Hewlett-Packard (HPQ)

Changes to U.S. Pension Plans at HP, 2002 through 2008

        HP has made significant changes to its U.S. pension programs over the past few years in order to reduce costs and provide benefits more in line with our peer technology companies. These changes applied to the NEOs at the same time and on the same terms as the changes applied to other U.S. employees.

        In general, U.S. employees hired before January 1, 2003 were eligible to participate in the HP Retirement Plan (the "RP"), a traditional defined benefit pension plan. Of the NEOs, Ms. Lesjak, Mr. Joshi and Ms. Livermore are in this category. Employees who joined HP between January 1, 2003 and December 31, 2005, including Messrs. Hurd, Mott and Bradley, were eligible to participate in the

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HP Cash Account Pension Plan (the "CAPP"). The assets of the RP and the CAPP were merged in November 2005, and the combined plan is now called the HP Pension Plan, but the benefits continue to be determined separately for the RP and the CAPP portions of the HP Pension Plan.

        Each of the RP and the CAPP is a qualified retirement plan within the meaning of Section 401(a) of the Code, and for each plan there is a parallel "excess" or non-qualified plan that provides benefits for the NEOs and other eligible employees who earn pension-eligible compensation in excess of the IRS limits applicable to the qualified plans. The excess plan for the RP is the HP Excess Benefit Plan (the "EBP"); the excess plan for the CAPP is the HP Cash Account Restoration Pension Plan (the "CARP").

        HP ceased pension accruals in both the RP and the CAPP (and correspondingly in the EBP and the CARP) effective December 31, 2005 for employees whose combination of age and qualifying service was less than 62. Employees with 62 or more "age-plus-service points" continued to accrue benefits in their existing pension plan after that date until December 31, 2007, at which time pension accruals ceased for all U.S. employees.

        U.S. employees who ceased pension accruals in 2005 (including Messrs. Hurd, Mott and Bradley) became eligible for a higher matching contribution under the HP 401(k) Plan beginning in 2006, and a comparable matching contribution on certain base pay deferrals under the non-qualified HP Executive Deferred Compensation Plan (the "EDCP"). The remaining NEOs became eligible for the higher matching contribution in the HP 401(k) Plan and the EDCP effective January 1, 2008, in connection with the freezing of their pension accruals.