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Walter Hewlett is trying to squelch fears that Hewlett-Packard Co.’s top executives and board members will resign en masse if investors reject its planned merger with Compaq Computer Corp. Stephen Neal, Hewlett’s lawyer and a partner in Palo Alto, Calif., firm Cooley Godward, is demanding that HP detail exactly which board members and executives would resign should shareholders vote down its $21.9 billion merger. The request came after Richard Hackborn, an HP board member who favors the deal, repeatedly suggested in published reports that he and other directors would step down if the deal is defeated, Neal said. “This type of threat by a member of the board or management of any company, and particularly a company like Hewlett-Packard, is shocking,” Neal wrote in a Dec. 12 letter to Larry Sonsini, HP’s lawyer and a partner at the Palo Alto firm Wilson Sonsini Goodrich & Rosati. “The threats raise serious questions about the directors’ compliance with their fiduciary duties and clearly are not in the best interests of shareholders.” An HP spokeswoman declined to comment, and the demand contained in the letter, which was filed Tuesday with the Securities and Exchange Commission, does not appear to be enforceable. A spokeswoman for Hewlett could not point directly to any securities laws that had been broken. She said the request rests on the premise that concrete resignation plans, if they exist, are “material information” that should be disclosed to shareholders. What’s more, the Hackborn statement Neal cites in the letter merely suggests that some officers would resign if the deal is defeated. “If the merger gets turned down by the shareholders,” Hackborn said in an interview with The New York Times, “they will have to get a board and a management to fix the PC business and these other problems.” Instead, the letter to HP’s counsel appears to target investors who might vote for the deal out of fear HP will lack leadership if the deal collapses. Wall Street sold off HP shares immediately after the deal’s announcement Labor Day weekend, only to buy them again in early November when Hewlett first announced plans to oppose the Compaq deal. But HP’s stock has flagged again in the past two weeks, which may suggest that investors unhappy with the deal are selling off their shares. HP shares were down 26 cents to $20.50 in trading late Tuesday afternoon. They closed Dec. 7 at $23.52, their highest level since the announcement. Hewlett is an HP director and the son of company co-founder William Hewlett. The descendants of HP’s other co-founder, David Packard, also oppose the deal. Together, families control about 18 percent of HP shares. Copyright (c)2001 TDD, LLC. All rights reserved.

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