Document:

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[HEWLETT-PACKARD LOGO]
                                                                   Exhibit 10(a)

                             HEWLETT-PACKARD COMPANY

                        1985 INCENTIVE COMPENSATION PLAN

                   PART 1. PLAN ADMINISTRATION AND ELIGIBILITY

1.       PURPOSE

         The purpose of this 1985 Incentive Compensation Plan (the "Plan") of
Hewlett-Packard Company (the "Company") is to encourage ownership in the
Company by key personnel whose long-term employment is considered essential to
the Company's continued progress and thus to provide them with a further
incentive to continue in the employ of the Company or its subsidiaries. (The
Company and all such subsidiaries are collectively referred to hereinafter as
the "Participating Companies.")

II.      ADMINISTRATION

         The Board of Directors (the "Board") of the Company or any committee
(the "Committee") of the Board that will satisfy Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any regulations
promulgated thereunder, as from time to time in effect, including any successor
rule ("Rule 16b-3"), shall supervise and administer the Plan. The Committee
shall consist solely of two or more non-employee directors of the Company, who
shall be appointed by the Board. A member of the Board shall be deemed to be a
"non-employee director" only if he satisfies such requirements as the
Securities and Exchange Commission may establish for non-employee directors
under Rule 16b-3. Members of the Board receive no additional compensation for
their services in connection with the administration of the Plan.

         The Committee or the Board shall from time to time designate the key
employees of the Participating Companies who shall be granted stock options,
stock or cash awards under the Plan and the amount and nature of the award
granted to each such employee.

         The Board or the Committee may adopt such rules or guidelines as it
deems appropriate to implement the Plan. All questions of interpretation of the
Plan or of any shares issued under it shall be determined by the Board or the
Committee and such determination shall be final and binding upon all persons
having an interest in the Plan. Any or all powers and discretion vested in the
Board or the Committee under this Plan may be exercised by any subcommittee so
authorized by the Board or the Committee and satisfying the requirements of
Rule 16b-3 for employees subject to Section 16 of the Exchange Act. In
addition, the Board or the Committee may delegate to the Executive Committee of
the Board of Directors the power to approve stock options and stock awards to
employees not subject to Section 16 of the Exchange Act.

III.     PARTICIPATION IN THE PLAN

         Key employees of the Company, including officers (with the exception
of Messrs. David Packard and William R. Hewlett), and directors of the Company
who are also employed by a Participating Company shall be eligible to
par-ticipate in the Plan.

IV.      STOCK SUBJECT TO THE PLAN

         The maximum number of shares which may be optioned or awarded under
the Plan shall be Twelve Million (12,000,000) shares of the Company's $l par
value Common Stock. If a class of Preferred Stock is created and authorized by
the Company's Amended Articles of Incorporation, Preferred Stock may be used in
lieu of Common Stock for awarded Plan grants. The limitation on the number of
shares which may be optioned or awarded under the Plan shall be subject under
the Plan shall be subject to adjustment as provided in Section XX of the Plan.

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         The grant of a stock award not pursuant to an option under the Plan
("Stock Award") shall be subject to such restrictions as the Committee shall
determine to be appropriate, including but not limited to restrictions on
resale, repurchase provisions, special vesting requirements or forfeiture
provisions.

         If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, or if any Stock Awards are
forfeited, the forfeited shares or shares allocable to the unexercised portion
of such option shall again become available for grant pursuant to the Plan.

         Upon the grant of a Stock Award or the exercise of an option, the
Company may issue new shares or reissue shares previously repurchased by or on
behalf of the Company. If shares are to be repurchased and reissued, the
Company shall determine, on or before the last day of each fiscal quarter, the
amount, if any, of the Company's Common Stock to be purchased by a broker or
other independent agent designated by the Company (the "Broker") in the
following quarter for delivery under the Plan. Stock so purchased by the Broker
shall be restored to the status of authorized but unissued shares. The amounts
of stock to be purchased may be all or less than all of the projected
requirements of the Plan. It is not the intent of the Company that purchases by
the Broker exceed actual Plan requirements for the quarter. In such an event,
however, excess shares would be carried over to help satisfy Plan requirements
in the following quarter. To the extent that the amounts purchased by the
Broker do not meet actual Plan requirements, the Company shall issue original
shares. The Broker shall be free to purchase such stock at such times, at such
prices and in such amounts as the Broker deems appropriate, whether through
brokers or by purchase from securities dealers, both on and off the national
exchanges, or by private sale or otherwise; provided that the Broker shall
purchase the full number of shares required by the Company to be purchased for
that quarter, and that such purchases shall be consistent with such conditions
as may be prescribed from time to time by law or by the Securities and Exchange
Commission ("SEC") in any rule or regulation or in any exemptive order or
no-action letter issued by the SEC to the Company or the Broker with respect to
the making of such purchases, or otherwise. As commitments for such purchases
are made by the Broker, the Company shall, upon written consent of the Broker,
deliver to the Broker the funds necessary to consummate such purchases and pay
any brokerage and related incidental charges. All amounts transferred to the
Broker by the Company shall be promptly invested in the Company's Common Stock,
in no event later than 30 days after delivery of such funds by the Company.

                    PART 2. OPTIONS AND STOCK APPRECIATION RIGHTS

V.       INCENTIVE STOCK OPTIONS

         Any option granted under the Plan may be designated by the Committee
as a non-statutory option or 'as an incentive stock option ("ISO") entitled to
special tax treatment under Section 422A of the Internal Revenue Code of 1954,
as amended to date and as may be amended from time to time (the "Code").

         No option intended to qualify as an ISO may be granted under the Plan
if such grant, together with any applicable prior grants, would exceed any
maximum established under the Code for ISOs that may be granted to a single
employee. Should it be determined that any ISO granted under the Plan exceeds
such maximum, the ISO shall be null and void to the extent, but only to the
extent, of such excess. Section 422A(b) (8) of the Code presently provides that
the aggregate fair market value (determined as of the time the ISO is granted)
of the stock for which any employee may be granted ISOs in any calendar year
under all incentive stock option plans of the Company shall not exceed $100,000
plus any unused limit carryover (as defined in the Code) to such year.

         Nothing in this section shall be deemed to prevent the grant of
options in excess of the maximum established by the Code where such excess
amount is treated as a non-statutory option not entitled to special tax
treatment under Section 422A of the Code.

VI.      TERMS, CONDITIONS AND FORM OF OPTIONS

         Each option granted under this Plan shall be authorized by action of
the Committee and shall be evidenced by a written agreement in such form as the
Committee shall from time to time approve, which agreements shall comply with
and be subject to the following terms and conditions:

         A.   OPTIONS NON-TRANSFERABLE. Each option granted under the Plan by
its terms shall not be transferable by the optionee otherwise than by will, or
by the laws of descent and distribution, and shall be exercised during the
lifetime of the optionee only by him. No option or interest therein may be
transferred, assigned pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.

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         B.      PERIOD OF OPTION. No option may be exercised before the first
anniversary of the date upon which it was granted, nor may it be exercised as
to more than one-fourth of the number of shares covered thereby before the
second anniversary of such date, nor as to more than one-half of the number of
shares covered thereby before the third anniversary of such date; provided,
however, that any option granted pursuant to the Plan shall become exercisable
in full upon the retirement of the optionee because of age or total and
permanent disability or upon the death of the optionee. No option shall be
exercisable after the expiration of ten (10) years from the date upon which
such option is granted. Each option shall be subject to termination before its
date of expiration as hereinafter provided.

         C.      EXERCISE OF OPTIONS. Options may be exercised only by written
notice to the Company at its head office accompanied by payment in cash of the
full consideration for the shares as to which they are exercised. In addition,
if and to the extent authorized by the Committee, optionees may make all or any
portion of any payment due to the Company upon exercise of an option by
delivery of any property (including securities of the Company) other than cash,
so long as such property constitutes valid consideration for the stock under
applicable law.

                 No option may be exercised while the optionee is on any leave
of absence from the Company other than an approved Medical Leave. Options will
continue to vest during any authorized leave of absence, and may be exercised
to the extent permitted by Section VI(B) upon the optionee's return to an
active employment status.

                 No ISO shall be exercisable while there is outstanding (within
the meaning of Section 422A(c) (7) of the Code) any ISO (within the meaning of
Section 422A(b) of the Code) which was granted, before the granting of such
ISO, to the holder of such ISO permitting the purchase of stock of the Company,
or of any corporation which (at the time of the granting of such ISO) is a
parent or subsidiary corporation of the Company, or of a predecessor
corporation of any such corporations.

         D.      TERMINATION OF OPTIONS. ALL rights of an employee in an
option, to the extent that it has not been exercised, shall terminate upon the
termination of his employment for any reason other than the death of the
employee or retirement because of age or total and permanent disability and in
case of such retirement three (3) months from the date thereof. In the event of
the death of the employee, the option shall terminate upon failure of his
designated representative to exercise the option in accordance with the time
period provided in subsection "E" below.

         E.      EXERCISE BY REPRESENTATIVE FOLLOWING DEATH OF EMPLOYEE. The
employee, by written notice to the Company, may designate one or more persons
(and from time to time change such designation) including his legal
representative, who, by reason of his death, shall acquire the right to
exercise all or a portion of the option. If the person or persons so designated
wish to exercise any portion of the option, they must do so within one (1) year
after the death of the employee or retired employee, as the case may be. All
rights of the representative(s) in the option shall terminate upon failure to
exercise the option within the time period set forth in this subsection E. Any
exercise by a representative shall be subject to the provisions of this Plan.

VII.     MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS

         The Company's Board of Directors and the Committee shall each have the
power to modify, extend or renew outstanding options and authorize the grant of
new options in substitution therefor, provided that any such action may not
have the effect of altering or impairing any rights or obligations of any
option previously granted without the consent of the optionee.

         The Board of Directors and the Committee shall have the power to lower
the exercise price of an outstanding option not intended to qualify as an ISO
under the Code; provided, however, that the exercise price per share may not be
reduced below the fair market value of a share of Common Stock of the Company
on the date the action is taken to reduce the exercise price. Such fair market
value shall be deemed to be the mean of the highest and lowest quoted selling
prices for such shares on that date as reported on The New York Stock Exchange
Composite Tape.

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VIII.    OPTION PRICE

         The option price per share for the shares covered by each option shall
be not less than one hundred percent (100%) of the fair market value of a share
of Common Stock of the Company on the date the option is granted. Such fair
market value shall be deemed to be the mean of the highest and lowest quoted
selling prices for such share on that date as reported on The New York Stock
Exchange Composite Tape.

IX.      LOANS FOR EXERCISE OF OPTIONS

         Any option agreement under this Plan entered into with an employee
may, but need not, provide that the Com-pany shall lend to the employee who
holds the option the funds for any exercise of his option. Such loans shall be
at a rate of interest adequate to avoid imputation of income under Sections 483
and 7872 of the Code and shall be for a term not to exceed fifteen (15) months
from the date of exercise of the related option, and shall be subject to such
other terms and conditions as shall be set forth in the option agreement, which
terms and conditions shall be determined by the Committee at the time of the
grant of the option. No such loan shall be secured directly or indirectly by
any margin security (as that term is from time to time defined in the
applicable Regulations of the Federal Reserve Board).

X.       STOCK APPRECIATION RIGHTS

         This section shall apply to employees who hold options heretofore or
hereafter granted under the Plan ("Options") and who are or may hereafter be
subject to Section 16 of the Securities Exchange Act of 1934. The Committee
may, but shall not be required to, grant to such employees stock appreciation
rights as herein provided with respect to not more than the number of shares
from time to time subject to the Options held by such employees. The stock
appreciation rights shall be integral parts of the respective Options and shall
have no existence apart therefrom.

         A stock appreciation right shall be the right of the holder thereof to
elect to surrender part or all of any Option which is wholly exercisable, or of
any exercisable portion of an Option which is partially exercisable, and
receive in exchange therefor cash or shares (valued at current fair market
value) or a combination thereof. Such cash or shares or combination shall have
an aggregate value ("Appreciation") equal to the excess of the current fair
market value of one (1) share over the Option price of one (1) share specified
in such Option multiplied by the number of shares subject to such Option or the
portion thereof which is surrendered. The current fair market value of a share
shall be the mean of the highest and lowest quoted selling prices for shares as
reported on The New York Stock Exchange Composite Tape on the day on which a
stock appreciation right is exercised, or if no sale was made on such date,
then on the next preceding day on which such a sale was made. No fractional
share shall be issued on the exercise of a stock appreciation right, and
settlement therefor shall be made in cash.

         Each stock appreciation right granted under this Plan shall be subject
to the following terms and conditions: (1) each stock appreciation right shall
be evidenced by a written agreement between the Company and the holder in such
form as the Committee shall authorize; (2) each stock appreciation right
granted under the Plan by its terms shall not be transferable by the holder
otherwise than by will or by the law of descent and distribution, and shall be
exercised during the lifetime of the holder only by him. No stock appreciation
right or interest therein may be transferred, assigned, pledged or hypothecated
by the holder during his lifetime, whether by operation of law or otherwise, or
be made subject to execution, attachment or similar process; (3) all rights of
an employee in a stock appreciation right, to the extent that it has not been
exercised, shall terminate upon the death of the employee or the termination of
his employment for any reason other than retirement because of age or total and
permanent disability, and in case of such retirement three (3) months from the
date thereof; provided, however, that the employee, by written notice to the
Company, may designate one or more persons (and from time to time change such
designation), including his legal representative, who, by reason of his death,
shall acquire the right to exercise all or a portion of the rights accrued
under the stock appreciation right as of the date of his death. If the person
or persons so designated wish to exercise any portion of the stock appreciation
right, they must do so within one (1) year after the death of the employee or
retired employee, as the case may be, and such exercise shall be subject to the
provisions of this Plan; (4) the life of stock appreciation rights shall be
coterminous with the life of the Options.

         The holder of a stock appreciation right may exercise the same by (1)
filing with the Secretary of the Company a written election, which election
shall be delivered by the Secretary to the Committee, specifying (a) the Option
or portion thereof to be surrendered, (b) the percentage of the Appreciation
which he desires to receive in cash, if any; and (2)

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surrendering such Option for cancellation or partial cancellation, as the case
may be; provided, however, that any election which specifies that the holder of
a stock appreciation right desires to receive any portion of the Appreciation
in cash shall be of no force or effect unless and until the Committee shall
have consented to such election.

         No stock appreciation right or related Option may be exercised during
the first six months of its term, except in the event of death or total and
permanent disability of the holder occurs prior to the expiration of this
six-month period.

         The Committee shall have the sole discretion to consent to approve or
disapprove, in whole or in part, any election to receive any portion of the
Appreciation in cash.

         Upon exercise of a stock appreciation right, the number of shares
reserved for issuance under the Plan shall be reduced by the number of shares
covered by the Option, or the portion thereof, which is surrendered in
connection with such exercise.

         Nothing in the Plan shall be construed to give any eligible employee
any right to be granted a stock appreciation right. Neither the Plan nor the
granting of a stock appreciation right nor any other action taken pursuant to
the Plan shall constitute or be evidence of any agreement or understanding,
express or implied, that the Company will employ the holder of a stock
appreciation right for any period of time or in any position or at any
particular rate of compensation. The holder of a stock appreciation right shall
have no rights as a stockholder with respect to the shares covered by his stock
appreciation right until the date of issuance to him of a stock certificate
therefor, and, except as otherwise specifically provided in the stock option
agreement for the Options, no adjustment will be made for dividends or other
rights for which the record date is prior to the date such certificate is
issued.

                           PART 3. STOCK AND CASH AWARDS

XI.      STOCK AND CASH AWARD DETERMINATION

         The Committee may grant an eligible employee Stock Awards or awards of
cash ("Cash Awards") at such times and in such amounts as the Committee may
designate which in its opinion fully reflect the performance level and
potential of such employee. The Committee shall designate whether such awards
are payable in Common Stock, cash, or a combination thereof. Such awards shall
be made in accordance with such guidelines as the Committee may from time to
time adopt. Stock and Cash Awards shall be independent of any grant of an
option under this Plan, and shall be made subject to such restrictions as the
Committee may determine to be appropriate.

XII.     PAYMENT OF STOCK OR CASH AWARDS

         A.      No employee shall have the right to receive payment of any
Stock or Cash Award until notified of the amount of such award, in writing, by
the Committee or its authorized delegate.

         B.      Payment of cash awards shall be made in a lump sum or in
annual installments over such period as the Committee may designate, which
period shall not exceed five years, provided that the Committee may from time
to time designate minimum installment amounts.

         C.      After an award of Common Stock subject to restrictions
("Restricted Stock"), certificates for such shares will be deposited in escrow
with the Company's Secretary. The Employee shall retain all rights in the
Restricted Stock while it is held in escrow including but not limited to voting
rights and the right to receive dividends, except that the Employee shall not
have the right to transfer or assign such shares until all restrictions
pertaining to such shares are terminated at which time the applicable stock
certificates shall be released from escrow and delivered to the employee by the
Company's Secretary.

         D.      The Committee may permit, on such terms as it deems
appropriate, use of Restricted Stock as partial or full payment upon exercise
of a stock option under a Company Incentive Stock Option Plan or this Plan. In
the event shares of Restricted Stock are so tendered as consideration for the
exercise of an option, a number of the shares issued upon the exercise of said
option, equal to the number of shares of Restricted Stock used as consideration
therefor, shall be subject to the same Restrictions as the Restricted Stock so
submitted. plus any additional Restrictions that m4y be imposed by the
Committee.
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XIII.    TERMINATION OF RESTRICTIONS ON STOCK AWARDS

         The Committee will establish the period or periods after which the
Restrictions on Restricted Stock will lapse.

         The Committee may in its discretion permit an employee to elect to
receive in lieu of shares of Restricted Stock, at the expiration of the
restrictions, a cash payment equal to the fair market value of the Restricted
Stock on the date restrictions lapse. Fair market value shall be the mean of
the high and low prices of such stock on The New York Stock Exchange Composite
Tape on the date in question, or if no sales of such stock were made on that
date, the mean of the high and low prices of such stock on the next preceding
day on which sales were made.

XIV.     DEATH OR TOTAL AND PERMANENT DISABILITY OF A PART I ICIPATING EMPLOYEE
         HOLDING RESTRICTED STOCK

         By written notice to the Company, an employee who has received a grant
of Restricted Stock may designate one or more persons (and from time to time
change such designation) who, by reason of his death, shall acquire the right
to receive any vested but unpaid awards held by the employee at the time of his
death. Such awards shall be paid to the designated representative at such time
and in such manner as if the employee were living.

         In the event of total and permanent disability of an employee who has
participated in the Plan, any unpaid but vested award shall be paid to the
employee if legally competent or to a committee or other legally designated
guardian or representative if the employee is legally incompetent.

         After , the death or total and permanent disability of an employee,
the Committee may in its sole discretion at any time terminate Restrictions
upon stock awarded to the employee. A request to the Committee for the
termination of Restrictions or the acceleration of payments not yet due may be
made by the employee's beneficiary or representative, or by a totally and
permanently disabled employee.

         If at the time of the employee's death, there is no effective
beneficiary designation as to all or some portion of the awards hereunder, such
awards or such portion thereof shall be paid to or on the order of the legal
representative of the employee's estate. In the event of uncertainty as to the
interpretation or effect of any notice of designation, the Committee's decision
with respect thereto shall be conclusive.

XV.      RESTRICTIONS AND FORFEITURE OF STOCK AWARDS

         The Company's obligation to deliver stock certificates held in escrow
is subject to the condition that the employee remain an active employee of the
Company or be under contract to provide services to the Company as provided in
Section XVI hereof for the entire deferral and/or restriction period, including
mandatory and optional deferrals. If the employee fails to meet this condition,
the employee's right to any such unpaid amounts or undelivered stock
certificates shall be forfeited. This provision may be waived by the Committee
in exceptional circumstances.

XVI.     RETIREMENT OF EMPLOYEE HOLDING STOCK AWARD

         If the employee retires due to age, the Company's obligation to make
any payment due thereafter under the Stock Award feature of the Plan is subject
to the condition that for the entire period of deferral or restriction,
including mandatory and optional deferrals:

         A.      The employee shall render as an independent contractor and not
as an employee, such advisory or consultative services to the Company as shall
be reasonably requested by the Board or the Executive Committee of the Board in
writing from time to time, consistent with the state of the retired employee's
health and any employment or other activities in which such employee may be
engaged. For purposes of this Plan, the employee shall not be required to
devote a major portion of time to such services and shall be entitled to
reimbursement for any reasonable out-of-pocket expenses incurred in connection
with the performance of such services;

         B.      The employee shall not render services for any organization or
engage directly or indirectly in any business which, in the opinion of the
Committee, competes with, or is in conflict with the interest of, the Company.
The employee shall be free, however, to purchase as an investment or otherwise,
stock or other securities of such organizations so long as they are listed upon
a recognized securities exchange or traded over-the-counter, or so long as such
investment
<PAGE>

does not represent a substantial investment to the employee or a significant
(greater than 1007o) interest in the particular organization. For the purposes
of this subparagraph, a company (other than a subsidiary) which engages in the
business of producing, leasing or selling products or providing services of the
type now or at any time hereafter made or provided by the Company, shall be
deemed to compete with the Company;

         C.      The employee shall not, without prior written authorization
from the Company, disclose to anyone outside the Company, or use in other than
the Company's business, any confidential information or material relating to
the business of the Company, either during or after employment with the
Company; and

         D.      The employee shall disclose promptly and assign to the Company
all right, title and interest in any invention or idea, patentable or not, made
or conceived by the employee during employment by the Company, relating in any
manner to the actual or anticipated business, research or development work of
the Company and shall do anything reasonably necessary to enable the Company to
secure a patent where appropriate in the United States and in foreign countries.

                           PART 4.  GENERAL PROVISIONS

XVII.    ASSIGNMENTS

         The rights and benefits under this Plan may not be assigned except for
the designation of a beneficiary as provided in Sections VI and XIV.

XVIII.   TIME FOR GRANTING OPTIONS OR STOCK AWARDS

         All options for shares and Stock Awards subject to this Plan shall be
granted, if at all, not later than ten (10) years after the adoption of this
Plan by the Company's Board of Directors.

XIX.     LIMITATION OF RIGHTS

         A.      NO RIGHT TO AN OPTION OR STOCK A WARD. Nothing in the Plan
shall be construed to give any personnel of the Participating Companies any
right to be granted an option or Stock or Cash Award.

         B.      NO EMPLOYMENT RIGHT. Neither the Plan, nor the granting of an
option or Stock or Cash Award nor any other action taken pursuant to the Plan,
shall constitute or be evidence of any agreement or understanding, express or
implied, that any of the Participating Companies will employ a grantee for any
period of time or in any position, or at any particular rate of compensation.

         C.      NO STOCKHOLDERS' RIGHTS FOR OPTIONS. An optionee shall have no
rights as a stockholder with respect to the shares covered by his options until
the date of the issuance to him of a stock certificate therefor, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such certificate is issued.

XX.      CHANGES IN PRESENT STOCK

         In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, or other change in the corporate
structure or capitalization affecting the Company's present Common Stock,
appropriate adjustment shall be made by the Board of Directors in the number
(including the aggregate numbers specified in Section IV) and kind of shares
which are or may become subject to options and stock awards granted or to be
granted hereunder, and in the option price of shares which are subject to
options granted hereunder.

XXI.     EFFECTIVE DATE OF THE PLAN

         The Plan shall take effect on the date of adoption by the Board of
Directors of the Company, subject to approval by the shareholders of the
Company at a meeting held within twelve (12) months after the date of such
adoption. Options and Stock or Cash Awards may be granted under the Plan at any
tirrw after the adoption of the Plan by the Board of Directors of the Company
and prior to the termination of this Plan.

<PAGE>

XXII.    AMENDMENT OF THE PLAN

         The Board or the Committee may suspend or discontinue the Plan or
revise or amend it in any respect whatsoever; provided, however, that the
Company may seek shareholder approval of an amendment if determined to be
required by or advisable by any law or regulation, including without
limitation, any regulations of the Securities and Exchange Commission or the
Internal Revenue Service, the rules of any stock exchange on which the
Company's stock is listed or other applicable law or regulation.

XXIII.   NOTICE

         Any written notice to the Company required by any of the provisions of
this Plan shall be addressed to the Secretary of the Company and shall become
effective when it is received.

XXIV.    COMPANY BENEFIT PLANS

         Nothing contained in this Plan shall prevent the employee prior to
death, or the employee's dependents or beneficiaries after the employee's
death, from receiving, in addition to any awards provided for under this Plan
and any salary, any payments under a Company retirement plan or which may be
otherwise payable or distributable to such employee, or to the employee's
dependents or beneficiaries under any other plan or policy of the Company or
otherwise.

XXV.     UNFUNDED PLAN

         Insofar as it provides for awards of Stock or cash, this Plan shall be
unfunded. Although bookkeeping accounts may be established with respect to
employees who are granted awards of Stock under this Plan, any such accounts
will be used merely as a bookkeeping convenience. Except for the holding of
Restricted Stock in escrow pursuant to Section XII C, the Company shall not be
required to segregate any assets which may at any time be represented by awards
of Stock or cash, nor shall this Plan be construed as providing for such
segregation, nor shall the Company nor the Board nor the Committee be deemed to
be a trustee of Stock or cash to be awarded under the Plan. Any liability of
the Company to any employee with respect to an award of Stock or cash under
this Plan shall be based solely upon any contractual obligations which may be
created by the Plan; no such obligation of the Company shall be deemed to be
secured by any pledge or other encumbrance on any property of the Company.
Neither the Company nor the Board nor the Committee shall be required to give
any security or bond for the performance of any obligation which may be created
by this Plan.

XXV1.    GOVERNING LAW

         This Plan and all determinations made and actions taken pursuant
hereto shall be governed by the law of the State of California and construed
accordingly.<PAGE>

[HEWLETT-PACKARD LOGO]
                                                                   Exhibit 10(b)

                             HEWLETT-PACKARD COMPANY
       INCENTIVE COMPENSATION PLAN STOCK OPTION AGREEMENT (NON-QUALIFIED)

       THIS AGREEMENT, dated , between HEWLETT-PACKARD COMPANY, a California
corporation ---------------------- (hereinafter called "Company") and (the
"Employee"), an employee of , --------------------------- is entered into as
follows:

                                   WITNESSETH:

         WHEREAS, the Company has established the Hewlett-Packard Company
1985 Incentive Compensation Plan (the "Plan") a copy of which is attached
hereto as Exhibit "A" and made a part hereof; and

         WHEREAS, the Executive Compensation and Stock Option Committee of
the Board of Directors (the "Committee") has determined that the Employee
shall be granted an option under the Plan as hereinafter set forth below;

         NOW THEREFORE, the parties hereby agree that in consideration of
services rendered and to be rendered, the Company grants the Employee an
option (the "Option") to purchase ------------- shares of its $1 par value
voting Common Stock upon the terms and conditions set forth herein.

1.   This Option is granted under and pursuant to the Plan and is subject to
     each and all of the provisions thereof.

2.   The Option price shall be $_____________ per share.

3.   This Option is not transferable by the Employee otherwise than by will or
     the laws of descent and distribution, and is exercisable only by the
     Employee during his lifetime. This Option may not be transferred, assigned,
     pledged, or hypothecated by the Employee during his lifetime, whether by
     operation of law or otherwise, and is not subject to execution, attachment
     or similar process.

4.   This Option may not be exercised before the first anniversary of the date
     hereof, nor may it be exercised as to more than one-fourth the number of
     shares covered herein before the second anniversary hereof, nor may it be
     exercised as to more than one-half the number of shares covered herein
     before the third anniversary hereof. Notwithstanding the foregoing this
     Option shall become exercisable in full upon the retirement of the Employee
     because of age or permanent and total disability, or upon his death.

5.   This Option will expire ten (10) years from the date hereof, unless sooner
     terminated or cancelled in accordance with the provisions of the Plan.

6.   This Option shall be exercised by delivering to the Secretary of the
     Company at its head office a written notice stating the number of shares as
     to which the Option is exercised; provided, however, that no such exercise
     shall be with respect to fewer than twenty-five shares or the remaining
     shares covered by the Option if fewer than twenty-five. The written notice
     must be accompanied by payment of the full Option price for such shares.
     Payment may be in cash or shares of the Company's Common Stock, or a
     combination thereof; provided, however, that any payment in shares shall be
     in strict compliance with all procedural rules established by the
     Committee.

7.   All rights of the Employee in this Option, to the extent that it has not
     been exercised, shall terminate upon the death of the Employee (except as
     hereinafter provided) or termination of his employment for any reason other
     than retirement because of age or permanent and total disability, and in
     case of such retirement three (3) months from the date thereof; provided,
     however, the Employee may, by written notice to the Secretary of the
     Company, designate one or more persons, including his legal representative,
     who shall by reason of the Employee's death acquire the right to exercise
     all or a portion of the employee's rights under this Option. The person so
     designated must exercise the Option within one year after the death of the
     Employee. The person designated to exercise the Option after the Employee's
     death shall be bound by the provisions of the Plan.

8.   The Employee hereby designates the following person(s) as the one(s) who
     may exercise this Option after his death as provided above:

     Name:                                   Relationship:
          -----------------------------                    -------------------
     Name:                                   Relationship:
          -----------------------------                    -------------------

9.   The Employee may change the above designation at his pleasure by filing
     with the Secretary of the Company a written notice of change.

10.  Employee shall remit to the Company payment for all applicable U.S.
     withholding taxes at the time Employee exercises any portion of this
     Option.

     IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
the day and year first above written.

                                      HEWLETT-PACKARD COMPANY

                                      By
     ----------------------------        --------------------------------
     Employee                            John Young, President

(See instructions on reverse side)    By
                                         --------------------------------
                                         D. Craig Nordlund, Secretary &
                                         Corporate Counsel

COMPANY COPY

<PAGE>

SPECIAL INSTRUCTIONS TO EMPLOYEE:

1.   Please sign both copies of this option agreement, separate on the
     perforation, and return the manually signed Company copy to the Corporate
     Secretary, Mailstop 20BQ, 3000 Hanover St., Palo Alto, CA 94304.

2.   Make certain you have filled in the name(s) of your legal
     represent-ative(s) who may exercise this option in the event of your death.

---------------------------------------- ---------------------------------------
           DATE OF EXERCISE                         NUMBER OF SHARES
---------------------------------------- ---------------------------------------

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                               OTHER ADJUSTMENTS
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