Document:

Exhibit
10(y)

 

HEWLETT-PACKARD COMPANY 2000

EMPLOYEE STOCK PURCHASE PLAN

(Effective November 1, 2000)

(As amended August 16, 2000, March 29, 2001, and September
12, 2002)

 

 

1.  PURPOSE.

 

                The purpose of this Plan is to
provide an opportunity for Employees of Hewlett-Packard Company (the
“Corporation”) and its Designated Affiliates, to purchase Common Stock of the
Corporation and thereby to have an additional incentive to contribute to the
prosperity of the Corporation. It is the intention of the Corporation that the
Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the
Internal Revenue Code of 1986, as amended, although the Corporation makes no
undertaking nor representation to maintain such qualification.  In addition, this Plan document authorizes the grant
of options under a non-423 Plan which do not qualify under Section 423 of
the Code pursuant to rules, procedures or sub-plans adopted by the Board (or
its designate) designed to achieve desired tax or other objectives.

 

2.  DEFINITIONS.

 

                                                (a)           “Affiliate” shall mean any
(i) Subsidiary and (ii) any other entity other than the Corporation
in an unbroken chain of entities beginning with the Corporation if, at the time
of the granting of the option, each of the entities, other than the last entity
in the unbroken chain, owns or controls 50 percent or more of the total
ownership interest in one of the other entities in such chain.

 

                                                (b)           “Board” shall mean the Board of Directors
of the Corporation.

 

                                                (c)           “Code” shall mean the Internal Revenue Code
of 1986, of the USA, as amended. Any reference to a section of the Code herein
shall be a reference to any successor or amended section of the Code.

 

                                                (d)           “Code
Section 423 Plan” shall mean an employee stock purchase plan which
is designed to meet the requirements set forth in Code Section 423.

 

                                                (e)           “Committee” shall mean the
committee appointed by the Board in accordance with Section 14 of the
Plan.

 

                                                (f)            “Common Stock” shall mean
the Common Stock of the Corporation, or any stock into which such Common Stock
may be converted.

 

                                                (g)           “Compensation” shall mean
an Employee’s base cash compensation, commissions and shift premiums paid on
account of personal services rendered by the Employee to the Corporation or a
Designated Affiliate, but shall exclude payments for overtime, incentive
compensation, incentive payments and bonuses, with any modifications determined
by the Committee. The Committee shall have the authority to determine and
approve all forms of pay to be included in the definition of Compensation and
may change the definition on a prospective basis.

 

                                                (h)           “Corporation” shall mean
Hewlett-Packard Company, a Delaware corporation.

 

                                                (i)            “Designated Affiliate”
shall mean an Affiliate that has been designated by the Committee as eligible
to participate in the Plan with respect to its Employees.  In the event the Designated Affiliate is not
a Subsidiary, it shall be designated for participation in the Non-423 Plan.

 

                                                (j)            “Employee” shall mean an
individual classified as an employee (within the meaning of Code
Section 3401(c) and the regulations thereunder) by the Corporation or
a Designated Affiliate on the Corporation’s or such Designated Affiliate’s
payroll records during the relevant participation period. Employees shall not
include individuals whose customary employment is for not more than five
(5) months in any calendar year (except those Employees in such category
the exclusion of whom is not permitted under applicable law) or individuals
classified as independent contractors.

 

                                                (k)           “Entry Date” shall mean
the first Trading Day of the Offering Period or, for new Participants, the
first Trading Day of their first Purchase Period.  In the
event that the Fair Market Value on the first Trading Day of a subsequent
Purchase Period within an Offering Period is less than the Fair Market Value on
the Participant’s Entry Date, the Participant’s Entry Date shall automatically
be reset to the first Trading Day of such subsequent Purchase Period within
such 

 

 

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Offering Period. The new Entry Date shall apply to such subsequent Purchase
Period and future Purchase Periods within such Offering Period.

 

                                                (l)            “Fair Market Value” shall
be the closing sales price for the Common Stock (or the closing bid, if no sales
were reported) as quoted on the New York Stock Exchange on the date of
determination if that date is a Trading Day, or if the date of determination is
not a Trading Day, the last market Trading Day prior to the date of
determination, as reported in The Wall Street Journal or such other source as
the Committee deems reliable.

 

                                                (m)          “Non-423
Plan” shall mean an employee stock purchase plan which does not meet
the requirements set forth in Code Section 423.

 

                                                (n)           “Offering Period” shall
mean the period of twenty-four (24) months during which an option granted
pursuant to the Plan may be exercised, commencing on the first Trading Day on
or after November 1, of every other year and terminating on the last
Trading Day in the period ending twenty-four (24) months later. The
duration and timing of Offering Periods may be changed or modified by the
Committee.

 

                                                (o)           “Participant” shall mean a
participant in the Plan as described in Section 5 of the Plan.

 

                                                (p)           “Plan” shall mean this
Employee Stock Purchase Plan which includes: (i) a Code Section 423 Plan and
(ii) a Non-423 Plan.

 

                                                (q)           “Purchase Date” shall mean
the last Trading Day of each Purchase Period.

 

                                                (r)            “Purchase Period” shall
mean the period of six (6) months commencing after one Purchase Date and
ending with the next Purchase Date, except that the first Purchase Period shall
commence on the Plan’s effective date. Subsequent Purchase Periods, if any,
shall run consecutively after the termination of the preceding Purchase Period.

 

                                                (s)           “Purchase Price” shall mean
85% of the Fair Market Value of a share of Common Stock on the Entry Date or on
the Purchase Date, whichever is lower; provided however, that the Purchase
Price may be adjusted by the Committee pursuant to Section 7.4.

 

                                                (t)            “Shareowner” shall mean a
record holder of shares entitled to vote shares of Common Stock under the
Corporation’s by-laws.

 

                                                (u)           “Subsidiary” shall mean
any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, as described in Code
Section 424(f).

 

                                                (v)           “Trading Day” shall mean a
day on which U.S. national stock exchanges and the NASDAQ System are open for
trading.

 

3.  ELIGIBILITY.

 

                Any Employee regularly employed
on a full-time or part-time (20 hours or more per week on a regular
schedule) basis by the Corporation or by any Designated Affiliate on an Entry
Date shall be eligible to participate in the Plan with respect to the Purchase
Period commencing on such Entry Date, provided that the Committee may establish
administrative rules requiring that employment commence some minimum
period (e.g., one pay period) prior to an Entry Date to be eligible to
participate with respect to the Purchase Period beginning on that Entry Date.
The Committee may also determine that a designated group of highly compensated
Employees are ineligible to participate in the Plan so long as the excluded
category fits within the definition of “highly compensated employee” in Code
Section 414(q). No Employee may participate in the Plan if immediately
after an option is granted the Employee owns or is considered to own (within
the meaning of Code Section 424(d)) shares of stock, including stock which
the Employee may purchase by conversion of convertible securities or under
outstanding options granted by the Corporation, possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of the
Corporation or of any of its Subsidiaries. All Employees who participate in the
Plan shall have the same rights and privileges under the Plan, except for
differences that may be mandated by local law and that are consistent with Code
Section 423(b)(5); provided, however, that Employees participating in the
Non-423 Plan by means of rules, procedures or sub-plans adopted pursuant to Section 15
need not have the same rights and privileges as Employees participating in the
Code Section 423 Plan. The Board may impose restrictions on eligibility
and participation of Employees who are officers and directors to facilitate
compliance with federal or state securities laws or foreign laws.

 

 

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4. 
OFFERING PERIODS.

 

                The Plan shall be implemented by
consecutive Offering Periods with a new Offering Period commencing on the first
Trading Day on or after the date twenty-four (24) months from the first
date of the immediately preceding Offering Period, or on such other date as the
Committee shall determine, and continuing thereafter for twenty-four
(24) months or until terminated pursuant to Section 13 hereof. The
first Offering Period shall commence on November 1, 2000. The Committee
shall have the authority to change the duration of Offering Periods (including
the commencement dates thereof) with respect to future offerings without
Shareowner approval if such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period to be affected
thereafter.

 

5.  PARTICIPATION.

 

                                                5.1           An Employee who is eligible to
participate in the Plan in accordance with Section 3 may become a
Participant by completing and submitting, on a date prescribed by the Committee
prior to an applicable Entry Date, a completed payroll deduction authorization
and Plan enrollment form provided by the Corporation or by following an
electronic or other enrollment process as prescribed by the Committee. An
eligible Employee may authorize payroll deductions at the rate of any whole
percentage of the Employee’s Compensation, not to exceed ten percent (10%) of
the Employee’s Compensation. All payroll deductions may be held by the
Corporation and commingled with its other corporate funds where
administratively appropriate. No interest shall be paid or credited to the
Participant with respect to such payroll deductions. The Corporation shall
maintain a separate bookkeeping account for each Participant under the Plan and
the amount of each Participant’s payroll deductions shall be credited to such
account. A Participant may not make any additional payments into such account.

 

                                                5.2           Under procedures established by the
Committee, a Participant may withdraw from the Plan during a Purchase Period,
by completing and filing a new payroll deduction authorization and Plan
enrollment form with the Corporation or by following electronic or other
procedures prescribed by the Committee, prior to the fifth business day
preceding the Purchase Date. If a Participant withdraws from the Plan during a
Purchase Period, his or her accumulated payroll deductions will be refunded to
the Participant without interest. The Committee may establish
rules limiting the frequency with which Participants may withdraw and
re-enroll in the Plan and may impose a waiting period on Participants wishing
to re-enroll following withdrawal.

 

                                                5.3           A Participant may change his or her
rate of contribution through payroll deductions at any time by filing a new
payroll deduction authorization and Plan enrollment form or by following
electronic or other procedures prescribed by the Committee. If a Participant
has not followed such procedures to change the rate of contribution, the rate
of contribution shall continue at the originally elected rate throughout the
Purchase Period and future Purchase Periods (including Purchase Periods of
subsequent Offering Periods). In accordance with Section 423(b)(8) of
the Code, the Committee may reduce a Participant’s payroll deductions to zero
percent (0%) at any time during a Purchase Period.

 

6.  TERMINATION OF EMPLOYMENT.

 

                In the event any Participant
terminates employment with the Corporation or any of its Designated Affiliates
for any reason (including death) prior to the expiration of a Purchase Period,
the Participant’s participation in the Plan shall terminate and all amounts
credited to the Participant’s account shall be paid to the Participant or, in
the case of death, to the Participant’s heirs or estate, without interest.
Whether a termination of employment has occurred shall be determined by the
Committee. The Committee may also establish rules regarding when leaves of
absence or changes of employment status will be considered to be a termination
of employment, including rules regarding transfer of employment among
Designated Affiliates, Affiliates and the Corporation, and the Committee may
establish termination-of-employment procedures for this Plan that are independent
of similar rules established under other benefit plans of the Corporation
and its Affiliates.

 

7. 
OFFERING.

 

                                                7.1           Subject to adjustment as set forth in
Section 10, the maximum number of shares of Common Stock, which may be
issued pursuant to the Plan, shall be one hundred million (100,000,000).
If, on a given Purchase Date, the number of shares with respect to which
options are to be exercised exceeds the number of shares then available under
the Plan, the Corporation shall make a pro rata allocation of the shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable.

 

                                                7.2           Each Purchase Period shall be
determined by the Committee. Unless otherwise determined by the Committee, the
Plan will operate with successive six (6) month Purchase Periods
commencing at the beginning of each fiscal year half (November 1 and
May 1). The Committee shall have the power to change the duration of
future Purchase Periods, without Shareowner approval, and without regard to the
expectations of any Participants.

 

 

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                                                7.3           Each eligible Employee who has
elected to participate as provided in Section 5.1 shall be granted an
option to purchase that number of whole shares of Common Stock (not to exceed
5,000 shares, subject to adjustment under Section 10 of the Plan) which may be
purchased with the payroll deductions accumulated on behalf of such Employee
during each Purchase Period at the purchase price specified in Section 7.4
below, subject to the additional limitation that no Employee shall be granted
an option to purchase Common Stock under the Plan at a rate which exceeds U.S.
twenty-five thousand dollars (U.S. $25,000) of the Fair Market Value of such
Common Stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time.  For
purposes of the Plan, an option is “granted” on a Participant’s Entry Date. In
the event of a new Entry Date as contemplated by Section 2(i), such option will
be “granted” on such new Entry Date. An option will expire upon the earlier to
occur of (i) the termination of a Participant’s participation in the Plan; (ii)
the grant of an option to such Participant on a new Entry Date within an
Offering Period; or (iii) the termination of an Offering Period. This section
shall be interpreted so as to comply with Code Section 423(b)(8).

 

                                                7.4           The purchase price under each option
shall be the lower of: (i) a percentage (not less than eighty-five percent
(85%)) established by the Committee (“Designated Percentage”) of the Fair
Market Value of the Common Stock on the Entry Date on which an option is
granted, or (ii) the Designated Percentage of the Fair Market Value on the
Purchase Date on which the Common Stock is purchased. The Committee may change
the Designated Percentage with respect to any future Offering Period, but not
below eighty-five percent (85%), and the Committee may determine with respect
to any prospective Offering Period that the option price shall be the
Designated Percentage of the Fair Market Value of the Common Stock on the
Purchase Date.

 

8.  PURCHASE OF STOCK.

 

                Upon the expiration of each
Purchase Period, a Participant’s option shall be exercised automatically for the
purchase of that number of whole shares of Common Stock which the accumulated
payroll deductions credited to the Participant’s account at that time shall
purchase at the applicable price specified in Section 7.4. Notwithstanding
the foregoing, the Corporation or its designee may make such provisions and
take such action as it deems necessary or appropriate for the withholding of
taxes and/or social insurance which the Corporation or its Designated Affiliate
is required by law or regulation of any governmental authority to withhold.
Each Participant, however, shall be responsible for payment of all individual
tax liabilities arising under the Plan.

 

9.  PAYMENT AND DELIVERY.

 

                As soon as practicable after the
exercise of an option, the Corporation shall deliver to the Participant a
record of the Common Stock purchased and the balance of any amount of payroll
deductions credited to the Participant’s account not used for the purchase,
except as specified below. The Committee may permit or require that shares be
deposited directly with a broker designated by the Committee or to a designated
agent of the Corporation, and the Committee may utilize electronic or automated
methods of share transfer. The Committee may require that shares be retained
with such broker or agent for a designated period of time and/or may establish
other procedures to permit tracking of disqualifying dispositions of such
shares. The Corporation shall retain the amount of payroll deductions used to
purchase Common Stock as full payment for the Common Stock and the Common Stock
shall then be fully paid and non-assessable. No Participant shall have any
voting, dividend, or other Shareowner rights with respect to shares subject to
any option granted under the Plan until the shares subject to the option have
been purchased and delivered to the Participant as provided in this
Section 9.

 

10.  RECAPITALIZATION.

 

                If after the grant of an option,
but prior to the purchase of Common Stock under the option, there is any
increase or decrease in the number of outstanding shares of Common Stock
because of a stock split, stock dividend, combination or recapitalization of
shares subject to options, the number of shares to be purchased pursuant to an
option, the price per share of Common Stock covered by an option and the
maximum number of shares specified in Section 7.1 may be appropriately
adjusted by the Board, and the Board shall take any further actions which, in
the exercise of its discretion, may be necessary or appropriate under the
circumstances.

 

                The Board’s determinations under
this Section 10 shall be conclusive and binding on all parties.

 

11.  MERGER, LIQUIDATION, OTHER CORPORATION
TRANSACTIONS.

 

                In the event of the proposed
liquidation or dissolution of the Corporation, the Offering Period will
terminate immediately prior to the consummation of such proposed transaction,
unless otherwise provided by the Board in its sole discretion, and all
outstanding options shall automatically terminate and the amounts of all
payroll deductions will be refunded without interest to the Participants.

 

                In the event of a proposed sale
of all or substantially all of the assets of the Corporation, or the merger or
consolidation of the Corporation with or into another corporation, then in the
sole discretion of the Board, (1) each option shall be assumed or an
equivalent 

 

 

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option
shall be substituted by the successor corporation or parent or subsidiary of
such successor corporation, (2) a date established by the Board on or
before the date of consummation of such merger, consolidation or sale shall be
treated as a Purchase Date, and all outstanding options shall be exercised on
such date, or (3) all outstanding options shall terminate and the
accumulated payroll deductions will be refunded without interest to the
Participants.

 

12.  TRANSFERABILITY.

 

                Options granted to Participants
may not be voluntarily or involuntarily assigned, transferred, pledged, or
otherwise disposed of in any way, and any attempted assignment, transfer,
pledge, or other disposition shall be null and void and without effect. If a
Participant in any manner attempts to transfer, assign or otherwise encumber
his or her rights or interests under the Plan, other than as permitted by the
Code, such act shall be treated as an election by the Participant to
discontinue participation in the Plan pursuant to Section 5.2.

 

13.  AMENDMENT OR TERMINATION OF THE PLAN.

 

13.1                                           The Plan shall continue until
November 1, 2010 unless otherwise terminated in accordance with
Section 13.2.

 

13.2                                           The Board may, in its sole
discretion, insofar as permitted by law, terminate or suspend the Plan, or
revise or amend it in any respect whatsoever, except that, without approval of
the Shareowners, no such revision or amendment shall increase the number of
shares subject to the Plan, other than an adjustment under Section 10 of
the Plan.

 

14.  ADMINISTRATION.

 

                The Board shall appoint a
Committee consisting of at least two members who will serve for such period of
time as the Board may specify and whom the Board may remove at any time. The
Committee will have the authority and responsibility for the day-to-day
administration of the Plan, the authority and responsibility specifically
provided in this Plan and any additional duty, responsibility and authority
delegated to the Committee by the Board, which may include any of the functions
assigned to the Board in this Plan. The Committee may delegate to one or more
individuals the day-to-day administration of the Plan. The Committee shall have
full power and authority to promulgate any rules and regulations which it
deems necessary for the proper administration of the Plan, to interpret the
provisions and supervise the administration of the Plan, to make factual
determinations relevant to Plan entitlements and to take all action in
connection with administration of the Plan as it deems necessary or advisable,
consistent with the delegation from the Board. Decisions of the Board and the
Committee shall be final and binding upon all participants. Any decision
reduced to writing and signed by a majority of the members of the Committee
shall be fully effective as if it had been made at a meeting of the Committee
duly held. The Corporation shall pay all expenses incurred in the administration
of the Plan. No Board or Committee member shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
hereunder.

 

15.  COMMITTEE RULES FOR FOREIGN JURISDICTIONS
AND THE NON-423 PLAN.

 

15.1                           The Committee may adopt rules or
procedures relating to the operation and administration of the Plan to
accommodate the specific requirements of local laws and procedures.  Without limiting the generality of the
foregoing, the Committee is specifically authorized to adopt rules and
procedures regarding handling of payroll deductions, payment of interest,
conversion of local currency, payroll tax, withholding procedures and handling
of stock certificates which vary with local legal requirements.

 

15.2                           The Committee may also adopt rules,
procedures or sub-plans applicable to particular Affiliates or locations, which
rules, procedures or sub-plans may be designed to be outside the scope of Code
Section 423.  The terms of such rules,
procedures or sub-plans may take precedence over other provisions of this Plan,
with the exception of Section 7.1, but unless otherwise expressly superseded by
the terms of such rule, procedure or sub-plan, the provisions of this Plan
shall govern the operation of the Plan. 
To the extent inconsistent with the requirements of Code
Section 423, such rules, procedures or sub-plans shall be considered part
of the non-423 Plan, and the options granted thereunder shall not be considered
to comply with Section 423.

 

16.  SECURITIES LAWS REQUIREMENTS.

 

                The Corporation shall not be
under any obligation to issue Common Stock upon the exercise of any option
unless and until the Corporation has determined that: (i) it and the
Participant have taken all actions required to register the Common Stock under
the Securities Act of 1933, or to perfect an exemption from the registration
requirements thereof; (ii) any applicable listing requirement of any stock
exchange on which the Common Stock is listed has been satisfied; and
(iii) all other applicable provisions of state, federal and applicable
foreign law have been satisfied.

 

 

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17.  GOVERNMENTAL REGULATIONS.

 

                This Plan and the Corporation’s
obligation to sell and deliver shares of its stock under the Plan shall be
subject to the approval of any governmental authority required in connection
with the Plan or the authorization, issuance, sale, or delivery of stock
hereunder.

 

18.  NO ENLARGEMENT OF EMPLOYEE RIGHTS.

 

                Nothing contained in this Plan
shall be deemed to give any Employee the right to be retained in the employ of
the Corporation or any Designated Affiliate or to interfere with the right of
the Corporation or Designated Affiliate to discharge any Employee at any time.

 

19.  GOVERNING LAW.

 

                This Plan shall be governed by
Delaware law, without regard to that State’s choice of law rules.

 

20.  EFFECTIVE DATE.

 

                This Plan shall be effective
November 1, 2000, subject to approval of the Shareowners of the
Corporation within 12 months before or after its adoption by the Board.

 

21.  REPORTS.

 

                Individual accounts shall be
maintained for each Participant in the Plan. Statements of account shall be
given to Participants at least annually, which statements shall set forth the
amounts of payroll deductions, the Purchase Price, the number of shares
purchased and the remaining cash balance, if any.

 

22. 
DESIGNATION OF BENEFICIARY FOR OWNED SHARES.

 

                With respect to shares of Common
Stock purchased by the Participant pursuant to the Plan and held in an account
maintained by the Corporation or its assignee on the Participant’s behalf, the
Participant may be permitted to file a written designation of beneficiary.
The Participant may change such designation of beneficiary at any time by
written notice. Subject to local legal requirements, in the event of a
Participant’s death, the Corporation or its assignee shall deliver such shares
of Common Stock to the designated beneficiary.

 

                Subject to local law, in the event of the death of a
Participant and in the absence of a beneficiary validly designated who is
living at the time of such Participant’s death, the Corporation shall deliver
such shares of Common Stock to the executor or administrator of the estate of
the Participant, or if no such executor or administrator has been appointed (to
the knowledge of the Corporation), the Corporation in its sole discretion, may
deliver (or cause its assignee to deliver) such shares of Common Stock to the
spouse, dependent or relative of the Participant, or if no spouse, dependent or
relative is known to the Corporation, then to such other person as the
Corporation may determine.

 

 

 

6Exhibit 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

 

1

 

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).

 

2

 

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:

 

3

 

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.

 

4

 

(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 

 

5

 

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

  

 

 

 

 

6

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