HP Board Approves Policies on Stockholder Rights Plans, Executive Compensation

HP today announced that the HP board of directors has approved an amendment to the company’s bylaws regarding stockholder rights plans and that the company has adopted a new long-term executive compensation program, confirming its longstanding policy on performance-based pay.

The amendment to HP’s bylaws formalizes the company’s existing policy that, subject to a limited fiduciary exception, the HP board will seek stockholder approval prior to its adoption or extension of a stockholder rights plan. It also states that any stockholder rights plan adopted or extended by the HP board without prior stockholder approval pursuant to the fiduciary exception will expire unless ratified by the stockholders of HP within one year of adoption.

The HP board’s HR and Compensation Committee approved a new program, effective with the fiscal 2008 compensation review cycle, under which most equity grants will vest only upon the satisfaction of financial performance criteria over a three-year period. In doing so, it confirmed its policy that a significant portion of long-term incentive compensation for senior executives should be performance-based. The structure of the new program reflects an updated approach to performance-based plan design.

The details of the program, including specific performance metrics and targets, are still in development. HP expects to provide more information regarding the new program in HP’s proxy statement for its 2008 annual meeting of stockholders.

The bylaw amendment and new equity compensation program were adopted in response to proposals stockholders submitted and approved at HP’s most recent annual stockholder meeting held on March 14, 2007. They are disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission.

About HP

HP focuses on simplifying technology experiences for all of its customers – from individual consumers to the largest businesses. With a portfolio that spans printing, personal computing, software, services and IT infrastructure, HP is among the world’s largest IT companies, with revenue totaling $100.5 billion for the four fiscal quarters ended July 31, 2007. More information about HP (NYSE: HPQ) is available at www.hp.com.