Exhibit 10(e)(e)


 


HEWLETT-PACKARD COMPANY


EXECUTIVE PAY-FOR-RESULTS PLAN


 


(Amended and Restated Effective November 1, 2002)


 


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 or bonus payments paid to commissioned employees pursuant to
an incentive plan, Bonuses, Target 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



 


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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/or 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 in each case 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).


(t)            “Revenue
Growth” shall be, with respect to any Performance Period, as defined
by the Committee, in its sole discretion.


(u)           “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.


(v)           “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, to the extent specified 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).


 


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6.             Bonuses. 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 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.


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, 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.


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:


 


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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 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
participation in a work force reduction program, 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
prorated 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 prorated 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 federal, state or local law
to be withheld, in accordance with the procedures to be established by the
Committee.


 


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(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
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 rules of any applicable 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 


 


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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 25th day of February
2003, effective November 1, 2002.


 


 


	
   

  	
  HEWLETT-PACKARD
  COMPANY

  
	
   

  	
   

  
	
   

  	
  /s/ Philip M. Condit

  
	
   

  	
  Philip M. Condit

  
	
   

  	
  Chair, HR and Compensation Committee

  



 


 


 


 


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