of a change in control of HP. The Committee believed that Page | 230

including those provisions was appropriate given the context of that agreement.

Separation Agreement with Mark V. Hurd

Mr. Hurd resigned as Chairman, President and Chief Executive Officer of HP and as a member of the Board effective August 6, 2010. In connection with Mr. Hurd͛s resignation, HP and Mr. Hurd entered into a Separation Agreement and Release (the ͚͚Separation Agreement͛͛) that provided

Mr. Hurd would receive a cash severance benefit of $12,224,693 in full satisfaction of HP͛s obligations under the HP Severance Plan for Executive Officers, which amount did not exceed the limit of 2.99 times the sum of Mr. Hurd͛s current annual base salary plus annual target cash bonus established under the HP Severance Policy for Senior Executives. The Separation Agreement also provided for continued vesting of, and an extension of time to exercise, certain of Mr. Hurd͛s outstanding equity awards, as well as payment of COBRA premiums for continuing medical coverage. In connection with the settlement of litigation subsequently commenced by HP against Mr. Hurd, all of his outstanding equity awards were cancelled.

Employment Agreement with L´eo Apotheker

On September 29, 2010, HP entered into a four-year employment agreement with Mr. Apotheker

(the ͚͚Apotheker Agreement͛͛) pursuant to which he was appointed President and Chief Executive

Officer of HP and a member of the Board effective November 1, 2010. Under the Apotheker

Agreement, Mr. Apotheker will receive base pay of $1.2 million, which amount is fixed for his first two years of service but may be reduced during the subsequent two years under certain circumstances, and a target annual bonus of 200% of base pay. Mr. Apotheker was granted a long-term incentive award consisting of 76,000 shares of time-based restricted stock vesting in equal amounts annually over a two-year period, 304,000 PRUs for the two-year performance period extending from

58November 1, 2010 through October 31, 2012, and an additional 304,000 PRUs for the three-year performance period extending from November 1, 2010 through October 31, 2013. Mr. Apotheker was

Page | 231

also granted a sign-on equity award consisting of 80,000 shares of time-based restricted stock vesting in equal amounts annually over a two-year period and 120,000 PRUs for the three-year performance period extending from November 1, 2010 through October 31, 2013. The cash flow metric for the first year of each three-year PRU grant is deemed to be achieved at no less than target. In addition, on

November 29, 2010, Mr. Apotheker received a cash signing bonus of $4 million, a pro rata portion of which he must re-pay if he resigns or is terminated for cause within 18 months, and an additional cash payment of $4.6 million as reimbursement for foregone non-competition payments from his former employer and to cover relocation expenses. Mr. Apotheker is eligible to participate in the standard employee benefits plans offered to employees in the United States and to receive perquisites offered to other senior executive officers.

The Apotheker Agreement was the result of arm͛s-length negotiation between representatives of

Mr. Apotheker and members of the Board, which received advice and input from both its independent counsel and the independent consultant to the Committee. The Board believed that the salary, bonus and long-term compensation provided under the Apotheker Agreement were in the aggregate consistent with the compensation packages provided to CEOs in comparable positions. The Board also believed that the sign-on equity awards and cash payments were appropriate in recognition of, among other things, the compensation from his former employer being foregone by Mr. Apotheker as a result of entering into the Apotheker Agreement and the considerable expense he will incur in relocating his family to the United States.

Letter Agreement with Catherine A. Lesjak and Interim CEO Compensation

Following the resignation of Mr. Hurd, Ms. Lesjak was appointed as interim Chief Executive Page | 232

Officer of HP effective August 6, 2010. Prior to being appointed as interim CEO, Ms. Lesjak advised the Committee that she did not wish to be considered as a candidate for the vacant CEO position. The

Committee subsequently began discussions with Ms. Lesjak about the terms of her employment because the Committee members believed that Ms. Lesjak͛s continued service as CFO was critical to providing stability and continuity to HP during the transition to a new CEO and that it was appropriate to provide Ms. Lesjak with certain additional benefits in the event that her employment was terminated under certain circumstances following that transition. As a result, on December 15, 2010, HP entered into a letter agreement with Ms. Lesjak (the ͚͚Lesjak Agreement͛͛) that (i) provides that she will continue to serve as HP͛s Executive Vice President and Chief Financial Officer throughout the three-year term of the agreement, (ii) maintains her base salary and target annual and long-term incentive awards at then-current levels, subject to reduction only in the event that similar reductions apply to substantially all other Executive Vice Presidents, and (iii) provides her with enhanced severance benefits in the event of a qualifying termination of her employment during the term of the agreement, subject to the limitations of the HP Severance Policy for Senior Executives described below under ͚͚Narrative to the Potential Payments upon Termination or Change in Control TableͶHP

Severance Policy for Senior Executives.͛͛ In addition, in recognition of Ms. Lesjak͛s exceptional service as interim CEO, the Committee awarded her a bonus consisting of $1 million cash (paid as part of her fiscal 2010 annual bonus) and equity awards with an aggregate value of $2.6 million granted in addition to her regular fiscal 2011 long-term incentive award. While recognizing that these circumstances were unique and that no directly applicable benchmark data was therefore available, the structure and amount of the compensation provided to Ms. Lesjak in recognition of her service as interim CEO was

Page | 233

reviewed by the Committee with its independent consultant, who, based on data gathered with respect to the compensation provided by other companies in connection with CEO transitions, determined that the compensation was appropriate, particularly in light of the length of Ms. Lesjak͛s service as interim

CEO and HP͛s performance during that period.

59Other Compensation-Related Matters

Succession Planning

Among the Committee͛s responsibilities as described in its charter is to oversee succession planning and leadership development. The Board plans for succession of the CEO and annually reviews senior management selection and succession planning that is undertaken by the Committee. As part of this process, the independent directors annually review the Committee͛s recommendation of candidates for senior management positions to see that qualified candidates are available for all positions and that development plans are being utilized to strengthen the skills and qualifications of the candidates. The criteria used when assessing the qualifications of potential CEO successors include, among others, strategic vision and leadership, operational excellence, financial management, executive officer leadership development, ability to motivate employees, and an ability to develop an effective working relationship with the Board.

Stock Ownership Guidelines

HP͛s stock ownership guidelines are designed to increase executives͛ equity stakes in HP and to align executives͛ interests more closely with those of stockholders. The guidelines provide that, within five years of joining HP, the CEO should attain an investment position in HP͛s stock equal to five times

Page | 234

his base salary and all other Section 16 officers should attain an investment position equal to three times their base salary. Shares counted toward these guidelines include any shares held by the executive directly or through a broker; shares held through the HP 401(k) Plan; shares held as restricted stock; shares underlying restricted stock units; and shares underlying vested but unexercised stock options

(50% of the in-the-money value of such options is used for this calculation). During fiscal 2010, all

NEOs were in compliance with these guidelines.

Accounting and Tax Effects

The impact of accounting treatment is considered in developing and implementing HP͛s compensation programs generally, including the accounting treatment as it applies to amounts awarded or paid to HP͛s executives. In this regard, the fact that the accounting treatment aligns more closely with the amount of the payouts was among the factors considered in adopting the PRU Program, and in reducing the number of stock options awarded generally.

The impact of federal tax laws on HP͛s compensation programs is also considered, including the deductibility of compensation paid to the NEOs, as limited by Section 162(m) of the Internal Revenue

Code (the ͚͚Code͛͛). Most of HP͛s compensation programs are designed to qualify for deductibility under Section 162(m), but to preserve flexibility in administering compensation programs, not all amounts paid under all of HP͛s compensation programs qualify for deductibility. In determining to award additional bonus amounts to the NEOs for fiscal 2010, the Committee considered the fact that such amounts would not be deductible and would result in loss of the deductibility of amounts paid from the PfR Plan to ͚͚covered employees͛͛ within the meaning of Section 162(m).

Likewise, the impact of Section 409A of the Code is taken into account, and HP͛s executive plans and programs are, in general, designed to comply with the requirements of that section so as to avoid possible adverse tax consequences that may result from non-compliance.

Policy on Recovery of Bonus in Event of Financial Restatement

Page | 235

In 2006, the Board adopted a ͚͚clawback͛͛ policy that permits the Board to recover bonuses from senior executives whose fraud or misconduct resulted in a significant restatement of financial results.

The policy allows for the recovery of bonuses from those senior executives whose fraud or misconduct

60resulted in the restatement where the bonuses would have been lower absent the fraud or misconduct, to the extent permitted by applicable law.

Approval Process for Equity Grants

There were no grants of stock options to the NEOs during fiscal 2010. Grants of restricted stock units and PRUs to Section 16 officers (other than the CEO) are approved by the Committee at a regularly scheduled meeting, or occasionally at a special meeting or by unanimous written consent.

Grants to the CEO are approved by the independent members of the full Board. If approval is made at a meeting, the grant date of the award is generally the date of the meeting; if approval is by unanimous written consent, the grant date of the award is generally the day the last Committee member (or independent Board member, in the case of the CEO) signs the consent. The Committee may act in advance to approve equity grants for newly-hired Section 16 officers and other executives, in which case the grant effective date may be the first day of employment or a later, pre-established date.

HP has no practice of timing grants of stock options or restricted stock awards to coordinate with the release of material non-public information, and HP has not timed the release of material non-public information for the purpose of affecting the value of NEO compensation.

HR and Compensation Committee Report on Executive Compensation

The HR and Compensation Committee of the Board of Directors of Hewlett-Packard Company has reviewed and discussed with management this Compensation Discussion and Analysis. Based on this review and discussion, it has recommended to the Board of Directors that the Compensation

Discussion and Analysis be included in this proxy statement and in the Annual Report on Form 10-K

Page | 236

of Hewlett-Packard Company filed for the fiscal year ended October 31, 2010.

HR and Compensation Committee of the Board of Directors

Lawrence T. Babbio, Jr., Chair

Rajiv L. Gupta

John H. Hammergren

Joel Z. Hyatt

Lucille S. Salhany

61Summary Compensation Table

The following table sets forth information concerning the compensation of HP͛s chief executive officer, chief financial officer, and the three other most highly-paid executive officers (collectively, the

͚͚NEOs͛͛) for the fiscal years ended October 31, 2010, October 31, 2009 and October 31, 2008.

Change in Pension

Value and

Non-Equity Nonqualified

Incentive Deferred

Stock Option Plan Compensation All Other

Name and Principal Salary

(1)

Bonus

(2)

Awards

(3)

Awards

(4)

Compensation

Page | 237

(5)

Earnings

(6)

Compensation

(7)

Total

Position Year ($) ($) ($) ($) ($) ($) ($) ($)

Catherine A. Lesjak

(8)

2010 610,000 2,580,762 3,514,884 Ͷ 940,925 366,363 84,034 8,096,968 . . .

Executive Vice President 2009 589,063 340,938 4,298,102 Ͷ 2,199,694 571,605 209,697 8,209,099 and Chief Financial Officer 2008 625,000 701,408 3,328,251 Ͷ 1,953,760 (33,346) 32,493 6,607,566

R. Todd Bradley ...... 2010 748,000 1,655,355 5,021,292 Ͷ 1,465,145 373 187,666 9,077,831

Executive Vice President, 2009 743,125 337,857 4,701,215 Ͷ 5,767,373 727 248,378 11,798,675

Personal Systems Group 2008 820,000 907,415 6,228,712 Ͷ 13,222,059 1,184 269,843 21,449,213

Ann M. Livermore . . . . . 2010 748,000 1,745,123 5,021,292 Ͷ 910,690 953,734 81,202 9,460,041

Executive Vice President, 2009 743,125 419,857 4,701,215 Ͷ 5,731,498 1,468,639 184,313 13,248,647

HP Enterprise Business 2008 820,000 917,586 4,640,918 Ͷ 13,601,216 (216,460) 68,130 19,831,390

Vyomesh I. Joshi ...... 2010 748,000 1,953,883 3,765,932 Ͷ 1,568,930 978,888 102,459 9,118,092

Executive Vice President, 2009 743,125 77,507 3,134,250 Ͷ 3,937,173 1,505,196 183,647 9,580,898

Imaging and Printing Group 2008 820,000 Ͷ 3,662,918 Ͷ 15,197,845 (311,000) 70,963 19,440,726

Mark V. Hurd

(9)

2010 1,121,944 Ͷ 9,883,455 Ͷ Ͷ 969 12,857,376 23,863,744 ......

Former Chairman of the 2009 1,268,750 1,180,340 11,909,924 Ͷ 14,629,074 1,895 475,192 29,465,175

Page | 238

Board, Chief Executive 2008 1,450,000 5,341,882 16,543,791 Ͷ 18,590,000 3,087 596,410 42,525,170

Officer and President

(1) Amounts shown represent base salary paid during the fiscal year, as described under ͚͚Compensation

Discussion and AnalysisͶAnalysis of Elements of Executive CompensationͶBase Pay.͛͛

(2) Amounts shown for each year include the discretionary bonuses awarded to the NEOs by the Committee taking into account performance during the applicable fiscal year.

(3) The grant date fair value of all stock awards has been calculated in accordance with applicable financial accounting standards. In the case of time-based RSUs, the value is determined by multiplying the number of

RSUs granted by the closing price of HP common stock on the grant date. In the case of PRUs, the accounting standards provide for the value to be determined using only those tranches where the cash flow targets have been set as of the reporting date. As a result, the grant date fair value of the PRUs is calculated using only the first two tranches of each grant; the third tranche is not included because its value is not yet probable of determination under applicable standards. If the PRUs were to be valued using the methodology applicable to the time-based RSUs (number of units multiplied by the closing price of HP common stock on the grant date), the fiscal 2010 PRU award grant date fair values would be reported as follows: Ms. Lesjak:

$4,507,837; Mr. Bradley: $6,439,781; Ms. Livermore: $6,439,781; Mr. Joshi: $4,829,836; and Mr. Hurd:

$12,695,783.

(4) No NEO was awarded a stock option in fiscal 2010, 2009 or 2008.

(5) Amounts shown consist of payouts under the PfR Plan (amounts earned during the applicable fiscal year but

Page | 239

paid after the end of the fiscal year).

(6) Amounts shown represent the increase (or decrease) in the actuarial present value of NEO pension benefits during the applicable fiscal year. As described in more detail under ͚͚Narrative to the Fiscal 2010 Pension

Benefits Table͛͛ below, pension accruals have ceased for all NEOs, so the amounts reported for them do not reflect additional accruals but rather reflect the fact that each of them is one year closer to ͚͚normal retirement age͛͛ as defined under the terms of the HP Pension Plan as well as changes in other actuarial assumptions. The assumptions used in calculating the change in pension benefits are described in footnote (2) to the Fiscal 2010 Pension Benefits Table below. No HP plan provides for above-market earnings on deferred compensation amounts, so the amounts reported in this column do not reflect any such earnings.

(7) The amounts shown are detailed in the supplemental All Other Compensation Table below.

(8) Ms. Lesjak served as interim Chief Executive Officer for the period August 6, 2010 through October 31, 2010 and as Chief Financial Officer for the entire fiscal year.

(9) Mr. Hurd resigned as Chairman, President and Chief Executive Officer of HP and as a member of the Board effective August 6, 2010. Under the terms of his Separation Agreement, Mr. Hurd received continued vesting of, and additional time to exercise, certain of his equity awards. All of his outstanding equity awards were subsequently cancelled in connection with the settlement of the litigation commenced against Mr. Hurd by

HP.

62Fiscal 2010 All Other Compensation Table

The following table provides additional information about the amounts that appear in the ͚͚All

Other Compensation͛͛ column in the Summary Compensation Table above:

Page | 240

401(k) NQDC Security Personal Tax

Company Company Relocation Services/ Aircraft Severance Gross- Total

Match

(1)

Match

(2)

Expenses

(3)

Systems

(4)

Usage

(5)

Payments Miscellaneous

(6)

(7)

AOC

Name ($) ($) ($) ($) ($) ($) ($) ($) ($)

Catherine A. Lesjak ...... 8,427 11,025 Ͷ 6,997 20,249 Ͷ 28,310 9,026 84,034

R. Todd Bradley ...... 9,770 11,025 35,290 19,230 6,408 Ͷ 64,891 41,052 187,666

Ann M. Livermore ...... 9,800 11,025 Ͷ 4,508 13,255 Ͷ 31,124 11,490 81,202

Vyomesh I. Joshi ...... 9,617 11,025 Ͷ 6,774 4,586 Ͷ 45,970 24,487 102,459

Mark V. Hurd ...... 9,562 11,025 Ͷ 362,899 158,816 12,224,693 53,762 36,619 12,857,376

(1) Represents matching contributions made under the HP 401(k) Plan.

(2) Represents matching contributions credited in February 2010 under the HP Executive Deferred

Compensation Plan with respect to the 2009 calendar year of the plan.

(3) Represents the mortgage subsidy that Mr. Bradley was eligible to receive under HP͛s relocation Page | 241

policy.

(4) Represents home security services provided to the NEOs. Although security systems were installed at the request of the company, consistent with SEC guidance, the expense is reported here as a perquisite due to the fact that there is an incidental personal benefit.

(5) Represents the value of personal usage of HP corporate aircraft. Under HP͛s policy for the personal use of corporate aircraft, the CEO and the other NEOs may use HP aircraft for personal purposes subject to availability, and at times the CEO is advised to use HP aircraft for personal travel for security reasons. For purposes of reporting the value of such personal usage in this table,

HP uses data provided by an outside firm to calculate the hourly cost of operating each type of aircraft. These costs include the cost of fuel, maintenance, landing and parking fees, crew, catering and supplies. For trips by NEOs that involve mixed personal and business usage, HP includes the incremental cost of such personal usage (i.e., the excess of the cost of the actual trip over the cost of a hypothetical trip without the personal usage).

For income tax purposes, the amounts included in NEO income are calculated based on the standard industry fare level (͚͚SIFL͛͛) valuation method. A tax gross-up was provided for certain travel in the past, but all aircraft-related gross-ups were discontinued effective March 1, 2009.

(6) Includes $18,000 for financial counseling for each NEO, except that the fiscal 2010 amount for

Mr. Hurd was $13,500. The remaining amounts represent primarily the aggregate incremental cost of lodging, travel, meals and other event-related expenses provided for family members accompanying the NEO to HP-sponsored events at HP͛s request. For group events where individual expense information is not available, the amounts reported represent an estimate of the aggregate incremental cost attributable to family members in attendance at such events.

(7) Represents primarily amounts to reimburse the NEOs for taxes on meals and other event-related expenses for individuals accompanying the NEOs to HP-sponsored events. This HP reimbursement policy applies to all HP employees where family members or partners are requested to attend

HP-sponsored events or the expenses are otherwise properly incurred with respect to those

Page | 242

individuals (e.g., in connection with an employee relocation). In the case of Mr. Hurd, amounts also include a gross-up on COBRA premiums for continuing medical coverage paid on his behalf as required by his Separation Agreement.

63Narrative to the Summary Compensation Table

The amounts reported in the Summary Compensation Table, including base pay, annual and long-term incentive amounts, benefits and perquisites, are described more fully under ͚͚Compensation

Discussion and Analysis.͛͛

The amounts reported in the column entitled ͚͚Non-Equity Incentive Plan Compensation͛͛ include amounts earned and paid in fiscal 2011 by all the NEOs under the PfR Plan for fiscal 2010. The narrative description of the remaining information in the Summary Compensation Table is provided in the narrative to the other compensation tables.

Grants of Plan-Based Awards in Fiscal 2010

The following table provides information on awards granted under the PfR Plan for fiscal 2010 and awards of PRUs and awards of restricted stock units (͚͚RSUs͛͛) granted as part of fiscal 2010 long-term incentive compensation:

All Other

Stock

Awards:

Estimated Future Payouts Estimated Future Payouts

Number Grant-Date

Under Non-Equity Under Equity of Shares Fair Value

Incentive Plan Awards

(1)

Incentive Plan Awards

(2) Page | 243

of Stock of Stock

Grant Threshold Target Maximum Threshold Target Maximum or Units

(3)

Awards

(4)

Name Date ($) ($) ($) (#) (#) (#) (#) ($)

Catherine A. Lesjak

PfR ...... 11/1/2009 6,906 690,625 1,726,563

PRU ...... 12/10/2009 17,981 89,905 179,810 2,387,937

RSU ...... 12/10/2009 22,476 1,126,947

R. Todd Bradley

PfR ...... 11/1/2009 8,713 871,250 2,178,125

PRU ...... 12/10/2009 25,688 128,436 256,872 3,411,347

RSU ...... 12/10/2009 32,109 1,609,945

Ann M. Livermore

PfR ...... 11/1/2009 8,713 871,250 2,178,125

PRU ...... 12/10/2009 25,688 128,436 256,872 3,411,347

RSU ...... 12/10/2009 32,109 1,609,945

Vyomesh I. Joshi

PfR ...... 11/1/2009 8,713 871,250 2,178,125

PRU ...... 12/10/2009 19,266 96,327 192,654 2,558,511

RSU ...... 12/10/2009 24,081 1,207,421

Mark V. Hurd

(5)

PfR ...... 11/1/2009 23,200 2,320,000 5,800,000

PRU ...... 12/11/2009 50,733 253,662 507,324 6,709,534

RSU ...... 12/11/2009 63,415 3,173,921 Page | 244

(1) Amounts represent the range of possible cash payouts for fiscal 2010 awards under the PfR Plan.

(2) Amounts represent the range of shares that may be released at the end of the three-year performance period applicable to the PRU award assuming achievement of threshold performance.

If HP͛s cash flow performance is below threshold for each year during the performance period or if HP͛s TSR for the period is in the bottom quartile of the S&P 500, no shares will be released at the end of the period. See the discussion of PRU awards under ͚͚Compensation Discussion and

AnalysisͶAnalysis of Elements of Executive CompensationͶLong-Term Incentive PayͶ

Performance-Based Restricted Units.͛͛

(3) Restrictions on the RSU awards lapse as to one-half of the units on the first and second anniversaries of the date of grant.

(4) See footnote (3) to the Summary Compensation Table for a description of the method used to determine the grant date fair value of stock awards.

(5) No annual incentive award was paid to Mr. Hurd for fiscal 2010 performance, and all stock awards granted to him in fiscal 2010 were cancelled in connection with his separation from HP on

August 6, 2010.

64Outstanding Equity Awards at 2010 Fiscal Year-End

The following table provides information on stock and option awards held by the NEOs as of

October 31, 2010:

Option Awards Stock Awards

Equity

Incentive

Equity Plan Awards:

Incentive Market or

Plan Awards: Payout Value

Market Number of of Unearned

Number of Value of Unearned Shares,

Page | 245

Number of Number of Shares or Shares or Shares, Units Units

Securities Securities Units of Units of or Other or Other

Underlying Underlying Option Stock That Stock That Rights That Rights That

Unexercised Unexercised Exercise Option Have Not Have Not Have Not Have Not

Options (#) Options (#) Price

(2)

Expiration Vested

(4)

Vested

(5)

Vested

(6)

Vested

(5)

Name Exercisable Unexercisable

(1)

($) Date

(3)

($) (#) ($) (#)

Catherine A. Lesjak . . . 6,250 Ͷ 21.77 4/14/2013 35,924 1,510,963 188,907 7,945,428

35,000 Ͷ 31.50 1/23/2014

75,000 25,000 42.27 1/18/2015

R. Todd Bradley . . . . . 15,000 Ͷ 23.77 6/14/2013 46,868 1,971,268 235,748 9,915,561

75,000 Ͷ 31.50 1/23/2014

150,000 50,000 42.27 1/18/2015

Ann M. Livermore . . . . 400,000 Ͷ 21.75 1/31/2012** 46,868 1,971,268 235,748 9,915,561

500,000 Ͷ 22.02 3/18/2012 Page | 246

400,000 Ͷ 21.77 4/14/2013

340,000 Ͷ 31.50 1/23/2014

150,000 50,000 42.27 1/18/2015

Vyomesh I. Joshi . . . . . 100,000 Ͷ 33.63 1/18/2011** 33,939 1,427,474 167,524 7,046,059

125,000 Ͷ 15.75 4/16/2011

300,000 Ͷ 22.02 3/18/2012

500,000 Ͷ 21.77 4/14/2013

340,000 Ͷ 31.50 1/23/2014

150,000 50,000 42.27 1/18/2015

Mark V. Hurd

(7)

Ͷ Ͷ Ͷ Ͷ ......

(1) Options vest at the rate of 25% per year with full vesting on the fourth anniversary of the date of grant.

(2) Option exercise prices are the fair market value of HP common stock on the date of grant.

(3) Options granted by HP since 2003 generally have an eight-year term. The options marked with

͚͚**͛͛ have a ten-year term.

(4) The amounts in this column include shares underlying dividend equivalent units granted with respect to outstanding RSU awards through October 31, 2010. The release dates and release amounts for all unvested stock awards are as follows:

ͻ Ms. Lesjak: December 10, 2010 (11,238 shares plus accrued dividend equivalent shares);

January 15, 2011 (13,125 shares plus accrued dividend equivalent shares); December 10, 2011

(11,238 shares plus accrued dividend equivalent shares).

ͻ Mr. Bradley: December 10, 2010 (16,054 shares plus accrued dividend equivalent shares);

January 15, 2011 (14,355 shares plus accrued dividend equivalent shares); December 10, 2011

(16,055 shares plus accrued dividend equivalent shares).

65ͻ Ms. Livermore: December 10, 2010 (16,054 shares plus accrued dividend equivalent shares); Page | 247

January 15, 2011 (14,355 shares plus accrued dividend equivalent shares); December 10, 2011

(16,055 shares plus accrued dividend equivalent shares).

ͻ Mr. Joshi: December 10, 2010 (12,040 shares plus accrued dividend equivalent shares);

January 15, 2011 (9,570 shares plus accrued dividend equivalent shares); December 10, 2011

(12,041 shares plus accrued dividend equivalent shares).

(5) Value calculated based on the $42.06 closing price of HP common stock on October 29, 2010, which was the last trading day of fiscal 2010.

(6) Represents the number of PRUs granted in fiscal 2009 and fiscal 2010, adjusted for actual achievement during those periods on the annual metric of cash flow from operations as a percentage of revenue with respect to the portion of each award attributable to fiscal 2010 performance. Performance on the annual cash flow metric was 100.94% of target for fiscal 2009 and was 90.26% of target for fiscal 2010. The 100.94% multiplier applies to the first one-third of the PRUs granted for fiscal 2009; the 90.26% multiplier applies to the second one-third of the

PRUs granted for fiscal 2009 and the first one-third of the PRUs granted for fiscal 2010; the remaining units are reported at target and will be adjusted based on actual cash flow performance during the remaining portion of the applicable performance periods. Total PRUs credited at the conclusion of each three-year period will be adjusted by HP͛s performance on TSR as compared to the S&P 500, which will determine the number of shares, if any, released at the end of the period.

(7) All outstanding equity awards held by Mr. Hurd were cancelled either under the terms of his

Separation Agreement or in connection with the settlement of litigation subsequently commenced against him by HP.

66Option Exercises and Stock Vested in Fiscal 2010

The following table provides information about options exercised and stock vested for the NEOs during the fiscal year ended October 31, 2010:

Option Awards Stock Awards

Number of Number of

Shares Acquired Value Realized Shares Acquired Value Realized Page | 248

on Exercise on Exercise

(1) on Vesting on Vesting

(2)

Name (#) ($) (#) ($)

Catherine A. Lesjak ...... 59,108 1,061,126 120,644 5,541,997

R. Todd Bradley ...... 160,000 3,986,550 162,920 7,370,845

Ann M. Livermore ...... 764,536 6,846,519 131 ,493 6,032,232

Vyomesh I. Joshi ...... 170,000 2,709,785 126,671 5,779,221

Mark V. Hurd ...... 850,000 12,469,600 127,987 6,696,478

(1) Represents the amounts realized based on the difference between the market price of HP stock on the date of exercise and the exercise price.

(2) Represents the amounts realized based on the fair market value of HP stock on the vesting date for restricted stock or restricted stock units and the release date for PRUs. Fair market value is determined based on the closing market price of HP stock on the applicable date. In the case of the PRUs granted for the three-year period that ended on October 31, 2010, the value was not determinable and no shares could be released until the fiscal 2010 cash flow performance and the three-year TSR were certified by the Committee, which occurred after the fiscal year end.

Fiscal 2010 Pension Benefits Table

The following table provides information about the present value of accumulated pension benefits payable to each NEO (no payments were made to any NEO during fiscal 2010):

Number of Present Value of

Years of Accumulated

Credited Benefit

Service 10/31/10

(2)

Page | 249

Name Plan Name

(1)

($) (#)

Catherine A. Lesjak ...... RP 21.3 225,694

EBP 21.3 1,671,017

R. Todd Bradley ...... CAPP 0.6 11,820

CARP 0.6 8,123

Ann M. Livermore ...... RP 25.4 231,237

EBP 25.4 4,673,497

Vyomesh I. Joshi ...... RP 27.2 294,968

EBP 27.2 5,640,218

Mark V. Hurd ...... C APP 0.8 11,867

CARP 0.8 40,079

(1) The ͚͚CAPP͛͛ and the ͚͚CARP͛͛ are the qualified HP Cash Account Pension Plan and the nonqualified HP Cash Account Restoration Plan, respectively. The ͚͚RP͛͛ and the ͚͚EBP͛͛ are the qualified HP Retirement Plan and the nonqualified HP Excess Benefit Plan, respectively. All benefits are frozen under these plans. The CAPP and the RP have been merged into the HP

Pension Plan, although benefits continue to be determined under the separate formulas.

67(2) The present value of accumulated benefits is shown at the age 65 unreduced retirement age for the RP and the EBP using the assumptions under Accounting Standards Codification (ASC) Topic

715-30 Defined Benefit PlansͶPension for 2010 fiscal year end measurement (as of October 31,

2010). The present value is based on a discount rate of 5.60% for the RP and 4.45% for the EBP, lump sum interest rates of 1.74% for the first 5 years, 4.75% for the next 15 years and 6.03% thereafter, and applicable mortality. As of October 31, 2009 (the prior measurement date), the

ASC Topic 715-30 or, as known prior to the codification of the accounting standards, Statement of

Financial Accounting Standard 87 assumptions included a discount rate of 5.91% for the RP and

Page | 250

5.33% for the EBP, lump sum interest rates of 2.73% for the first 5 years, 5.63% for the next

15 years and 6.07% thereafter, and applicable mortality. Since there are no early retirement reductions in the CAPP or the CARP and the account balances are vested, the CAPP and the

CARP account balances are used as the present value of the accumulated benefit.

Narrative to the Fiscal 2010 Pension Benefits Table

No NEO currently accrues a benefit under any qualified or non-qualified defined benefit pension plan, as HP ceased benefit accruals in all of its U.S. qualified defined benefit pension plans (and their non-qualified plan counterparts) in prior years. Benefits previously accrued by the NEOs under HP pension plans are payable to them following termination of employment, subject to the terms of the applicable plan.

Terms of the HP Retirement Plan

Ms. Lesjak, Ms. Livermore and Mr. Joshi earned benefits under the RP and the EBP based on pay and service prior to 2008. The RP is a traditional defined benefit plan that provided a benefit based on years of service and the participant͛s ͚͚highest average pay rate,͛͛ reduced by a portion of Social

Security earnings. ͚͚Highest average pay rate͛͛ was determined based on the 20 consecutive fiscal quarters when pay was the highest. Pay for this purpose included base pay and bonus, subject to applicable IRS limits. Benefits under the RP may be taken in one of several different annuity forms or in an actuarially equivalent lump sum. Benefits calculated under the RP are offset by the value of benefits earned under the HP Deferred Profit Sharing Plan (the ͚͚DPSP͛͛) before 1993. Together, the

RP and the DPSP constitute a ͚͚floor-offset͛͛ arrangement for periods before 1993.

Benefits not payable from the RP and the DPSP due to IRS limits are paid from the nonqualified

EBP under which benefits are unfunded and unsecured. When an EBP participant terminates employment, the benefit liability is transferred to the EDCP, where an account is established for the participant. That account is then credited with hypothetical investment earnings (gains or losses) based upon the investment election made by participants from among investment options similar to those offered under the HP 401(k) Plan. There is no formula that would result in above-market earnings or Page | 251

payment of a preferential interest rate on this benefit.

At the time of distribution, amounts representing EBP benefits are paid from the EDCP in a lump sum or installment form, according to pre-existing elections made by those participants, except that participants with a small benefit or who have not qualified for retirement status (age 55 with at least

15 years of service) are paid their EBP benefit in January of the year following their termination, subject to any delay required by Section 409A of the Code.

Terms of the HP Cash Account Pension Plan

Prior to 2006, Mr. Bradley and Mr. Hurd earned benefits under the CAPP, which is a cash balance plan that provides pension benefits determined by reference to a hypothetical account balance.

Prior to this plan being frozen, participants received ͚͚pay credits͛͛ equal to four percent of base pay credited quarterly to their accounts and ͚͚interest credits͛͛ credited daily. Currently, participants

68who have not taken a distribution receive interest credits, credited at the rate equal to the one- year rate for Treasury securities plus one percent; the ͚͚interest credit͛͛ rate is adjusted annually. Benefits under the CAPP may be taken in one of several different annuity forms or in a lump sum equal to the hypothetical account balance.

Prior to 2006, Mr. Bradley and Mr. Hurd also received pay and interest credits to a hypothetical account balance established for them under the CARP on base pay in excess of certain IRS limits at the same rates as had been credited under the CAPP. Benefits under the CARP are unfunded and unsecured. Upon termination of employment, a CARP participant is paid his or her account balance in the form of a lump sum in January of the year following termination, subject to any delay required by

Section 409A of the Code.

HP does not sponsor any other supplemental pension plans or special retiree medical benefit plans for executive officers.

Fiscal 2010 Nonqualified Deferred Compensation Table

The following table provides information about contributions, earnings and balances under the

Page | 252

EDCP (there were no withdrawals or distributions to NEOs during fiscal 2010):

Executive Registrant Aggregate

Contributions Contributions Earnings Aggregate in Last FY

(1) in Last FY

(2) in Last FY Balance at FYE

Name ($) ($) ($) ($)

Catherine A. Lesjak ...... 1,431,597 11,025 633,148 4,041,816

R. Todd Bradley ...... 28,000 11,025 150,810 2,504,134

Ann M. Livermore ...... 2,600 11,025 890,790 6,578,087

Vyomesh Joshi ...... 120,000 11,025 267,180 1,977,274

Mark V. Hurd ...... 39,577 11,025 5,539 263,599

(1) The amounts reported here as ͚͚Executive Contributions͛͛ and ͚͚Registrant Contributions͛͛ are reported as compensation to such NEO in the Summary Compensation Table above.

(2) The contributions reported here as ͚͚Registrant Contributions͛͛ were made in February 2010 with respect to calendar year 2009 participant base-pay deferrals. During fiscal 2010, the NEOs were eligible to receive a discretionary 4% matching contribution on base pay deferrals that exceeded the IRS limit that applies to the qualified HP 401(k) Plan up to a maximum of two times that limit.

Narrative to the Fiscal 2010 Nonqualified Deferred Compensation Table

HP sponsors the EDCP, a nonqualified deferred compensation plan that permits eligible U.S. employees to defer base pay in excess of the amount taken into account under the qualified HP 401(k)

Plan and bonus amounts of up to 95% of the annual incentive bonus payable under the PfR Plan. In addition, a matching contribution is available under the plan to eligible employees. The matching

Page | 253

contribution applies to base pay deferrals on compensation above the IRS limit that applies to the qualified HP 401(k) Plan up to a maximum of two times that compensation limit (for fiscal 2010, on base pay from $245,000 to $490,000).

At the time participation is elected, employees must specify the amount of base pay and/or the percentage of bonus to be deferred, as well as the time and form of payment. If termination of employment occurs before retirement (defined as at least age 55 with 15 years of service), distribution is made in the form of a lump sum in January of the year following the year of termination, subject to any timing restriction otherwise applicable under Section 409A of the Code. At retirement, benefits are paid according to the distribution election made by the participant at the time of the deferral election and are subject to any timing restrictions applicable under Section 409A of the Code. No withdrawals are permitted during employment or prior to the previously elected distribution date, other than

͚͚hardship withdrawals͛͛ as permitted by applicable law.

69During fiscal 2010, the NEOs were eligible for a discretionary matching contribution of up to 4%, based on HP͛s financial performance during each fiscal quarter. Effective with restoration of the matching contribution made to the HP 401(k) Plan on a non-discretionary basis beginning February 1,

2011, matching contributions to the EDCP will also revert to being non-discretionary.

Amounts deferred or credited under the EDCP are credited with hypothetical investment earnings based on participant investment elections made from among the investment options available under the

HP 401(k) Plan. Accounts maintained for participants under the EDCP are not held in trust, and all such amounts are available to general creditors of HP. No amounts are credited with above-market earnings.

Potential Payments Upon Termination or Change in Control

The amounts in the following table assume that the NEOs terminated HP employment effective

Page | 254

October 31, 2010. The closing price of HP common stock was $42.06 on the last trading day before that date. These amounts are in addition to benefits generally available to U.S. employees upon termination of employment, such as distributions from the retirement plans and the HP 401(k) Plan and payment of accrued vacation. Of the NEOs, only Mr. Joshi is currently eligible for ͚͚retirement͛͛ status, which is generally defined in the United States as termination of employment on or after age 55 with at least

15 years of qualifying service.

Long Term Incentive Programs

(3)

Stock Restricted PRU

Termination Total

(1)

Severance

(2)

Options Stock Program

Name Scenario ($) ($) ($) ($) ($)

Catherine A. Lesjak . Voluntary/For Cause Ͷ Ͷ Ͷ Ͷ Ͷ

Disability 5,449,336 Ͷ Ͷ 1,497,378 3,951,958

Retirement Ͷ Ͷ Ͷ Ͷ Ͷ

Death 5,025,792 Ͷ Ͷ 1,073,834 3,951,958

Not for Cause 13,558,247 4,115,454 Ͷ 1,497,378 7,945,415

Change in Control 13,558,247 4,115,454 Ͷ 1,497,378 7,945,415

R. Todd Bradley . . . . Voluntary/For Cause Ͷ Ͷ Ͷ Ͷ Ͷ

Disability 6,657,789 Ͷ Ͷ 1,954,276 4,703,513

Retirement Ͷ Ͷ Ͷ Ͷ Ͷ

Death 6,075,805 Ͷ Ͷ 1,372,292 4,703,513

Not for Cause 16,422,670 4,552,836 Ͷ 1,954,276 9,915,558 Page | 255

Change in Control 16,422,670 4,552,836 Ͷ 1,954,276 9,915,558

Ann M. Livermore . . Voluntary/For Cause Ͷ Ͷ Ͷ Ͷ Ͷ

Disability 6,657,789 Ͷ Ͷ 1,954,276 4,703,513

Retirement Ͷ Ͷ Ͷ Ͷ Ͷ

Death 6,075,805 Ͷ Ͷ 1,372,292 4,703,513

Not for Cause 16,100,474 4,230,640 Ͷ 1,954,276 9,915,558

Change in Control 16,100,474 4,230,640 Ͷ 1,954,276 9,915,558

Vyomesh I. Joshi . . . . Voluntary/For Cause 4,686,553 Ͷ Ͷ 1,415,361 3,271,192

Disability 4,686,553 Ͷ Ͷ 1,415,361 3,271,192

Retirement 4,686,553 Ͷ Ͷ 1,415,361 3,271,192

Death 4,256,363 Ͷ Ͷ 985,171 3,271,192

Not for Cause 12,516,655 4,055,232 Ͷ 1,415,361 7,046,062

Change in Control 12,516,655 4,055,232 Ͷ 1,415,361 7,046,062

(1) Total does not include amounts earned or benefits accumulated due to continued service by the

NEO through October 31, 2010, including vested stock options, accrued retirement benefits, and

70vested balances in the EDCP, all as detailed in the preceding tables. Total also does not include amounts an NEO was eligible to receive under the annual PfR Plan with respect to fiscal 2010 performance or the release of shares under the fiscal 2008 PRU grant for the performance period ended October 31, 2010. These amounts could have been reduced or eliminated by the Committee

(prior to payment) for any reason.

(2) Reflects the cash benefit payable in the event of a qualifying termination under the HP Severance

Plan for Executive Officers.

(3) Under the HP equity plans, the Board and the Committee have the discretion to accelerate vesting of options and to release vesting restrictions on stock and cash awards in the event of a change in control, as well as in connection with individual employment terminations. The information reported in these two columns assumes that the Board or the Committee would exercise discretion

Page | 256

to release restrictions in both of these circumstances. From time to time, however, certain HP executives have received less than full acceleration of vesting on stock options, and no (or less than full) release of the vesting restrictions on stock and cash awards, so the amounts actually paid to an NEO upon a ͚͚not for cause͛͛ termination may be lower in some circumstances. In the case of

Mr. Joshi, because he is ͚͚retirement eligible,͛͛ he will have up to three years following his termination to exercise his vested stock options; any unreleased restricted stock or stock unit awards will continue to vest, subject to certain post-employment obligations; and any outstanding

PRU awards will receive pro-rata vesting. Pro-rata vesting of PRUs applies in the event of a termination due to retirement, death or disability for all grant recipients.

Narrative to the Potential Payments upon Termination or Change in Control Table

Termination payments for the NEOs are generally governed by the terms of the HP Severance

Plan for Executive Officers and discretionary terms within the PfR Plan and the HP stock plans. Of the

NEOs, only Mr. Joshi qualified for termination based on ͚͚retirement͛͛ status as of the end of the fiscal year, which generally requires attainment of age 55 with at least 15 years of qualifying service.

HP Severance Plan for Executive Officers

The HP Severance Plan for Executive Officers (͚͚SPEO͛͛), originally adopted by the Board in 2003, provides a severance benefit under certain circumstances to executives who were Section 16 officers of

HP within 90 days of their termination employment. This plan provides for a lump-sum cash severance benefit upon a qualifying termination, calculated as a multiple of the sum of annual base salary and target cash bonus, as in effect immediately prior to the employment termination; the multiple is 2.0 for the position of CEO, 1.5 for executive vice presidents, and 1.0 for senior vice presidents and vice presidents. Payments under the SPEO are reduced by any cash severance benefit payable to the participant under any other HP plan, program or agreement. In addition, the cash benefit is subject to the ͚͚2.99 limit͛͛ of the HP Severance Policy for Senior Executives, described below. Page | 257

A participant will be deemed to have incurred a qualifying termination for purposes of this plan if he or she is involuntarily terminated without cause and executes a full release of claims in a form satisfactory to HP, promptly following termination. For purposes of the SPEO, ͚͚cause͛͛ means a participant͛s material neglect (other than as a result of illness or disability) of his or her duties or responsibilities to HP or conduct (including action or failure to act) that is not in the best interest of, or is injurious to, HP.

Voluntary or ͚͚For Cause͛͛ Termination

In general, an NEO who remained employed through October 31, 2010 (the last day of the fiscal year) but voluntarily terminated employment immediately thereafter, or was terminated immediately thereafter as a ͚͚for cause͛͛ termination, would be eligible (1) to receive his or her annual incentive

71amount earned for fiscal 2010 under the PfR Plan (subject to any downward adjustment or elimination by the Committee prior to actual payment), (2) to exercise his or her vested stock options on or before the last day of employment, (3) to receive a distribution of vested amounts deferred or credited under the EDCP, and (4) to receive a distribution of his or her vested benefits under the HP 401(k) and pension plans. An NEO who terminated employment before the last day of the fiscal year, either voluntarily or as a ͚͚for cause͛͛ termination, would generally not be eligible to receive any amount under the PfR Plan with respect to the fiscal year in which the termination occurred, except that the

Committee has the discretion to make payment of prorated bonus amounts to individuals on leave of absence or in non-pay status, as well as in connection with certain voluntary severance incentives, workforce reductions and similar programs.

͚͚Not for Cause͛͛ Termination

A ͚͚not for cause͛͛ termination would qualify the NEO for the amounts described above under a

͚͚voluntary͛͛ termination and benefits under the SPEO, if the NEO signs the required release of claims

Page | 258

in favor of HP.

In addition to the cash severance benefit payable under the SPEO, the NEO would be eligible to exercise vested stock options and receive distributions of vested, accrued benefits from HP deferred compensation and pension plans. The Committee may also exercise its discretion to release restrictions on equity-based awards in individual cases.

Termination Following a Change in Control

During fiscal 2010, no NEO was covered by an agreement that provided for special payments in the event of a change in control. In the event of a change in control of HP, however, the Board is authorized (but not required) to accelerate the vesting of stock options and to release restrictions on awards issued under HP stock plans. For the purposes of this table, the amounts reported for each

NEO in the rows marked ͚͚Change in Control͛͛ assume that the Board would exercise its discretion in this manner, resulting in fully accelerated vesting of stock options, and release of all restrictions on restricted stock and outstanding PRU awards. In addition, an executive terminated following a change in control would be eligible for benefits under the SPEO, as described above.

As described under ͚͚Executive CompensationͶCompensation Discussion and AnalysisͶAnalysis of Elements of Executive CompensationͶLetter Agreement with Catherine A. Lesjak,͛͛ on

December 15, 2010, HP entered into a letter agreement with Ms. Lesjak relating to her employment with HP. That letter agreement includes, among other things, certain protections for Ms. Lesjak in the event of a change in control of HP. The Committee believed that including those provisions was appropriate given the context of that agreement.

HP Severance Policy for Senior Executives

Under the HP Severance Policy for Senior Executives adopted by the Board in July 2003 (the ͚͚HP

Severance Policy͛͛), HP will seek stockholder approval for future severance agreements, if any, with certain senior executives that provide specified benefits in an amount exceeding 2.99 times the sum of

Page | 259

the executive͛s current annual base salary plus annual target cash bonus, in each case as in effect immediately prior to the time of such executive͛s termination. Individuals subject to this policy consist of the Section 16 officers designated by the Board. In implementing this policy, the Board may elect to seek stockholder approval after the material terms of the relevant severance agreement are agreed upon.

For purposes of determining the amounts subject to the HP Severance Policy, benefits subject to the limit generally include cash separation payments that directly relate to extraordinary benefits that are not available to groups of employees other than the Section 16 officers upon termination of

72employment. Benefits that have been earned or accrued, as well as prorated bonuses, accelerated stock or option vesting and other benefits that are consistent with HP practices applicable to employees other than the Section 16 officers, are not counted against the limit. Specifically, benefits subject to the HP

Severance Policy include: (a) separation payments based on a multiplier of salary plus target bonus, or cash amounts payable for the uncompleted portion of employment agreements; (b) any gross-up payments made in connection with severance, retirement or similar payments, including any gross- up payments with respect to excess parachute payments under Section 280G of the Code; (c) the value of any service period credited to a Section 16 officer in excess of the period of service actually provided by such Section 16 officer for purposes of any employee benefit plan; (d) the value of benefits and perquisites that are inconsistent with HP practices applicable to one or more groups of employees in addition to, or other than, the Section 16 officers (͚͚Company Practices͛͛); and (e) the value of any accelerated vesting of any stock options, stock appreciation rights, restricted stock or long-term cash incentives that is inconsistent with Company Practices. The following benefits are not subject to the HP

Page | 260

Severance Policy, either because they have been previously earned or accrued by the employee or because they are consistent with Company Practices: (i) compensation and benefits earned, accrued, deferred or otherwise provided for employment services rendered on or prior to the date of termination of employment pursuant to bonus, retirement, deferred compensation or other benefit plans, e.g., 401(k) plan distributions, payments pursuant to retirement plans, distributions under deferred compensation plans or payments for accrued benefits such as unused vacation days, and any amounts earned with respect to such compensation and benefits in accordance with the terms of the applicable plan; (ii) payments of prorated portions of bonuses or prorated long-term incentive payments that are consistent with Company Practices; (iii) acceleration of the vesting of stock options, stock appreciation rights, restricted stock, restricted stock units or long-term cash incentives that is consistent with Company Practices; (iv) payments or benefits required to be provided by law; and

(v) benefits and perquisites provided in accordance with the terms of any benefit plan, program or arrangement sponsored by HP or its affiliates that are consistent with Company Practices.

For purposes of the HP Severance Policy, future severance agreements include any severance agreements or employment agreements containing severance provisions that HP may enter into after the adoption of the HP Severance Policy by the Board, as well as agreements renewing, modifying or extending such agreements. Future severance agreements do not include retirement plans, deferred compensation plans, early retirement plans, workforce restructuring plans, retention plans in connection with extraordinary transactions or similar plans or agreements entered into in connection with any of the foregoing, provided that such plans or agreements are applicable to one or more groups of employees in addition to the Section 16 officers.

HP Retirement Arrangements

Upon retirement on or after age 55 with at least 15 years of service, HP employees in the United

Page | 261

States receive full vesting of options granted under HP common stock plans with a three-year post-termination exercise period. Restricted stock and restricted stock units continue to vest in accordance with their normal vesting schedule, subject to certain post-employment restrictions. Awards under the PRU Program, if any, are paid on a prorated basis to participants at the end of the performance period based on actual results, and bonuses, if any, under the PfR Plan may be paid in prorated amounts in the discretion of management based on actual results. In accordance with

Section 409A of the Code, certain amounts payable upon retirement of (or other termination by) the

NEOs and other key employees will not be paid out for at least six months following termination of employment. Of the NEOs, only Mr. Joshi was eligible to retire as of October 31, 2010.

HP sponsors two retiree medical programs in the United States, one of which provides subsidized coverage for eligible participants based on years of service. Eligibility for this program requires that participants have been employed by HP before January 1, 2003, and to have met other age and service

73requirements. Of the NEOs, only Mr. Joshi will be eligible for this program following his termination of employment.

The other U.S. retiree medical program sponsored by HP provides eligible retirees with access to coverage at group rates only, with no direct subsidy provided by HP. In addition, beginning at age 45, eligible U.S. employees may participate in the HP Retirement Medical Savings Account Plan (the

͚͚RMSA͛͛), under which participants are eligible to receive HP matching credits of $1,200 per year, beginning at age 45, up to a lifetime maximum of $12,000, which can be used to cover the cost of such retiree medical coverage (or other qualifying medical expenses) if the employee retires from HP on or after age 55 with at least 10 years of service. All of the NEOs other than Mr. Joshi could be eligible for the HP Retiree Medical Plan and the employer credits accumulated under the RMSA if they retire from HP on or after age 55 with at least 10 years of qualifying service.

Separation Agreement with Mark V. Hurd Page | 262

As discussed under ͚͚Executive CompensationͶCompensation Discussion and AnalysisͶAnalysis of Elements of Executive CompensationͶSeparation Agreement with Mark V. Hurd,͛͛ Mr. Hurd resigned as Chairman, President and Chief Executive Officer of HP and as a member of the Board effective August 6, 2010. In connection with Mr. Hurd͛s resignation, HP and Mr. Hurd entered into a

Separation Agreement and Release that provided Mr. Hurd would receive a cash severance benefit of

$12,224,693 in full satisfaction of HP͛s obligations under the SPEO, which amount did not exceed the limit of 2.99 times the sum of Mr. Hurd͛s current annual base salary plus annual target cash bonus established under the HP Severance Policy. The agreement also provided for continued vesting of, and an extension of time to exercise, certain of Mr. Hurd͛s outstanding equity awards, as well as payment of

COBRA premiums for continuing medical coverage. In connection with the settlement of litigation subsequently commenced by HP against Mr. Hurd, all of his outstanding equity awards were cancelled.

74EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes our equity compensation plan information as of October 31, 2010.

Common shares to Common shares be issued upon Weighted-average available for future exercise of exercise price issuance under equity outstanding of outstanding compensation plans options, warrants options, warrants (excluding securities

Plan Category and rights

(1) and rights

(2) reflected in column (a))

(a) (b) (c)

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Equity compensation plans approved by HP stockholders ...... 130,095,753

(3)

$28.8389 124,553,185

(4)

Equity compensation plans not approved by

HP stockholders ...... 0 $ 0 0

Totals ...... 130,095,753 $28.8389 124,553,185

(1) This column does not reflect awards of options and restricted stock units assumed in acquisitions where the plans governing the awards were not available for future awards as of October 31, 2010.

As of October 31, 2010, individual awards of options and restricted stock units to purchase a total of 42,408,497 shares were outstanding pursuant to awards assumed in connection with acquisitions and granted under such plans at a weighted average exercise price of $24.9673. Includes stock appreciation rights with respect to 84,419 shares of HP common stock assumed in connection with

HP͛s acquisition of Compaq Computer Corporation. Also includes awards of PRUs representing

1,568,530 shares that may be issued under the Amended and Restated 2003 Incentive Plan of

Electronic Data Systems Corporation. The terms of the PRU awards are summarized in footnote

(3) to this table.

(2) This column does not reflect the exercise price of shares underlying the assumed options referred to in footnote (1) to this table or the purchase price of shares to be purchased pursuant to the

Share Ownership Plan, which is governed by the HP 2000 Employee Stock Purchase Plan (the

͚͚ESPP͛͛), or the legacy HP Employee Stock Purchase Plan (the ͚͚Legacy ESPP͛͛). In addition, the weighted average exercise price does not take into account the shares issuable upon vesting of outstanding awards of restricted stock units and PRUs, which have no exercise price.

(3) Includes awards of options and restricted stock units outstanding under the HP Amended and

Restated 2004 Stock Incentive Plan (the ͚͚2004 Plan͛͛), the HP 2000 Stock Plan (the ͚͚2000 Plan͛͛), the HP 1995 Incentive Stock Plan and the HP 1997 Director Stock Plan. Also includes awards of Page | 264

PRUs representing 23,946,866 shares that may be issued under the 2004 Plan. Each PRU award reflects a target number of shares that may be issued to the award recipient. HP determines the actual number of shares the recipient receives at the end of a three-year performance period based on results achieved versus company performance goals and stockholder return relative to the market. The actual number of shares that a grant recipient receives at the end of the period may range from 0% to 200% of the target number of shares.

(4) Includes (i) 90,034,630 shares available for future issuance under the 2004 Plan, (ii) 30,426,564 shares available for future issuance under the ESPP, (iii) 2,725,611 shares available for future issuance under the Legacy ESPP, and (iv) 1,366,380 shares available for future issuance under the

HP Service Anniversary Award Plan. In November 2010, the ESPP expired, and HP ceased issuing shares under that plan.

75PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Audit Committee has appointed Ernst & Young LLP (͚͚EY͛͛) as HP͛s independent registered public accounting firm for the fiscal year ending October 31, 2011. Stockholders are being asked to ratify the appointment of EY at the annual meeting pursuant to Proposal No. 2. Representatives of EY are expected to be present at the annual meeting, will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Fees Incurred by HP for Ernst & Young LLP

The following table shows the fees paid or accrued by HP for audit and other services provided by

EY for fiscal 2010 and 2009.

2010 2009

In millions

Audit Fees

(1)

30.8 $30.5$ ......

Audit-Related Fees Page | 265

(2)

14.9 13.8 ......

Tax Fees

(3)

6.1 9.3 ......

All Other Fees

(4)

0.0 0.2 ......

Total ...... $51.8 $53.8

The Audit Committee has approved all of the fees above.

The Audit Committee has delegated to the chair of the Audit Committee the authority to pre-approve audit-related and non-audit services not prohibited by law to be performed by HP͛s independent registered public accounting firm and associated fees up to a maximum for any one non-audit service of $250,000, provided that the chair shall report any decisions to pre-approve such audit-related or non-audit services and fees to the full Audit Committee at its next regular meeting.

(1) Audit fees represent fees for professional services provided in connection with the audit of HP͛s financial statements and review of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.

(2) Audit-related fees consisted primarily of SAS 70 reviews, accounting consultations, employee benefit plan audits, services related to business acquisitions and divestitures and other attestation services.

(3) For fiscal 2010, tax fees included primarily tax advice and tax planning fees of $3.6 million and tax compliance fees of $2.3 million. For fiscal 2009, tax fees included primarily tax advice and tax planning fees of $5.6 million and fees for expatriate tax services of $3.0 million.

(4) All other fees included primarily fees for advice relating to employee benefits matters.

76REPORT OF THE AUDIT COMMITTEE OF

THE BOARD OF DIRECTORS Page | 266

The Audit Committee represents and assists the Board in fulfilling its responsibilities for general oversight of the integrity of HP͛s financial statements, HP͛s compliance with legal and regulatory requirements, the independent registered public accounting firm͛s qualifications and independence, the performance of HP͛s internal audit function and independent registered public accounting firm, and risk assessment and risk management. The Audit Committee manages HP͛s relationship with its independent registered public accounting firm (which reports directly to the Audit Committee). The

Audit Committee has the authority to obtain advice and assistance from outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties and receives appropriate funding, as determined by the Audit Committee, from HP for such advice and assistance.

HP͛s management is primarily responsible for HP͛s internal control and financial reporting process.

HP͛s independent registered public accounting firm, Ernst & Young LLP, is responsible for performing an independent audit of HP͛s consolidated financial statements and issuing opinions on the conformity of those audited financial statements with United States generally accepted accounting principles and the effectiveness of HP͛s internal control over financial reporting. The Audit Committee monitors HP͛s financial reporting process and reports to the Board on its findings.

In this context, the Audit Committee hereby reports as follows:

1. The Audit Committee has reviewed and discussed the audited financial statements with HP͛s management.

2. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed under the rules adopted by the Public Company

Accounting Oversight Board (͚͚PCAOB͛͛).

3. The Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm͛s independence and has discussed Page | 267

with the independent registered public accounting firm its independence.

4. Based on the review and discussions referred to in paragraphs (1) through (3) above, the

Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in HP͛s Annual Report on Form 10-K for the fiscal year ended October 31, 2010, for filing with the Securities and Exchange Commission.

The undersigned members of the Audit Committee have submitted this Report to the Board of

Directors.

AUDIT COMMITTEE

Robert L. Ryan, Chair

Sari M. Baldauf

John R. Joyce

Lucille S. Salhany

G. Kennedy Thompson

77IMPORTANT INFORMATION CONCERNING THE HP ANNUAL MEETING

Check-in begins: 12:30 p.m., local time Meeting begins: 2:00 p.m., local time

ͻ HP stockholders, including joint holders, as of the close of business on January 24, 2011, the record date for the annual meeting, are entitled to attend the annual meeting on March 23, 2011

ͻ All stockholders and their proxies should be prepared to present photo identification for admission to the meeting

ͻ If you are a record holder or a participant in the HP 401(k) Plan or the Share Ownership Plan, your share ownership will be verified against a list of record holders or plan participants as of the record date prior to your being admitted to the meeting

ͻ If you are a beneficial owner of your HP shares (i.e., you hold your shares through a broker, trustee or

Page | 268

nominee), you will be asked to present proof of beneficial ownership of HP shares as of the record date, such as your most recent brokerage statement prior to January 24, 2011 or other evidence of ownership

ͻ Persons acting as proxies must bring a valid proxy from a record holder who owns shares as of the close of business on January 24, 2011

ͻ Failure to present identification or otherwise comply with the above procedures will result in exclusion from the meeting

ͻ Meeting attendees will not be permitted to bring cameras, mobile phones, recording equipment, electronic devices or large bags, briefcases or packages to the meeting

ͻ Please allow ample time for check-in

THANK YOU FOR YOUR INTEREST AND SUPPORTͶYOUR VOTE IS IMPORTANT!

Directions to the Sheraton National Hotel, 900 South Orme Street, Arlington, Virginia

From the North:

ͻ Follow 95 South to 495 West (Silver Spring)

ͻ Follow 495 West to the George Washington Parkway

ͻ Follow the George Washington Parkway for approximately 8 miles to the exit for 395 South and Route 27

(Lyndon B. Johnson) exit

ͻ Stay to the right at the fork, heading towards 395 South

ͻ Stay to your right and take exit Route 244 West/Columbia Pike/Navy Annex

ͻ Continue straight through two traffic lights; Sheraton National Hotel is on your right side

From the South:

ͻ Follow 95 North to 395 North/Washington exit 8A-Washington Blvd

ͻ Once on Washington Blvd. immediately get into the extreme right lane and take exit Columbia Pike/Navy

Annex; Sheraton National Hotel is directly in front of you

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From the West:

ͻ Follow route 66 East toward Washington, DC

ͻ Exit at Route 110 Pentagon exit

ͻ Continue on Route 110 to the Washington Blvd. exit

ͻ Very shortly thereafter, take exit Columbia Pike/Navy Annex; Sheraton National Hotel is directly in front of you

From the West of the Capital Beltway:

ͻ Follow 270 East to 495 South to the George Washington Parkway

ͻ Follow the George Washington Parkway for approximately 8 miles to the exit for 395 South and Route 27

(Lyndon B. Johnson) exit

ͻ Stay to your right at the fork, heading toward 395 South

ͻ Stay to the right and take exit Route 244 West/Columbia Pike/Navy Annex

ͻ Continue straight through two traffic lights; Sheraton National Hotel is on your right

Parking: Follow the signs to the parking garage, which is located underground and is accessible from the main entrance to the hotel. You will be provided with a complimentary parking pass at the HP registration desk.

Metro Riders: Attendees traveling by Metro should take the Blue or Yellow line to the Pentagon City Metro Stop.

4AA3-2578ENW

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