Hewlett-Packard Co. and former CEO Mark Hurd have settled their legal dispute over his decision to become co-president of rival Oracle Corp.
HP announced Monday that it has dropped a lawsuit against Hurd under a settlement agreement that requires him to give up 346,030 shares of HP stock, or nearly $14 million (as of Monday's closing price of $39.39), effectively waiving about half of his severance package.
Hurd "will adhere to his obligations to protect HP's confidential information while fulfilling his responsibilities at Oracle," HP and Oracle said in a joint press release.
Oracle CEO Larry Ellison evidently didn't want to risk having Hurd handcuffed by the lawsuit.
After publicly scolding HP's board for its "vindictive" act, Ellison privately called HP director Marc Andreessen to start negotiating a settlement of the Hurd lawsuit, according to a person familiar with the talks. This person wasn't authorized to speak publicly.
After the settlement was announced, Ellison said in a statement that the companies would continue to "build and expand" on their decades-long partnership. HP made a similar pledge.
HP, for its part, appears to be getting closer to naming Hurd's replacement. Many observers envision an insider who was already on board with Hurd's vision for the company's future scoring the gig. Top candidates include Todd Bradley, chief of HP's personal computer division; Ann Livermore, head of services, servers, storage and software; and Vyomesh Joshi, head of HP's printing division. HP is expected to announce its selection before a meeting with analysts scheduled for next week.
HP ousted Hurd on Aug. 6, citing expense account lapses discovered after a marketing contractor accused him of sexual harassment. He was given a severance package that included a $12 million payment and stock options worth an estimated $22 million or more. A month later, Oracle announced that it had hired Hurd as co-president.
HP was represented by San Jose, Calif., lawyer Allen Ruby; a team from Seyfarth Shaw that includes Michael Wexler in Chicago and Camille Olson and Robert Milligan in Los Angeles; and Robert Cooper and Samuel Liversidge in Gibson, Dunn & Crutcher's Los Angeles office. Although Oracle was not named in the suit, both Oracle and Hurd were represented in this litigation matter by Orrick employment partners Robert Shwarts in San Francisco and Mike Delikat in New York. Hurd was also represented in other matters related to his departure at HP by Amy Wintersheimer Findley, an employment litigation partner at Allen Matkins Leck Gamble Mallory & Natsis in San Diego.
This story has been updated since its original posting. Information from The Associated Press also contributed to the Law.com posting of this Recorder story.