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EXHIBIT 10(i)    
  

Hewlett-Packard Company

Executive Deferred Compensation Plan
  (Amended and Restated effective November 1, 2001) 

Section 1. Establishment and Purpose of Plan

        The
Hewlett-Packard Company Executive Deferred Compensation Plan was adopted and established effective January 1, 1994, and has been amended from time to time. The Plan provides
deferred compensation for a select group of management or highly compensated employees as established in Title I of ERISA. Effective November 1, 2001, the Plan is hereby amended and restated. 

        The
Plan is intended to be an unfunded and unsecured deferred compensation arrangement between the Participant and the Company, in which the Participant agrees to give up a portion of
the Participant's current compensation in exchange for the Company's unfunded and unsecured promise to make a deferred payment at a future date, as specified in Section 6. The Company retains
the right, as provided in Section 14, to amend or terminate the Plan at any time. Certain capitalized words used in the text of the Plan are defined in Section 21 in alphabetical order. 

Section 2. Participation in the Plan.

        All
Eligible Employees are eligible to defer Base Pay or Bonuses under the Plan. 

Section 3. Timing and Amounts of Deferred Compensation

        Eligible
Employees shall make elections to participate in the Plan, as follows: 

        3.1    Base Pay Deferrals.    

        3.1.1    Timing of Base Pay Deferral.    With respect to a deferral of Base Pay, an election to participate must be
made prior to December 16 of the calendar year preceding the calendar year with respect to which an election to defer Base Pay is made, in accordance with any procedures established by the
Committee. 

        3.1.2    Amount of Base Pay Deferral.    Once an election is made by an Eligible Employee, an annual whole dollar
amount will be deferred from Base Pay, taken equally over the twenty-four (24) pay periods falling within the calendar year to which the election pertains. The minimum amount of
Base Pay which may be deferred is $6,000 per calendar year. The maximum amount of Base Pay which may be deferred each calendar year is equal to the amount of Base Pay exceeding the amount defined in
Code section 401(a)(17), as adjusted by the Secretary of the Treasury under Code section 415(d), in effect on January 1 of the calendar year to which the deferral election
pertains. 

        3.2    Bonus Deferrals.    

        3.2.1    Timing of Bonus Deferral.    Participants must make an election to defer an H1 Bonus and/or H2 Bonus before
December 16 of the calendar year ending within the fiscal year to which the H1 and H2 Bonuses pertain, in accordance with any procedures established by the Committee. Participants must make an
election to defer the Deferred Cash Bonus in accordance with any procedures established by the Committee. Notwithstanding the foregoing, an election to defer an H2 Bonus may be amended or revoked at
any time prior to the commencement of the Performance Period to which the H2 Bonus relates, in accordance with any procedures established by the Committee. 

        3.2.2    Amount of Bonus Deferral.    An Eligible Employee may defer any portion, up to 95%, of any H1 or H2 Bonus to
which he or she may become entitled, so long as the deferral amount is expressed in terms of a whole percentage point. An Eligible Employee may also 

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defer any portion, up to 95%, of the Deferred Cash Bonus to which he or she may become entitled, so long as the deferral amount is expressed in terms of a whole percentage point. Once an election is
made by an Eligible Employee to defer a portion of a Bonus, the appropriate amount will be withheld from the Bonus when the amount of the Bonus has been certified by the Committee (with respect to a
Bonus under the PFR Plans), but not before the Bonus would otherwise have been paid to the Participant in cash under the plan from which the Bonus is payable. 

        3.3    Effect of Taxes on Maximum Deferrals.    Notwithstanding any provision herein to the contrary, and to the
extent consistent with the terms of the PFR Plans, the Company may withhold Taxes from any cash payment made under such plans, owing as a result of any deferral or payment hereunder, as the Company
deems appropriate in its sole discretion. If, with respect to the pay period within which a deferral, payment or Bonus is made under this Plan or other plans from which a Bonus is payable, the
Participant receives insufficient actual cash compensation to cover such Taxes, then the Company may withhold any remaining Taxes owing from the Participant's subsequent cash compensation received,
until such Tax obligation is satisfied, or otherwise make appropriate arrangements with the Participant for satisfaction of such obligation. 

        3.4    Committee Discretion.    Notwithstanding anything in this Section 3 to the contrary, the Committee shall
have the discretion to modify the availability and timing of a valid deferral election under this Section 3, in any manner it deems appropriate; provided, however, that any alteration with
respect to a Covered Officer must be consistent with the requirements for deductibility of compensation under section 162(m) of the Code. 

Section 4. Deferral Accounts.

        4.1    In General.    Amounts deferred pursuant to Section 3 shall be credited to a Deferral Account in the
name of the Participant. Deferred Amounts arising from deferrals of Base Pay shall be credited to a Deferral Account at least quarterly. Deferrals resulting from amounts credited to a Participant's
Deferral Account from the deferral of Bonuses shall be credited to a Deferral Account as soon as practicable after the Committee or its delegate—as appropriate under, and in accordance
with, the terms of the plan from which the Bonus is payable—has certified the amount of a Bonus, but not before the Bonus would otherwise have been paid to the Participant in cash. The
Participant's rights in the Deferral Account shall be no greater than the rights of any other unsecured general creditor of the Company. Deferred Amounts and Earnings thereon invested hereunder shall
for all purposes be part of the general funds of the Company. Any payout to a Participant of amounts credited to a Participant's Deferral Account are not due, nor are such amounts ascertainable, until
the Payout Commencement Date. 

        4.2    Hewlett-Packard Company Officers Early Retirement Plan Deferrals.    A Deferral Account may be created or
credited pursuant to the termination of the Hewlett-Packard Company Officers Early Retirement (OER) Plan, as restated effective October 31, 1999. Except as otherwise provided in this
Section 4.2, an OER Deferral shall be forfeited in full, if the Termination Date of a Rollover Participant for whom the OER Deferral was created or credited, occurs prior to April 1,
2001. Notwithstanding the foregoing, the OER Deferral of a Rollover Participant shall not be forfeited due to his or her Termination Date occurring prior to April 1, 2001, if the Rollover
Participant has attained the age of 58 on or before March 31, 1999. 

Section 5. Earnings on the Deferral Account.

        5.1    Crediting in General.    Amounts in a Participant's Deferral Account will be credited at least quarterly with
Earnings until such amounts are paid out to the Participant under this Plan as set forth in Section 6. All Earnings attributable to the Deferral Account shall be added to the liability of and
retained therein by the Company. Any such addition to the liability shall be appropriately reflected on 

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the books and records of the Company and identified as an addition to the total sum owing the Participant. The Deferral Account of a Rollover Participant shall be credited with Earnings at the same
time and accounted for in the same manner as the Deferral Account of a Participant (regardless of the Rollover Participant's eligibility to participate in the Plan), pro-rated to reflect
the date on which the deferral account from a Rollover Plan is transferred into the Plan. 

        5.2    Hypothetical Investment Choice.    Except as otherwise provided in this Section 5.2, and subject to provisions
of Section 4.1, the Committee may, in its discretion, offer Participants a choice among various hypothetical investments on which their Deferral Accounts may be credited. Such a choice is
nominal in nature, and grants Participants no real or beneficial interest in any specific fund or property. Provision of a choice among hypothetical investment options grants the Participant no
ability to affect the actual aggregate investments the Company may or may not make to cover its obligations under the Plan. Any adjustments the Company may make in its actual investments for the Plan
may only be instigated by the Company, and may or may not bear a resemblance to the Participants' hypothetical investment choices on an account-by-account basis. The timing,
allowance and frequency of hypothetical investment choices, and a Participant's ability to change how his or her Deferral Account is credited, is within the sole discretion of the Committee. 

        5.3    OER Deferral Fund.    The balanced Fund, referenced in Section 21.13.3, with respect to which OER
Deferrals are credited, is a frozen fund. Participants will not have, among the hypothetical investment choices, the right to request that additional Deferral Account balances be credited in
accordance with the deemed return on investment of this Fund. However, Participants may choose to have any or all of the balance of a Deferral Account being credited in accordance with the deemed
return on investment of this Fund, credited instead using any of the hypothetical investment choices referenced in Section 5.2. 

Section 6. Payout to the Participants.

        6.1    Termination After Retirement Date.    If a Participant's Termination Date is on or after his or her Retirement
Date and the Participant's Deferral Account balance is no less than $15,000 on the Retirement Date, an election as to the form and commencement of benefit may be made in accordance with this
Section 6.1. An election under this section is only valid if made before the date which is at least twelve (12) months prior to the Participant's Termination Date, and on or before the
last day of the calendar year preceding the Termination Year. 

        6.1.1    Form of Payout.    A Participant making a valid election under this Section 6.1 may elect to receive
either (a) a single lump sum payout by January 15 of the year following the Termination Year, or (b) a payout in annual installments over a five (5) to fifteen
(15) year period beginning with the January 15 following the Termination Year. 

        6.1.2    Commencement of Payout.    A Participant making a valid election under this Section 6.1 may elect to
further defer the Payout Commencement Date, under either the single lump sum or the annual installment election addressed in Section 6.1.1, by an additional one (1), two (2) or three
(3) years beginning after the January 15 following the Termination Year. 

        6.1.3    Earnings on Deferral Accounts.    Whatever the form of payout under Section 6, and whatever the timing
of the Payout Commencement Date, the Deferral Account of a Participant shall continue to be credited with Earnings until all amounts in such an account are paid out to the Participant. 

        6.2    Default Form and Commencement of Payout.    If a Participant's Termination Date is on or after his or her
Retirement Date, a valid election under Section 6.1 is not made, and the Participant's Deferral Account balance is no less than $15,000 on the Retirement Date, then the Participant shall
receive his or her payout in annual installments over the fifteen (15) year period beginning with the 

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January 15 following the Termination Year. If, however, such Deferral Account balance is less than $15,000 on the Retirement Date, then the Participant shall receive a single lump sum payout
as soon as practicable after the Retirement Date. 

        6.3    Death of Participant.    If a Participant dies and an election was made under Section 6.1, the
Beneficiary shall be paid according to the election even though the election was not made twelve (12) months or more prior to the Participant's death. If the Participant dies and no valid
election was made, and the Participant's Deferral Account balance is no less than $15,000 on the date of death, then the Beneficiary will receive the payout in annual installments over the fifteen
(15) year period beginning with the January 15 in the calendar year following the year of the Participant's death. If, however, such Deferral Account balance is less than $15,000 on the
date of death, then the Beneficiary shall receive a single lump sum payout as soon as practicable after the date of death. 

        6.4    Termination Prior to Retirement Date.    If the Participant's Termination Date precedes his or her Retirement
Date, then the Participant will receive a single lump sum payout as soon as practicable after the Termination Date. 

        6.5    Committee Discretion.    Notwithstanding anything in this Section 6 to the contrary, the Committee shall
have the discretion to modify the availability and timing of a valid election under Section 6.1, and the timing, form and amount (e.g., payouts affected by a forfeiture under
Section 4.2) of any payout, in any manner it deems appropriate; provided, however, that any alteration with respect to a Covered Officer
must be consistent with the requirements for deductibility of compensation under section 162(m) of the Code. 

Section 7. Hardship Provision

        7.1    Unforeseeable Emergencies.    Neither the Participant nor his or her Beneficiary is eligible to withdraw
amounts credited to a Deferral Account prior to the time specified in Section 6.    However, such credited amounts may be subject to early withdrawal if an unforeseeable emergency
occurs that is caused by an event beyond the Participant's or Beneficiary's control and would result in severe financial hardship to the individual if early withdrawal is not permitted. A severe
financial hardship exists only when all other reasonably available financial resources have been exhausted. The Committee shall have sole discretion to determine whether to approve any hardship
withdrawal, which amount will be limited to the amount necessary to meet the emergency.    The Committee's decision will be final and binding on all interested parties. 

        7.2    Waiting Period.    If the Committee approves a hardship withdrawal, the Participant (1) may not defer
Base Pay, as specified in Section 3, for the remainder of the calendar year within which the withdrawal is received, or for the next succeeding calendar year, and (2) may not defer
Bonuses, as specified in Section 3, for the remainder of the fiscal year in which the hardship withdrawal is received, or for the next succeeding fiscal year. 

Section 8. Other Access to Deferral Accounts.

        8.1    Unanticipated Needs.    Neither the Participant nor his or her Beneficiary is eligible to withdraw amounts
credited to a Deferral Account prior to the time specified in Section 6. However, such credited amounts may be subject to early withdrawal if an unanticipated need for funds occurs, other than
a need specified in Section 7; provided that the Participant permanently forfeits ten (10) percent of the amount to be withdrawn. Additionally, withdrawals based on an unanticipated need
for funds may be made no more than once each calendar year and the amount to be withdrawn must be at least $12,000. 

        8.2    Waiting Period.    If the Participant withdraws amounts credited to a Deferral Account under this section, he
or she (1) may not defer Base Pay, as specified in Section 3, for the remainder of the calendar year within which the withdrawal is received, or for the next succeeding calendar year,
and 

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(2) may not defer Bonuses, as specified in Section 3, for the remainder of the fiscal year in which the hardship withdrawal is received, or for the next succeeding fiscal year. 

Section 9. Designation of Beneficiary

        The
Participant shall, by written notice to the Company, (1) at the time of the first election designate a Beneficiary hereunder, and (2) shall have the right thereafter to
change any Beneficiary previously designated by the Participant. In the case of a Participant's death, payment due under this Plan shall be made to the designated Beneficiary or, in the absence of
such designation, by will or the laws of descent and distribution in the state of residence of the Participant. 

Section 10. Change in Control

        10.1    Discretion to Accelerate.    In the event of a proposed change in control of the Company, as defined below,
the Committee shall have complete authority and discretion, but no obligation, to accelerate payments of both terminated and active Participants. 

        10.2    Proposed Change in Control.    A "proposed change in control" shall mean (1) a tender offer by any
person or entity, other than the Company or a Company subsidiary, to acquire securities representing 40 percent or more of the voting power of the Company or (2) the submission to the
Company's shareholders for approval of a transaction involving the sale of all or substantially all of the assets of the Company or a merger of the Company with or into another corporation. 

        10.3    Request for Negotiation.    The Committee may also ask the Board of Directors to negotiate, as part of any
agreement involving the sale or merger of the Company, or a sale of substantially all of the Company's assets or a similar transaction, terms providing for protection of Participants and their
interests in the Plan. 

Section 11. Limitation on Assignments

        Benefits
under this Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishments by creditors of the
Participant or the Participant's Beneficiary and any attempt to do so shall be void. 

Section 12. Administration

        12.1    Administration by Committee.    The Plan shall be administered by the Committee. No member of the Committee
shall become a Participant of the Plan. The Committee shall have the sole authority to interpret the Plan, to establish and revise rules and regulations relating to the Plan and to make any other
determinations that it believes necessary or advisable for the administration of the Plan. Decisions and determination by the Committee shall be final and binding upon all parties, including
shareholders, Participants, Beneficiaries and other employees. The Committee may delegate its administrative responsibilities as it deems appropriate. 

        12.2    Books and Records.    Books and records maintained for the purpose of the Plan shall be maintained by the
officers and employees of the Company at its expense and subject to supervision and control of the Committee. 

Section 13. No Funding Obligation

        The
Company is under no obligation to transfer amounts credited to the Participant's Deferral Account to any trust or escrow account, and the Company is under no obligation to secure any
amount credited to a Participant's Deferral Account by any specific assets of the Company or any other asset in which the Company has an interest. This Plan shall not be construed to require the
Company to fund any of the benefits provided hereunder nor to establish a trust for such purpose The Company may make such arrangements as it desires to provide for the payment of benefits, including,
but not limited to, the establishment of a rabbi trust or such other equivalent arrangements as the Company may 

5

 

decide. No such arrangement shall cause the Plan to be a funded plan within the meaning of Title I of ERISA, nor shall any such arrangement change the nature of the obligation of the Company nor the
rights of the Participants under the Plan as provided in this document. Neither the Participant nor his or her estate shall have any rights against the Company with respect to any portion of the
Deferral Account except as a general unsecured creditor. No Participant has an interest in his or her Deferral Account until the Participant actually receives the deferred payment. 

Section 14. Amendment and Termination of the Plan.

        The
Company, by action of the Committee, in its sole discretion may suspend or terminate the Plan or revise or amend it in any respect whatsoever; provided, however, that amounts already
allocated to the Deferral Accounts will continue to be owed to the Participants or Beneficiaries and will continue to accrue Earnings and continue to be a liability of the Company. Any amendment or
termination of the Plan will not affect the entitlement of any Participant or the Beneficiary of a Participant who terminates employment before the amendment or termination. All benefits to which any
Participant or Beneficiary may be entitled shall be determined under the Plan as in effect at the time the Participant terminates employment and shall not be affected by any subsequent change in the
provisions of the Plan; provided, that the Company reserves the right to change the basis of return on investment of the Deferral Account with respect to any Participant or Beneficiary. Participants
or Beneficiaries will be given notice prior to the discontinuance of the Plan or reduction of any benefits provided by the Plan. 

Section 15. Tax Withholding.

        If
the Company concludes that Tax is owing with respect to any deferral of income or payment hereunder, the Company shall withhold such amounts from any payments due the Participant, or
otherwise make appropriate arrangements with the Participant or his or her Beneficiary for satisfaction of such obligation. 

Section 16. Choice of Law.

        This
Plan, and all rights under this Plan, shall be interpreted and construed in accordance with ERISA and, to the extent not preempted, the law of the State of Delaware, unless
otherwise stated in the Plan. 

Section 17. Notice.

        Any
written notice to the Company required by any of the provisions of this Plan shall be addressed to the chief personnel officer of the Company or his or her delegate and shall become
effective when it is received. 

Section 18. No Employment Rights.

        Nothing
in the Plan, nor any action of the Company pursuant to the Plan, shall be deemed to give any person any right to remain in the employ of the Company or affect the right of the
Company to terminate a person's employment at any time, with or without cause. 

Section 19. Rollovers from other Plans.

        19.1    Discretion to Accept.    The Committee shall have complete authority and discretion, but no obligation, to
allow the Plan to create Deferral Accounts for Rollover Participants and credit such accounts with amounts to reflect the Rollover Participant's deferral account in a Rollover Plan. The amounts
credited to such Deferral Accounts are fully subject to the provisions of this Plan. Reference in the Plan to such a crediting as a "rollover" or "transfer" of assets from a Rollover Plan is nominal
in nature, and confers no additional rights upon a Rollover Participant other than those specifically set forth in the Plan. 

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        19.2    Status of Rollover Participants.    A Rollover Participant and his or her Beneficiary are fully subject to the
provisions of this Plan, except as otherwise expressly set forth herein. A Rollover Participant who is not already a Participant in the Plan and is not otherwise eligible to participate in the Plan at
the time of rollover, shall not be entitled to make any additional deferrals under the Plan unless and until he or she has becomes an Eligible Employee under the terms of the Plan. 

        19.3    Payment to Rollover Participants.    If at the time of rollover or transfer, payments from a Rollover
Participant's account in a Rollover Plan have already commenced from a Rollover Plan, he or she shall continue to receive such payments in accordance with the form and timing of payment provisions of
such plan. If a Rollover Participant is not yet eligible to receive payments from the Rollover Plan at the time of the rollover or transfer, he or she is bound by the payout provisions of this Plan. 

Section 20. Code Section 162(m).

        With
respect to Covered Employees, this Plan is designed to satisfy the special requirements for performance-based compensation set forth in Section 162(m)(4)(C) of the Code, and
the Plan shall be so construed. Furthermore, if a provision of the Plan as it relates to a Covered Officer causes a deferral or payment to fail to satisfy these special requirements, the Plan shall be
deemed amended to satisfy the requirements to the extent permitted by law and subject to Committee approval. 

Section 21. Definitions.

        21.1    Base Pay    means the annual base rate of cash compensation for employees on the U.S. payroll of the Company,
excluding commissions, overtime pay, bonuses or Bonuses, shift differential, payments under the Hewlett-Packard Company Employee Benefits Organization Income Protection Plan and the Hewlett-Packard
Company Supplemental Income Protection Plan, or any other additional compensation. 

        21.2    Beneficiary    means the person or persons designated by a Participant under Section 9 to receive any
amounts payable under the Plan in the event of the Participant's death. 

        21.3    Bonus    refers to an H1 Bonus, an H2 Bonus and/or the Deferred Cash Bonus. 

        21.4    Code    means the Internal Revenue Code of 1986, as amended from time to time. 

        21.5    Committee    means the Compensation Committee of the Board of Directors of the Company, as constituted in
accordance with the provisions of the PFR Plan, or its delegate. 

        21.6    Company    means Hewlett-Packard Company, a Delaware corporation, and any business entity within the
Hewlett-Packard Company consolidated group. 

        21.7    Company Performance Bonus Plan    and CPB Plan refer to the
Company's Company Performance Bonus Plan, effective November 1, 2000, as amended from time to time. 

        21.8    Covered Officer    shall have the same meaning as set forth in the PFR Plan. 

        21.9    Deferral Account    means the account balance of a Participant in the Plan created from Deferred Amounts or
from a credit to a Participant's account from a Rollover Plan, and the Earnings thereon prior to payout to the Participant. 

        21.10    Deferred Amount    means the amount the Participant elects to have deferred from Base Pay and/or a Bonus,
pursuant to Section 3. 

        21.11    Earnings    refers to the deemed return on investment (or charge on investment loss) allocated to the
Participant's Deferral Account, based on the return of the Fund. 

        21.12    Eligible Employee    means an individual who is an active (i.e., not on paid or unpaid leave) employee on the
U.S. payroll of the Company on the first day of October preceding the fiscal and 

7

 

calendar years within which deferrals are to be made, who has Base Pay at such time equal to or in excess of the sum of (1) the amount defined in Code section 401(a)(17), which is in
effect on January 1 of the calendar year to which the deferral election pertains, as adjusted by the Secretary of the Treasury under Code section 415(d), plus (2) $6,000. 

        21.13    ERISA    means the Employee Retirement Income Security Act of 1974, as amended from time to time. 

        21.14    Fund means-    

        21.14.1    With respect to Earnings credited to deferrals of Base Pay or Bonuses, those funds representing the investment
returns of the hypothetical investment choices designated by the Committee from time to time, in accordance with the provisions of Section 5; 

        21.14.2    With respect to Earnings credited to the Deferral Account of a Covered Officer, the term Fund shall specifically
refer to the Vanguard Institutional Index Fund, or such other fund as permitted in accordance with Section 5; and 

        21.14.3    With respect to an OER Deferral, the term Fund shall specifically refer to a fund the investments of which are
comprised of a mix of debt and equity, as chosen in the sole discretion of the Committee, and as subject to the forfeiture provisions of Section 4.2. 

        21.15    H1 Bonus    means a Bonus arising from the Performance Period described by the first half of the Company's
fiscal year (November 1 through April 30), as defined in the PFR Plans and the CPB Plan. The term "H1 Bonus" also relates to any other bonus payable to a Participant on the same cycle as
the PFR Plans and CPB Plan—i.e., with a Performance Period defined by the first half of the Company's fiscal year (November 1 through April 30). 

        21.16    H2 Bonus    means a Bonus arising from the Performance Period described by the second half of the Company's
fiscal year (May 1 through October 31), as defined in the PFR Plans and the CPB Plan. The term "H2 Bonus" also relates to any other bonus payable to a Participant on the same cycle as
the PFR Plans and CPB Plan—i.e., with a Performance Period defined by the second half of the Company's fiscal year (May 1 through October 31). 

        21.17    OER Deferral    means that portion of a Participant's Deferral Account comprised of amounts deferred and
credited to the account arising from the termination of the Hewlett-Packard Company Officers Early Retirement Plan, as restated effective October 31, 1999, including any earnings thereon. 

        21.18    Participant,    unless preceded by "PFR" in which case the term indicates a participant in a PFR Plan, means
any individual who has benefits in a Deferral Account under the Plan or who is receiving or entitled to receive benefits under the Plan. The term Participant also refers to a Rollover Participant,
except where expressly provided otherwise. 

        21.19    Pay for Results Plan(s) or "PFR" Plan(s)    refers to both the Hewlett-Packard Company Executive
Pay-for-Results Plan, amended and restated effective November 1, 2000, as amended from time to time
(also referred to the "Executive PFR Plan"), and the Hewlett-Packard Company Pay-for-Results Short-Term Bonus Plan, effective November 1, 2000, as amended
from time to time. 

        21.20    Payout Commencement Date    means the date on which the payout to a Participant of amounts credited to his or
her Deferral Account first commence. 

        21.21    Performance Measure    shall have the same meaning as set forth in the PFR Plans. 

        21.22    Performance Period    shall have the same meaning as set forth in the PFR Plans. 

        21.23    Plan    means, unless preceded by (i) "PFR" in which case the term refers to the PFR Plans,
(ii) "CPB" or "Company Performance Bonus" in which case the term refers to the CPB Plan, or 

8

 

(iii) "Rollover" in which case the term refers to a Rollover Plan, the Hewlett-Packard Company Executive Deferred Compensation Plan, as adopted effective January 1, 1994, as amended and
restated from time to time. 

        21.24    Deferred Cash Bonus    means the deferred cash bonus, which is a bonus arising from, and as defined in, the
Merger Transition Deferred Cash Agreement entered into by and between the Eligible Employee and the Company in connection with the merger of the Company and Compaq Computer Corporation. 

        21.25    Retirement Date    means the date on which a Participant has completed at least 15 years of service,
as defined in the Retirement Plan, and has attained age 55. For this purpose, the Committee may, in its discretion, permit the years of service of a Rollover Participant to include the years of
service with the employer for which a Rollover Participant worked immediately preceding employment with the Company. 

        21.26    Retirement Plan    means the Hewlett-Packard Company Retirement Plan, as amended from time to time. 

        21.27    Rollover Participant    means an individual with a Deferral Account in the Plan transferred from a Rollover
Plan in accordance with the provisions of Section 19. The term Rollover Participant may also refer to an individual who has previously been a Participant in the Plan, or an existing Participant
at the time of transfer. 

        21.28    Rollover Plan    means either- 

        21.28.1    The nonqualified deferred compensation plan of a business entity acquired by the Company through acquisition of a
majority of the voting interest in, or substantially all of the assets of, such entity; or, 

        21.28.2    Any plan or program of the Company, or any employing business entity within the Hewlett-Packard Company consolidated
group, including but not limited to the Hewlett-Packard Company Officers Early Retirement Plan, pursuant to the termination of which a Deferral Account is created or added to for a Participant or
Rollover Participant. 

        21.29    Tax or (Taxes)    means any federal, state, local, or any other governmental income tax, employment or
payroll tax, excise tax, or any other tax or assessment owing with respect to amounts deferred, any Earnings thereon, and any payments made to Participants under the Plan. 

        21.30    Termination Date    means the date on which the Participant ceases to be an employee of the Company. 

        21.31    Termination Year    means the calendar year within which a Participant's Termination Date falls. 

Section 22. Execution

        IN
WITNESS WHEREOF, the Company has caused this Plan to be duly amended and restated by the undersigned this            day
of                        , 2001, effective November 1,
2001. 

	Hewlett-Packard Company
	 	 	 
	

By:	
 	

 
	 	 	
 Philip M. Condit

Chair, Compensation Committee

9

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EXHIBIT 10(pp)    
  

PERSONAL &
CONFIDENTIAL 

October 20,
2000 

Mr. Michael
D. Capellas

[Street Address]

[City], [State] [Zip] 

Dear
Michael: 

        On
behalf of all of your fellow members of the Board of Directors, I want to congratulate you on being selected to serve as Chairman of the Board and to thank you for your outstanding
contributions over the past months as Chief Executive Officer. We believe that your vision and continuing leadership will take Compaq to new heights as we tackle the numerous challenges that face our
industry. The terms and conditions set forth in this employment agreement (the "Agreement"), which supersedes the agreement you entered into with Compaq on July 22, 1999 (the "1999 Agreement"),
are intended to provide you with the financial security to focus on continued success as a leader of Compaq and to compensate you for the additional responsibilities you have assumed as Chairman. 

        TERM
OF AGREEMENT: This Agreement shall be effective for an initial three-year term, beginning October 1, 2000 and ending on September 30, 2003, and will be
automatically renewed thereafter on an annual basis for successive one-year terms unless the Board of Directors of Compaq Computer Corporation or any successor entity (the "Board of
Directors" or the "Board") provides you with written notice that the Agreement will not be renewed ("Notice of Non-Renewal") no later than 120 days prior to the expiration of the
then-current term. 

        DUTIES
AND RESPONSIBILITIES: During the term of this Agreement, you will serve as Chairman of the Board and Chief Executive Officer of Compaq Computer Corporation ("Compaq" or the
"Company"), with all the duties and responsibilities commensurate with those roles. All other employees of Compaq will report to you or your designee. You agree to dedicate your full professional
skills, time, and energies to your responsibilities to Compaq and understand and agree that this will not permit you to engage in other business activities. 

        BASE
SALARY: During the term of this Agreement, your base salary, stated on an annual basis, shall not be less than $1,600,000; provided that if the Board approves an increase in your
base salary during the term of this Agreement, your base salary shall not thereafter be reduced below that increased level during the remaining term of this Agreement. 

        ANNUAL
CASH INCENTIVE OPPORTUNITY: During the term of this Agreement, you will continue to be eligible to participate in the annual bonus plan, or any successor plan, available to
executive officers on the same terms as other executive officers of the Company. Under the current program, you will have the opportunity to earn a target annual bonus of two times your base salary. 

        STOCK
OPTIONS/OTHER LONG-TERM INCENTIVE OPPORTUNITIES: During the term of this Agreement, you will have the opportunity to receive stock options and other
long-term incentives on the same basis as other executive officers of Compaq. The value, on an annual basis, of your total target long-term incentive opportunities (including
stock options and other forms of long-term incentives) will be seven to ten times your base salary, using a Black-Scholes method of valuation. 

        SPECIAL
BONUS: Upon execution of this Agreement, Compaq will pay to you a special one-time lump sum bonus of $850,000, less applicable tax withholding. 

        SPECIAL
1999 STOCK OPTION GRANT: The special one-time Stock Option grant for one million shares as provided for in the 1999 Agreement (the "Special 1999 Stock Option Grant")
shall continue to be governed by the original terms of any applicable grant notice and the Compaq Computer Corporation 1998 Stock Option Plan. 

 

RESTRICTED
STOCK: 

        2000
GRANT: On October 13, 2000, Compaq granted you an additional 970,000 shares of restricted stock under the 1989 Equity Incentive Plan (the "2000 Restricted Stock"). The 2000
Restricted Stock shall vest as follows: 

        170,000
shares will vest thirty days from the date of the grant; provided, however, that you agree not to sell, exchange, offer as security, grant an option on or otherwise dispose of or
encumber those shares, except to defray associated taxes, for a period of one year from the date they vest. Another 300,000 shares will vest in increments of 100,000 shares each on November 1,
2001, on November 1, 2002, and on November 1, 2003, provided that you remain continuously employed by Compaq through the applicable vesting date. 

        500,000
shares will vest only upon attainment of certain performance objectives, as described below: 

        During
your employment by Compaq, 250,000 shares of the 2000 Restricted Stock will vest in the quantities listed below the first time between October 1, 2000 and
November 1, 2004 that the average closing price of Compaq's stock on the New York Stock Exchange (or other nationally recognized stock exchange on which it is listed at the time) for any period
of 15 consecutive trading days equals or exceeds each of the performance targets listed below: 

	QUANTITY
	 	PERFORMANCE TARGET

	50,000	 	$35 per share
	50,000	 	$40 per share
	50,000	 	$45 per share
	50,000	 	$50 per share
	50,000	 	$55 per share

        If,
however, these targets have not been met by November 1, 2004, you will no longer be eligible to vest in any portion of these 250,000 shares which has not previously vested. 

        250,000
shares of the 2000 Restricted Stock shall vest based on growth of Compaq's earnings per share excluding investment gains and losses ("EPS") when compared to average EPS growth
for International Business Machines, Dell Computer Corporation, and Hewlett-Packard or any successor entities (the "Index Companies"). Specifically, these 250,000 shares shall vest over three
performance periods of four quarters each (4th calendar quarter 2000 through 3rd calendar quarter 2001, 4th calendar quarter 2001 through 3rd calendar quarter 2002, and 4th calendar quarter 2002
through 3rd quarter 2003), using the fiscal quarters for each company that most closely correspond to the time period covered by the relevant performance period. You will have the opportunity to vest
in up to 83,333 shares based on relative EPS growth during each performance period as follows: 

	•
	If
Compaq's EPS growth over the performance period is equal to the average EPS growth of the Index Companies for the performance period, you will vest in
50,000 shares.

	•
	If
Compaq's EPS growth over the performance period is equal to or greater than 1.1 times the average EPS growth of the Index Companies for that performance
period, you will vest in 83,333 shares of the 2000 Restricted Stock for that performance period.

	•
	Compaq
will use linear interpolation to determine the number of shares in which you will vest should Compaq's EPS growth over a performance period fall
between 1 and 1.1 times the average EPS growth of the Index Companies for that performance period.

	•
	If
Compaq's EPS growth for any performance period does not equal or exceed the average EPS growth of the Index Companies for that performance period, you
will not vest in any shares for that performance period. 

2

 

        However,
should any of the 83,333 shares available for vesting in the first performance period remain unvested after the conclusion of that performance period, you will have the
opportunity to vest in any such remaining shares based on cumulative EPS growth over the first and second performance periods as follows: 

	•
	If
Compaq's cumulative EPS growth is equal to the cumulative average EPS growth for the Index Companies, you will vest in 60% of any such remaining shares.

	•
	If
Compaq's cumulative EPS growth is equal to or greater than 1.1 times the cumulative average EPS growth for the Index Companies, you will vest in 100% of
any such remaining shares.

	•
	If
Compaq's cumulative EPS growth is between 1 and 1.1 times the cumulative average EPS growth of the Index Companies, linear interpolation will be used to
determine the number of remaining shares in which you will vest. 

        The
same approach will be used should any of the 83,333 shares from the first performance period remain unvested at the conclusion of the second performance period, based on cumulative
EPS growth over all three performance periods. Again, you will vest in 60-100% of those shares, depending on relative cumulative EPS growth, in accordance with the schedule described
above. 

        Similarly,
should any of the 83,333 shares from the second performance period remain unvested at the conclusion of the second performance period, you will vest in 60-100% of
those remaining shares based on cumulative EPS for the second and third performance periods, using the schedule described above to determine the precise number of those remaining shares in which you
will then vest. 

        Any
shares which remain unvested at the conclusion of the third performance period will be forfeited. 

        1999
GRANT: The 200,000 shares of restricted stock granted pursuant to Article 5.4 of the 1999 Agreement (the "1999 Restricted Stock") shall continue to be governed by the terms
and conditions of the 1989 Equity Incentive Plan. Vesting of the 1999 Restricted Stock shall be in accordance with its original terms, which, restated, are as follows: 

        As
a special performance incentive, the 1999 Restricted Stock shall vest in the quantities listed below the first time after July 22, 1999 and during your employment with Compaq
that the closing price of Compaq's stock on the New York Stock Exchange (or other nationally recognized stock exchange on which it is listed at the time) equals or exceeds each performance target
listed below for thirty consecutive trading days: 

	QUANTITY
	 	PERFORMANCE TARGET

	50,000	 	$35 per share
	50,000	 	$40 per share
	100,0000	 	$50 per share

        Except
to the extent that the 1999 Restricted Stock vests in accordance with the above schedule or you separate from employment prior to July 22, 2004 (in which event, your rights
as to the 1999 Restricted Stock, if any, will be governed by the termination provisions set forth below), the 1999 Restricted Stock shall become fully vested on July 22, 2004. 

        Compaq
shall adjust the quantities and performance targets for the 1999 Restricted Stock and the 2000 Restricted Stock, as set forth above, to reflect any stock dividend, subdivision, or
combination of shares or reclassification that occurs in the manner contemplated by the 1989 Equity Incentive Plan or any successor to such Plan. Dividends on all unvested shares shall inure to the
benefit of Compaq. 

        PRIOR
LOAN TO PURCHASE SHARES: Under the 1999 Agreement, you received a loan to purchase additional shares of Compaq stock (the "1999 Loan"). Provided that you remain in the 

3

 

continuous employ of Compaq, Compaq will forgive 1/3 of the then-outstanding balance of the 1999 Loan on November 1, 2001, 1/2 of the
then-outstanding balance of that loan on November 1, 2002, and the remaining balance on November 1, 2003. Compaq is releasing its security interest in the shares of Compaq
stock currently securing the 1999 Loan. 

        TAX
ASSISTANCE: Compaq will loan you $2,500,000 on a full recourse basis to assist you in defraying taxes associated with certain aspects of this Agreement (the "Tax Assistance Loan").
The Tax Assistance Loan will be secured by 125,000 shares of Compaq common stock currently owned by you. The proceeds of any sale of those shares prior to repayment of the Tax Assistance Loan shall be
used to retire any outstanding balance on the Tax Assistance Loan. The Tax Assistance Loan will bear interest at a fixed rate which will be the minimum rate required under Section 7872 of the
Internal Revenue Code of 1986, as amended, in order that the loan is not considered a below market interest loan. Principal and interest on the loan will be due and payable on the earlier of the fifth
anniversary of this Agreement or, if you separate from employment under circumstances that do not constitute a Qualifying Termination, as defined below, 120 days after the termination of your
employment with Compaq. 

        BENEFITS
AND PERQUISITES: You will continue to be eligible to participate in such benefit plans, and for such perquisites, as Compaq offers other executive officers of the Company,
including but not limited to insurance for directors and officers liability, subject to the terms of the governing plans and programs. 

        SEPARATION
FROM EMPLOYMENT: Your employment with Compaq is at-will. Under certain circumstances, however, you will be entitled to severance benefits should you separate from
employment during the term of this Agreement. The following provisions govern your compensation and benefits should you separate from employment during the term of this Agreement: 

QUALIFYING
TERMINATION: 

        Should
you incur a Qualifying Termination (as defined below) you will be eligible for the following payments and benefits, provided that you remain in compliance with your obligations
under the terms of this Agreement, including, but not limited to the provisions regarding non-competition, non-solicitation, and non-disparagement, and the Release
(as defined below). Should you fail to comply with your obligations under this Agreement or the Release, Compaq may, in addition to any other available remedies, cease making any payment or benefit
provided for herein. 

        SEPARATION
PAYMENT: A separation payment equivalent, before applicable deductions, to three times the sum of your base salary and your target annual bonus, both as in effect at the time
of your separation from employment (the "Separation Payment"). The Separation Payment shall be paid as follows: 25% of the Separation Payment shall be paid to you within ten business days of your
execution of the Release, with the remaining 75% to be paid in equal installments, without interest, commencing on Compaq's second regularly scheduled payroll following your execution of the Release
and ending with Compaq's regularly scheduled payroll twenty-four months later (the "Separation Pay Period"). In the event of a change in payroll practice during the Separation Pay Period,
Compaq may adjust the amounts of such installments as necessary to ensure that the total amount paid is equal to the Separation Payment, as defined above. 

        PRORATED
ANNUAL INCENTIVE: A prorated annual incentive calculated by multiplying the target annual bonus for which you are otherwise eligible times a fraction, the numerator of which is
the number of full calendar months during which you were employed in the applicable measurement period and the denominator of which is the total number of full calendar months in the applicable
measurement period (the "Prorated Annual Incentive"). The Prorated Annual Incentive shall be subject to applicable deductions and will be paid at the same time such payments are made to other
participants in Compaq's annual incentive program. 

4

 

        STOCK
OPTIONS: You will continue to vest in any unvested stock options as if you had remained employed by Compaq for the duration of the Separation Pay Period. You will have until the
earlier of (a) the expiration of the term of the option or (b) the twelve-month anniversary of the payment of the final Separation Payment installment to exercise any options that are or
become vested. 

        1999
RESTRICTED STOCK: Upon the expiration of a 180-day period following your separation date, you will vest in a prorated number of the original shares of the 1999
Restricted Stock grant based on the following formula: (N/60 × 200,000) - Y, where N equals the number of whole calendar months from July 22, 1999 to the
end of the year in which you separate from employment (to a maximum of 60) and Y equals the number of shares of the 1999 Restricted Stock that have vested as a result of achievement of the
performance targets set forth above in connection with the 1999 Restricted Stock. The 200,000 in the formula shall be adjusted to the same extent that the original number of shares of 1999 Restricted
Stock is adjusted under the 1989 Equity Incentive Plan, or any successor to such Plan, due to a stock dividend, subdivision, or combination of shares or a reclassification. 

        2000
RESTRICTED STOCK: On the date the Release becomes effective and irrevocable, you will vest in any outstanding shares of the 470,000 shares of the 2000 Restricted Stock granted
pursuant to this agreement that were scheduled to vest over time. You will not be entitled to continue to vest in any portion of the 2000 Restricted Stock which was scheduled to vest only upon
achievement of the performance factors set forth above. Notwithstanding the immediately preceding sentence, (1) if you have a Qualifying Termination as a result of receipt of a Notice of
Non-Renewal during the initial three-year term, you will be treated as having been employed through September 30, 2003 for purposes of vesting in the performance-based
2000 Restricted Stock and (2) if you have a Qualifying Termination as a result of receipt of a Notice of Non-Renewal after the initial three-year term, you will be
treated as having been employed through November 1 immediately following the end of the then-current term for purposes of vesting in the performance-based 2000 Restricted Stock. 

        1999
LOAN: Compaq will forgive in full any outstanding balance of the 1999 Loan upon a Qualifying Termination. 

        TAX
ASSISTANCE LOAN: Repayment of the Tax Assistance Loan provided for under this Agreement will not be accelerated in the event of a Qualifying Termination. 

        SUPPLEMENTAL
PAYMENT: A special one-time lump sum payment to you of $100,000 (the "Supplemental Payment"), payable on the ninety day anniversary of Compaq's receipt of the
executed Release. The Supplemental Payment shall be subject to applicable deductions and shall be in lieu of any payment by Compaq to you for tax preparation services, security system monitoring,
accounting or legal fees necessitated by the termination of your employment, secretarial services, outplacement services, or any other similar purposes. 

        HEALTH
BENEFIT CONTINUATION: Continuation of certain health benefits under COBRA for you and your eligible dependents following your separation from employment. Compaq will make any
necessary payments or adjustments so that you will have the opportunity to continue those COBRA-covered benefits at the employee premium rate for six months following your separation. Thereafter, you
will have the opportunity, as determined by the provisions of COBRA, to continue such coverage at the COBRA premium rate. 

        DEFINITION
OF A QUALIFYING TERMINATION: For purposes of this Agreement, a Qualifying Termination shall mean any of the following: 

	(1)
	Involuntary
termination of your employment without Cause. For purposes of this Agreement, Cause shall mean a good faith determination by the Board of Directors, after consultation
with outside legal counsel, that you have committed an act or omission that is materially contrary to the best interests of Compaq or that you have materially breached any of the terms and conditions
of this Agreement. You will not, however, be deemed to have been 

5

 

involuntarily
terminated for Cause unless and until you are presented with a resolution of the Board of Directors, approved by at least 3/4 of the entire membership of the Board after
providing you with reasonable notice and opportunity to be heard, with counsel, before the Board, finding that you have engaged in conduct which would constitute Cause under this Agreement. 

	(2)
	Resignation
within 90 days of the occurrence of a Good Reason, which, for purposes of this Agreement, shall mean: (a) involuntary removal from the position of Chief
Executive Officer, (b) involuntary removal from, or failure to be elected, Chairman of the Board, (c) assignment, by the Board, of duties inconsistent with the position of Chief
Executive Officer, (d) receipt of a Notice of Non-Renewal, or (e) the Board's approval of a material reduction in target compensation opportunities that is not part of an
across-the-board reduction for all executive officers of the Company. Notwithstanding the foregoing, you will not be eligible for a Separation Payment unless you provide the
Board of Directors with 60 days written notice of your intent to resign for Good Reason, containing details regarding the grounds for your resignation, and allow the Board of Directors to take
action to remove or correct the Good Reason within 30 days. If the Board of Directors fails to take action to remove or correct the Good Reason within 30 days of receiving notice of
same, your resignation for Good Reason shall become effective.

	(3)
	Involuntary
termination of your employment by the Company for any reason within 180 days of a Change in Control, as defined in Exhibit A. 

        You
will not be deemed to have incurred a Qualifying Termination unless you execute, within 30 days of your separation, a release of claims substantially similar to the form
attached as Exhibit B hereto (the "Release"). Under no circumstances shall your resignation or termination from employment as a result of Disability (as defined below) or death constitute a
Qualifying Termination. 

        SEPARATION
DUE TO DEATH OR DISABILITY: In the event of separation from employment as a result of Disability or death and contingent upon your, or, in the event of your death, your
estate's, execution of a Release, you, or in the event of your death, your estate, will receive (1) a one-time lump sum Special Separation Payment equivalent, before applicable
deductions, to 1.5 times the sum of your base salary and your target annual bonus, both as determined as of the date of your separation from employment, and (2) a Prorated Annual Incentive, as
defined above, payable at the same time annual incentives are paid to other participants. Both the Special Separation Payment and the Prorated Annual Incentive shall be subject to applicable
deductions. Compaq will also forgive any remaining balance on the 1999 Loan, and repayment of the Tax Assistance Loan will not be accelerated. All other compensation and benefits shall be determined
by the terms of the governing plan or program. For purposes of the Agreement, Disability shall mean your inability to perform the essential functions of your position as Chief Executive Officer, or to
perform your duties as Chairman of the Board, as a result of illness or injury for a period of six consecutive months. 

        INVOLUNTARY
TERMINATION FOR CAUSE/RESIGNATION WITHOUT GOOD REASON: If you are involuntarily terminated for Cause or resign your employment for any reason other than a Good Reason, you
will not be entitled to any severance payment under this Agreement. Compaq will have no other obligations under this Agreement, and all compensation and benefits will be determined by the terms of the
governing plan or program. 

        EXCISE
TAX GROSS-UP: In the event of a Change in Control, Compaq, at its sole expense, shall cause its independent auditors promptly to review all payments, distributions and
benefits that have been made to or provided to, and are to be made to or provided to, you under this Agreement, and any other agreement and plan benefiting you, to determine the applicability of
Section 4999 of the United States Internal Revenue Code of 1986, as amended (the "Code"). If Compaq's independent auditors determine that any such payments, distributions or benefits are
subject to excise taxes as 

6

 

provided under Section 4999 of the Code (the "Excise Tax"), then such payment, distributions, or benefits (the "Original Payment(s)") shall be increased by an amount (the "Gross-up
Amount") such that, after the Company withholds all taxes due, including any excise and employment taxes imposed on the Gross-up Amount, you will retain a net amount equal to the Original
Payment(s) less income and employment taxes, if any, imposed on the Original Payment(s). To facilitate the calculation of the applicable excise tax, you agree to provide Compaq's auditors with copies
of your Forms W-2 for the tax years they deem necessary for their use in determining the application of Section 4999 and calculating any amounts payable under this provision.
Compaq's auditors will perform the calculations in conformance with the foregoing provisions and provide you with a copy of their calculation. The intent of the parties is that Compaq shall be solely
responsible for, and shall pay, any Excise Tax on the Original Payment(s) and Gross-up Amount and any income and employment taxes (including, without limitation, penalties and interest)
imposed on any Gross-up Amount. If no determination by Compaq's auditors is made prior to the time you are required to file a tax return reflecting any portion of the Original
Payment(s), you will be entitled to receive a Gross-up Amount calculated on the basis of the Original Payment(s) you report in such tax return, within 30 days of the filing of such
tax return. You agree that, for the purposes of the foregoing sentence, you are not required to file a tax return until you have obtained the maximum number and length of filing extensions
available. If any tax authority finally determines that a greater Excise Tax should be imposed upon the Original Payment(s) than is determined by Compaq's independent auditors or reflected in your tax
returns, you shall be entitled to
receive the full Gross-up Amount calculated on the basis of the additional amount of Excise Tax determined to be payable by such tax authority (including related penalties and interest)
from Compaq within 30 days of such determination as long as you have taken all reasonable actions to minimize any such amounts. If any tax authority finally determines the Excise Tax to be less
than the amount taken into account hereunder in calculating the Gross-up Amount, you shall repay to Compaq, within 30 days of your receipt of a refund resulting from that
determination, the portion of the Gross-up Amount attributable to such reduction (plus the refunded portion of Gross-up Amount attributable to the Excise Tax and federal, state
and local income and employment taxes imposed on the Gross-up Amount being repaid, less any additional income tax resulting from such refund). 

        COVENANTS:
In your role with Compaq (which, for purposes of these Covenants includes Compaq Computer Corporation, its subsidiaries, affiliates, related entities, and successors), you
will have access to confidential and proprietary information, and your access to such information is intrinsic to, and essential to the success of, your employment by the Company. In consideration of
your access to such information, your continuing employment with the Company, and the payments and benefits provided for under this Agreement, you agree to the following Covenants, which you agree are
reasonable and necessary for the protection of Compaq's legitimate business interests, including, but not limited to, good will and information which is confidential and proprietary to Compaq. 

        CONFIDENTIAL
INFORMATION/INTELLECTUAL PROPERTY: You agree that you will not, at any time during or after your employment by Compaq, make any unauthorized use or disclosure of
Confidential Information (as defined below) or Intellectual Property (as defined below), including confidential information or intellectual property of third parties to which you had access as a
result of your employment. Nothing in this Agreement shall prohibit you from complying with a court order to produce information, but you agree to provide Compaq notice, immediately upon becoming
aware of such requirement, of any subpoena, order, or other mandate to produce information which may be Confidential Information and to cooperate fully with Compaq in obtaining such protection as
Compaq deems appropriate. 

7

  

        During your employment by Compaq, you agree to promptly disclose in writing to Compaq any Intellectual Property, whether originated, conceived, created, made, developed or invented in
whole or in part by you, and maintain adequate and current records thereof. You assign, transfer, and convey to Compaq, or its designees or successors, your entire right, title and interest in any
Intellectual Property that you originate, conceive, create, make, develop or invent, whether as sole inventor, creator, developer or originator or as a joint inventor, creator, developer or originator
with others, whether made within or without the usual working hours or upon the premises of Compaq or elsewhere, during your employment. 

        If,
subsequent to separation from Compaq, you perform an act at Compaq's request or direction, or provide assistance to Compaq, as described in this paragraph, then Compaq shall
compensate you for your time at a rate of one thousand dollars per day. Either during or subsequent to your employment, upon the request and at the expense of Compaq, but for no consideration in
addition to that due to you pursuant to your employment with Compaq and this Agreement, you shall execute, acknowledge, and deliver to Compaq or its designee any instruments that in the judgment of
Compaq may be necessary or desirable to secure or maintain for the benefit of Compaq or its designee adequate patent, copyright, and other property rights with respect to Intellectual Property within
the scope of this Agreement, including, but not limited to: (a) domestic and foreign patent and copyright applications, (b) any other applications for securing, protecting, or
registering property rights, and (c) powers of attorney, assignments, oaths, affirmations, supplemental oaths and sworn statements. You shall also assist Compaq or its designee, as required, to
draft such instruments, to obtain such rights, and to enforce such rights, provided that such assistance will not unreasonably interfere with your other endeavors. 

        For
purposes of this Agreement, "Confidential Information" means any confidential or private information, not generally known to the public, related to the business or operations (past,
present or future) of Compaq. You agree that Confidential Information encompasses a broad scope of information that includes, without limitation: business plans and strategies; information regarding
the identities, skills, qualities, competencies, characteristics, expertise, or experience of the directors, officers, or employees of Compaq; information regarding the compensation practices of, or
payments made to or by, Compaq; the contents of communications, oral or written, with, by or between directors, officers, employees, or agents of Compaq; statements of fact or opinion or mixed
statements of fact and opinion if such statements are based on information or events to which you had access as a result of your employment by Compaq; and similar information related to third parties
to whom Compaq owes a duty of confidentiality or privacy. 

        Intellectual
Property includes, without limitation, any and all information, ideas, concepts, improvements, discoveries, designs, inventions, trade secrets, know-how,
manufacturing processes,
product formulae, design specifications, writings and other works of authorship, computer programs, and business methods, whether patentable or not, which are originated by, conceived by, created by,
made by, developed by, invented by, learned by, or disclosed to you, individually or in conjunction with others, during your employment by Compaq (whether during business hours or otherwise and
whether on Compaq's premises or otherwise) which relate to Compaq's business, products, or services (including, without limitation, all such information relating to corporate opportunities, research,
financial and sales data, pricing and trading terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or their requirements, the identity of key contacts with
in the customer's organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names, and marks). The term "Intellectual Property" also
includes all rights provided by the law of any jurisdiction throughout the world with respect to such information, ideas, concepts, improvements, discoveries, designs, inventions, trade secrets,
know-how, manufacturing processes, product formulae, design specifications, writings and other works of authorship, computer programs, and business methods, including, without limitation,
the right to 

8

 

maintain the same as confidential information, the right to first publication, the right to obtain patents and industrial rights thereon, all rights of copyright, all trademark rights, and the right
to protect the same against acts of unfair competition. 

        NON-COMPETITION
AND NO SOLICITATION: During your employment with Compaq and, should your employment terminate for any reason (whether voluntary or involuntary), for the
greater of (a) a period of 24 months following your separation or (b) any Separation Pay Period, you agree that you will not, directly or indirectly, on your own behalf or on the
behalf of others, in any geographic area or market where Compaq is conducting, or has, during the previous twelve months conducted, any business: 

	(1)
	Engage
in any business competitive with the business conducted by Compaq at the time of your separation or set forth in any then-existing business plan that you have
approved and with respect to which significant steps toward implementation have been taken at the time of your separation;

	(2)
	Render
advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business competitive with the business
conducted by Compaq at the time of your separation or set forth in any then-existing business plan that you have approved and with respect to which significant steps toward implementation
have been taken at the time of your separation; or

	(3)
	Solicit,
influence, or induce, or attempt to solicit, influence, or induce, any employee of Compaq to terminate his or her employment with Compaq, or recruit, hire or assist in the
recruitment or hiring of any such employee by any person, association, or entity not affiliated with Compaq. 

        You
understand that these restrictions may limit your ability to engage in certain businesses anywhere in the world during the period provided for above, but you also acknowledge and
agree that you will
receive sufficiently high remuneration and other benefits under this Agreement to justify such restriction. 

        NON-DISPARAGEMENT:
During your employment with Compaq and, should your employment terminate for any reason (whether voluntary or involuntary), for the greater of (a) a
period of 24 months following your separation or (b) any Separation Pay Period, you agree that you will not make any comment or take any action which disparages, defames, or places in a
negative light Compaq or its past and present officers, directors, and employees. Compaq agrees that during this same period, its officers and directors shall refrain from making any comment or taking
any action to disparage, defame, or place you in a negative public light. 

        REMEDIES:
You acknowledge that money damages would not be sufficient remedy for any breach of the foregoing Covenants and that Compaq shall be entitled to specific performance and
injunctive relief to enforce these Covenants or to remedy a breach or threatened breach of these Covenants. Such remedies shall not be deemed the exclusive remedies for a breach of these Covenants,
but shall be in addition to all remedies available at law or in equity to Compaq, including, without limitation, the recovery of damages from you and any agent acting on your behalf in connection with
such breach. 

        ARBITRATION:
Except for claims by Compaq arising out of your alleged breach of obligations under the Covenants section of this Agreement, all disputes arising out of or relating to this
Agreement or to your employment or the termination thereof, will be resolved by final and binding arbitration in Houston, Texas, under the Federal Arbitration Act in accordance with the Employment
Dispute Resolution Rules then in effect with the American Arbitration Association. This paragraph shall apply both during and after termination of the employment relationship. Either party shall have
the right to enforce this agreement to arbitrate in either federal or state court. 

9

 

        All
proceedings and documents prepared in connection with any arbitration under this Agreement shall be Confidential Information and, unless otherwise required by law, the contents or
subject matter thereof shall not be disclosed to any person other than the parties to the proceedings, their counsel, witnesses and experts, the arbitrator, and, if court enforcement of an arbitration
award is sought, the court and court staff hearing such matter. 

        Should
a dispute under this Agreement be submitted to arbitration and you prevail in that arbitration, you will be entitled to recover your reasonable expenses you incurred in connection
with that arbitration, including but not limited to attorneys' fees and arbitrators' fees, from Compaq. Should Compaq prevail, each party shall pay its own costs. 

        CONTROLLING
LAW: Except where otherwise provided for herein, this Agreement shall be governed in all respects by the laws of the State of Texas, excluding any
conflict-of-law rule or principle that might refer the construction of the Agreement to the laws of another State or country. 

        NOTICES:
Any notices under this agreement that are required to be given to the Company shall be addressed to Corporate Secretary, Compaq Computer Corporation, 20555 SH 249, Houston,
Texas 77070-2698, and any notices required to be given to you shall be sent to your address as shown in the Company's records. 

        SEPARABILITY
AND CONSTRUCTION: If any provision of this Agreement is determined to be invalid, unenforceable, or unlawful by an arbitrator or a court of competent jurisdiction, the other
provisions of this Agreement shall remain in full force and effect, and the provisions that are determined to be invalid, unenforceable, or unlawful will either be limited so that they will remain in
effect to the extent permissible by law or such arbitrator or court will substitute, to the extent enforceable, provisions similar thereto or other provision so as to provide, to the fullest extent
allowed by law, the benefits intended by this Agreement. 

        WAIVER
OF BREACH: No failure by any party to give notice of any breach of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver or
relinquishment or that party's rights, and no waiver or relinquishment of rights by any party at any one or more times will be deemed to be a waiver or relinquishment of such right or power at any
other time or times. 

        ENTIRE
AGREEMENT: Except as provided in written Compaq policies dealing with issues such as securities trading, business ethics, governmental affairs and political contributions,
delegation of authority, compliance with law, conflicts of interest, and the like, this Agreement, together with the plan documents, option grant notice, restricted stock award and loan instruments
described herein, as amended from time to time, shall constitute the entire understanding relating to the services to be performed for Compaq, and, except as to any agreements as to indemnification,
including the August 3, 1998 Indemnity Agreement, any previous employment or other agreements, whether written or oral, between you and Compaq shall be deemed to be revoked and canceled for all
purposes as of the date of this Agreement. 

        MODIFICATION
IN WRITING: No addition to, or modification of, this Agreement shall be effective, unless it is in writing and signed by both you and an authorized representative of Compaq. 

        ASSUMPTION
OF OBLIGATIONS: Compaq agrees that it shall not enter into any merger, reorganization, sale of substantially all its assets or other similar agreement or transaction without
specifically providing that any successor entity shall assume the Compaq's obligations under this Agreement. You agree that Compaq may assign its rights under this Agreement to a successor entity
provided that such assignment shall not offset, reduce, or diminish any rights that shall accrue to you as a result of any Change in Control that may thereby occur. Except as set forth in this
paragraph, neither
Compaq nor you shall assign their rights under this Agreement without the written consent of the other party. 

10

 

        Michael,
I hope that this Agreement, as is intended, provides you with the level of security and incentive that will allow you to continue to lead Compaq to the best of your abilities.
Please sign below and return an executed original to indicate your acceptance of these terms. Again, congratulations on being named Chairman. 

        Effective
October 1, 2000, amended and restated December 13, 2000. 

Sincerely, 

	/s/  LAWRENCE T. BABBIO, JR.      
 Lawrence T. Babbio, Jr.

Chairman – Human Resources Committee of

the Board of Directors	 	 
	

cc:	

Judith Craven

Kenneth Lay

Yvonne Jackson	
 	

 
	

/s/  MICHAEL D. CAPELLAS      
 Michael D. Capellas	
 	

 
	

December 13, 2000
 Date

	
 	

 

11

 
 
 

EXHIBIT A TO EMPLOYMENT AGREEMENT BETWEEN MICHAEL CAPELLAS
  AND COMPAQ COMPUTER CORPORATION    
  

 
 

DEFINITION OF CHANGE IN CONTROL    
  

        A "Change in Control" shall be deemed to have occurred if: (i) any "person" as such term is used in Sections 13(d) and 14(d) of the Securities and Exchange
Act of 1934, as amended (the "Exchange Act") other than Compaq Computer Corporation ("the Company"), any trustee or other fiduciary holding securities under any employee benefit plan of the Company,
or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company's then
outstanding securities; (ii) during any period of two consecutive years (not including any period prior to October 20, 2000), individuals who at the beginning of such period constitute
the Board of Directors of the Company, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in
clause (i), (iii), or (iv) of this definition) whose election by the Board of Directors or nomination for election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously
so approved, cease for any reason to constitute at least a majority of the Board of Directors; (iii) the stockholders of the Company approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which
no person acquires more than 30% of the combined voting power of the Company's then outstanding securities shall not constitute a Change in Control of the Company; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. 

12

 
 
 

EXHIBIT B TO EMPLOYMENT AGREEMENT BETWEEN
  MICHAEL CAPELLAS AND COMPAQ    
  

 
 

RELEASE OF CLAIMS    
  

        I acknowledge that I have had twenty-one days to decide whether to execute this Release of Claims ("Release") and that I have been advised in writing
to consult an attorney before executing this Release. I acknowledge that I have seven days from the date I execute this Release to revoke my signature. I understand that if I choose to revoke this
Release I must deliver my written revocation to Compaq before the end of the seven-day period. 

        Excepts
as to rights provided me in the Employment Agreement, I, FOR MYSELF, MY HEIRS, SUCCESSORS, AND ASSIGNS DO HEREBY SETTLE, WAIVE, AND RELEASE COMPAQ COMPUTER CORPORATION ("COMPAQ")
AND ANY OF ITS PAST AND PRESENT OFFICERS, OWNERS, STOCKHOLDERS, PARTNERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS, PREDECESSORS, ASSIGNS, REPRESENTATIVES, ATTORNEYS, DIVISIONS, SUBSIDIARIES, OR
AFFILIATES FROM ANY AND ALL CLAIMS, CHARGES, COMPLAINTS, RIGHTS, DEMANDS, ACTIONS, AND CAUSES OF ACTION OF ANY KIND OR CHARACTER, IN CONTRACT, TORT, OR OTHERWISE, BASED ON ACTIONS OR OMISSIONS
OCCURRING IN THE PAST AND/OR PRESENT, AND REGARDLESS OF WHETHER KNOWN OR UNKNOWN TO ME AT THIS TIME, INCLUDING THOSE NOT SPECIFICALLY MENTIONED IN THIS RELEASE. AMONG THE RIGHTS, CLAIMS, AND CAUSES OF
ACTION WHICH I GIVE UP UNDER THIS RELEASE ARE THOSE ARISING IN CONNECTION WITH MY EMPLOYMENT AND THE TERMINATION OF MY EMPLOYMENT, INCLUDING RIGHTS OR CLAIMS UNDER FEDERAL, STATE AND LOCAL FAIR
EMPLOYMENT PRACTICE OR DISCRIMINATION LAWS (INCLUDING THE VARIOUS CIVIL RIGHTS ACTS, THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE EQUAL PAY ACT, AND THE TEXAS COMMISSION ON HUMAN RIGHTS ACT), LAWS
PERTAINING TO BREACH OF EMPLOYMENT CONTRACT, WRONGFUL TERMINATION OR OTHER WRONGFUL TREATMENT, AND ANY OTHER LAWS OR RIGHTS RELATING TO MY EMPLOYMENT WITH COMPAQ AND THE TERMINATION OF THAT
EMPLOYMENT. I ACKNOWLEDGE THAT I AM AWARE OF MY RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AND THAT I AM KNOWINGLY AND VOLUNTARILY WAIVING AND RELEASING ANY CLAIM OF AGE DISCRIMINATION
WHICH I MAY HAVE UNDER THAT STATUTE AS PART OF THIS RELEASE. THIS AGREEMENT DOES NOT WAIVE OR RELEASE ANY RIGHTS, CLAIMS, OR CAUSES OF ACTION THAT MAY ARISE FROM ACTS OR OMISSIONS OCCURRING AFTER THE
DATE I EXECUTE THIS RELEASE. I AGREE NOT TO BRING OR JOIN ANY LAWSUIT OR FILE ANY CLAIM AGAINST COMPAQ IN ANY COURT RELATING TO MY EMPLOYMENT OR THE TERMINATION OF MY EMPLOYMENT. 

	
	 	Date:	

	Michael D. Capellas

	 	 	 

13

QuickLinks

EXHIBIT 10(pp)

EXHIBIT A TO EMPLOYMENT AGREEMENT BETWEEN MICHAEL CAPELLAS AND COMPAQ COMPUTER CORPORATION

DEFINITION OF CHANGE IN CONTROL

EXHIBIT B TO EMPLOYMENT AGREEMENT BETWEEN MICHAEL CAPELLAS AND COMPAQ

RELEASE OF CLAIMS

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