Case 3:05-cv-02047-CRB Document 61-1 Filed 04/07/2006 Page 1 of 44 1 EDWARD F. HABER (pro hac vice) SHAPIRO HABER & URMY LLP 2 53 State Street Boston, MA 02109 3 Telephone: (617) 439-3939 4 5 6 7 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA 8 9 10 11 GEORGIANNA HANRAHAN, IRA, Case No. 05-CV-02047 (CRB) 12 individually and on behalf of all others similarly sitatuted, 13 AMENDED CLASS ACTION COMPLAINT 14 Plaintiff, 15 v. 53 State Street (617) 439-3939 439-3939 (617) 16 HEWLETT-PACKARD COMPANY and Boston, MA 02109 MA Boston, CARLETON FIORINA, 17 Defendants. 18 SHAPIRO HABER & URMY LLP 19 20 21 22 23 24 25 26 27 28 Amended Class Action Complaint Case No. 05-CV-02047 (CRB) -i- Case 3:05-cv-02047-CRB Document 61-1 Filed 04/07/2006 Page 2 of 44 1 TABLE OF CONTENTS 2 INTRODUCTION……………………………………………………………………………….….-1- 3 JURISDICTION AND VENUE…………………………………………………………………….-2- 4 PARTIES……………………………………………………………………………………………-3- 5 SUBSTANTIVE ALLEGATIONS…………………………………………………………………-4- 6 7 Information Regarding Walter B. Hewlett………………………………………………………-4- 8 Walter B. Hewlett’s Negative Views Regarding the Merger and His Opposition to the Merger……………………………………………………………………………………….-6- 9 The Defendants’ Public Statements and Filings Regarding the 10 Merger On September 3, 2001 and Throughout the Class Period……………………………...-16- 11 The Stock Market Responded Negatively to the Proposed Merger……………………………-21- 12 The Defendants’ Omission of the Omitted Material Facts Caused 13 The September 3, 2001 Press Release and the Defendants’ Other Statements and Filings Regarding the Merger During the Class 14 Period to be Deceptive and Misleading………………………………………………………...-29- 15 Hewlett’s Opposition to the Merger is Publicly Disclosed by Hewlett on 53 State Street (617) 439-3939 439-3939 (617) 16 November 6, 2001……………………………………………………………………………...-32- Boston, MA 02109 MA Boston, 17 The Defendants Acted With Scienter, With the Intent to Defraud……………………………..-34- 18 CLASS ACTION ALLEGATIONS……………………………………………………………….-36- SHAPIRO HABER & URMY LLP 19 COUNT I 20 AGAINST DEFENDANTS HEWLETT-PACKARD AND FIORINA FOR VIOLATIONS OF SECTION 10(b) OF THE EXCHANGE ACT 21 AND RULE 10b-5 PROMULGATED THEREUNDER………………………………………….-38- 22 COUNT II 23 AGAINST DEFENDANT FIORINA PURSUANT TO SECTION 20(a) OF 24 THE EXCHANGE ACT…………………………………………………………………………...-40- 25 PRAYERS FOR RELIEF………………………………………………………………………….-41- 26 27 28 Amended Class Action Complaint Case No. 05-CV-02047 (CRB) -ii- Case 3:05-cv-02047-CRB Document 61-1 Filed 04/07/2006 Page 3 of 44 1 AMENDED CLASS ACTION COMPLAINT 2 3 Plaintiff, through its attorneys, alleges the following upon information and belief, except as 4 to the allegations which pertain to the Plaintiff and its counsel, which are alleged upon personal 5 knowledge. Plaintiff’s information and belief are based, inter alia, on the investigation made by and 6 through its attorneys, including but not limited to the review of documents filed with the Securities 7 and Exchange Commission; press releases and other public statements of the Defendants and others; 8 and published books. 9 10 11 INTRODUCTION 12 1. This is a federal securities class action which is brought by the Plaintiff against the 13 Defendants Hewlett-Packard Company (“Hewlett-Packard” or “HP”) and Carleton Fiorina 14 (“Fiorina”), the former Chief Executive Officer and Chairman of the Board of Directors of Hewlett- 15 Packard, on behalf of a class (the "Class") consisting of all persons or entities who sold the common 53 State Street (617) 439-3939 439-3939 (617) 16 Boston, MA 02109 MA Boston, 17 stock of Hewlett-Packard during the period September 4, 2001 through November 5, 2001, inclusive 18 (the “Class Period”). Plaintiff seeks to recover damages caused to the Class by Defendants’ SHAPIRO HABER & URMY LLP 19 violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 20 10b-5 promulgated thereunder. 21 2. This action arises as a result of the announcement by the Defendants on September 3, 22 23 2001 of the proposed merger of Hewlett-Packard with Compaq Computer Corporation (“Compaq”) 24 (the “Merger”) and subsequent public statements and public filings by the Defendants from 25 September 4, 2001 through November 5, 2001 regarding the Merger. Those statements by the 26 Defendants regarding the Merger were deceptive and misleading because they failed to disclose that 27 Walter B. Hewlett (“Hewlett”) was opposed to the Merger, as detailed herein. 28 Amended Class Action Complaint Case No. 05-CV-02047 (CRB) -1- Case 3:05-cv-02047-CRB Document 61-1 Filed 04/07/2006 Page 4 of 44 1 3. As detailed herein, Hewlett, who is the son of the co-founder of HP, the late William 2 R. Hewlett, and who, at all relevant times, was a Director of Hewlett-Packard, owns, controls the 3 voting rights of, and has substantial influence with respect to the voting of, hundreds of millions of 4 shares of Hewlett-Packard common stock. Hence, Hewlett’s opposition to the Merger significantly 5 6 decreased the likelihood that the Merger would be consummated. Accordingly, the Defendants’ 7 public statements and filings regarding the Merger, from September 3, 2001 through November 5, 8 2001, deceived and misled the marketplace as to the likelihood of the Merger being consummated, 9 by failing to disclose Hewlett’s opposition to the Merger, as detailed herein. 10 4. The Class Period begins on September 4, 2001, the first day of trading of Hewlett- 11 Packard stock after the Defendants announced the proposed Merger on September 3, 2001. The 12 13 Class Period ends on November 5, 2001, the last trading day of Hewlett-Packard stock prior to it 14 first becoming publicly known that Hewlett was opposed to the Merger, as a result of a press release 15 issued by Hewlett on November 6, 2001. 53 State Street (617) 439-3939 439-3939 (617) 16 Boston, MA 02109 MA Boston, 5. As demonstrated herein, the Defendants’ misleading and deceptive public statements 17 regarding the Merger on September 3, 2001 and throughout the Class Period significantly artificially 18 SHAPIRO HABER & URMY LLP decreased and deflated the price of HP stock throughout the Class Period. 19 20 21 JURISDICTION AND VENUE 22 6. This Court has jurisdiction of this action pursuant to Section 27 of the Exchange Act 23 [15 U.S.C. §78aa], and 28 U.S.C. §§1331 and 1337. 24 7. This action arises under and pursuant to Section 10(b) of the Exchange Act [15 25 U.S.C. §78j(b)], Rule 10b-5 promulgated thereunder by the SEC [17 C.F.R. §240.10b-5] and 26 27 Section 20 of the Exchange Act [15 U.S.C.S. §78t(a)]. 28 Amended Class Action Complaint Case No. 05-CV-02047 (CRB) -2- Case 3:05-cv-02047-CRB Document 61-1 Filed 04/07/2006 Page 5 of 44 1 8. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28 2 U.S.C. §1391(b). The Defendants are located in this District and acts complained of herein occurred 3 in this District. 4 9. In connection with the acts alleged in this Complaint, Defendants, directly or 5 6 indirectly, used the means and instrumentalities of interstate commerce, including, but not limited 7 to, the mails, interstate telephonic communications and the facilities of the New York Stock 8 Exchange, a national securities exchange. 9 10 PARTIES 11 10. Plaintiff Georgianna Hanrahan, IRA, (“Plaintiff”), is the IRA account of Georgianna 12 13 Hanrahan, a natural person who resides in Norwalk, Connecticut. As detailed in the Certification of 14 the Plaintiff, attached to the original complaint filed in this action, the Plaintiff sold 255 shares of 15 Hewlett-Packard common stock during the Class Period. The Plaintiff did not purchase any 53 State Street (617) 439-3939 439-3939 (617) 16 Boston, MA 02109 MA Boston, Hewlett-Packard common stock during the Class Period. 17 11. Defendant Hewlett-Packard is a Delaware corporation, with its headquarters in Palo 18 SHAPIRO HABER & URMY LLP Alto, California. It is located and does business throughout the United States and internationally, 19 20 including in this judicial district. 21 12. The Defendant Carleton Fiorina was, at all relevant times, Chairman of the Board of 22 Directors and Chief Executive Officer of Hewlett-Packard. On February 9, 2005, Fiorina was fired 23 as the Chairman of the Board of Directors and Chief Executive Officer of Hewlett-Packard. 24 13. The Defendants Hewlett-Packard and Fiorina are collectively referred to herein as the 25 “Defendants.” 26 27 28 Amended Class Action Complaint Case No. 05-CV-02047 (CRB) -3- Case 3:05-cv-02047-CRB Document 61-1 Filed 04/07/2006 Page 6 of 44 1 SUBSTANTIVE ALLEGATIONS 2 Information Regarding Walter B. Hewlett 3 14. Hewlett is the son of the late William R. Hewlett, a co-founder of Hewlett-Packard. 4 Prior to the Merger he had been a Director of HP for 14 years. As a result of his personal ownership 5 6 of HP shares; his relationship to and influence with persons who own or control the voting rights of 7 HP shares; and his positions with and influence with entities that own substantial numbers of HP 8 shares; Hewlett’s negative views regarding the Merger and his opposition to the Merger, had they 9 been disclosed during the Class Period, would have had a significant impact on the marketplace’s 10 judgment, during the Class Period, as to the likelihood of the Merger being consummated. 11 15. At all times relevant hereto Hewlett personally owned or had the sole power to vote 12 13 or to direct the vote of 439,334 shares of HP stock.