votes, you should contact your broker, trustee or nominee. If you sign your proxy card or voting instruction card with no further instructions, Ms. Dunn, Mr. Wayman and Ms. Baskins, 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 instruct that your votes be withheld.

Cumulative voting applies only to the election of directors. For all other matters, each share of common stock outstanding as of the close of business on theRecord Date is entitled to one vote.

Q:    What happens if additional matters are presented at the annual meeting?

A:    Other than the three 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, Ms. Dunn, Mr. Wayman and Ms. Baskins, 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.

Q:    Who will serve as inspector of elections?

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

Q:    What should I do if I receive more than one set of voting materials?

A:    You may receive more than one set of voting materials, including multiple 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 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 will receive more than one proxy card. Please complete, sign, date and return each HP proxy card and voting instruction card that you receive.

Q:    How may I obtain a separate set of proxy materials or request a single set for my household?

A:    If you share an address with another stockholder, you may receive only one set of proxy materials (including our 2004 Form 10-K and proxy statement) unless you have provided contrary instructions. If you wish to receive a separate set of proxy materials now, please request the additional copies by sending an e-mail to Innisfree at info@innisfreema.com or calling:

(877) 750-5838
International Calls: (646) 822-7402

If you are a stockholder of record and wish to receive a separate set of proxy materials in the future, please call Computershare at:

(800) 286-5977
International Calls: (312) 360-5138

If you hold shares beneficially in street name and you wish to receive a separate set of proxy materials in the future, please call Automatic Data Processing, Inc. (ADP) 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, CA 94304

Similarly, if you share an address with another stockholder and have received multiple copies of our proxy materials, you may write us at the address above to request delivery of a single copy of these materials.

If you wish to request electronic delivery of proxy materials in the future, please sign up at:

http://www.hp.com/hpinfo/investor/financials/edelivery/

Q:    Who will bear the cost of soliciting votes for the annual meeting?

A:    HP is making this solicitation and will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials and soliciting votes. If you choose to access the proxy materials and/or vote over the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. In addition

to the mailing of 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 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 Innisfree a fee of $15,000 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. Upon request, we will also reimburse brokerage houses and other custodians, nominees and fiduciaries for forwarding proxy and solicitation materials to stockholders.

Q:    Where can I find the voting results of the annual meeting?

A:    We intend to announce preliminary voting results at the annual meeting and publish final results in our quarterly report on Form 10-Q for the second quarter of fiscal 2005.

Q:27.   What is the deadline to propose actions for consideration at next year's annual meeting of stockholders or to nominate individuals to serve as directors?stockholders?

A:You may submit proposals including director nominations, for consideration at future stockholder meetings.

Stockholder Proposals: For a stockholder proposal to be considered for inclusion in HP's proxy statement for the annual meeting next year, the Corporate Secretary of HP must receive the written proposal at our principal executive offices no later than October 14, 2005.September 26, 2006. Such proposals also must comply with Securities and Exchange Commission ("SEC") regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to:

Corporate Secretary
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 HP's proxy statement under Rule 14a-8, the stockholder must deliver a proxy statement and form of proxy to holders of a sufficient number of shares of HP common stock to approve that proposal, provide the information required by the bylawsBylaws of HP and give timely notice to the Corporate Secretary of HP in accordance with the bylawsBylaws of HP, which, in general, require that the notice be received by the Corporate Secretary of HP:Secretary:

•

Not earlier than the close of business on November 16, 2005,10, 2006, and



•

Not later than the close of business on December 16, 2005.11, 2006.




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 HP's proxy statement under Rule 14a-8 must be received nonot earlier than the close of business 120 days prior to the meeting and nonot later than the close of business on the later of the following two dates:

•

90 days prior to the meeting; and



•

10 days after public announcement of the meeting date.

Nomination of Director Candidates:28.   How may I recommend or nominate individuals to serve as directors?

You may propose director candidates for consideration by the Board's Nominating and Governance Committee. Any such recommendations should include the nominee's name and qualifications for Board membership and should be directed to the Corporate Secretary of HP at the address of our principal executive offices set forth above.

In addition, the bylawsBylaws of HP permit stockholders to nominate directors for election at an annual stockholder meeting. To nominate a director, the stockholder must deliver a proxy statement and form of proxy to holders of a sufficient number of shares of HP common stock to elect such nominee and provide the information required by the bylawsBylaws of HP, as well as a statement by the nominee acknowledging that he or she will owe a fiduciary obligation to HP and its stockholders. In addition,

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

A stockholder may send a proposed director candidate's name and information to the Board at anytime. Generally, such proposed candidates are considered at the Board meeting prior to the annual meeting.

To nominate an individual for election at an annual stockholder meeting, the stockholder must give timely notice to the Corporate Secretary of HP in accordance with the bylawsBylaws of HP, which, in general, require that the notice be received by the Corporate Secretary between the close of HP withinbusiness on November 10, 2006 and December 11, 2006, unless the time periodannual meeting is moved by more than 30 days before or 60 days after the anniversary of the prior year's annual meeting, in which case the deadline will be as described above under "Stockholder Proposals" forin question 27.

30.   How may I obtain a copy of HP's Bylaw provisions regarding stockholder proposals that are not intended to be included in HP's proxy statement.and director nominations?

Copy of Bylaw Provisions:You may contact the HP Corporate Secretary at our principal executive offices for a copy of the relevant bylawBylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates. HP's bylawsBylaws also are available on HP's website at http://www.hp.com/hpinfo/investor/bylaws.html.

Further Questions

31.   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 HP's proxy solicitor:

Innisfree M&A Incorporated
501 Madison Avenue, 20^th Floor
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

If you need additional copies of this proxy statement or voting materials, please contact Innisfree as described above or send an e-mail to info@innisfreema.com.





CORPORATE 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 HP's integrity in the marketplace. HP has adopted a code of business conduct and ethics for directors, officers (including HP's principal executive officer, principal financial officer and controller) and employees, known as the Standards of Business Conduct. HP also has adopted Corporate Governance Guidelines, which, in conjunction with the Certificate of Incorporation, Bylaws and Board Committeecommittee charters, form the framework for governance of HP. HP's StandardsAll of Business Conduct and Corporate Governance Guidelinesthese documents are available at http://www.hp.com/hpinfo/investor/. HP will post on this web site 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 and the Corporate Governance Guidelines from:

Hewlett-Packard Company
Attention: Investor Relations
3000 Hanover Street
Palo Alto, CA 94304
(866) GET-HPQ1 or (866) 438-4771

or alternatively on HP's Investor Relations web site at:


http://investor.hp.com/docreq.cfm

Board Policy Regarding Voting for Directors

        HP has adopted a policy whereby any nominee for director who receives a greater number of votes "withheld" from his or her election than votes "for" 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.

Board Independence

        HP's Corporate Governance Guidelines provide that a substantial majority of the Board shallwill consist of independent directors. The Board has determined that each of the non-employee director nominees standing for election, except the Chief Executive Officer (the "CEO")including Patricia C. Dunn, Lawrence T. Babbio, Jr., Sari M. Baldauf, Richard A. Hackborn, John H. Hammergren, George A. Keyworth II, Thomas J. Perkins, Robert L. Ryan and Chief Financial Officer,Lucille S. Salhany, and each of the members of each Board Committeecommittee has no material relationship with HP (either directly or as a partner, shareholder or officer of an organization that has a relationship with HP) and is independent within the meaning of HP's director independence standards. These standards reflect exactly New York Stock Exchange, Inc. ("NYSE") and, NASDAQ Stock Market, Inc. ("NASDAQ") directorand Pacific Exchange, Inc. corporate governance listing standards described below. In addition, each member of the Audit Committee meets the heightened independence standards required for audit committee members under the applicable listing standards.

HP's Director Independence Standards

        In determining independence, the Board reviews whether directors have any material relationship with HP. The Board considers all relevant facts and circumstances. In assessing the materiality of a director's relationship to HP, the Board considers the issues from the director's 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 below. The Board reviews commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships. An independent director must not have any material relationship with HP, either directly or as currentlya partner, shareholder or officer of an organization that has a relationship with HP, or any relationship that would interfere with the exercise of independent judgment in effect.carrying out the responsibilities of a director.






        A director will not be considered independent in the following circumstances:

(1)

The director is, or has been in the past three years, an employee of HP, or an immediate family member of the director is, or has been in the past three years, an executive officer of HP.



(2)

The director has received, or has an immediate family member who has received, direct compensation from HP in excess of $60,000 in any 12 month period in the past three years, other than compensation for board service, compensation received by the director's 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.



(3)

(A) The director or an immediate family member is a current partner of the firm that is HP's 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 firm's 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 HP's audit within that time.



(4)

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 HP's present executive officers at the same time serves or has served on that company's compensation committee.



(5)

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 or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of the recipient's consolidated gross revenues.



(6)

The director is, or an immediate family member is, a partner in, or a controlling shareholder or an executive officer of, any organization to which HP made, or from which HP received, payments for property or services in the current or any of the past three fiscal years that exceed the greater of 5% of the recipient's consolidated gross revenues for that year, or $200,000.

        For these purposes, an "immediate family" member includes a director's spouse, parents, children, siblings, mother and father-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone who shares the director's home.

Board Structure and Committee Composition

        As of the date of this proxy statement, our Board has nineten directors and the following five committees: (1) Acquisitions, (2) Audit, (3) HR and Compensation, (4) Nominating and Governance, and (5) Technology. The committee membership and meetings during the last fiscal year and the function of each of the committees are described below. Each of the committees operates under a written charter adopted by the Board. All of the committee charters are available on HP's website at http://www.hp.com/ /www.hp.com/hpinfo/investor/structure.html. During fiscal 2004,2005, the Board held eight16 meetings. Each current director attended at least 75% of all Board and applicable committee meetings. Directors are encouraged to attend annual meetings of HP stockholders. EightAll then-current directors attended the last annual meeting of stockholders.




Name of Director		Acquisitions(1)		Audit(2)		HR and Compensation		Nominating and Governance		Technology
Non-Employee Directors:
Patricia C. Dunn(3)				Member
Lawrence T. Babbio, Jr.(4)		Chair		*		Chair		Member
Philip M. Condit(5)						*		*
Sam Ginn(6)						*		*
Richard A. Hackborn										Member
Dr. George A. Keyworth II(7)		Member		Member						Chair
Robert E. Knowling, Jr.(8)				*		Member		Chair
Sanford M. Litvack(9)				*
Thomas J. Perkins(10)						*				*
Robert L. Ryan(11)		Member		Chair						Member
Lucille S. Salhany						Member		Member
Former Employee Director
Carleton S. Fiorina(12)
Number of Meetings in Fiscal 2004		3		16		7		5		6

Name of Director		Acquisitions		Audit		HR and Compensation		Nominating and Governance		Technology
Non-Employee Directors:
Patricia C. Dunn(1)				Member
Lawrence T. Babbio, Jr.		Chair				Chair		Member
Richard A. Hackborn										Member
John H. Hammergren(2)						Member				Member
George A. Keyworth II		Member		Member						Chair
Robert E. Knowling, Jr.(3)						*		*
Sanford M. Litvack(4)				*
Thomas J. Perkins(5)								Chair		Member
Robert L. Ryan		Member		Chair						Member
Lucille S. Salhany						Member		Member
Employee Directors
Mark V. Hurd(6)
Robert P. Wayman(7)
Former Employee Director
Carleton S. Fiorina(8)
Number of Meetings in Fiscal 2005		7		15		9		4		6

---

* = Former Committee Chair or member

(1)

The Acquisitions Committee was established in March 2004.



(2)

The Finance and Investment Committee, which consisted of Mr. Babbio as Chair, Ms. Dunn, Mr. Knowling and Mr. Litvack, held one meeting in November 2003, then it terminated and its functions were taken over by the Audit Committee and the Acquisitions Committee in March 2004.



(3)

Ms. Dunn served as Chair of the Audit Committee until March 2004. The Board elected Ms. Dunn Non-Executivenon-executive Chairman of the Board on February 8, 2005.



(4)(2)

Mr. BabbioHammergren was a member ofelected to the Audit Committee from May 2003 to March 2004.Board effective November 22, 2005. Mr. Babbio has served as Chair of the Acquisitions Committee andHammergren joined the HR and Compensation Committee since March 2004.and the Technology Committee effective January 11, 2006.



(5)(3)

Mr. Condit did not stand for reelection andKnowling retired from the Board in March 2004. Mr. Conditon September 23, 2005. Prior to his retirement, he served as Chair ofon the HR and Compensation Committee until his retirement from the Board.



(6)

Mr. Ginn did not stand for re-election and retired from the Board in March 2004. Mr. Ginn served as Chair of the Nominating and Governance Committee until his retirement from the Board.Committee.



(7)

Dr. Keyworth has served as Chair of the Technology Committee since March 2004.



(8)

Mr. Knowling joined the HR and Compensation Committee in March 2004, and he joined the Nominating and Governance Committee and became its Chair in May 2004. He served as a member of the Audit Committee until March 2004.



(9)(4)

Mr. Litvack resigned from the Board on February 2, 2005. Mr. Litvack did not attend 75% of all Board and applicable committee meetings in fiscal 2005.



(10)(5)

Mr. Perkins did not stand for re-election at the 2004 annual meeting of stockholders and retired from the Board in March 2004. Mr. Perkins served as Chair of the Technology Committee until his retirement from the Board. Mr. Perkins was re-electedelected to the Board on February 7, 2005. He became the Chair of the Nominating and Governance Committee on July 21, 2005.



(11)(6)

Mr. RyanHurd was elected to the Board in March 2004. Mr. Ryan joined the Audit Committee and became its Chair in March 2004. Mr. Ryan joined the Acquisitions Committee and the Technology Committee in March 2004.effective April 1, 2005.



(12)(7)

Mr. Wayman was elected to the Board on February 8, 2005.



(8)

Ms. Fiorina terminated as Chairman and Chief Executive Officer and resigned as a director on February 8, 2005.




Acquisitions Committee

The Acquisitions Committee overseesassists the scope, direction, quality, investment levels and execution ofBoard in overseeing HP's investment, acquisition, managed services, joint venture and divestiture transactions as part of HP's business strategy. The Acquisitions Committee reviewsevaluates and evaluates guidelines forrevises policies with respect to such transactions, and reviews and approves proposed transactions in accordance with such guidelines.policies. The Acquisitions Committee also evaluatesoversees HP's integration planning and execution, and the financial results of transactions after integration.

The charter of the Acquisitions Committee is available at http://www.hp.com/hpinfo/investor/structure.html.

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 Act"). The Audit Committee assists the Board in fulfilling its responsibilities for general oversightgenerally overseeing HP's financial reporting processes and the audit of HP's financial statements, including the integrity of HP's financial statements, HP's compliance with legal and regulatory requirements, the qualifications and independence of the independent registered public accounting firm, the performance of HP's internal audit function and the independent registered public accounting firm, risk assessment and risk management, and finance and investment functions. Among other things, the Audit Committee prepares the Audit Committee report for inclusion in the annual proxy statement; annually reviews its charter and performance; appoints, evaluates and determines the compensation of the independent registered public accounting firm; reviews and approves the scope of the annual audit, the audit fee and the financial statements; reviews HP's 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 HP's compliance programs with respect to legal and regulatory requirements; oversees investigations into complaints concerning financial matters; reviews other risks that may have a significant impact on HP's financial statements; overseesreviews the investments and assetsactivities of HP's U.S. pension and welfare benefit plan trusts and the international pension plans of HP's subsidiaries;Investment Review Committee; reviews and oversees treasury matters, HP's loans, loan guarantees and outsourcings; reviews HP Financial Services' capitalization and operations; reviews the activities of Investor Relations; and coordinates with the HR and Compensation Committee regarding the cost, funding and financial impact of HP's equity compensation plans and benefit programs. The Audit Committee works closely with management as well as the independent registered public accounting firm. The Audit Committee has the authority to obtain advice and assistance from, and receive appropriate funding from HP for, outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties.

The Board determined that each of Robert L. Ryan, Chair of the Audit Committee, and Audit Committee members Patricia C. Dunn and Dr. George A. Keyworth II is, and former Audit Committee member Sanford M. Litvack was, an audit committee financial expert as defined by Item 401(h) of Regulation S-K of the Exchange ActSEC rules and independent within the meaning of Item 7(d)(3)(iv) of Schedule 14A of the Exchange Act.applicable listing standards.

The report of the Audit Committee is included herein on page 50.72. The charter of the Audit Committee is available at http://www.hp.com/hpinfo/investor/structure.html and also is included herein as Appendix A. A free printed copy also is available to any stockholder who requests it from the address on page 8.10.

HR and Compensation Committee

The HR and Compensation Committee discharges the Board's responsibilities relating to the compensation of HP's executives and directors; produces an annual report on executive compensation for inclusion in the annual proxy statement; provides general oversight of HP's total rewards compensation structure, including HP's equity compensation plans and benefits programs;structure; reviews and provides guidance on HP's human resources programs; and retains and approves the terms of the retention of compensation consultants and




other compensation experts. Other specific duties and




responsibilities of the HR and Compensation Committee include evaluating human resources and compensation strategiesreviewing senior management selection and overseeing HP's total rewards program; monitoringsuccession 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 HP's equity-based and incentive compensation plans; overseeing non-equity based benefit plans and approving any changes to non-equity based benefitsuch plans involving a material financial commitment by HP; monitoring workforce management programs; recommending toestablishing compensation policies and practices for service on the Board director compensation;and its committees and for the Chairman of the Board; developing guidelines for and monitoring director and executive stock ownership; and annually evaluating its performance and its charter.

The report of the HR and Compensation Committee is included herein beginning on page 43.61. The charter of the HR and Compensation Committee is available at http://www.hp.com/hpinfo/investor/structure.html and also is included herein as Appendix B. A free printed copy is available to any stockholder who requests it from the address on page 8.10.

Nominating and Governance Committee

The Nominating and Governance Committee identifies individuals qualifiedrecommends candidates to become Board members,be nominated for election as directors at HP's annual meeting, consistent with criteria approved by the Board; develops and regularly reviews corporate governance principles and related policies for approval by the Board; oversees the organization of the Board to discharge the Board's duties and responsibilities properly and efficiently; and identifies best practices and recommends corporate governance principles, including givingsees that proper attention is given and making effective responses are made to stockholder concerns regarding corporate governance. Other specific duties and responsibilities of the Nominating and Governance Committee includeinclude: annually assessing the size and composition of the Board;Board, including developing membershipand reviewing director qualifications for approval by the Board; identifying and recruiting new directors consistent with the Board committees; defining specific criteria for board membershipComposition Guidelines and director independence; monitoring compliance with Board and Boardconsidering candidates proposed by stockholders; recommending assignments of directors to committees to ensure that committee membership criteria; annually reviewingcomplies with applicable laws and recommending directors for continued service; coordinatinglisting standards; conducting a preliminary review of director independence and assisting managementfinancial literacy and the Board in recruiting new members to the Board; reviewingexpertise of Audit Committee members; and recommendingoverseeing director orientation and continuing education. The Nominating and Governance Committee also reviews proposed changes to HP's charter or bylawsCertificate of Incorporation, Bylaws and Board committee charters; assessing periodicallyassesses and recommending action with respect tomakes recommendations regarding stockholder rights plans or other stockholder protections; recommending Board committee assignments; reviewingprotections, as appropriate; reviews and approvingapproves any employee directorexecutive officers for purposes of Section 16 of the Exchange Act ("Section 16 Officers") standing for election for outside for-profit boards of directors; reviewing governance-relatedreviews stockholder proposals and recommending Board responses; overseeing the evaluation of the Board and management; conducting a preliminary review of director independence and the financial literacy and expertise of Audit Committee members; and reviewing material and extraordinary claims for indemnification of directors, officers and non-officer employees of HP and its subsidiaries. Annually the Chairman of the Nominating and Governance Committee worksin conjunction with the Chairman of the HR and Compensation Committee to evaluate the performance of the Chairman of the Board and CEO and presentrecommends Board responses; oversees in conjunction with the resultsChairman of the review toBoard the self-evaluation of the Board and toits committees; ensures that the annual evaluation of the CEO is conducted by the Chairman and CEO. The Chair of the NominatingBoard in conjunction with the HR and GovernanceCompensation Committee also receives communications directed to non-management directors.with input from all Board members; evaluates senior management in conjunction with the HR and Compensation Committee; and reviews requests for permissive indemnification.

The charter of the Nominating and Governance Committee is available at http://www.hp.com/hpinfo/investor/structure.html and also is included herein as Appendix C. A free printed copy is available to any stockholder who requests it from the address on page 8.10.

Technology Committee

The Technology Committee assesses the health of HP's technology development strategies and the scope and quality of HP's intellectual property. ItThe Technology Committee makes recommendations to the Board as to scope, direction, quality, investment levels and execution of HP's technology strategies. It provides guidance onstrategies; oversees the execution of technology strategies formulated by HP's internal technology council andmanagement; provides guidance on technology as it may pertain to, among other things, market entry and exit;exit, investments, mergers, acquisitions and divestitures;divestitures, new




business divisions and spin-offs;spin-offs, research and development investments;investments, and key competitor and partnership strategies.strategies; and reviews and makes recommendations on proposed investment, acquisition, joint venture and divestiture transactions with a value of at least $100 million that involve technology prior to any review by the Acquisitions Committee or the Board pursuant to HP's M&A approval policies.

The charter of the Technology Committee is available at http://www.hp.com/hpinfo/investor/structure.html.




Consideration of Stockholder Recommendations for Director Nominees

Stockholder nomineesrecommendations

The policy of the Nominating and Governance Committee is to consider properly submitted stockholder nominations forrecommendations of candidates for membership on the Board to be included in HP's proxy statement as described below under "Identifying and Evaluating NomineesCandidates for Directors." In evaluating such nominations,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 "Director Qualifications." Any stockholder nominationsrecommendations proposed for consideration by the Nominating and Governance Committee should include the nominee'scandidate's name and qualifications for Board membership and should be addressed to:

Corporate Secretary
Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304
Fax: (650) 857-4837

Stockholder Nominations

In addition, the bylawsBylaws of HP 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 HP's bylaws, see "Questions and Answers about the Proxy MaterialsAnswers—Stockholder Proposals, Director Nominations and the Annual Meeting—What is the deadline to propose actions for consideration at next year's annual meeting of stockholdersRelated Bylaw Provisions—28. How may I recommend or to nominate individuals to serve as directors?" on page 7.

Director Qualifications

HP's Corporate Governance Guidelines contain Board membership criteria that apply to nominees recommended by the Nominating and Governance Committee for a position on HP's Board. Under these 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 the public interest.service. They should be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and 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.

Identifying and Evaluating NomineesCandidates for Directors

The Nominating and Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Nominating and Governance Committee 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 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. These 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 nominationsrecommendations for candidates for the Board to be included in HP's 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 issuance of the proxy statement for HP's 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. Sari M. Baldauf, a nominee for election to HP's Board, was identified by the search firm.

On February 7, 2005 and February 8,November 18, 2005, the Board elected Thomas J. Perkins and Robert P. Wayman, respectively, as directors. Mr. Perkins previously servedJohn Hammergren as a director from May 2002 until March 2004.effective November 22, 2005. Mr. Wayman previously served as a director from December 1993 until May 2002. Neither Mr. Perkins nor Mr. WaymanHammergren was identified by the professional search firm.an HP director.

Executive Sessions

Executive sessions of independent directors are held at least three times a year. The sessions are scheduled and chaired by the ChairChairman of the Nominating and Governance Committee, the Non-Executive Chairman or any other director whom the Board from time to time may request to preside at such sessions.Board. Any non-managementindependent director may request that an additional executive session be scheduled.

Communications with the Board

Individuals may communicate with the Board by submitting an e-mail to HP's Board atbod@hp.com or by sending a letter to:contacting:

Rosemarie Thomas
Secretary to the Board of Directors
3000 Hanover Street, MS 1050
Palo Alto, CA 94304
e-mail: bod@hp.com

All directors have access to this correspondence. Communications that are intended specifically for non-management directors should be sent to the e-mail address or street address noted above, to the attention of the Chair of the Nominating and Governance Committee. 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. HP's independent directors have requested that certain items that are unrelated to the Board's duties, such as spam, junk mail, mass mailings, solicitations, resumes and job inquiries, not be posted.

Policy regarding Stock Option Expensing

At HP's annual meeting        Communications that are intended specifically for independent or non-management directors should be sent to the e-mail address or street address noted above, to the attention of stockholders held in March 2004, a majoritythe Chairman of votes cast were voted in favor of an advisory stockholder proposal requesting that the Board establish a policy of expensing the costs of all future stock options issued by HP, and HP announced that it would duly consider this recommendation. The Board appreciates and takes seriously the views expressed by HP stockholders and has carefully deliberated the issues relating to expensing employee stock options over the course of several meetings in order to respond appropriately to this proposal.

HP has sought clarity and guidance from the appropriate authorities on the requirement to expense options and the rules and guidelines for such expensing. Now that these requirements and guidelines have been clarified through the Financial Accounting Standards Board's issuance of Statement of Financial Accounting Standards No. 123 (revised) in December 2004, HP expects to begin expensing all share-based payments to employees, including stock options, in the fourth quarter of 2005.Board.







New York Stock Exchange Certification

The certification of the Chief Executive Officer required by the New York Stock Exchange Listing Standards, Section 303A.12(a), relating to HP's compliance with the New York Stock Exchange Corporate Governance Listing Standards, was submitted to the New York Stock Exchange on April 15, 2004.

Common Stock and Dividends

HP is listed on the NYSE, NASDAQ and the Pacific Exchange, with the ticker symbol HPQ. HP has paid cash dividends each year since 1965. The current rate is $0.08 per share per quarter.

Headquarters Information

        HP's headquarters are located at 3000 Hanover Street, Palo Alto, California 94304-1112, and the telephone number is (650) 857-1501. HP's regional headquarters are as follows: (1) Americas—20555 SH 249, Houston, Texas 77070, telephone number (281) 370-0670; (2) Europe, Middle East, Africa—Route du Nant-d'Avril 150, CH-1217 Meyrin 2, Geneva, Switzerland, telephone number (41) 22 780-8111; and (3) Asia Pacific—450 Alexandra Road, Singapore 119960, telephone number (65) 6275-3888.





DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES


        The following table provides information on HP's compensation and reimbursement practices for non-employeeEmployee directors as well as the range of compensation paid to non-employee directors who served during fiscal 2004. Director compensation increased to the amounts shown below on March 17, 2004, upon the election of directors at the HP 2004 annual meeting of stockholders. Prior to March 17, 2004, directors received an annual retainer of $100,000 and the Chair of each committee received an additional retainer of $5,000. Ms. Fiorina diddo not receive any separate compensation for hertheir Board activities, and Mr. Wayman will notactivities. Non-employee directors receive any separatethe compensation for his Board activities.described below.

NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL 2004
Annual retainer		$200,000
Minimum percentage of annual retainer to be paid in HP securities(1)		75%(2)
Additional retainer for Chair of any committee(3)		$10,000 - $15,000
Reimbursement for expenses attendant to Board membership(4)		Yes
Range of compensation earned by directors (for the year)(5)		$200,000 - $220,000

---

⁽¹⁾

Each non-employee director is entitled to receive an annual cash retainer of $50,000 but may elect to receive an equivalent amount of securities in lieu of the cash retainer. In addition, each non-employee director is entitled to receive an annual retainer of $150,000 in the form of restricted stock or stock options (under special circumstances, the securities portion of the annual retainer may be paid in a grant of restricted stock or stock options.cash, but no such exceptions were made during fiscal 2005). The restricted stock awards are determined based on the fair market value of HP common stock on the grant date, and stock options are determined based on a modified Black-Scholes option valuation model.



⁽²⁾

Under special circumstances, less than 75% may be paid The restricted stock and options generally vest after one year from the date of grant, which is approximately one month after the annual meeting. In November 2005, HP amended the Hewlett-Packard Company 2005 Executive Deferred Compensation Plan to permit non-employee directors to elect to defer the cash portion of their annual retainer.

        In addition to the annual retainer, non-employee directors who serve as committee chairs receive a retainer for such service, in securities.



⁽³⁾

The additional retainerthe amount of $15,000 for the Chair of the Audit Committee is $15,000.



⁽⁴⁾

Reimbursementand $10,000 for the chair of expenses includes expenses related to directors' spouses when spouses are invited to attendother Board events.



⁽⁵⁾

Directorscommittees. In addition, on January 23, 2006, the HR and Compensation Committee determined that the non-executive Chairman of the Board will receive an additional retainer of $100,000, effective March 16, 2006. Non-employee directors also receive $2,000 for each Board meeting attended in excess of six per year, and an additional $2,000 for each committee meeting attended in excess of six per year for each committee on which the non-employee director serves.

Non-employee directors are reimbursed for their expenses in connection with attending Board meetings (including expenses related to spouses when they are invited to attend Board events), and non-employee directors may use the company aircraft for travel to and from HP events. Non-employee directors also may receive up to $2,500 worth of HP equipment each year.

        The following table provides information on fiscal 2005 compensation for non-employee directors who served during fiscal 2005.

NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL 2005
Name		Cash Retainer			Equity Retainer			Additional Meeting Fees			Committee Chair Fees			HP Equipment			Total
Patricia C. Dunn			—		$	200,000		$	36,000			—		$	399	(1)	$	236,399
Lawrence T. Babbio, Jr.		$	50,000			150,000			26,000		$	20,000			—			246,000
Richard A. Hackborn			50,000			150,000			20,000			—			399			220,399
George A. Keyworth II			50,000			150,000			40,000			10,000			1,991			251,991
Thomas J. Perkins			—			200,000			8,000			2,500	(2)		1,692			212,192
Robert L. Ryan			50,000			150,000			38,000			15,000			—			253,000
Lucille S. Salhany			50,000			150,000			16,000			—			—			216,000
Former Directors
Robert E. Knowling, Jr.(3)			37,500			150,000			22,000			7,500			—			217,000
Sanford M. Litvack(4)			12,500			—			—			—			—			12,500




        Under HP's stock ownership guidelines, fornon-employee directors during fiscal 2004, all directors wereare required to accumulate over time shares of HP stock equal in value to at least twice the value of the annual retainer. In November 2004, the guidelines were changed to require directors to accumulate over time shares of HP stock equal in value to at least three times the value of the regular annual retainer.cash and equity retainers. Shares counted toward these guidelines include:

•

any shares held by the director directly or through a broker, including shares received under restricted stock grants;



•

restricted stock; and



•

vested but unexercised stock options (50% of the in-the-money value of such options is used for the calculation).

        All non-employee directors with more than two years of service have met HP's stock ownership guidelines. See "Common Stock Ownership of Certain Beneficial Owners and Management" on page 33.

---

(1)

Ms. Dunn donated this HP equipment to Larkin Street Youth Services, a charity.



(2)

Mr. Perkins became Chair of the Nominating and Governance Committee on July 21, 2005.



(3)

Mr. Knowling retired from the Board on September 23, 2005.



(4)

Mr. Litvack resigned from the Board on February 2, 2005.





PROPOSALS TO BE VOTED ON

PROPOSAL NO. 1

ELECTION OF DIRECTORS


        There are nineeleven nominees for election to our Board this year. All of the nominees except Thomas J. PerkinsSari M. Baldauf, John H. Hammergren and Robert P. WaymanMark V. Hurd have served as directors since the last annual meeting. Mr. Perkins and Mr. Wayman were re-electedHammergren was elected by the Board to serve as directors on February 7, 2005 and February 8, 2005, respectively.a director effective November 22, 2005. Mr. Hurd was elected by the Board to serve as a director effective April 1, 2005. Information regarding the business experience of each nominee is provided below. Each director is elected annually to serve until the next annual meeting or until his or her successor is elected. There are no family relationships among our executive officers and directors.

        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 nineeleven 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 directors. If you wish to cumulate your votes, you will need to indicate explicitly your intent to cumulate your votes among the nineeleven persons who will be voted upon at the annual meeting. See "Questions and Answers About the Proxy Materials and the Annual Meeting—Answers—Voting Information 18. Is cumulative voting permitted for the election of directors?" on page 5 for further information about how to cumulate your votes. Patricia C. Dunn, Robert P. WaymanMark V. Hurd and Ann O. Baskins, 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 stockholder's votes will not be cast for a nominee as to whichwhom such stockholder instructs that such votes be withheld.

        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, however, the proxy holders, Ms. Dunn, Mr. WaymanHurd and Ms. Baskins, will vote for a nominee or nominees designated by the Board, unless the Board chooses to reduce the number of directors serving on the Board.

        If a director nominee receives a greater number of votes "withheld" from 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 the policy adopted by the Board in fiscal 2005 and described on page 10.

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

Vote Required

        The nineeleven persons receiving the highest number of "for" votes represented by shares of HP common stock present in person or represented by proxy and entitled to be voted at the annual meeting will be elected.

Lawrence T. Babbio, Jr. Director since 2002 Age 60		Mr. Babbio has served as Vice Chairman and President of Verizon Communications, Inc. (formerly Bell Atlantic Corporation) since 2000. In 1997 he was elected President and Chief Operating Officer—Network Group, and Chairman—Global Wireless Group of Bell Atlantic. Mr. Babbio was a director of Compaq from 1995 until May 2002, the date of the acquisition of Compaq Computer Corporation ("Compaq"). Mr. Babbio is also a director of ARAMARK Corporation.
Patricia C. Dunn Director since 1998 Age 5152		Ms. Dunn has served as Non-Executivewas named non-executive Chairman of the HP Board sincein February 8, 2005. SheMs. Dunn was appointed Vice Chairman of Barclays Global Investors, (BGI)an investment company, in 2002 and served as its Co-Chairman, Chairman and Chief Executive Officer from October 1995 through June 2002.






Lawrence T. Babbio, Jr. Director since 2002 Age 61		Mr. Babbio has served as Vice Chairman and President of Verizon Communications, Inc. (formerly Bell Atlantic Corporation), a telecommunications company, since 2000. He was a director of Compaq Computer Corporation ("Compaq") from 1995 until HP's acquisition of Compaq in May 2002. Mr. Babbio is also a director of ARAMARK Corporation.
Sari M. Baldauf Nominee Age 50		Ms. Dunn advisesBaldauf served as Executive Vice President and General Manager of the Networks business group of Nokia Corporation ("Nokia"), a communications company, from July 1998 until February 2005. She previously held various positions at Nokia since 1983. Ms. Baldauf also serves as a director at SanomaWSOY, F-Secure, the Savonlinna Opera Festival and on strategy and key business issues for BGI, the world's largest institutional investment manager.Global Board of the International Youth Foundation.
Richard A. Hackborn Director since 1992 Age 6768		Mr. Hackborn served as HP's Chairman of the HP Board from January 2000 to September 2000. He was HP's Executive Vice President, Computer Products Organization from 1990 until his retirement in 1993 after a 33-year career with HP.
John H. Hammergren Director since 2005 Age 46		Mr. Hammergren has served as Chairman of McKesson Corporation ("McKesson"), a healthcare services and information technology company, since July 2002 and as President and Chief Executive Officer of McKesson since April 2001. From July 1999 to April 2001, Mr. Hammergren served as Co-President and Co-Chief Executive Officer of McKesson. Mr. Hammergren is also a director of Nadro, S.A. de C.V. (Mexico) and Verispan LLC.




Mark V. Hurd Director since 2005 Age 49		Mr. Hurd has served as Chief Executive Officer of HP ("CEO"), President and a member of the Board since April 1, 2005. Prior to that, he served as Chief Executive Officer of NCR Corporation ("NCR"), a technology company, from March 2003 to March 2005 and as President from July 2001 to March 2005. From September 2002 to March 2003 Mr. Hurd was the Chief Operating Officer of NCR, and from July 2000 until March 2003, he was Chief Operating Officer of NCR's Teradata data-warehousing division. Mr. Hurd also served as an Executive Vice President of NCR from July 2000 through July 2001.
Dr. George A. Keyworth II Director since 1986 Age 6566		Dr. Keyworth has served as the Chairman and Senior Fellow with The Progress & Freedom Foundation, a public policy research institute, since 1995. He was Science Advisor to the President and Director of the White House's Office of Science and Technology Policy from 1981 to 1986. He also is a director of General Atomics. Dr. Keyworth holds various honorary degrees and is an honorary professor at Fudan University in Shanghai, People's Republic of China.
Robert E. Knowling, Jr. Director since 2000 Age 49		Mr. Knowling has served as Chief Executive Officer of the New York City Leadership Academy at the New York City Board of Education since January 2003. From February 2001 to January 2003, Mr. Knowling served as the Chairman and Chief Executive Officer of Simdesk Technologies Inc., a software development company. From July 1998 through October 2000, he was President and Chief Executive Officer of Covad Communications Company, a national broadband service provider of high speed Internet and network access. He also served as Chairman of Covad from September 1999 to October 2000. In August 2001, Covad filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Mr. Knowling is a director of Ariba, Inc. and Heidrick & Struggles International, Inc. He also serves as a member of the advisory board for both Northwestern University's Kellogg Graduate School of Management and the University of Michigan Graduate School of Business.
Thomas J. Perkins Director since 2005 Age 7374		The Board of Directors re-elected Mr. Perkins a director on February 7, 2005. He previouslyhas served as a director of HP from May 2002 until March 2004. Mr. Perkins has been a General Partnergeneral partner of Kleiner Perkins Caufield & Byers, a private investment partnership, since 1972, and has served as either a general or limited partner at many of numerous funds formed by it. Mr. Perkinsits funds. He was elected to the Board in February 2005 and previously served as Chairmana director following HP's acquisition of the Board of Directors of Tandem Computers Incorporated from 1974Compaq in May 2002 until 1997.March 2004. Mr. Perkins was a director of Compaq from 1997 until theHP acquired Compaq acquisition. Mr. Perkinsin May 2002. He is also is a director of News Corporation.
Robert L. Ryan Director since 2004 Age 6162		Mr. Ryan has beenserved as Senior Vice President and Chief Financial Officer of Medtronic, Inc., a medical technology company, since 1993.from 1993 until his retirement in May 2005. He also is currently a director of UnitedHealth Group.Group, General Mills and Black and Decker Corporation.




Lucille S. Salhany Director since 2002 Age 5859		Ms. Salhany has been theserved as President and CEOChief Executive Officer of JHMedia, a consulting company, since March 2002.1997. Since 2003, she has been a partner and director of Echo Bridge Entertainment, an independent film distribution company. From 1999 to March 2002, she was President and CEOChief Executive Officer of LifeFX Networks, Inc. In May 2002, LifeFX Networks Inc., which filed for federal bankruptcy protection under Chapter 11in May 2002. From 1994 to 1997, Ms. Salhany was the Chief Executive Officer and President of the United States Bankruptcy Code.UPN (United Paramount Network), a broadcasting company. From 1993 to 1994, she was Chairman of Fox Broadcasting Company, a national television network, and from 1991 to 1993 she was Chairman of Twentieth Television, a division of Fox Broadcasting Company. Ms. Salhany was a director of Compaq from 1997 until theHP's acquisition of Compaq acquisition. She is also a director of American Media, Inc. and Managing Partner of Echo Bridge Entertainment. She is a trustee of Emerson College.in May 2002.
Robert P. Wayman Director since 2005 Age 5960		The Board of Directors re-elected Mr. Wayman a director on February 8, 2005. He previously served as a director of HP from December 1993 until May 2002. Mr. Wayman was elected Chief Executive Officer on an interim basis by the HP Board of Directors on February 8, 2005. He has served as Chief Financial Officer of HP since 1984 and previously served as Executive Vice President since 1992.December 1992 and Chief Financial Officer of HP ("CFO") since 1984. Mr. Wayman served as interim CEO from February 2005 through March 2005. He was elected to the Board in February 2005 and previously served on the Board from 1993 to 2002. Mr. Wayman is also a director of CNF Inc. and Sybase Inc. He also serves as a member of the Kellogg Advisory Board to the Northwestern University School of Business.





PROPOSAL 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 HP's consolidated financial statements for the fiscal year ending October 31, 2005.2006. During fiscal 2004,2005, Ernst & Young LLP served as HP's independent registered public accounting firm and also provided certain tax and other audit-related services. See "Principal Accountant Fees and Services" on page 49.71. 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.

        Our Board recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as HP's independent registered public accounting firm for the 20052006 fiscal year. If the appointment is not ratified, the Board will consider whether it should select another independent registered public accounting firm.

Vote Required

        Ratification of the appointment of Ernst & Young LLP as HP's independent registered public accounting firm for the 2006 fiscal 2005year 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.





PROPOSAL NO. 3

APPROVAL OF AN ADDITIONAL 75 MILLION SHARES FOR
THE HEWLETT-PACKARD COMPANY 2000 EMPLOYEE STOCK PURCHASE2005 PAY-FOR-RESULTS PLAN


        TheOn November 17, 2005 the HR and Compensation Committee of the Board has amended(the "Committee") approved the Hewlett-Packard Company 2005 Pay-for-Results Plan (the "PfR Plan"). The PfR Plan is a continuation of the Hewlett-Packard Company 2000 Employee Stock PurchaseExecutive Pay-for-Results Program, in which HP's Section 16 Officers, and other individuals previously participated. The PfR Plan (the "Share Ownership Plan") to increaseprovides a non-exclusive framework that can satisfy the numberstandards of shares available under the plan by 75 million shares, subject to approval by HP stockholders. If HP's stockholders approve the proposed amendment to the Share Ownership Plan, a total of 175 million shares of common stock (approximately 6%Section 162(m) of the outstanding shares as of December 31, 2004) will be reserved for issuance pursuant to the Share Ownership Plan. The amendment to the Share Ownership Plan providing for 75 million additional shares will not become effective until it is approved by HP's stockholders. Stockholder approval is required by applicable stock exchange listing standards and Section 423(b) of theUnited States Internal Revenue Code of 1986, as amended (the "Code"). Under the PfR Plan the Committee will 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 is asking HPbelieves 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 the additional sharesPfR Plan to fulfill one of the requirements to qualify the amounts paid pursuant to the PfR Plan for a United States federal income tax deduction.

        The Board believes that it is in the best interests of HP and its stockholders to provide for a stockholder-approved plan under which bonuses paid to its Section 16 Officers can qualify for deductibility by HP for federal income tax purposes. Accordingly, HP has structured the PfR Plan in a manner such that payments under it can satisfy the requirements for "performance-based" compensation within the meaning of Section 162(m) of the Code. In general, Section 162(m) of the Code places a limit on the deductibility for federal income tax purposes of the compensation paid to the named executive officers set forth in the Summary Compensation Table on page 37 who were employed by HP on the last day of its taxable year. Under Section 162(m), compensation paid to such persons in excess of $1 million in a taxable year is not generally deductible. However, compensation that qualifies as "performance-based" as determined under Section 162(m) does not count against the $1 million limitation. One of the requirements of "performance-based" 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 company's stockholders. 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 Share Ownershipperformance goal. Each of these aspects of the PfR Plan to assist HP in achieving its goals of increasing profitabilityis discussed below, and stockholder value by providing HP employees an opportunityapproval of the PfR Plan will be deemed to purchase sharesconstitute approval of HP common stock, while also qualifying such shareseach of these aspects of the PfR Plan for special tax treatment under Sections 421 and 423purposes of the approval requirements of Section 162(m) of the Code.

        Our Board recommends a vote FOR the approval of the amendment to increase by 75 million shares the number of shares available pursuant to the Share OwnershipPfR Plan.

Vote Required

        Approval of the proposed amendmentPfR 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 meeting.

SUMMARY OF THE PFR PLAN

        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 Committee" to act on certain compensation and benefits matters. The Plan




Committee will have the responsibility for general administration and interpretation of the PfR Plan, except to the Share Ownershipextent inconsistent with Section 162(m) of the Code. The Plan Committee is composed of HP's 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. HP's non-employee directors are not entitled to participate in the PfR Plan. Currently, HP has fifteen Section 16 Officers who are eligible to participate in the PfR Plan in fiscal 2006.

        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 termination due to death, workforce restructuring, disability, retirement or in connection with certain mutual separation agreements. Adjustments will 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 pursuant to the following policy. In the event of such a restatement, the Board will review all bonuses that were made 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:

•

the performance period (the PfR Plan defines "performance period" to mean HP's fiscal year or such other period that the Committee may establish),



•

the employees (designated by position or name) who will be participants in the PfR Plan for the performance period,



•

the performance measures and targeted performance goals for those measures during the performance period,



•

the bonus formula applicable to each participant for the performance period (which can be set on an individual or group basis),



•

the target bonus opportunity for each participant,



•

the weighting of each performance measure, and



•

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. For example, the Committee determined at its November 2005 meeting that the variable pay programs will have a performance period that coincides with HP's 2006 fiscal year, rather than being composed of two semi-annual performance periods as in prior years. The Committee also determines the performance measures, and associated weighting and targeted goals, for the applicable performance period. For the 2006 fiscal year performance period, the Committee selected non-GAAP net profit and revenue as performance measures, and the threshold funding is based on year-over-year improvement in these performance measures. For certain participants, the Committee determined that the performance measures will also include business net profit and revenue metrics.






        BUSINESS 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 period's 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 ("GAAP") 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 measures, (viii) stock price, (ix) return on equity or average stockholders' 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. However, in no event will the Committee use its discretion to increase a bonus paid to a participant.

        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    The bonus amount for each participant is determined after calculating the amount payable under the bonus formula approved at the beginning of the performance period for the participant. 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 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 HP's executive officers, directors 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 executives, directors 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 all or part of the compensation they would receive under the PfR Plan regardless of whether the performance goal is attained.

        TERM: AMENDMENT AND TERMINATION OF THE PFR PLAN    The PfR Plan is effective as of November 1, 2005, provided that the PfR Plan will terminate unless it is approved at stockholders at the annual meeting. If approved by stockholders, the Committee may establish additional bonus grants for subsequent performance periods until the earlier of (i) its termination at the discretion of the Committee, (ii) the date any stockholder approval requirement under Section 162(m) of the Code ceases to be met or (iii) the date that is five years after the annual meeting.

        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    The following table shows the maximum amounts of the awards that may be paid under the PfR Plan to Section 16 Officers named in the Summary Compensation Table if the performance goals for fiscal 2006 are achieved at the highest levels.

MAXIMUM POTENTIAL AWARDS UNDER THE PAY-FOR-RESULTS PROGRAM
FOR FISCAL 2006

NAME AND POSITION			DOLLAR VALUE ($)
Mark V. Hurd Chief Executive Officer and President			$	9,240,000
Robert P. Wayman Executive Vice President and Chief Financial Officer				4,387,500
Vyomesh I. Joshi Executive Vice President Imaging and Printing Group				2,906,250
Ann M. Livermore Executive Vice President Technology Solutions Group				2,906,250
R. Todd Bradley Executive Vice President Personal Systems Group				2,718,750
Randall D. Mott Executive Vice President and Chief Information Officer				2,587,500
Former Officers
	Carleton S. Fiorina Former Chairman and Chief Executive Officer			0
	Michael J. Winkler Former Executive Vice President			0
Executive Officer Group				37,290,000
Non-Executive Director Group				0
Non-Executive Officer Employee Group				0




FEDERAL INCOME TAX CONSIDERATIONS

        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-based" 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 federal income taxation upon employees and HP with respect to amounts paid pursuant to the PfR Plan. It does not purport to be complete and does not discuss the tax consequences arising in the context of the employee's death or the income tax laws of any municipality, state or foreign country in which the employee's income or gain may be taxable.

INCORPORATION BY REFERENCE

        The foregoing is only a summary of the PfR Plan and is qualified in its entirety by reference to the full text of the PfR Plan, a copy of which is attached hereto as Appendix D.





PROPOSAL NO. 4

STOCKHOLDER PROPOSAL ENTITLED
DIRECTOR ELECTION MAJORITY VOTE STANDARD PROPOSAL


        HP has received a stockholder proposal from The United Brotherhood of Carpenters and Joiners of America ("United Brotherhood of Carpenters"), 101 Constitution Avenue, N.W., Washington, D.C. 20001. The United Brotherhood of Carpenters has requested that HP include the following proposal and supporting statement in its proxy statement for the 2006 annual meeting of stockholders, and if properly presented this proposal will be voted on at the annual meeting. The United Brotherhood of Carpenters beneficially owns 49,700 shares of HP common stock. The stockholder proposal is quoted verbatim in italics below.

        Management of HP does not support the adoption of the resolution proposed below and asks stockholders to consider management's response, which follows the stockholder proposal.

Our Board recommends a vote AGAINST Proposal No. 4.

Vote Required

        Approval of the stockholder proposal 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.

SUMMARY OF THE SHARE OWNERSHIP PLANSTOCKHOLDER PROPOSAL

Director Election Majority Vote Standard Proposal

        GENERAL.Resolved:    The purposeThat the shareholders of Hewlett-Packard Company ("Company") hereby request that the Board of Directors initiate the appropriate process to amend the Company's governance documents (certificate of incorporation or bylaws) to provide that director nominees shall be elected by the affirmative vote of the Share Ownership Planmajority of votes cast at an annual meeting of shareholders.

        Supporting Statement:Our Company is incorporated in Delaware. Delaware law provides that a company's certificate of incorporation or bylaws may specify the number of votes that shall be necessary for the transaction of any business, including the elections of directors. (DGCL, Title 8, Chapter 1, Subchapter VII, Section 216.) The law provides that if the level of voting support necessary for a specific action is not specified in a corporation's certificate or bylaws, directors "shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors."

Our Company presently uses the plurality vote standard to elect directors. This proposal requests that the Board initiate a change in the Company's director election vote standard to provide employeesthat nominees for the board of HP and its designated subsidiaries with an opportunitydirectors must receive a majority of the vote cast in order to purchase HP common stock and, therefore, to have an additional incentive to contributebe elected or re-elected to the prosperity of HP.Board.

        ADMINISTRATION.    The Share Ownership Plan is administered byWe believe that a committee (the "Committee") appointed bymajority vote standard in director elections would give shareholders a meaningful role in the Board. The Committee has full power to interpretdirector election process. Under the Share Ownership Plan, and the decisionsCompany's current standard, a nominee in a director election can be elected with as little as a single affirmative vote, even if a substantial majority of the Board andvotes cast are "withheld" from the Committee are final and binding upon all participants.

        ELIGIBILITY.    Any employeenominee. The majority vote standard would require that a director receive a majority of HP or any HP subsidiary designated by the Committee who is regularly employed for at least 20 hours per week and more than five monthsvote cast in a calendar year on an Entry Date (as defined below) is eligibleorder to participate in the Share Ownership Plan during the Offering Period (as defined below) beginning on that Entry Date, subject to administrative rules established by the Committee. However, no employee is eligible to participate in the Share Ownership Planbe elected to the extent that, immediately afterBoard.

The majority vote proposal received high levels of support last year, winning majority support at Advanced Micro Devices, Freeport McMoRan, Marathon Oil, Marsh and McClennan, Office Depot, Raytheon, and others. Leading proxy advisory firms recommended voting in favor of the grant, that employee would own 5% of either the voting power or the value of HP's common stock, and no employee's rights to purchase HP's common stock pursuant to the Share Ownership Plan may accrue at a rate that exceeds $25,000 per calendar year. Eligible employees become participants in the Share Ownership Plan by filing with HP an enrollment agreement authorizing payroll deductions on a date set by the Committee prior to the applicable Entry Date. As of October 31, 2004, approximately 143,000 HP employees, including 16 executive officers, were eligible to participate in the Share Ownership Plan.

        PARTICIPATION IN AN OFFERING.proposal.    The Share Ownership Plan is implemented by offering periods lasting for six months (an "Offering Period"). The duration and timing of Offering






PeriodsSome companies have adopted board governance policies requiring director nominees that fail to receive majority support from shareholders to tender their resignations to the board. We believe that these policies are inadequate for they are based on continued use of the plurality standard and would allow director nominees to be elected despite only minimal shareholder support. We contend that changing the legal standard to a majority vote is a superior solution that merits shareholder support.

Our proposal is not intended to limit the judgment of the Board in crafting the requested governance change. For instance, the Board should address the status of incumbent director nominees who fail to receive a majority vote under a majority vote standard and whether a plurality vote standard may be changed or modified byappropriate in director elections when the Committee.number of director nominees exceeds the available board seats.

We urge your support for this important director election reform.


MANAGEMENT STATEMENT IN OPPOSITION TO STOCKHOLDER PROPOSAL


        This proposal requests that HP adopt a majority voting standard for director elections so that stockholders have a meaningful role in the director election process. As noted in the proposal, HP, a Delaware company, uses a plurality voting standard, the default under Delaware law. The first six-month Offering Period commencedplurality voting standard provides that the nominees who receive the most affirmative votes are elected to serve as HP directors. Most large public companies that are incorporated in Delaware and elsewhere use a plurality voting standard.

        After careful consideration, we recommend a vote against this proposal because HP has already implemented a policy (described below) that addresses the proponent's concerns. Moreover, the plurality voting standard is compatible with HP's cumulative voting provisions, which allow stockholders to aggregate their votes for a single director nominee, and therefore provide stockholders a meaningful ability to express their preferences in the election of directors.

        As announced on November 1, 2004. Prior to November 1, 2004, each Offering Period lasted two years. The Share Ownership Plan was amended on August 25, 2004 to reduce Offering Periods2, 2005, HP has adopted a policy whereby any director nominee who receives a greater number of votes "withheld" from 24 months to six months. Every six months on the last trading day of each Offering Period (a "Purchase Date") common stock is purchased under the Share Ownership Plan unless the participant becomes ineligible, withdraws or terminates employment earlier. To participate in the Share Ownership Plan, each eligible employee must authorize payroll deductions pursuant to the Share Ownership Plan. Such payroll deductions may not exceed 10% of a participant's eligible compensation and also are subject to the limitations discussed above. Subject to these limitations, a participant may increase or decrease his or her rateelection than votes "for" such election will tender his or her resignation for consideration by the Nominating and Governance Committee. HP believes that this policy is effective in giving stockholders a meaningful role in the election of contribution through payroll deductions at any time. Each participantdirectors and in removing a director opposed by stockholders. Under HP's policy, a nominee and incumbent director who hasreceives a majority of withheld votes would tender his or her resignation and could be removed from the Board. By contrast, the majority voting standard requested by the proposal only addresses the voting requirement for being elected to participatethe Board. It does not remove incumbent directors who have not received a majority vote because under Delaware law, an incumbent director who is automatically granted an optionnot re-elected "holds over" and continues to purchase sharesserve with the same voting rights and powers until his or her successor is elected and qualified. Therefore, even if the proposal were adopted, HP could not force a director who failed to receive a majority vote to leave the Board until the next annual meeting.

        The HP policy also gives stockholders a meaningful role in the director election process without interfering with cumulative voting. The ability to cumulate votes in director elections is universally recognized as protecting stockholder rights. A majority voting standard may raise difficult issues in the context of common stockcumulative voting. While the rules governing plurality voting are well understood, majority voting at companies that have cumulative voting presents technical and legal issues for which there is no precedent. These difficulties have led the American Bar Association Committee on Corporate Laws, the Entry Date. The Entry Date isCouncil of Institutional Investors and the first trading dayInstitutional Shareholder Services Institute for Corporate Governance to indicate that majority voting should not apply to companies that allow cumulative voting. HP's voting system must be a reliable process for the election of qualified directors to represent the Offering Period (an "Entry Date"). The option expiresinterests of all of our stockholders. In the absence of uniform, workable standards that can be consistently applied by all companies and that take into account the special circumstances of companies with cumulative voting, HP believes it would be inappropriate to adopt a majority voting standard.

        For the reasons described above, the Board recommends a vote AGAINST this proposal.





PROPOSAL NO. 5

STOCKHOLDER PROPOSAL ENTITLED
RECOUP UNEARNED MANAGEMENT BONUSES


        HP has received a stockholder proposal from Mr. Nick Rossi, custodian for Katrina Wubbolding, P.O. Box 249, Boonville, California, 95415. Mr. Rossi has requested that HP include the following proposal and supporting statement in its proxy statement for the 2006 annual meeting of stockholders, and if properly presented this proposal will be voted on 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 payroll deductions accumulated during such Offering Period. The number ofannual meeting. Mr. Rossi beneficially owns 206 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 during an Offering Period.

        PURCHASE PRICE, SHARES PURCHASED.    Shares of common stock may be purchased under the Share Ownership Plan at a price equal to not less than 85% of the fair market value of the common stock on (i) the Entry Date or (ii) the Purchase Date, whichever is less. On December 31, 2004, the closing price per share of HP common stock was $20.97.stock. The numberstockholder proposal is quoted verbatim in italics below.

        Management of HP does not support the adoption of the resolution proposed below and asks stockholders to consider management's response, which follows the stockholder proposal.

Our Board recommends a vote AGAINST Proposal No. 5.

Vote Required

        Approval of the stockholder proposal requires the affirmative vote of a majority of the shares of HP common stock a participant purchasespresent in each Offering Period is determinedperson or represented by dividingproxy and entitled to be voted on the total amount of payroll deductions withheld fromproposal at the participant's compensation during that Offering Period by the purchase price.annual meeting.

STOCKHOLDER PROPOSAL

5—Recoup Unearned Management Bonuses

        TERMINATION OF EMPLOYMENT.RESOLVED:    TerminationRecoup Unearned Management Bonuses. Shareholders request our board to adopt a policy whereby, in the event of a participant'ssignificant restatement of financial results or significant extraordinary write-off, our board will review all bonuses and any other awards that were made to senior executives on the basis of having met or exceeded specific performance targets during the restatement period and will recoup for the benefit of our Company all such bonuses or awards to the extent that the specified performance targets were not achieved and focus on those employees most responsible. This would include that all applicable employment agreements adopt enabling text in an expedited manner as soon as feasibly possible and/or retroactively.

Important Because Our Board Has a Record of Overcompensation

On February 8, 2005 our Board ousted our chairperson Carleton Fiorina. Our board shoulders much of the blame for any reason, including death, immediately cancels his orboth Ms. Fiorina's pay and her option and participationfailure. Our board delivered excess pay to Ms. Fiorina in the Share Ownership Plan. In such event,beginning, front-loaded, with a massive value not related to performance.

Ms. Fiorina received almost $180 million in pay during her tenure, including a $21 million severance.

Our Board approved the payroll deductions creditedpay in question, including the "golden hello", the excess base salary, the substantial stock option awards and the excessive severance package. None of these were properly tied to performance, indeed most were completely independent of it. Consequently our board should not be surprised that since October 1998, Hewlett-Packard lost $41 in share price. If pay is delivered regardless of performance, there is no incentive to deliver performance. If our board had made all but the basic fixed elements of Ms. Fiorina's pay dependent on both turning HP around and realizing the so-called promise of the Compaq merger, then HP stockholders would be richer.

Text of the above three paragraphs based on a 2005 report from The Corporate Library (TCL), an independent investment research firm in Portland, Maine.






Similar to Proposal Voted at Computer Associates

This proposal is similar to the participant's account will be returned without interest to him or her or,proposal voted at the Computer Associates (CA) August 2004 annual meeting. In October 2003 Computer Associates announced that it had inflated revenues in the case of death,fiscal year ending March 31, 2000 by reporting revenue from contracts before they had been signed.

Bonuses for senior executives that year were based on income exceeding goals. Sanjay Kumar, then CEO, received a $3.2 million bonus and 80,000 shares based on Computer Associates' supposedly superior performance in 2000. Mr. Kumar did not offer to return his bonuses based on discredited earnings.

There is no excuse for over-compensation based on discredited earnings at any company. This proposal will give shareholders more options if we find ourselves in a situation with similarities to the personComputer Associates scenario. If it appears that our Company reported erroneous results that must be restated downward, then our board should be enabled by adoption of this proposal to recoup money that was not earned or persons entitled to those deductions.deserved.

        ADJUSTMENTS UPON CHANGESRecoup Unearned Management Bonuses
Yes on 5


MANAGEMENT STATEMENT IN CAPITALIZATION, MERGER OR SALE OF ASSETS.OPPOSITION TO STOCKHOLDER PROPOSAL
    In

        The HR and Compensation Committee of the event that HP common stockBoard, which is changed by reasoncomposed solely of any stock split, stock dividend, combination, recapitalization or other similar changesindependent directors, sets executive compensation in HP's capital structure effected without the receipt of consideration, appropriate proportional adjustments maya manner it believes to be made in the numberbest interests of shares of stock subjectHP and its stockholders. HP's executive compensation programs are designed to the Share Ownership Plan, the number of shares of stockattract and retain highly qualified executives and to be purchased pursuantmotivate executives to an optionmaximize stockholder returns. The HR and Compensation Committee and the price per shareBoard agree that a review of common stock coveredexecutive performance-based compensation is appropriate when results are restated due to fraud or misconduct, and the Board has adopted a policy that addresses the fundamental concerns expressed by an option. Any such adjustment will be madethe proposal. The Board believes that the key concerns expressed by this proposal are already addressed by the policy adopted by the Board, whose determination shallas well as the Sarbanes-Oxley Act of 2002. In contrast, the stockholder proposal adopts an overly mechanistic approach to this issue. In addition, the Board believes that it would be conclusivedifficult or impossible to implement some aspects of this proposal because the proposal is vague in some respects and binding. would cause HP to violate existing contractual obligations in other respects. Accordingly, after careful consideration, the Board recommends a vote against the stockholder's proposal.

        The Board believes that the fundamental concerns expressed by the proposal are already largely addressed. Upon the recommendation of the HR and Compensation Committee, the Board has implemented a policy that accomplishes many of the underlying goals raised by the proposal, without mechanistically recouping bonuses in inequitable circumstances or violating HP's existing contractual commitments. In particular, the policy provides:

In the event of a proposed salesignificant restatement of financial results, our Board will review all bonuses that were made to senior executives on the basis of having met or substantiallyexceeded specific performance targets for performance periods beginning after December 31, 2005 which occur during 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 for the benefit of our company all such bonuses to senior executives whose fraud or misconduct resulted in such restatement, as determined by the Board. For purposes of this policy, the term "senior executives" means executive officers for purposes of the assetsSecurities Exchange Act of HP or1934, as amended, and the merger or consolidationterm "bonuses" means bonuses and awards under the Pay-for-Results Program and the Long-Term Performance Cash Program.

        Moreover, the Sarbanes-Oxley Act of HP with another company,2002 already requires that in 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 Share Ownership Plan at any time, except that without stockholder approval the Board may not increase the numbercase of shares subjectaccounting restatements due to the Share Ownership Plan other than pursuant to adjustments upon changes in capitalizationissuer's material non-compliance, as described. The Share Ownership Plan will continue until November 1, 2010, unless otherwise terminated bya result of misconduct, with any financial reporting requirement under the Board.

        WITHDRAWAL.    Generally, a participant may withdraw fromsecurities laws, the Share Ownership Plan during an Offering Period prior to the date established by the Committee as the change enrollment deadline, which generally is three weeks before a Purchase Date. The Committee may establish rules limiting the frequency with which participants may withdrawcompany's chief executive officer and re-enroll and may establish a waiting period for participants wishing to re-enroll.chief financial officer






        SUB-PLANS.must reimburse the company for any bonus or other incentive-based or equity-based compensation and profits from the sale of the company's securities during the 12-month period following initial publication of the financial statement that had to be restated.

        The Committee may adopt rules, proceduresproposal is fundamentally flawed because of its mechanistic approach. Under the proposal, the Board would be required to recoup all affected bonuses and awards to executive officers without regard to the relevant facts and circumstances present in a particular case, including whether the restatement was merely due to a change in accounting pronouncements. Because the proposal could put a substantial portion of performance-based compensation at risk due to events over which an executive had no control and would prevent the Board from considering all relevant facts and circumstances, we believe that attempted implementation of the proposal would be inequitable, thereby negatively affecting employee morale and inhibiting HP's ability to attract, retain and motivate executive talent.

        Finally, the proposal would be difficult or sub-plans applicableimpossible to implement as written. In particular, subsidiaries or employees in particular locations, which allow for participationthe proposal requires that, in the Share Ownership Plan inevent of a manner"significant extraordinary write-off," the Board will recoup all bonuses and awards that may not complywere made to senior executives "during the restatement period." Since there are no "restatement periods" associated with the requirements of Section 423 of the Code.

        NEW PLAN BENEFITS.    Because benefits under the Share Ownership Plan, as proposed to be amended, will depend on employees' elections to participate and the fair market value of HP common stock at various future dates,write-offs, it is not possible to determinetell which bonuses should be recouped. Moreover, our existing employment agreements and the benefits that will be received by executive officersagreements governing bonuses and other employees if the proposed amendmentlong-term performance cash previously awarded to the Share Ownership Plan is approved by the stockholders. Non-employee directors areour senior executives do not eligible to participateprovide for recouping bonuses in the Share Ownership Plan.

        UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.    Ifevent of a restatement. While future awards could include provisions for recouping bonuses, HP stockholders approve this proposal,cannot unilaterally change the Share Ownership Plan, and the rightterms of participants to make 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 in connection with the shares issuable under the Share Ownership Plan until the shares purchased under the Share Ownership Plan 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 fair market value of the shares at the time of such sale or disposition over the purchase price, or (ii) an amount equal to 15% of the fair market value of the shares as of the applicable 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 described above. In all other cases, no deduction is allowed to HP.preexisting agreements without violating its contractual commitments.

        THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF UNITED STATES FEDERAL INCOME TAXATION UPON THE PARTICIPANTS AND HP WITH RESPECT TO THE SHARES PURCHASED UNDER THE SHARE OWNERSHIP PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX CONSEQUENCES ARISING IN THE CONTEXT OF A PARTICIPANT'S DEATH OR THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT'S INCOME OR GAIN MAY BE TAXABLE.

        INCORPORATION BY REFERENCE.    The foregoing is onlyFor the reasons described above, the Board recommends a summary of the Share Ownership Plan and is qualified in its entirety by reference to the full text of the Share Ownership Plan, a copy of which is attached hereto as Appendix D.vote AGAINST this proposal.





COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT


        The following table sets forth information, as of December 31, 2004, concerning:2005, concerning beneficial ownership by:

•

beneficial ownership by holders of more than 5% of HP's common stock,



•

HP directors and nominees and each of the named executive officers set forth in the Summary Compensation tableTable on page 29,37, and



•

beneficial ownership bycurrent directors nominees, named executive officers and current HP executive officers as a group.

        The information provided in the table is based on HP's records, information filed with the Securities and Exchange CommissionSEC and information provided to HP, except where otherwise noted.

        The number of shares beneficially owned by each entity person, director or executive officerindividual is determined under SEC rules, of the Securities and Exchange Commission, 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, 20052006 (60 days after December 31, 2004)2005) through the exercise of any stock option or other right. 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


Name of Beneficial Owner		Amount of Beneficial Ownership		Nature of Beneficial Ownership(1)		Percent of Class
Beneficial Owners of More than 5%
Capital Research and Management Company 333 South Hope Street, 55th Floor Los Angeles CA 90071		156,949,130	(2)			5.6%
Current Directors and Nominees:
Lawrence T. Babbio, Jr.		28,028 117,801		Direct Vested Options
		145,829				*
Sari M. Baldauf		0				*
Patricia C. Dunn		65,996 40,000		Direct Vested Options
		105,996				*
Richard A. Hackborn		40,239 40,000		Direct Vested Options
		80,239				*
John H. Hammergren		1,708 2,600		Direct Indirect(3)
		4,308				*






Name of Beneficial Owner		Amount of Beneficial Ownership		Nature of Beneficial Ownership(1)		Percent of Class
Current Directors and Nominees:
Lawrence T. Babbio, Jr.Dr. George A. Keyworth II		20,7058,080 205,9714,250 104,136		Direct Indirect(4) Vested Options
		226,676				*
Patricia C. Dunn		55,798 40,000		Direct Vested Options
		95,798				*
Richard A. Hackborn		32,916 40,000		Direct Vested Options
		72,916				*
Dr. George A. Keyworth II		8,080 95,196		Direct Vested Options
		103,276				*
Robert E. Knowling, Jr.		18,798 47,707		Direct Vested Options
		66,505116,466				*
Thomas J. Perkins		51,137 509,790 101,507		Direct Indirect(5) Vested Options	(2)
		662,434				*
Robert L. Ryan		14,723		Direct
		14,723				*
Lucille S. Salhany		23,720 129,044		Direct Vested Options
		152,764				*
Current Directors, Nominees and Named Executive Officers:
Mark V. Hurd		400,000		Direct
		400,000				*
Robert P. Wayman		166,774 119,058 1,657,114		Direct Indirect(6) Vested Options
		1,942,946				*
Current Named Executive Officers:
R. Todd Bradley		100,000		Direct
		100,000				*
Vyomesh I. Joshi		205,387 52,313 826,352		Direct Indirect(7) Vested Options
		1,084,052				*
Ann M. Livermore		164,275 3,823 2,130,490		Direct Indirect(8) Vested Options
		2,298,588				*
Randall D. Mott		285,050		Direct
		285,050
All current directors and executive officers as a group (23 persons)		10,183,997		(9)(10)		*




Robert L. Ryan		7,400 0		Direct Vested Options
		7,400				*
Lucille S. Salhany		16,397 215,064		Direct Vested Options
		231,461				*
Current Director, Nominee and Named Executive Officer:
Robert P. Wayman		289,466 2,120 1,774,484		Direct Indirect Vested Options	(3)
		2,066,070				*
Current Named Executive Officers:
Vyomesh I. Joshi		65,469 50,690 878,070		Direct Indirect Vested Options	(4)
		994,229				*
Ann M. Livermore		21,996 1,861,006		Direct Vested Options
		1,883,002				*
Former Directors and Named Executive Officers:
Carleton S. Fiorina(5)		852,914 6,065,852		Direct Vested Options	(5)
		6,918,766				*
Sanford M. Litvack(6)		5,060 45 45,236		Direct Indirect Vested Options	(6)
		50,341
Duane E. Zitzner(7)		55,506 2,280,742		Direct Vested Options
		2,336,248				*
All Directors, Nominees, Named Executive Officers and Current Executive Officers as a Group (25 persons)		20,221,498			(8)(9)	..7%

Former Directors and Named Executive Officers:
Carleton S. Fiorina(11)		852,914 3,815,852		Direct Vested Options
		4,668,766				*
Michael J. Winkler(12)		60,511 4,679 1,449,187		Direct Indirect(13) Vested Options
		1,514,377				*

---

*

Represents holdings of less than one percent.



(1)

Pursuant to Rule 13d-3(d)(1) of the Securities Exchange Act, of 1934, as amended, "Vested Options" are options that may be exercised as of March 1, 20052006 (60 days after December 31, 2004)2005).



(2)

On its Schedule 13G filed February 14, 2005, Capital Research and Management Company, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, reported the beneficial ownership of 156,949,130 shares, or 5.2% of the 3,019,899,000 shares then outstanding, as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. In its Schedule 13G filed February 14, 2005, Capital Research and Management Company disclaimed beneficial ownership pursuant to Rule 13d-4.



(3)

2,600 shares are held by the Hammergren Family Trust.



(4)

4,250 shares are held by Dr. Keyworth's wife.



(5)

160,945 shares are held by the Thomas J. Perkins Ttee Frank Caufield Ttee UAD 12/14/72 Perkins Bypass Trust C and 348,541 shares are held by TJ Perkins & F Caufield Ttees Survivors Trust A U/A




dated 11/13/1987. Mr. Perkins serves as co-trustee of both trusts. The foregoing shares have been pledged to a securities broker pursuant to the terms of prepaid variable equity forward contracts established in May 2004 when Mr. Perkins was not a director or affiliate of HP. Mr. Perkins does not have voting or investment power with respect to the shares held by these trusts as a result of the foregoing arrangements. In addition, a trust for the benefit of Mr. Perkins' daughter also owns 304 shares.





(3)(6)

2,12021,096 shares are held by Mr. Wayman as custodianin the HP 401(k) Plan, 95,142 shares are held by the Wayman Family Trust and 2,820 shares are held for histhe benefit of Mr. Wayman's son.



(4)(7)

50,69052,313 shares are held by Mr. Joshi in a living trust.



(5)(8)

3,823 shares are held by Ms. Livermore in the HP 401(k) Plan.



(9)

Includes an aggregate of 7,261,825 shares that the current directors and executive officers have the right to acquire as of March 1, 2006.



(10)

Includes an aggregate of 7,984,215 shares held by current directors and executive officers in fiduciary or beneficial capacities.



(11)

Ms. Fiorina terminated as Chairman and Chief Executive Officer and resigned as a director on February 8, 2005.



(6)(12)

Mr. Litvack serves as a co-trustee of a trust holding 45 shares. Mr. Litvack resigned as a directorWinkler retired on February 2,November 7, 2005.



(7)(13)

Mr. Zitzner retired in fiscal 2005.



(8)

Includes an aggregate of 17,734,8764,679 shares that the current directors and executive officers have the right to acquire as of March 1, 2005.



(9)

Includes an aggregate of 18,303,141 sharesare held by current directors and executive officersMr. Winkler in fiduciary or beneficial capacities.the HP 401(k) Plan.





SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE


        Section 16(a) of the Securities Exchange Act, of 1934, as amended, requires our directors, executive officers and holders of more than 10% of HP common stock to file reports with the Securities and Exchange Commission reportsSEC regarding their ownership and changes in ownership of our securities. HP believes that, during fiscal 2004,2005, its directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements, with the exceptions noted herein. One late Form 4 report was filed by Michael J. WinklerAnn O. Baskins on AugustFebruary 9, 2005 to report an option exercise on November 15, 2004. One late Form 4 was filed by Dick Lampman on December 7, 2004 to report a cash distribution under the Hewlett-Packard Company Deferred Compensation Plansale of shares on January 22,November 23, 2004. In addition, oneOne late Form 4 report was filed by Sanford M. LitvackDuane Zitzner on February 10,November 12, 2004 to report an option exercise and same day sale on November 9, 2004. One late Form 4 was filed by Marcela Perez De Alonso on January 20, 2005 to report salesa disposition of shares from his individual retirement account and a purchase of shares by a trust of which he is a co-trustee from 2002 through 2004.for tax withholding purposes on January 15, 2005. In making these statements, HP has relied upon examination of the copies of Forms 3, 4, and 5, and amendments thereto, provided to HP and the written representations of its directors, executive officers and 10% stockholders.





CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


        In 2005, Ms. Lyons, an HP repurchases sharesexecutive officer, repaid $85,037.46 plus $23,806.19 in interest to HP for required withholding taxes that HP paid on behalf of its common stock under a systematic program to manageMs. Lyons upon the dilution created by shares issued under employee stock plans and also to return cash to HP's stockholders. As part of this repurchase program, between December 1, 2003 and February 8, 2005, HP repurchased a total of 68,825,000 shares for $1,378,259,886 from the David and Lucile Packard Foundation (the "Packard Foundation"). The Packard Foundation was a beneficial owner of more than 5% of HP common stock until September 1, 2004. Shares repurchased from the Packard Foundation were purchased under the termsrelease of a memorandum of understanding dated September 9, 2002 and amended and restated September 17, 2004 that, among other things, prices the repurchases by referencerestricted stock grant prior to the volume weighted-average price for composite New York Stock Exchange transactions on trading days in which a repurchase occurs. Either HP or the Packard Foundation may suspend or terminate sales under the amended and restated memorandum of understanding at any time.time that she became an executive officer.





EXECUTIVE OFFICERS


Robert P. Wayman; age 59; Chief Executive Officer and Chief Financial Officer

        Mr. Wayman was elected Chief Executive Officer on an interim basis and was re-elected a director on February 8, 2005. Mr. Wayman has served as Chief Financial Officer of HP since 1984 and previously served as Executive Vice President since 1992. Mr. Wayman is a director of CNF Inc. and Sybase Inc. He also serves as a member of the Kellogg Advisory Board to the Northwestern University School of Business.

Ann O. Baskins; age 49; Senior Vice President, General Counsel and Secretary

        Ms. Baskins was elected Senior Vice President in 2002 after serving as Vice President since November 1999. She has served as General Counsel responsible for worldwide legal matters since January 2000. She has served as Secretary since 1999 and was Assistant Secretary from 1985 to 1999.

Gilles Bouchard; age 44; Chief Information Officer and Executive Vice President, Global Operations

        Mr. Bouchard was elected Chief Information Officer and Executive Vice President in January 2004. From May 2002 to December 2003, he was Senior Vice President of Imaging and Printing Group ("IPG") Operations. From March 2001 to May 2002, he was Vice President and General Manager of HP's Business Customer Operations. Mr. Bouchard also served as Vice President of Worldwide Operations for HP's Personal Computing Organization from December 1999 to March 2001, and from June 1998 to December 1999 he was General Manager for the Pavilion home personal computer business in the Americas.

Charles N. Charnas; age 46; Vice President, Deputy General Counsel and Assistant Secretary*

        Mr. Charnas was elected Assistant Secretary in 1999. He was appointed a Vice President and Deputy General Counsel in 2002. Since 1999 he has headed the Corporate, Securities and Mergers and Acquisitions Section of the worldwide Legal Department.

---

*

Mr. Charnas is not an "executive officer" for purposes of Section 16 of the Exchange Act.

Debra L. Dunn; age 48; Senior Vice President, Corporate Affairs

        Ms. Dunn was elected Senior Vice President in 2002 after serving as Vice President since November 1999. She previously held the position of General Manager of the Executive Council from 1998 to 1999.

Jon E. Flaxman; age 47; Senior Vice President, Controller and Principal Accounting Officer

        Mr. Flaxman was elected Principal Accounting Officer on February 8, 2005. He was elected Senior Vice President in 2002 after serving as Vice President and Controller since May 2001. From May 1999 to May 2001, he served as Vice President and Chief Financial Officer of the Business Customer Organization. He was first appointed a Vice President in 1998.

Brian Humphries; age 31; Vice President, Investor Relations

        Mr. Humphries was elected Vice President in 2004. Since July 2004, he has served as Vice President of Investor Relations. From August 2003 to June 2004, he was Director of Financial Communications. From May 2002 to July 2003, Mr. Humphries was Director of Finance for Industry Standard Servers business. Before the Compaq acquisition, he served as Compaq's Director of Investor Relations from May 1999 to May 2002.






Vyomesh Joshi; age 50; Executive Vice President, Imaging and Personal Systems Group

        Mr. Joshi was elected Executive Vice President in 2002 after serving as Vice President since January 2001. He became President of IPG in February 2001. Mr. Joshi also served as Chairman of Phogenix Imaging LLC, a joint venture between HP and Kodak focused on developing retail digital inkjet photo finishing equipment and supplies, until May 14, 2003, when Phogenix was dissolved. Since 1989, he has held various management positions in IPG. From 1999 to 2000, he was Vice President and General Manager of Inkjet Systems. Effective January 2005, Personal Systems Group ("PSG") also is reporting to Mr. Joshi, and IPG and PSG have combined to form the Imaging and Personal Systems Group ("IPSG").

Richard H. Lampman; age 59; Senior Vice President of Research, Director of HP Labs

        Mr. Lampman was elected Senior Vice President in 2002. He has served as the director of HP Labs since 1999. Mr. Lampman has held various positions with HP since 1971, when he joined HP.

Catherine A. Lesjak; age 46; Senior Vice President and Treasurer

        Ms. Lesjak was elected Senior Vice President and Treasurer in 2003. From May 2002 to July 2003, she was Vice President of Finance for Enterprise Marketing and Solutions and Vice President of Finance for the Software Global Business Unit. From June 2000 to May 2002, Ms. Lesjak was controller for the Software Solutions Organization. From September 1998 to September 2000, she served as controller and credit manager for the Commercial Customer Organization.

Ann M. Livermore; age 46; Executive Vice President, Technology Solutions Group

        Ms. Livermore was elected Executive Vice President in 2002 after serving as Vice President since 1995. Since May 2004, she has led the Technology Solutions Group. In April 2001, she became President of HP Services. In October 1999, she became President of the Business Customer Organization. She was appointed President of Enterprise Computing in April 1999. Ms. Livermore is a member of the Board of Directors of United Parcel Service, Inc. She is also on the board of visitors of the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill and the Board of Advisors at the Stanford Business School.

Marcela Perez de Alonso; age 50; Executive Vice President, Human Resources and Workforce Development

        Ms. Perez was elected Executive Vice President, Human Resources and Workforce Development in January 2004. From 1999 until she joined HP, Ms. Perez was Division Head of Citigroup North Latin America Consumer Bank, in charge of the retail business operations of Citigroup in Puerto Rico, Venezuela, Colombia, Peru, Panama, The Bahamas, and Dominican Republic. She served as Global Consumer Head, Human Resources of Citigroup from 1996 to 1999.

Shane V. Robison; age 51; Executive Vice President and Chief Strategy and Technology Officer

        Mr. Robison was elected Executive Vice President in 2002 following the Compaq acquisition. He has served as Chief Strategy and Technology Officer since May 2002. Prior to joining HP, Mr. Robison served as Senior Vice President, Technology and Chief Technology Officer at Compaq since 2000. Prior to joining Compaq, Mr. Robison was President of Internet Technology and Development at AT&T Labs, a technology research and development organization, a position he had held since 1999.

Michael J. Winkler; age 59; Executive Vice President, Customer Solutions Group and Chief Marketing Officer

        Mr. Winkler was elected Executive Vice President in 2002 in connection with the Compaq acquisition. In August 2004, he became Executive Vice President, Customer Solutions Group. In December 2002, he became the Chief Marketing Officer responsible for the Global Brand and Communications, Global Alliances and Total Customer Experience teams. Prior to joining HP, Mr. Winkler served as Executive Vice President, Global Business Units of Compaq since 2000. Prior to that, Mr. Winkler was Senior Vice President and Group General Manager, Commercial Personal Computing Group, a position to which he was elected in 1996. Mr. Winkler is a director of Banta Corporation.





EXECUTIVE COMPENSATION


        The following table discloses compensation received by HP's formercurrent CEO, andeach other person who served as CEO during fiscal 2005, HP's four other most highly paid executive officers (together withand a former executive officer who would have been among HP's four most highly paid executive officers at the former CEO,end of fiscal 2005 (collectively, the "named executive officers") during fiscal 2004, as well asand their compensation received from HP for each of the fiscal years ending October 31, 20032005, 2004 and October 31, 2002.2003.


SUMMARY COMPENSATION TABLE


				Annual Compensation									Long-Term CompensationAwards
(a)		(b)		(c)			(d)			(e)			(f)			(g)		(h)			(i)
Name and Principal Position		Year		Salary ($)			Bonus ($)(1)(2)(3)			Other Annual Compensation ($)(3)(4)			Restricted Stock AwardsAward(s) ($)(4)(5)(6)			Securities Underlying Options/ SARs(#)		LTIP Payouts ($)			All Other Compensation ($)(6)(7)
Robert P. WaymanMark V. Hurd(7)(8) Director, Chief Executive Officer and Chief Financial OfficerPresident		2005 2004 2003 2002		$	975,000 988,542 925,000		$	546,342 728,993 875,490		$	70,188 3,198 5,776	* *	$	330,150 0 0		300,000 300,000 400,000		0816,667 0 0		$	12,3075,131,333 2,439,4140 2,435,5440		$	492,858 0 0		$	8,684,000 0 0		1,150,000 0 0		$	8,119,977 0 0
Vyomesh I. Joshi(8)Robert P. Wayman Executive Vice President Imaging and Personal Systems GroupChief Financial Officer		2005 2004 2003			975,000 2002975,000 988,542			4,513,688 546,342 728,993			130,008 70,188 3,198			0 330,150 0		400,000 300,000 300,000			12,542 12,307 2,439,414
Vyomesh I. Joshi Executive Vice President Imaging and Printing Group		2005 2004 2003			775,000 775,000 712,500 600,000			1,002,656 361,886 513,090 687,655			21,750 36,474 3,563 3,061	* *		330,150 0 0		300,000 500,000 400,000		0 0 0			4,109,500 330,150 0		500,000 300,000 500,000			10,335 12,635 2,055,642 2,054,485
Ann M. Livermore Executive Vice President Technology Solutions Group		2005 2004 2003 2002			775,000 764,583 754,167 700,000			789,448 355,674 0 782,285			109,443 78,258 60,102			330,150 0 0		500,000 300,000 400,000		0 0 0			9,35168,463 2,108,753109,443 2,106,371
Carleton S. Fiorina(9) Former Chairman and Chief Executive Officer		2004 2003 200278,258			1,400,0003,057,000 1,241,667330,150 1,000,0000		400,000 500,000 300,000			1,568,9109,678 2,101,6009,351 2,930,602			134,782 84,296 59,997			660,300 0 0		700,000 700,000 850,000		0 0 0			47,302 91,983 131,7542,108,753
Duane E. ZitznerR. Todd Bradley(10)(9) Former Executive Vice President Personal Systems Group		2005 2004 2003 2002			775,000 780,208 725,000			361,886 715,611 789,584			24,532 3,434 2,381	* *		330,150 0 0		200,000 300,000 400,000		0280,115 0 0			11,0091,724,796 2,185,5790 2,181,3710			18,030 0 0			2,385,000 0 0		400,000 0 0			1,201 0 0
Randall D. Mott(10) Executive Vice President and Chief Information Officer		2005 2004 2003			211,706 0 0			2,638,231 0 0			8,291 0 0			7,102,200 0 0		500,000 0 0			332,599 0 0
Former Officers
Carleton S. Fiorina(11) Former Chairman and Chief Executive Officer		2005 2004 2003			575,287 1,400,000 1,241,667			0 1,568,910 2,101,600			60,513 134,782 84,296			0 660,300 0		0 700,000 700,000			21,638,470 47,302 91,983
Michael J. Winkler(12) Former Executive Vice President		2005 2004 2003			678,125 715,625 643,615			1,834,492 290,384 484,985			24,751 27,606 3,999			0 330,150 0		0 200,000 250,000			11,374 11,121 2,855,030

---

*

As permitted under Securities and Exchange Commission rules, for fiscal 2003 and fiscal 2002 these figures include tax reimbursements but do not include perquisites and other personal benefits where the total incremental cost of all perquisites did not exceed $50,000 per year.



(1)

The amounts shown in this column reflect payments under HP's Executive Pay-for-Results Plan (the "Executive PfR Plan," which term includes its predecessors, as applicable). HP employees who were subject to Section 16(a) of the Securities Exchange Act of 1934, as amended,16 Officers at the beginning of the applicable performance period and selected other employees were eligible to participate in the Executive PfR Plan. During the fiscal years shown, all of the named executive officers who were employed by HP during such years participated in the Executive PfR Plan.





The Executive PfR Plan permits the HR and Compensation Committee to designate a portion of the target annual cash compensation for participants, including executive officers, as variable pay. Under the Executive PfR Plan for the fiscal years shown, the percentage of the targeted variable amount that is paid depends upon the degree to which performance metrics defined on a semi-annual basis arewere met. In December 2003 and MayNovember 2004 and June 2004,2005, the HR and Compensation Committee established the performance metrics for the first and second halves of fiscal 2004,2005, respectively, which were weighted 40% based on revenue, 40% based on net profit, and 20% based on total customer experience.

For the first half of fiscal 2004, the HR and Compensation Committee determined that the following variable compensationexperience for the named executive officers had been earned under the Executive PfR Plan: Mr. Wayman, $348,904; Mr. Joshi, $231,105; Ms. Livermore; $224,893; Ms. Fiorina, $1,001,910; and Mr. Zitzner, $231,105. officers.





The HR and Compensation Committee determined that no variable compensation for the named executive officers had been earned under the Executive PfR Plan for the first half of fiscal 2005. For the first half of fiscal 2005, Mr. Hurd received $233,333 under the Executive PfR Plan as guaranteed pro-rated bonus payment paid at target. For the second half of fiscal 2004.

2005, the HR and Compensation Committee determined that the following variable compensation for the named executive officers had been





earned under the Executive PfR Plan: Mr. Hurd, $2,898,000; Mr. Wayman, $1,513,688; Mr. Joshi, $1,002,656; Ms. Livermore, $789,448; Mr. Bradley, $724,796; Mr. Mott, $438,231; and Mr. Winkler, $751,992.

(2)

TheFor fiscal 2004, the HR and Compensation Committee awarded a bonus outside of the variable pay plans for all employees in an aggregate amount of $90 million for HP's performance in the fourth quarter of fiscal 2004. The bonus column also includes the following amounts paid to the named executive officers pursuant to that action: Mr. Wayman, $197,438; Mr. Joshi, $130,781; Ms. Livermore, $130,781; Ms. Fiorina, $567,000; and Mr. Zitzner, $130,781.Winkler, $123,399.



(3)

For fiscal 2004,The amount shown in this column for Mr. Hurd includes the $2,000,000 signing bonus described in "Employment Contracts, Termination of Employment and Change-in-Control Arrangements—Employment Agreement with Mark V. Hurd" beginning on page 50.






The amount shown in this column for Mr. Wayman includes the $3,000,000 cash payment awarded him on April 1, 2005 in recognition of his service as interim CEO of HP and his ongoing contribution to the transition to the new CEO.






The amount shown in this column for Mr. Bradley includes the $1,000,000 signing bonus described in "Employment Contracts, Termination of Employment and Change-in-Control Arrangements—Employment Agreement with R. Todd Bradley" beginning on page 53.






The amount shown in this column for Mr. Mott includes the $2,200,000 signing bonus described in "Employment Contracts, Termination of Employment and Change-in-Control Arrangements—Employment Agreement with Randall D. Mott" beginning on page 55.






The amount shown in this column for Mr. Winkler includes retention bonuses of $1,082,500 described in "Employment Contracts, Termination of Employment and Change-in-Control Arrangements—Michael J. Winkler Agreement" on page 57.



(4)

This column includes the perquisites outlined in the table below valued at theirthe incremental cost of providing such perquisites as well as tax reimbursements for the named executive officers. For fiscal 2003, this column includes tax reimbursements but does not include perquisites and other personal benefits where the total incremental cost of all perquisites did not exceed $50,000 per year, as permitted under the SEC rules.






Perquisites include the personal use of HP's corporate aircraft. For proxy valuation purposes, HP utilizes data provided by an outside firm to calculate the variable cost per hour of operating each type of aircraft, including the cost of fuel, maintenance, landing and parking fees, crew and catering and supplies. For proxy reporting and tax purposes, personal use of corporate aircraft includes use of the aircraft for relocation purposes. At the time Mr. Hurd was hired in April 2005, he lived with his family out-of-state. Until he relocated later in the year, consistent with HP's policy for the use of corporate aircraft described below, Mr. Hurd utilized HP aircraft for commuting purposes. The incremental cost to HP as itemizedof such usage during fiscal 2005 is shown in the table below in the column entitled "Personal aircraft usage—relocation." For trips by named executive officers 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).






Under HP's policy for the personal use of corporate aircraft by senior executives, the CEO is eligible to use the aircraft for personal purposes. The value of all relocation travel, the first 25 hours of non-relocation personal usage, as well as spousal travel, is added to the CEO's income based on the standard industry fare level ("SIFL") valuation method and grossed up so that it is tax reimbursements described below.neutral to the CEO. Other Executive Council members may use the corporate aircraft for personal purposes, subject to review by and approval of the CEO, but the value of such trips is added to the executives' income and is not grossed up. The value of spousal travel on business trips is added to income, and this value is grossed up if the spousal travel is requested by HP.




Name		Security Services/ Systems			Personal Aircraft Usage			Personal Automobile Usage			Financial Counseling			Total			Security Services/ Systems			Personal Aircraft Usage Non-relocation			Personal Aircraft Usage Relocation			Personal Automobile Usage			Financial Counseling			Tax Reimbursements			Total
Mark V. Hurd																	$	109,835		$	59,559		$	237,095			N/A		$	10,500		$	75,869		$	492,858
Robert P. Wayman			N/A		$	47,846			N/A		$	18,000		$	65,846			N/A			106,774			N/A			N/A			18,000			5,234			130,008
Vyomesh I. Joshi			N/A			810			N/A			21,000			21,810			N/A			296			N/A			N/A			18,000			3,454			21,750
Ann M. Livermore			N/A			89,239			N/A			18,000			107,239			N/A			50,223			N/A			N/A			18,000			240			68,463
R. Todd Bradley																		N/A			10,263			N/A			N/A			7,500			267			18,030
Randall D. Mott																		N/A			2,291			N/A			N/A			6,000			N/A			8,291
Former Officers
Carleton S. Fiorina		$	7,381			66,846		$	909			18,000			93,136			308			46,047			N/A		$	180			6,000			7,979			60,513
Duane E. Zitzner			N/A			99			N/A			21,500			21,599
Michael J. Winkler																		N/A			1,499			N/A			N/A			18,000			4,800			24,751

This




For the 2004 and 2003 fiscal years, this column also includes tax reimbursements for each named executive officer as follows: Mr. Wayman, $4,342 $3,198, and $5,776;$3,198; Mr. Joshi, $14,664 $3,563, and $3,061;$3,563; Ms. Livermore, $2,204 $2,822, and $2,381;$2,822; Ms. Fiorina, $41,646 $26,205, and $27,949;$26,205; and Mr. Zitzner, $2,933, $3,434,Winkler, $8,533 and $2,381, in$3,999.







The amounts reported for fiscal 2004 2003,for Mr. Wayman include $47,846 for personal aircraft usage and 2002, respectively.

$18,000 for financial counseling. The amounts reported for fiscal 2004 for Messrs. Joshi and Winkler include $21,000 and $18,000, respectively, for financial counseling. Amounts reported for Ms. Livermore include $57,436$89,239 and $45,221$57,436 for personal aircraft usage in fiscal 20032004 and 2002,2003, respectively. Amounts reported for Ms. Fiorina in fiscal 2003 include $66,846 and $38,165 for personal use of corporate aircraft andusage in fiscal 2002 include $14,950 for tax services.

2004 and 2003, respectively.



(4)(5)

The amounts shown in this column reflect the dollar values based on the closing price at grant of time-based restricted stock granted to the named executive officers in fiscal 2004.2005. The time-basedHR and Compensation Committee granted restricted stock wasto Messrs. Hurd, Bradley and Mott in the amounts indicated below pursuant to their respective employment agreements described under "Employment Contracts, Termination of Employment and Change-in-Control Arrangements" beginning on page 49. The HR and Compensation Committee granted 150,000 shares of restricted stock to Mr. Joshi and 150,000 shares of restricted stock to Ms. Livermore on March 17, 2005, each vesting 100% on the second anniversary of the grant. The HR and Compensation Committee also granted 50,000 shares of restricted stock to Mr. Joshi on December 15, 200316, 2004, vesting 50% on each of the first and vested 100% after one year.third anniversaries of the grant date.





At the end of fiscal 2004,2005, the aggregate share amount and dollar value based on the closing price of $28.04 on October 29, 200431, 2005 of the restricted stock held by the named executive officers was:




		Number of Shares		Value			Number of Shares		Value
Mark V. Hurd							400,000		$	11,216,000
Robert P. Wayman		15,000		$	279,900		0			0
Vyomesh I. Joshi		15,000			279,900		200,000			5,608,000
Ann M. Livermore		15,000			279,900		150,000			4,206,000
R. Todd Bradley							100,000			2,804,000
Randall D. Mott							285,000			7,991,400
Former Officers
Carleton S. Fiorina		30,000			559,800		0			0
Duane E. Zitzner		15,000			279,900
Michael J. Winkler							0			0




The named executive officers receive non-preferential dividends on restricted shares they hold.





(5)(6)

On July 17, 2004, Ms. Fiorina received a net payment of 795,878 shares pursuant to the release of the award of restricted stock units granted to her in 1999 and previously reported as a grant of restricted stock units in this column for fiscal 1999.






(6)(7)

For the named executive officers, this column includes the following payments by HP in the fiscal years indicated:




Name	Name		401(k) Company Match			Term-Life Insurance Payment		Name		401(k) Company Match			Term-Life Insurance Payment			Mortgage Interest Subsidy			Relocation Bonus			Relocation Expenses			Legal Fees
Mark V. Hurd								Mark V. Hurd
								2005			N/A		$	2,320		$	53,288		$	2,750,000		$	270,038		$	43,910
								2004			N/A			N/A			N/A			N/A			N/A			N/A
								2003			N/A			N/A			N/A			N/A			N/A			N/A
Robert P. Wayman	Robert P. Wayman							Robert P. Wayman
	2004		$	8,200		$	4,107	2005		$	8,400			4,142			N/A			N/A			N/A			N/A
	2003			8,000			3,289	2004			8,200			4,107			N/A			N/A			N/A			N/A
	2002			7,333			85	2003			8,000			3,289			N/A			N/A			N/A			N/A
Vyomesh I. Joshi	Vyomesh I. Joshi							Vyomesh I. Joshi
	2004			11,400			1,235	2005			8,400			1,935			N/A			N/A			N/A			N/A
	2003			4,800			842	2004			11,400			1,235			N/A			N/A			N/A			N/A
	2002			4,400			85	2003			4,800			842			N/A			N/A			N/A			N/A
Ann M. Livermore	Ann M. Livermore							Ann M. Livermore
	2004			8,200			1,151	2005			8,400			1,278			N/A			N/A			N/A			N/A
	2003			8,000			595	2004			8,200			1,151			N/A			N/A			N/A			N/A
	2002			6,286			85	2003			8,000			595			N/A			N/A			N/A			N/A
Carleton S. Fiorina
	2004			8,750			2,209
	2003			7,000			1,394
	2002			6,286			85
Duane E. Zitzner
	2004			7,752			3,257
	2003			7,998			2,581
	2002			6,286			85







R. Todd Bradley
	2005			N/A			1,201			N/A			N/A			N/A			N/A
	2004			N/A			0			N/A			N/A			N/A			N/A
	2003			N/A			0			N/A			N/A			N/A			N/A
Randall D. Mott
	2005			N/A			1,143			N/A			300,000			N/A			31,456
	2004			N/A			0			N/A			0			N/A			0
	2003			N/A			0			N/A			0			N/A			0
Former Officers
Carleton S. Fiorina
	2005			8,850			2,320			0			N/A			N/A			N/A
	2004			8,750			2,209			36,343			N/A			N/A			N/A
	2003			7,000			1,394			83,589			N/A			N/A			N/A
Michael J. Winkler
	2005			8,400			2,974			N/A			N/A			N/A			N/A
	2004			8,200			2,921			N/A			N/A			N/A			N/A
	2003			8,000			3,280			N/A			N/A			N/A			N/A




The amounts in the 401(k) column above represent HP matching contributions paid in fiscal 2004.contributions. All such amounts are within IRSUnited States Internal Revenue Service ("IRS") limits for the applicable plan years.

Amounts shown in






The mortgage interest subsidy and relocation bonuses are described under "Employment Contracts, Termination of Employment and Change-in-Control Arrangements" beginning on page 49.






In addition, for Mr. Hurd this column for fiscal 2002 and fiscal 2003 include payments under HP's retention program adopted in connection with the Compaq acquisition. The program provided incentives toincludes a grouppayment of employees who were considered critical$5,000,421 pursuant to the completionprice protection provisions described in "Employment Contracts, Termination of the Compaq acquisition, to the integration of the companies, or to ongoing business operations. Under the program, Mr. Wayman, Mr. Joshi, Ms. LivermoreEmployment and Mr. Zitzner were entitled to receive two equal annual payments in the following amounts: Mr. Wayman, $2,428,125; Mr. Joshi, $2,050,000; Ms. Livermore $2,100,000; and Mr. Zitzner, $2,175,000. The first installment was paidChange-in-Control Arrangements—Employment Agreement with Mark V. Hurd" beginning on September 4, 2002, and the second installment was paid on September 4, 2003.

page 50.






For Ms. Livermore, for fiscal 2003, this column also includes a service award of 10 shares of common stock valued at $158 awarded to her for her 20-year20 year service anniversary. This award was made pursuant to the Service Anniversary Stock Plan, which provides for grants of 10 shares of common stock to eligible employees upon completion of 10, 20, 30, 40 or 50 years of service.

In addition, for






For Ms. Fiorina, this column also includes HP-sponsored mortgage assistance, in accordance with HP's standard mortgage assistance program that is generally available to employees who relocate, in the following respective amounts during fiscal 2004, 2003,severance payment of $21,627,300, described under "Employment Contracts, Termination of Employment and 2002: $36,343; $83,589Change-in-Control Arrangements—Carleton S. Fiorina Severance Agreement and $125,383.

(7)

Mr. Wayman was re-elected a director and Chief Executive OfficerRelease" beginning on February 8, 2005.page 57.



(8)

Mr. Joshi was named to lead IPSG in JanuaryHurd became Chief Executive Officer and President on April 1, 2005.



(9)

Mr. Bradley became Executive Vice President of PSG on June 13, 2005.



(10)

Mr. Mott became Chief Information Officer on July 12, 2005.



(11)

Ms. Fiorina terminated as Chairman and Chief Executive Officer and resigned as a director effective February 9,8, 2005. Because of her termination, Ms. Fiorina will receivereceived severance benefits described under "Employment Contracts, Termination of Employment and Change-in-Control Arrangements—Carleton S. Fiorina Severance Agreement and Release," beginning on page 40.57.



(10)(12)

Mr. ZitznerWinkler retired in fiscalon November 7, 2005. Upon retirement, Mr. ZitznerWinkler received retirement benefits, consistent with HP's practices, as described under "Employment Contracts, Termination of Employment and Change-in-Control Arrangements—HP Retirement Arrangements"Michael J. Winkler Agreement" on page 40.57.





OPTION GRANTS IN LAST FISCAL YEAR


        The following table provides information on option grants in fiscal 20042005 by HP to each of the named executive officers. HP did not grant any stock appreciation rights to the named executive officers during fiscal 2004.2005.

Name		Number of Securities Underlying Options Granted(1)(2)		Percent of Total Options Granted to Employees in Fiscal Year(3)		Exercise Price ($/Share)		Expiration Date		Grant Date Present Value ($)(4)			Number of Securities Underlying Options Granted(1)(2)		Percent of Total Options Granted to Employees in Fiscal Year(3)		Exercise Price ($/Share)			Expiration Date		Grant Date Present Value ($)(4)
Mark V. Hurd(5)													700,000 450,000		1.1 0.7	% %	$	21.730 21.730		March 2013 March 2013		$	3,784,877 2,433,135
Robert P. Wayman		300,000		0.4%		$22.015		March 2012		$	1,860,905		400,000		0.6	%		21.770		April 2013			2,166,768
Vyomesh I. Joshi		300,000		0.4%		22.015		March 2012			1,860,905		500,000		0.8	%		21.770		April 2013			2,708,460
Ann M. Livermore		500,000		0.7%		22.015		March 2012			3,101,508		400,000		0.6	%		21.770		April 2013			2,166,768
Carleton S. Fiorina(5)		700,000		1.0%		22.015		March 2012			4,342,112
Duane E. Zitzner(6)		200,000		0.3%		22.015		March 2012			1,240,603
R. Todd Bradley													400,000		0.6	%		23.770		June 2013			2,365,828
Randall D. Mott													500,000		0.8	%		24.930		July 2013			3,101,604
Former Officers
Carleton S. Fiorina(6)													0		N/A			N/A		N/A			N/A
Michael J. Winkler(7)													0		N/A			N/A		N/A			N/A

---

(1)

AllUnless otherwise noted, all options granted in fiscal 2004 are exercisable in the following percentages2005 vest 25% on the following anniversarieseach anniversary of the grant date: 25% after the first anniversary, 50% after the second anniversary, 75% after the third anniversary, and 100% after the fourth anniversary.date.



(2)

AllUnless otherwise noted, all of the unvested portions of these options vest in connection with certain terminations of employment, including termination due to death, disability, or retirement. In addition, HP's policy generally has been to provide accelerated vesting in the event of involuntary termination. In the event of the termination of Mr. Bradley or Mr. Mott as the result of a covered event during the 36 months following the commencement of employment, 50% of any unvested options will vest, as described in the summaries of their respective employment contracts under "Employment Contracts, Termination of Employment and Change-in-Control Arrangements" beginning on page 53.



(3)

In fiscal 2004,2005, HP granted options to employees to purchase a total of approximately 7263 million shares.



(4)

HP used a modified Black-Scholes model of option valuation to determine grant date present value. Calculations for the named executive officers are based on a five-yearfour and one-half year option term, which reflects HP's expectation that its options, on average, will be exercised within fivefour and one-half years of grant. Other assumptions used forin the Black-Scholes valuations are: risk free rate of return of 2.72%3.93%; annual dividend yield of 1.4%1.5%; and volatility of 35%28%. The resulting values are reduced by 7.8%7.5% to reflect HP's experience with forfeitures.



(5)

The Black-Scholes valuations reported above for Mr. Hurd's option grants are lower than the values reported in the Form 8-K filed on March 29, 2005 because the valuation in this table is based on the assumptions in note (4) above, which reflect averages applicable to all the options reported in this table, including a forfeiture rate of 7.5%, rather than the individual assumptions applicable at the time of Mr. Hurd's grant. The option grant for 450,000 shares is intended to compensate Mr. Hurd for compensation forfeited from his prior employer. It will vest at a rate of 33.3% on each anniversary of the grant over three years as described under the "Employment Contracts, Termination of Employment and Change-in-Control Arrangements—Employment Agreement with Mark V. Hurd" beginning on page 50.



(6)

On February 8, 2005, Ms. Fiorina terminated as Chairman and Chief Executive Officer and resigned as a director, and her options vested, with a one-year post-termination exercise period.



(6)(7)

In fiscalOn November 7, 2005, Mr. ZitznerWinkler retired, and his options vested, with a three-year post-termination exercise period. The options Mr. Winkler received from Compaq have a post-termination exercise period equal to the life of the vested option.





AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES


        The following table provides information on option exercises with respect to HP common stock in fiscal 20042005 by each of the named executive officers and the values of each of such officer's unexercised options at October 31, 2004.2005. There were no stock appreciation rights for the named executive officers exercised or outstanding.

																						Number of Securities Underlying Unexercised Options at Fiscal Year-End(2)				Value of Unexercised In-The-Money Options at Fiscal Year-End(3)
							Number of Securities Underlying Unexercised Options At Fiscal Year-End(2)				Value of Unexercised In-The-Money Options At Fiscal Year-End(3)						# of Shares Acquired on Exercise		Value Realized(1)
Name		Shares Acquired on Exercise		Value Realized(1)																		Exercisable		Unexercisable		Exercisable			Unexercisable
							Exercisable		Unexercisable		Exercisable			Unexercisable
Mark V. Hurd																	0		$	0		0		1,150,000		$	0		$	7,256,500
Robert P. Wayman		0		$	0		1,586,984		812,700		$	330,226		$	655,875		252,386			2,128,108		1,672,298		875,000			5,397,897			6,338,875
Vyomesh I. Joshi		100,000			549,000		710,570		942,700			72,875			1,093,125		101,918			1,123,679		976,352		1,075,000			3,198,286			8,195,876
Ann M. Livermore		11,262			90,997		1,673,506		1,012,700			252,105			655,875		30,716			277,212		2,030,490		1,025,000			6,115,048			7,242,625
R. Todd Bradley																	0			0		0		400,000			0			1,710,000
Randall D. Mott																	0			0		0		500,000			0			1,555,000
Former Officers
Carleton S. Fiorina(4)		0			0		4,165,652		1,900,200			510,125			1,530,375		2,250,000			6,279,000		3,815,852		0			0			0
Duane E. Zitzner(5)		17,916			86,096		1,868,042		712,700			218,625			655,875
Michael J. Winkler(5)																	192,764			1,785,891		1,536,334		284,228			5,050,898			2,556,529

---

(1)

The value realized is based upon the difference between the market price of the shares purchased on the exercise date and the exercise price times the number of shares covered by the exercised option.



(2)

All of the unvested portions of these options vest in connection with certain terminations of employment, including termination due to death, disability, or retirement. In addition, HP's policy generally has been to accelerate option vesting in the event of involuntary termination. In the event of the termination of Mr. Bradley or Mr. Mott as the result of a covered event during the 36 months following the commencement of employment, 50% of any unvested options will vest, as described in the summaries of their respective employment contracts under "Employment Contracts, Termination of Employment and Change-in-Control Arrangements" beginning on page 53.



(3)

The value of unexercised options is based upon the difference between the exercise price and the closing market price on October 29, 2004,31, 2005, which was $18.66.$28.04.



(4)

On February 8, 2005, Ms. Fiorina terminated as Chairman and Chief Executive Officer and resigned as a director, and her options vested, with a one-year post-termination exercise period.



(5)

In fiscalOn November 7, 2005, Mr. ZitznerWinkler retired, and his options vested, with a three-year post-termination exercise period. The options Mr. Winkler received from Compaq have a post-termination exercise period equal to the life of the vested option.





LONG-TERM INCENTIVE PLANS—AWARDS IN LAST FISCAL YEAR


        In May 2004, the HR and Compensation Committee granted awards under theThe Long-Term Performance Cash Program (the "LTPC Program") to selected senior managers, including the named executive officers. The LTPC Program was established in fiscal 2003 to drive value creation and operational efficiency, through balance sheet and total stockholder return ("TSR") performance measures, to retain top-performing and critical employees, and to reward senior managers for exceptional performance. The LTPC Program also is designed to reduce HP's use of option grants for senior executives and, therefore, HP's dilution levels. As described below, the LTPC Program includes both short-term cash flow as a percentage of total revenue ("Cash Flow") metrics and three-year total stockholder return ("TSR") metrics, which together determine the payout, if any, under the LTPC Program.

        During the regular compensation cycle, the LTPC Program works in conjunction with option grants to provide long-term incentives to senior managers ("Regular LTPC Grants"). For the named executive officers, the HR and Compensation Committee reviews Total Rewards on a holistic basis, including base pay, variable pay and long-term incentives. During this process, a total value for long-term incentives is determined for each participant. Half of that total value is granted in the form of options. The remainder of the total value is then used as the target LTPC amount. For example, if the total long-term incentive amount for each programa participant is split between options10,000 option shares, the participant would receive 5,000 option shares and a long-term performance cash as follows. First, aaward that, if it pays out at target, number of option equivalents for each participant is determined. Fifty percent (for executive officers and other higher level participants) or two-thirds (for remaining participants) of this target amount is then grantedequivalent in value to the participant in the form of options, and the remaining value (as determined in accordance with5,000 option shares (based on a modified Black-Scholes valuation model) is used asmodel at the targettime of grant). Mr. Wayman, Mr. Joshi and Ms. Livermore each received a Regular LTPC Grant in connection with their fiscal 2005 compensation review.

        In addition, grants of long-term performance cash payout amountmay be made outside of the normal compensation cycle in connection with in-hire decisions ("In-hire LTPC Grants"). In-hire LTPC Grants may be intended in part to compensate a participant for the value of long-term incentives from the participant's former employer that the participant has forfeited by joining HP. HP believes that making participants whole for such forfeitures is necessary and appropriate in order to hire top candidates for key roles. Because the amounts forfeited will vary depending upon each individual's compensation arrangements with his or her prior employer, In-hire LTPC Grants do not necessarily bear a meaningful relationship to Regular LTPC Grants or to other In-hire LTPC Grants. Mr. Hurd, Mr. Bradley and Mr. Mott received In-hire LTPC Grants based in part on HP's intention to compensate them for amounts from their previous employers that they forfeited by joining HP.

        Because Regular LTPC Grants were granted under the LTPC Program in the course of annual compensation reviews in 2003, 2004 and 2005, and Regular LTPC Grants are subject to a three-year cycle, multiple program cycles are outstanding simultaneously. In fiscal 2005, the HR and Compensation Committee amended the award agreements for such participant. Awardsthe outstanding program cycles to align the named executive officers undercycles with HP's fiscal year. As a result of this fiscal year alignment, some of the annual performance periods were broken into two six-month stub periods. The following diagram depicts the LTPC program cycles that were outstanding in fiscal 2005:



        Under the LTPC Program, were granted pursuant to the Hewlett-Packard Company 2004 Stock Incentive Plan, which has been approved by HP stockholders.

        The targeted long-term performance cash award amount for each participant was divided approximately into thirds corresponding to the three-year performance period of the LTPC Program (33% in the first and second years, 34% in the third). Annualshort-term Cash Flow milestones are set based on the performance metric of cash flow from operations as a percentage of revenue.set. At the end of each year,short-term performance period, if HP achieves a threshold level of performance for the Cash Flow metric, a percentage will beis applied to each participant's targeted cash amount for the period, and this amount is banked on the participant's behalf. The percentage to be applied to each participant's targeted cash amount for the first, second and third three-year programs ranges from 0% to 150% based upon the extent to which performance goals are achieved. Interest, using the applicable federal rates determined by the Internal Revenue Service (the "IRS"), will beIRS, is applied to banked amounts. If HP does not achieve a certain threshold level of Cash Flow performance for






the year,period, the percentage applied will beis zero. For the May 2004-April 2005 performance period, threshold Cash Flow performance levels were not met and no amounts were banked for participants. For the May 2005-October 2005 performance period, Cash Flow performance exceeded aspirational levels and amounts were banked for participants accordingly.

        At the end of theeach three-year performanceprogram period, the total banked amounts if any, will be adjusted by applying a modifier based on HP's TSR (which includes reinvestment of dividends) relative to the TSR for the S&P 500 for the three-year performanceprogram period. The modifier to be applied to each participant's total banked amount ranges from 0% to 200% (reduced to 150% for performance periods after 2005). If HP does not achieve a certain threshold TSR relative to the TSR for the S&P 500,level, then the modifier will be zero, and any banked amounts held by then currentthen-current participants will be forfeited. The ultimate payout under this program is dependent on HP's TSR relative to the TSR of the S&P 500 over the three-year performance period, and therefore, payouts, if any, generally will occur at the end of such three-year period.

        If cash flow from operations as a percentage of revenueCash Flow is below the threshold level, no amounts will be banked for these current participants for the year.short-term performance period. Similarly, if TSR thresholds are not achieved for the three-year performance period, any banked amounts held by then currentthen-current participants at the end of the period will be forfeited. To achieve a modifier above 100%, HP's TSR must exceed the median of the TSR for the S&P 500 over the three-year performanceprogram period, and, to achieve the maximum payout, HP's TSR must significantly exceed the median for S&P 500 companies.

        NotwithstandingAs previously disclosed, Ms. Fiorina received a payout under the foregoing, ifLTPC Program calculated at target for the 2003 - 2004 and 2004 - 2005 program years and Mr. Winkler also is entitled to receive guaranteed payouts under the LTPC Program. Also as previously disclosed, certain amounts under the LTPC Program have been guaranteed to pay out at least at target levels for Messrs. Hurd and Mott in accordance with the terms of their employment agreements. For a participant is no longer employeddescription of these arrangements, see "Employment Contracts, Termination of Employment and Change-in-Control Arrangements" beginning on page 50.

        Awards to the named executive officers under the LTPC Program were granted pursuant to the Hewlett-Packard Company 2004 Stock Incentive Plan, which has been approved by HP due to involuntary termination, disability, retirement or death, targeted awards are paid subject to certain adjustments. In the event of voluntary terminations, any banked amounts will be forfeited and no payment is made.stockholders.

        Because the amount of an executive's LTPC Program bonus is dependent upon the satisfaction of annual cash flow and three-year TSR objectives, the exact amount of the payout (if any) to an executive under the program cannot be determined at this time. The following table describes the hypothetical amounts that would be payable to named executive officers, excluding accrued interest, under LTCP






for LTPC Program awards granted during fiscal 2004,2005, assuming that threshold, target and maximum levels of both cash flow and TSR performance metrics are met.







Long-Term Incentive Plans—Awards In Last Fiscal Year


				Hypothetical Estimated Future Payouts Under Non-Stock Price-Based Plans (Cash)														Hypothetical Estimated Future Payouts Under Non-Stock Price-Based Plans (Cash)
		Performance Or Other Period Until Maturation Or Payout														Performance Or Other Period Until Maturation Or Payout
Name				Below Threshold Value			Threshold Value			Target Value			Hypothetical Maximum Value					Below Threshold Value			Threshold Value			Target Value			Hypothetical Maximum Value
Regular LTPC Grants
Robert P. Wayman		3 years		$	0		$	644,014		$	2,576,057		$	7,728,171		3 years		$	0		$	689,585		$	2,758,338		$	8,275,014
Vyomesh I. Joshi		3 years			0			644,014			2,576,057			7,728,171		3 years			0			861,981			3,447,923			10,343,769
Ann M. Livermore		3 years			0			1,073,357			4,293,428			12,880,284		3 years			0			689,585			2,758,338			8,275,014
Carleton S. Fiorina(1)		3 years			0			1,502,700			6,010,800			18,032,400
Duane E. Zitzner(2)		3 years			0			429,343			1,717,371			5,152,113
In-hire LTPC Grants
Mark V. Hurd(1)																3 years			0			1,050,000			4,200,000			12,600,000
R. Todd Bradley																3 years			0			690,000			2,760,000			8,280,000
Randall D. Mott(1)																3 years			0			1,750,000			7,000,000			21,000,000
Former Officers
Carleton S. Fiorina																N/A			0			0			0			0
Michael J. Winkler																N/A			0			0			0			0

---

(1)

Ms. Fiorina terminated as ChairmanGuaranteed long-term incentive amounts for Messrs. Hurd and Chief Executive OfficerMott are described in the "Employment Contracts, Termination of Employment and resigned as a directorChange-in-Control Arrangements" beginning on February 8, 2005.



(2)

Mr. Zitzner retired in fiscal 2005.page 50.





EQUITY COMPENSATION PLAN INFORMATION


        The following table summarizes our equity compensation plan information as of October 31, 2004.2005. Information is included for equity compensation plans approved by HP stockholders and equity compensation plans not approved by HP stockholders. In the case of equity compensation plans not approved by HP stockholders, many of the plans (including the equity compensation plans available to directors, officers and employees of Compaq, which HP acquired in fiscal 2002) were approved by stockholders of companies acquired by HP, as described in footnote (6) below. The table does not include the additional shares that may be issuable pursuant to the proposed amendment adding 75 million shares to the Share Ownership Plan that is the subject of Proposal No. 3 of this proxy statement.

Plan Category		Common shares to be issued upon exercise of outstanding options, warrants and rights(1)		Weighted-average exercise price of outstanding options, warrants and rights(2)			Common shares available for future issuance under equity compensation plans (excluding securities reflected in column (a))			Common shares to be issued upon exercise of outstanding options, warrants and rights(1)		Weighted-average exercise price of outstanding options, warrants and rights(2)			Common shares available for future issuance under equity compensation plans (excluding securities reflected in column (a))
		(a)		(b)			(c)			(a)		(b)			(c)
Equity compensation plans approved by HP stockholders		342,553,847	(3)	$	28.6486		228,430,704	(4)(5)		347,674,719	(3)	$	28.0441		228,220,012	(4)(5)
Equity compensation plans not approved by HP stockholders		203,309,352	(6)(7)(8)	$	32.5655		29,123,064	(9)		183,291,181	(6)(7)(8)(9)	$	32.7557		32,449,276	(10)
Totals:		545,863,199		$	30.1073		257,553,768			530,965,900		$	29.6701		260,669,288

---

(1)

This column does not reflect options assumed in acquisitions where the plans governing the options will not be used for future awards.



(2)

This column does not reflect the exercise price of shares underlying the assumed options referred to in footnote (1) of this table or the purchase price of shares to be purchased pursuant to the Share Ownership Plan or the Hewlett-Packard Company Employee Stock Purchase Plan.



(3)

Includes options to purchase shares outstanding under the Hewlett-Packard Company 2004 Stock Incentive Plan, the Hewlett-Packard Company 2000 Stock Plan, the Hewlett-Packard Company 1995 Incentive Stock Plan, the Hewlett-Packard Company 1990 Incentive Stock Plan, the Hewlett-Packard Company 1997 Director Stock Plan and the 1987 Hewlett-Packard Company Director Option Plan.



(4)

Includes shares available for future issuance under the Hewlett-Packard Company 2004 Stock Incentive Plan, the Hewlett-Packard Company 2000 Stock Plan, the Hewlett-Packard 1995 IncentiveCompany 1997 Director Stock Plan, the 1987 Hewlett-Packard Company 1997 Director StockOption Plan, the Share Ownership Plan, the Hewlett-Packard Company Employee Stock Purchase Plan and the Hewlett-Packard Company Service Anniversary Award Plan.

As of October 31, 2004, 26,405,5922005, 77,220,408 shares were available under the Share Ownership Plan, 2,725,611 shares were available under the Hewlett-Packard Company Employee Stock Purchase Plan and 1,531,8201,455,400 shares were available under the Hewlett-Packard Company Service Anniversary Award Plan. The balance is available for option grants under our other stockholder-approved equity compensation plans.

(5)

In addition to options, the Hewlett-Packard Company 2004 Stock Incentive Plan and the Hewlett-Packard Company 2000 Stock Plan provide for the award of cash and stock. The Hewlett-Packard Company 2004 Stock Incentive Plan provides for a maximum of 100,000,000 shares for stock awards, and 100,000,00096,604,689 shares remain available for such stock awards. The Hewlett-Packard Company 2000 Stock Plan provides for a maximum of 20,000,000 shares for stock awards, and 17,954,61913,027,751 shares remain available for such stock awards. The Hewlett-Packard Company 1995 Incentive Stock Plan also






provides for the award of cash and stock. There is no limit on the number of shares that can be allocated as awards other than options.

(6)

As of October 31, 2004,2005, individual options to purchase a total of 5,437,8693,114,849 shares had beenwere outstanding pursuant to options assumed in connection with acquisition transactions by HP, at a weighted average




exercise price of $14.3291.$13.1948. These options were issued under the plans listed below, which have not been approved by HP stockholders: the Compaq Computer Corporation 1985 Executive and Key Employee Stock Option Plan, the Compaq Computer Corporation 1985 Nonqualified Stock Option Plan, the Compaq Computer Corporation 1985 Stock Option Plan, the Compaq Computer Corporation 1987 Nonqualified Stock Option Plan for Non-employee Directors, the Compaq Computer Corporation 1998 Former Non-Employee Replacement Option Plan (Digital), the VeriFone, Inc. Amended and Restated 1987 Supplemental Stock Option Plan, the 1992 Amended and Restated VeriFone Directors Stock Option Plan, the VeriFone, Inc. Amended and Restated Incentive Stock Option Plan, the 1995 Convex Stock Option Conversion Plan, the StorageApps Inc. 2000 Stock Incentive Plan, the Flexible Stock Incentive Plan of Indigo N.V. ("Indigo"), the Indigo N.V. 1996 International Flexible Stock Incentive Plan, the Consera Software Corporation 2002 Stock Plan, the TruLogica, Inc. 2003 Stock Plan, the Digital Equipment (India) Limited 1999 Stock Option Plan, the Digital GlobalSoft Limited 2001 Stock Option Plan, the Novadigm, Inc. 1992 Stock Option Plan, the Novadigm, Inc. 1999 Nonstatutory Stock Option Plan, and the Novadigm, Inc. 2000 Stock Option Plan, the 1995 Convex Stock Option Conversion Plan and the AppIQ, Inc. 2001 Stock Option and Incentive Plan. These options are not reflected in the table above. In connection with the Compaq acquisition, HP also assumed stock options to purchase 189,750 shares of HP common stock at a price of $35.97 and 189,750 shares of HP common stock at a price of $37.46 granted to former Compaq directors in April 1999. These options were not issued under any of the plans listed above and are not reflected in the table above. In connection with the Indigo acquisition, HP also assumed stock options covering 1,876 shares at a price of $17.96 granted to former Indigo employees under the Indigo plans noted above. These shares are not registered and are not reflected in the table above. While the Compaq plans listed above have not been approved by HP stockholders, they were approved by Compaq stockholders when the plans were initially implemented. Prior to the applicable acquisition by HP, stockholders of the acquired companies also approved the following plans: the StorageApps Inc. 2000 Stock Incentive Plan, the Flexible Stock Incentive Plan of Indigo N.V., the Indigo N.V. 1996 International Flexible Stock Incentive Plan, the 1992 Amended and Restated VeriFone Directors Stock Option Plan, the VeriFone Inc. Amended and Restated 1987 Supplemental Stock Option Plan, the Consera Software Corporation 2002 Stock Plan, the TruLogica, Inc. 2003 Stock Plan, the Digital Equipment (India) Limited 1999 Stock Option Plan, the Digital GlobalSoft Limited 2001 Stock Option Plan, the Novadigm, Inc. 1992 Stock Option Plan, and the Novadigm, Inc. 2000 Stock Option Plan, and the AppIQ, Inc. 2001 Stock Option and Incentive Plan.

HP has assumed and intends to continue issuing awards in accordance with applicable stock exchange listing standards under the following plans, which have not been approved by HP stockholders but were approved by Compaq stockholders: the Compaq Computer Corporation 1989 Equity Incentive Plan, the Compaq Computer Corporation 1995 Equity Incentive Plan, the Compaq Computer Corporation 1998 Stock Option Plan and the Compaq Computer Corporation 2001 Stock Option Plan. Exercisable options issued under these plans are reflected in this column.

(7)

This figure also includes the individual option grants to Stone Yamashita described below under "Individual Arrangements."