Exhibit 10(c)(c)

 

HEWLETT-PACKARD COMPANY

EXECUTIVE PAY-FOR-RESULTS PLAN

(Amended and Restated Effective November 1, 2003)

 

1.                                      PURPOSE.  THE PURPOSE OF THE
HEWLETT-PACKARD COMPANY EXECUTIVE PAY-FOR-RESULTS PLAN IS TO PROVIDE CERTAIN
EMPLOYEES OF HEWLETT-PACKARD COMPANY AND ITS SUBSIDIARIES WITH INCENTIVE
COMPENSATION BASED UPON THE LEVEL OF ACHIEVEMENT OF FINANCIAL, BUSINESS AND
OTHER PERFORMANCE CRITERIA.

 

2.                                      DEFINITIONS.  AS USED IN THE PLAN, THE
FOLLOWING TERMS SHALL HAVE THE MEANINGS SET FORTH BELOW:

 

(A)  “AFFILIATE” SHALL MEAN (I) ANY ENTITY THAT, DIRECTLY OR INDIRECTLY, IS
CONTROLLED BY THE COMPANY AND (II) ANY ENTITY IN WHICH THE COMPANY HAS A
SIGNIFICANT EQUITY INTEREST, IN EITHER CASE AS DETERMINED BY THE COMMITTEE.

 

(B)  “AFM” SHALL MEAN THE COMPANY’S ACCOUNTING AND FINANCIAL MANUAL, AS POSTED
FROM TIME TO TIME ON THE COMPANY’S INTERNAL WEB SITE.

 

(C)  “BOARD” SHALL MEAN THE BOARD OF DIRECTORS OF THE COMPANY.

 

(D)  “BONUS” SHALL MEAN A CASH PAYMENT, WHICH MAY BE AN ADDITION TO BASE PAY
MADE PURSUANT TO THE PLAN WITH RESPECT TO A PARTICULAR PERFORMANCE PERIOD.  THE
AMOUNT OF A BONUS MAY BE LESS THAN, EQUAL TO, OR GREATER THAN THE TARGET BONUS;
PROVIDED, HOWEVER, THAT A BONUS SHALL NOT BE GREATER THAN AN AMOUNT EQUAL TO
THREE HUNDRED PERCENT (300%) OF THE TARGET BONUS.

 

(E)  “CODE” SHALL MEAN THE INTERNAL REVENUE CODE OF 1986 AND REGULATIONS
PROMULGATED THEREUNDER, ALL AS AMENDED FROM TIME TO TIME, AND ANY SUCCESSORS
THERETO.

 

(F)  “COMMITTEE” SHALL MEAN THE COMMITTEE, DESIGNATED PURSUANT TO SECTION 4 OF
THE PLAN, OR ITS DELEGATE(S).

 

(G)  “COMPANY” SHALL MEAN HEWLETT-PACKARD COMPANY, A DELAWARE CORPORATION.

 

(H)  “COVERED OFFICER” SHALL MEAN AT ANY DATE (I) ANY INDIVIDUAL WHO WITH
RESPECT TO THE PREVIOUS TAXABLE YEAR OF THE COMPANY, WAS A “COVERED EMPLOYEE” OF
THE COMPANY WITHIN THE MEANING OF CODE SECTION 162(M); PROVIDED, HOWEVER THAT
THE TERM “COVERED OFFICER” SHALL NOT INCLUDE ANY SUCH INDIVIDUAL WHO IS
DESIGNATED BY THE COMMITTEE, IN ITS SOLE DISCRETION, AT THE TIME OF ANY BONUS OR
AT ANY SUBSEQUENT TIME, AS REASONABLY EXPECTED NOT TO BE SUCH A “COVERED
EMPLOYEE” WITH RESPECT TO THE THEN CURRENT TAXABLE YEAR OF THE COMPANY, AND (II)
ANY INDIVIDUAL WHO IS DESIGNATED BY THE COMMITTEE, IN ITS SOLE DISCRETION, AT
THE TIME OF ANY BONUS OR AT ANY SUBSEQUENT TIME, AS REASONABLY EXPECTED TO BE
SUCH A “COVERED EMPLOYEE” WITH RESPECT TO THE THEN CURRENT TAXABLE YEAR OF THE
COMPANY OR WITH RESPECT TO THE TAXABLE YEAR OF THE COMPANY IN WHICH ANY
APPLICABLE BONUS WILL BE PAID.

 

(I)  “ELIGIBLE EARNINGS” SHALL MEAN THE ANNUAL BASE RATE OF CASH COMPENSATION,
EXCLUDING DISCRETIONARY OR CONTRACTUAL BONUSES, ACTUAL COMMISSIONS/BONUS
PAYMENTS PAID TO COMMISSIONED EMPLOYEES PURSUANT TO AN INCENTIVE PLAN, BONUSES,
TARGET

 

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Bonuses, payments under the Hewlett-Packard Company Disability Plan and the
Hewlett-Packard Company Supplemental Disability Plan, or any other additional
compensation. Eligible earnings may be modified in accordance with local law or
requirements.

 

(J)  “FISCAL YEAR” SHALL MEAN THE TWELVE-MONTH PERIOD FROM NOVEMBER 1 THROUGH
OCTOBER 31.

 

(K)  “NET ORDER DOLLARS” SHALL BE AS DEFINED IN THE COMPANY’S CORPORATE
MARKETING POLICY, AS POSTED ON THE COMPANY’S INTERNAL WEB SITE AT THE START OF
THE PERFORMANCE PERIOD.

 

(L)  “NET PROFIT DOLLARS” SHALL BE AS DEFINED IN THE AFM AT THE START OF THE
PERFORMANCE PERIOD.

 

(M)  “NET PROFIT GROWTH” SHALL BE, WITH RESPECT TO ANY PERFORMANCE PERIOD, AS
DEFINED BY THE COMMITTEE, IN ITS SOLE DISCRETION.

 

(N)  “NET REVENUE DOLLARS” SHALL BE AS DEFINED IN THE AFM AT THE START OF THE
PERFORMANCE PERIOD.

 

(O)  “PARTICIPANT” SHALL MEAN EACH SALARIED EMPLOYEE OF THE COMPANY OR ITS
AFFILIATES IN ACTIVE SERVICE WHOSE POSITION IS DESIGNATED BY THE COMMITTEE AS
ELIGIBLE FOR PARTICIPATION IN THE PLAN; PROVIDED, HOWEVER, THAT PARTICIPANTS WHO
ARE COVERED OFFICERS MUST BE SELECTED PRIOR TO THE PREDETERMINATION DATE.

 

(P)  “PERFORMANCE MEASURE” SHALL MEAN ANY MEASURABLE CRITERIA USING AN APPROACH,
SUCH AS A BALANCED SCORE CARD, WHICH IS TIED TO THE COMPANY’S SUCCESS THAT THE
COMMITTEE MAY DETERMINE, INCLUDING, BUT NOT LIMITED TO, NET ORDER DOLLARS, NET
PROFIT DOLLARS, NET PROFIT GROWTH, NET REVENUE DOLLARS, REVENUE GROWTH, TOTAL
SHAREHOLDER RETURN RELATIVE TO PEER INDEX, CASH FLOW, EARNINGS OR EARNINGS PER
SHARE, GROWTH IN EARNINGS OR EARNINGS PER SHARE, RETURN ON EQUITY, STOCK PRICE,
RETURN ON EQUITY OR AVERAGE STOCKHOLDERS’ EQUITY, TOTAL STOCKHOLDER RETURN,
RETURN ON CAPITAL, RETURN ON ASSETS OR NET ASSETS, RETURN ON INVESTMENT,
REVENUE, INCOME OR NET INCOME, OPERATING INCOME OR NET OPERATING INCOME,
OPERATING PROFIT OR NET OPERATING PROFIT, OPERATING MARGIN, RETURN ON OPERATING
REVENUE, MARKET SHARE, OVERHEAD OR OTHER EXPENSE REDUCTION, CREDIT RATING,
STRATEGIC PLAN DEVELOPMENT AND IMPLEMENTATION, SUCCESSION PLAN DEVELOPMENT AND
IMPLEMENTATION, CUSTOMER SATISFACTION INDICATORS, AND EMPLOYEE METRICS.

 

(Q)  “PERFORMANCE PERIOD” SHALL MEAN A SIX-MONTH PERIOD OF TIME BASED UPON THE
HALVES OF THE COMPANY’S FISCAL YEAR, OR SUCH OTHER TIME PERIOD AS SHALL BE
DETERMINED BY THE COMMITTEE.

 

(R)  “PLAN” SHALL MEAN THE HEWLETT-PACKARD COMPANY EXECUTIVE PAY-FOR-RESULTS
PLAN, AS AMENDED FROM TIME TO TIME.

 

(S)  “PREDETERMINATION DATE” SHALL MEAN (I) THE EARLIER OF: A DATE 45 DAYS AFTER
COMMENCEMENT OF THE PERFORMANCE PERIOD, OR A DATE NOT LATER THAN THE EXPIRATION
OF 25% OF THE PERFORMANCE PERIOD; PROVIDED THAT THE SATISFACTION OF SELECTED
PERFORMANCE MEASURES IS SUBSTANTIALLY UNCERTAIN AT SUCH TIME, OR (II) SUCH OTHER
DATE ON WHICH A PERFORMANCE GOAL IS CONSIDERED TO BE PRE-ESTABLISHED PURSUANT TO
CODE SECTION 162(M).

 

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(T)  “REVENUE GROWTH” SHALL BE, WITH RESPECT TO ANY PERFORMANCE PERIOD, AS
DEFINED BY THE COMMITTEE, IN ITS SOLE DISCRETION.

 

(U)  “SECTION 16 OFFICER” SHALL MEAN A PARTICIPANT WHO IS AN OFFICER OF THE
COMPANY WITHIN THE MEANING OF SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.

 

(V)  “TARGET BONUS” SHALL MEAN A BONUS AMOUNT THAT MAY BE PAID IF 100% OF ALL
THE APPLICABLE PERFORMANCE MEASURES ARE ACHIEVED AT TARGET IN THE PERFORMANCE
PERIOD.  THE TARGET BONUS SHALL BE EQUAL TO A FIXED PERCENTAGE OF THE
PARTICIPANT’S BASE PAY FOR SUCH PERFORMANCE PERIOD.  SUCH PERCENTAGE SHALL BE
DETERMINED BY THE COMMITTEE PRIOR TO THE PREDETERMINATION DATE.

 

(W)  “TOTAL SHAREHOLDER RETURN RELATIVE TO PEER INDEX” SHALL BE, WITH RESPECT TO
ANY PERFORMANCE PERIOD, AS DEFINED BY THE COMMITTEE, IN ITS SOLE DISCRETION.

 

3.                                      ELIGIBILITY.  PERSONS EMPLOYED BY THE
COMPANY OR ANY OF ITS AFFILIATES DURING A PERFORMANCE PERIOD AND IN ACTIVE
SERVICE ARE ELIGIBLE TO BE PARTICIPANTS UNDER THE PLAN FOR SUCH PERFORMANCE
PERIOD (WHETHER OR NOT SO EMPLOYED OR LIVING AT THE DATE A BONUS IS PAID) AND
MAY BE CONSIDERED BY THE COMMITTEE FOR A BONUS.  AN INDIVIDUAL IS NOT RENDERED
INELIGIBLE TO BE A PARTICIPANT BY REASON OF BEING A MEMBER OF THE BOARD. 
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE COMMITTEE SHALL HAVE SOLE
DISCRETION TO DESIGNATE OR APPROVE THE PARTICIPANTS FOR ANY GIVEN PERFORMANCE
PERIOD.

 

4.                                      ADMINISTRATION.

 

(A)  UNLESS OTHERWISE DESIGNATED BY THE BOARD, THE HR AND COMPENSATION COMMITTEE
OF THE BOARD SHALL BE THE COMMITTEE UNDER THE PLAN.  A DIRECTOR MAY SERVE AS A
MEMBER OR AN ALTERNATE MEMBER OF THE COMMITTEE ONLY DURING PERIODS IN WHICH THE
DIRECTOR IS AN “OUTSIDE DIRECTOR” AS DESCRIBED IN CODE SECTION 162(M).  THE
COMMITTEE SHALL HAVE FULL POWER AND AUTHORITY TO CONSTRUE, INTERPRET AND
ADMINISTER THE PLAN.  IT MAY ISSUE RULES AND REGULATIONS FOR ADMINISTRATION OF
THE PLAN AND SHALL MEET AT SUCH TIMES AND PLACES AS IT MAY DETERMINE.  A
MAJORITY OF THE MEMBERS OF THE COMMITTEE SHALL CONSTITUTE A QUORUM AND ALL
DECISIONS OF THE COMMITTEE SHALL BE FINAL, CONCLUSIVE AND BINDING UPON ALL
PARTIES, INCLUDING THE COMPANY, ITS STOCKHOLDERS, EMPLOYEES AND PARTICIPANTS. 
IN THE CASE OF PARTICIPANTS WHO ARE NOT COVERED OFFICERS, THE COMMITTEE MAY
EMPOWER CERTAIN PERSON(S) OR A COMMITTEE TO ADMINISTER THE PLAN AND TO PERFORM
THE DUTIES OF THE COMMITTEE SPECIFIED HEREIN, SUBJECT TO ANY LIMITATIONS IMPOSED
BY THE COMMITTEE AT THE TIME OF DELEGATION, AND SUBJECT TO MODIFICATION AT ANY
TIME THEREAFTER, WHOSE DECISIONS SHALL SIMILARLY BE FINAL, CONCLUSIVE AND
BINDING UPON ALL PARTIES.

 

(B)  THE EXPENSES OF THE ADMINISTRATION OF THE PLAN SHALL BE BORNE THE COMPANY.

 

5.                                      TERM.  SUBJECT TO SECTION 10(G), THE
PLAN SHALL BE EFFECTIVE AS OF NOVEMBER 1, 2002 AND SHALL BE APPLICABLE FOR
FUTURE FISCAL YEARS OF THE COMPANY UNLESS AMENDED OR TERMINATED BY THE BOARD OR
THE COMMITTEE PURSUANT TO SECTION 10(E).

 

6.                                      BONUSES.

 

(A)  PRIOR TO THE PREDETERMINATION DATE, THE COMMITTEE SHALL DESIGNATE OR
APPROVE (A) THE POSITIONS OR EMPLOYEES WHO WILL BE PARTICIPANTS FOR A
PERFORMANCE PERIOD, (B) THE

 

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minimum and maximum Bonuses and the Target Bonuses for the position or employee,
(c) the applicable Performance Measures and combination of Performance Measures
and percentages allocated to the applicable Performance Measures; and (d) the
Performance Period.  All Performance Measures pertaining to a Covered Officer
shall be of such a nature that an objective third party having knowledge of all
the relevant facts could determine whether performance results with respect to
such Performance Measures have been achieved.

 

(B)  NOTWITHSTANDING THE FOREGOING, PRIOR TO THE DATE WHICH IS 90 DAYS AFTER THE
BEGINNING OF THE PERFORMANCE PERIOD, THE COMMITTEE SHALL DESIGNATE OR APPROVE
THE APPLICABLE PERFORMANCE MEASURES AND COMBINATION OF PERFORMANCE MEASURES AND
PERCENTAGES ALLOCATED TO THE APPLICABLE PERFORMANCE MEASURES FOR REGIONS,
BUSINESS GROUPS, BUSINESS UNITS OR ANY OTHER SUB-GROUP; PROVIDED, HOWEVER, THAT
SUCH DESIGNATION OR APPROVAL SHALL NOT APPLY TO ANY COVERED OFFICER OR
SECTION 16 OFFICER.

 

(C)  THE COMMITTEE, IN ITS DISCRETION, MAY DETERMINE THAT A PORTION OR ALL OF
THE ENTIRE BONUS WILL BE DETERMINED BY FACTORS OTHER THAN PERFORMANCE MEASURES;
PROVIDED, HOWEVER, THAT SUCH DETERMINATION SHALL NOT APPLY TO ANY COVERED
OFFICER OR SECTION 16 OFFICER.

 

7.                                      DETERMINATION OF AMOUNT OF BONUS.

 

(A)  CALCULATION   AS SOON AS ADMINISTRATIVELY PRACTICABLE AFTER THE END OF THE
RELEVANT PERFORMANCE PERIOD, THE COMMITTEE, OR, IN THE CASE OF A BONUS TO A
PARTICIPANT WHO IS NOT A COVERED OFFICER, THE PERSON(S) OR COMMITTEE EMPOWERED
BY THE COMMITTEE OR THE BOARD, SHALL DETERMINE THE AMOUNT OF THE BONUS FOR EACH
PARTICIPANT BY:

 

(I)                                     DETERMINING THE ACTUAL PERFORMANCE
RESULTS FOR EACH PERFORMANCE MEASURE;

 

(II)                                  DETERMINING THE AMOUNT TO WHICH EACH
PARTICIPANT IS ENTITLED BASED ON THE PERCENTAGE ALLOCATED BY THE COMMITTEE TO
EACH PERFORMANCE MEASURE AGAINST THE TARGET BONUS FOR EACH PARTICIPANT; AND

 

(III)                               CERTIFYING BY RESOLUTION DULY ADOPTED BY THE
COMMITTEE THE AMOUNT OF THE BONUS FOR EACH COVERED OFFICER SO DETERMINED.

 

(B)  ADJUSTMENTS TO BONUSES.

 

(I)                                     IN GENERAL.  IN ITS SOLE DISCRETION, AND
IN CIRCUMSTANCES DEEMED APPROPRIATE BY THE COMMITTEE, THE COMMITTEE ALONE MAY
APPROVE ANY OTHER ADJUSTMENTS TO A PARTICIPANT’S BONUS DURING A PERFORMANCE
PERIOD.  THE COMMITTEE MAY, IN THE EXERCISE OF ITS SOLE DISCRETION AND BASED ON
ANY FACTORS THE COMMITTEE DEEMS APPROPRIATE, INCREASE, REDUCE OR ELIMINATE TO
ZERO THE AMOUNT OF A BONUS TO A PARTICIPANT PRIOR TO PAYMENT THEREOF.  THE
COMMITTEE SHALL MAKE A DETERMINATION OF WHETHER AND TO WHAT EXTENT TO INCREASE,
REDUCE OR ELIMINATE BONUSES UNDER THE PLAN FOR EACH PERFORMANCE PERIOD AT SUCH
TIME OR TIMES FOLLOWING THE CLOSE OF THE PERFORMANCE PERIOD AS THE COMMITTEE
SHALL DEEM APPROPRIATE.  THE INCREASE, REDUCTION OR ELIMINATION IN THE AMOUNT OF
A BONUS TO A PARTICIPANT FOR A PERFORMANCE PERIOD SHALL HAVE NO EFFECT ON THE
AMOUNT OF THE BONUS TO ANY OTHER PARTICIPANT FOR SUCH PERIOD.

 

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(II)                                  NO ADJUSTMENT INCREASE FOR COVERED
OFFICERS.  NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (I) ABOVE AND FOR
PURPOSES OF TAX DEDUCTIBILITY UNDER SECTION 162(M) OF THE CODE, ANY ADJUSTMENTS
MADE IN ACCORDANCE WITH OR FOR THE PURPOSES OF PARAGRAPH (I) SHALL BE
DISREGARDED FOR PURPOSES OF CALCULATING THE BONUS TO ANY COVERED OFFICER TO THE
EXTENT THAT SUCH ADJUSTMENTS WOULD HAVE THE EFFECT OF INCREASING SUCH BONUS.

 

(C)  MAXIMUM.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS PLAN, THE MAXIMUM
BONUS THAT MAY BE PAID TO A COVERED OFFICER UNDER THE PLAN WITH RESPECT TO A
PARTICULAR PERFORMANCE PERIOD IS $15 MILLION.  TO THE EXTENT THE PERIOD OF TIME
DEFINING A PERFORMANCE PERIOD IS CHANGED BY THE COMMITTEE, THEN THE MAXIMUM
BONUS THAT MAY BE PAID TO A COVERED OFFICER UNDER THE PLAN IS AN AMOUNT THAT
BEARS THE SAME PRO RATA RELATIONSHIP TO THE NEW PERIOD OF TIME AS THE ABOVE
AMOUNT DOES TO THE CURRENT SIX-MONTH PERFORMANCE PERIOD AS SET BY THE COMMITTEE.

 

8.                                      PAYMENT OF BONUSES.

 

(A)  PAYMENT OF A BONUS TO A PARTICIPANT SHALL BE MADE AS SOON AS PRACTICABLE
AFTER DETERMINATION OF THE AMOUNT OF THE BONUS UNDER SECTION 7 ABOVE, AND AFTER
THE COMMITTEE HAS CERTIFIED IN WRITING THE AMOUNT TO BE PAID TO COVERED
OFFICERS, EXCEPT TO THE EXTENT A PARTICIPANT HAS MADE A TIMELY ELECTION TO DEFER
THE PAYMENT OF ALL OR ANY PORTION OF SUCH BONUS UNDER THE HEWLETT-PACKARD
COMPANY EXECUTIVE DEFERRED COMPENSATION PLAN OR ANY OTHER SIMILAR PLAN AS THE
COMMITTEE DETERMINES IN ITS DISCRETION.

 

(B)  A PARTICIPANT WILL FORFEIT ANY BONUS FOR A PERFORMANCE PERIOD DURING WHICH
HE OR SHE IS INVOLUNTARILY TERMINATED FOR CAUSE OR VOLUNTARILY TERMINATES HIS OR
HER EMPLOYMENT WITH THE COMPANY FOR ANY REASON EXCEPT AS OTHERWISE PROVIDED IN
SECTION 8(C), BELOW.

 

(C)  THE PAYMENT OF A BONUS WITH RESPECT TO A SPECIFIC PERFORMANCE PERIOD
REQUIRES THAT THE EMPLOYEE BE ON THE COMPANY’S PAYROLL AS OF THE END OF SUCH
PERFORMANCE PERIOD, SUBJECT TO THE FOLLOWING:

 

(I)                                     NON-PAY STATUS.  A PARTICIPANT WHO
CONTINUES TO BE ON APPROVED NON-PAY STATUS THROUGH THE END OF THE PERFORMANCE
PERIOD MAY RECEIVE A BONUS PAYMENT IF RETURN TO WORK IS WITHIN THE MAXIMUM
PERIOD APPROVED BY THE COMPANY FOR THE NON-PAY STATUS.  IF THE NON-PAY STATUS
RESULTS IN A LEAVE OF ABSENCE OR TERMINATION, GUIDELINES GOVERNING THOSE
SITUATIONS WILL APPLY.

 

(II)                                  LEAVE OF ABSENCE.  A PARTICIPANT MAY
RECEIVE A BONUS PAYMENT WHILE ON AN APPROVED LEAVE OF ABSENCE EVEN IF THE LEAVE
BEGAN PRIOR TO THE END OF THE PERFORMANCE PERIOD.  THE BONUS WILL BE BASED ON
THE PARTICIPANT’S ACTUAL BASE PAY FOR THE PERFORMANCE PERIOD.  WHILE ON AN
APPROVED MEDICAL LEAVE OF ABSENCE, ACCRUAL OF BASE PAY WILL CONTINUE FOR AS LONG
AS THE EMPLOYEE IS INTEGRATING DISABILITY BENEFITS WITH FLEXIBLE TIME OFF (FTO)
HOURS, OR SICK OR VACATION HOURS.  ONLY THE FTO OR SICK OR VACATION HOURS WILL
BE INCLUDED IN BASE PAY.

 

(III)                               WORK-RELATED ILLNESS/INJURY.  A PARTICIPANT
WHO CANNOT WORK DUE TO A WORK-RELATED INJURY/ILLNESS AND WHO MAY BE DRAWING
WORKERS’ COMPENSATION BENEFITS WILL BE PLACED ON MEDICAL LEAVE FROM THE LAST DAY
WORKED.  WHILE ON LEAVE, A

 

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Participant may receive a bonus payment even if the leave began prior to the end
of the Performance Period.

 

(IV)                              WORK FORCE REDUCTION.  IF THE REASON FOR A
PARTICIPANT’S TERMINATION OF EMPLOYMENT PRIOR TO THE END OF A PERFORMANCE PERIOD
IS WORK FORCE REDUCTION, ANY BONUS MAY BE PRORATED BASED UPON THE PARTICIPANT’S
ELIGIBLE EARNINGS FOR THE PERFORMANCE PERIOD, UNLESS OTHERWISE DETERMINED DUE TO
LOCAL LAW.

 

(V)                                 RETIREMENT.  IF THE REASON FOR A
PARTICIPANT’S TERMINATION OF EMPLOYMENT PRIOR TO THE END OF A PERFORMANCE PERIOD
IS HIS OR HER RETIREMENT AT THE AGE AND SERVICE-YEAR LEVEL SET BY THE COMPANY OR
THE LOCAL LAW REQUIREMENTS WHERE THE PARTICIPANT IS EMPLOYED, ANY BONUS MAY BE
PRO-RATED BASED UPON THE EMPLOYEE’S TIME SPENT ACTIVELY AT WORK PRIOR TO HIS OR
HER RETIREMENT DATE.

 

(VI)                              DEATH.  IF A PARTICIPANT DIES PRIOR TO THE END
OF A PERFORMANCE PERIOD OR AFTER THE END OF A PERFORMANCE PERIOD BUT PRIOR TO
PAYMENT, ANY BONUS MAY BE PAID TO THE PARTICIPANT’S ESTATE AND MAY BE BASED ON
THE PARTICIPANT’S ACTUAL BASE PAY FOR THE PERFORMANCE PERIOD.

 

(D)  PAYMENTS OF BONUSES TO PARTICIPANTS WHO ARE ON THE PAYROLL OF AFFILIATES OF
THE COMPANY SHALL BE PAID DIRECTLY BY SUCH ENTITIES.

 

9.                                      CHANGES IN STATUS.

 

(A)  IF PRIOR TO THE END OF A PERFORMANCE PERIOD A PERSON IS HIRED FOR A
POSITION PREVIOUSLY DESIGNATED BY THE COMMITTEE FOR PARTICIPATION UNDER THE
PLAN, THAT PERSON WILL COMMENCE PARTICIPATION IN THE PLAN ON A PRO-RATED BASIS
FROM THE DATE OF HIRE.  SUBJECT TO PARAGRAPH (C) BELOW IF AN EMPLOYEE’S POSITION
CHANGES, OR THE EMPLOYEE IS TRANSFERRED, FROM A POSITION THAT WAS ELIGIBLE FOR
PARTICIPATION IN THE COMPANY PERFORMANCE BONUS PLAN, OR THE PAY-FOR-RESULTS
SHORT-TERM BONUS PLAN, HE OR SHE WILL BE CONSIDERED TO HAVE BEEN A PARTICIPANT
IN THIS PLAN FROM THE BEGINNING OF THE PERFORMANCE PERIOD OR, IF LATER, FROM THE
DATE OF HIRE. NOTWITHSTANDING THE FOREGOING, THIS SECTION 9(A) SHALL NOT APPLY
TO A COVERED OFFICER.

 

(B)  IF A PARTICIPANT TRANSFERS FROM ONE ELIGIBLE POSITION TO ANOTHER PRIOR TO
THE END OF A PERFORMANCE PERIOD, ANY BONUS WILL BE BASED ON PERFORMANCE AS IT
RELATES TO THE PARTICIPANT’S POSITION ON THE LAST DAY OF THE PERFORMANCE PERIOD.

 

(C)  IF PRIOR TO THE END OF A PERFORMANCE PERIOD, A PARTICIPANT TRANSFERS INTO A
POSITION THAT IS NOT ELIGIBLE FOR PARTICIPATION UNDER THE PLAN, THE EMPLOYEE
WILL NOT RECEIVE A BONUS UNDER THE PLAN.

 

10.                               MISCELLANEOUS.

 

(A)  NO ASSIGNMENT.  NO PORTION OF ANY BONUS UNDER THE PLAN MAY BE ASSIGNED OR
TRANSFERRED OTHERWISE THAN BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION PRIOR
TO THE PAYMENT THEREOF.

 

(B)  TAX REQUIREMENTS.  ALL PAYMENTS MADE PURSUANT TO THE PLAN OR DEFERRED
PURSUANT TO SECTION 8(A) SHALL BE SUBJECT TO ALL APPLICABLE TAXES OR
CONTRIBUTIONS REQUIRED BY

 

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federal, state or local law to be withheld, in accordance with the procedures to
be established by the Committee.

 

(C)  NO ADDITIONAL PARTICIPANT RIGHTS.  THE SELECTION OF AN INDIVIDUAL FOR
PARTICIPATION IN THE PLAN SHALL NOT GIVE SUCH PARTICIPANT ANY RIGHT TO BE
RETAINED IN THE EMPLOY OF THE COMPANY OR ANY OF ITS AFFILIATES, AND THE RIGHT OF
THE COMPANY AND ANY SUCH AFFILIATE TO DISMISS SUCH PARTICIPANT OR TO TERMINATE
ANY ARRANGEMENT PURSUANT TO WHICH ANY SUCH PARTICIPANT PROVIDES SERVICES TO THE
COMPANY, WITH OR WITHOUT CAUSE, IS SPECIFICALLY RESERVED.  NO PERSON SHALL HAVE
CLAIM TO A BONUS UNDER THE PLAN, EXCEPT AS OTHERWISE PROVIDED FOR HEREIN, OR TO
CONTINUED PARTICIPATION UNDER THE PLAN.  THERE IS NO OBLIGATION FOR UNIFORMITY
OF TREATMENT OF PARTICIPANTS UNDER THE PLAN.  THE BENEFITS PROVIDED FOR
PARTICIPANTS UNDER THE PLAN SHALL BE IN ADDITION TO AND SHALL IN NO WAY PRECLUDE
OTHER FORMS OF COMPENSATION TO OR IN RESPECT OF SUCH PARTICIPANTS.  IT IS
EXPRESSLY AGREED AND UNDERSTOOD THAT THE EMPLOYMENT IS TERMINABLE AT THE WILL OF
EITHER PARTY AND, IF SUCH PARTICIPANT IS A PARTY TO AN EMPLOYMENT CONTRACT WITH
THE COMPANY OR ONE OF ITS AFFILIATES, IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THE PARTICIPANT’S EMPLOYMENT CONTRACT.

 

(D)  LIABILITY.  THE BOARD AND THE COMMITTEE SHALL BE ENTITLED TO RELY ON THE
ADVICE OF COUNSEL AND OTHER EXPERTS, INCLUDING THE INDEPENDENT AUDITORS FOR THE
COMPANY.  NO MEMBER OF THE BOARD OR OF THE COMMITTEE, ANY OFFICERS OF THE
COMPANY OR ITS AFFILIATES OR ANY OF THEIR DESIGNEES SHALL BE LIABLE FOR ANY ACT
OR FAILURE TO ACT UNDER THE PLAN, EXCEPT IN CIRCUMSTANCES INVOLVING BAD FAITH ON
THE PART OF SUCH MEMBER, OFFICER OR DESIGNEE.

 

(E)  AMENDMENT; SUSPENSION; TERMINATION.  THE BOARD OR COMMITTEE MAY, AT ANY
TIME AND FROM TIME TO TIME, AMEND, SUSPEND OR TERMINATE THE PLAN OR ANY PART OF
THE PLAN AS IT MAY DEEM PROPER AND IN THE BEST INTERESTS OF THE COMPANY.  IN THE
CASE OF PARTICIPANTS EMPLOYED OUTSIDE THE UNITED STATES, THE BOARD, THE
COMMITTEE OR THEIR DESIGNEES MAY VARY THE PROVISIONS OF THE PLAN AS DEEMED
APPROPRIATE TO CONFORM WITH LOCAL LAWS, PRACTICES AND PROCEDURES.  IN ADDITION,
THE GENERAL COUNSEL, SECRETARY OR ASSISTANT SECRETARY OF THE COMPANY IS
AUTHORIZED TO MAKE CERTAIN MINOR OR ADMINISTRATIVE CHANGES REQUIRED BY OR MADE
DESIRABLE BY GOVERNMENT REGULATION.  ANY MODIFICATION OF THE PLAN MAY AFFECT
PRESENT AND FUTURE PARTICIPANTS AND THE AMOUNT OF ANY BONUS HEREUNDER.

 

(F)  OTHER COMPENSATION ARRANGEMENTS.  NOTHING CONTAINED IN THE PLAN SHALL
PREVENT THE COMPANY OR ANY AFFILIATE OF THE COMPANY FROM ADOPTING OR CONTINUING
IN EFFECT OTHER COMPENSATION ARRANGEMENTS, WHICH ARRANGEMENTS MAY BE EITHER
GENERALLY APPLICABLE OR APPLICABLE ONLY IN SPECIFIC CASES.

 

(G)  GOVERNING LAW.  THE VALIDITY, CONSTRUCTION AND EFFECT OF THE PLAN AND ANY
RULES AND REGULATIONS RELATING TO THE PLAN SHALL BE DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE AND APPLICABLE FEDERAL LAW.

 

(H)  NO TRUST.  NEITHER THE PLAN NOR ANY BONUS SHALL CREATE OR BE CONSTRUED TO
CREATE A TRUST OR SEPARATE FUND OF ANY KIND OR A FIDUCIARY RELATIONSHIP BETWEEN
THE COMPANY OR ANY PARTICIPANT.  TO THE EXTENT THAT THE PARTICIPANT ACQUIRES A
RIGHT TO RECEIVE PAYMENTS FROM THE COMPANY IN RESPECT OF ANY BONUS, SUCH RIGHT
SHALL BE NO GREATER THAN THE RIGHT OF ANY UNSECURED GENERAL CREDITOR OF THE
COMPANY.

 

(I)  SECTION 162(M). ALL PAYMENTS UNDER THIS PLAN ARE DESIGNED TO SATISFY THE
SPECIAL REQUIREMENTS FOR PERFORMANCE-BASED COMPENSATION SET FORTH IN CODE
SECTION

 

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162(m)(4)(C) of the Code, and the Plan shall be so construed.  Furthermore, if a
provision of the Plan causes a payment to fail to satisfy these special
requirements, it shall be deemed amended to satisfy the requirements to the
extent permitted by law and subject to Committee approval.

 

(J)  DESIGNATION OF BENEFICIARIES.  A PARTICIPANT MAY, IF THE COMMITTEE PERMITS,
DESIGNATE A BENEFICIARY OR BENEFICIARIES TO RECEIVE ALL OR PART OF THE BONUSES
WHICH MAY BE PAID TO THE PARTICIPANT, OR MAY BE PAYABLE, AFTER SUCH
PARTICIPANT’S DEATH.  A DESIGNATION OF BENEFICIARY SHALL BE MADE IN ACCORDANCE
WITH PROCEDURES SPECIFIED BY THE COMPANY AND MAY BE REPLACED BY A NEW
DESIGNATION OR MAY BE REVOKED BY THE PARTICIPANT AT ANY TIME.  IN CASE OF THE
PARTICIPANT’S DEATH, A BONUS WITH RESPECT TO WHICH A DESIGNATION OF BENEFICIARY
HAS BEEN MADE (TO THE EXTENT IT IS VALID AND ENFORCEABLE UNDER APPLICABLE LAW)
SHALL BE PAID TO THE DESIGNATED BENEFICIARY OR BENEFICIARIES.  ANY BONUS GRANTED
OR PAYABLE TO A PARTICIPANT WHO IS DECEASED AND NOT SUBJECT TO SUCH A
DESIGNATION SHALL BE DISTRIBUTED TO THE PARTICIPANT’S ESTATE.  IF THERE SHALL BE
ANY QUESTION AS TO THE LEGAL RIGHT OF ANY BENEFICIARY TO RECEIVE A BONUS UNDER
THE PLAN, THE AMOUNT IN QUESTION MAY BE PAID TO THE ESTATE OF THE PARTICIPANT,
IN WHICH EVENT THE COMPANY OR ITS AFFILIATES SHALL HAVE NO FURTHER LIABILITY TO
ANYONE WITH RESPECT TO SUCH AMOUNT.

 

(K)  STOCKHOLDER APPROVAL.  PLAN AMENDMENTS SHALL REQUIRE STOCKHOLDER APPROVAL
ONLY IF AND TO THE EXTENT REQUIRED BY APPLICABLE LAW OR THE APPLICABLE RULES OF
ANY STOCK EXCHANGE.

 

(L)  SEVERABILITY.  IF ANY PORTION OF THIS PLAN IS DEEMED TO BE IN CONFLICT WITH
LOCAL LAW, THAT PORTION OF THE PLAN, AND THAT PORTION ONLY, WILL BE DEEMED VOID
UNDER LOCAL LAW.  ALL OTHER PROVISIONS OF THE PLAN WILL REMAIN IN EFFECT.

 

(M)  SAVINGS CLAUSE.  IF ANY PORTION OF THIS PLAN AS IT RELATES TO A COVERED
OFFICER IS CONSTRUED AS FAILING TO SATISFY THE PROVISIONS OF CODE
SECTION 162(M), THEN THE PLAN WILL BE DEEMED AMENDED TO SATISFY THE REQUIREMENTS
TO THE EXTENT PERMITTED BY LAW AND SUBJECT TO COMMITTEE APPROVAL.

 

11.                               EXECUTION

 

IN WITNESS WHEREOF, the Company has caused this Plan to be adopted this 15th day
of January 2004, effective November 1, 2003.

 

 

HEWLETT-PACKARD COMPANY

 

 

 

 

 

 

 

 

Philip M. Condit

 

Chair, HR and Compensation Committee

 

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