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HPQ » Topics » Employment Agreement with R. Todd Bradley

This excerpt taken from the HPQ DEF 14A filed Jan 23, 2006.

Employment Agreement with R. Todd Bradley

        HP offered Mr. Bradley employment on June 9, 2005, on the terms set forth below.

Position   Executive Vice President, Personal Systems Group

Term of Employment
 
At will employment. Employment may be terminated by Mr. Bradley or HP, at any time.

Salary
 
$725,000 base salary.

Bonus
 
At least $906,250 (target at 125% of base), pro-rated for mid-year entry with a maximum target opportunity of $2,718,750 (375% of base) assuming performance goals are achieved under HP's PfR plan. The applicable targets for the second six months of fiscal 2005 and the first six months of fiscal 2006 will be deemed to have been met and the incentive earned during fiscal 2005 was pro-rated based on the hire date.

Long-Term Incentives
 
 
 

Long-Term Cash Performance Plan
 
Eligible for $2,760,000 over the three-year cycle beginning May 1, 2005 in HP's Long-Term Performance Cash program, which provides for a cash payout after three years assuming applicable targets are met.

Stock Options
 
 
 

Number of Shares
 
Option for 400,000 shares (with a maximum term of eight years) with a grant price of the fair market value on the grant date.

Black-Scholes Value
 
Approximately $2,366,000

Vesting Schedule
 
Vests 25% annually over four years.

Restricted Stock
 
 

Number of Shares
 
100,000 shares of restricted stock

Value at Grant
 
Approximately $2,385,000

Vesting Schedule
 
Vesting 50% on the first and third anniversaries of the grant date.

Signing Bonus
 
$1,000,000 cash bonus paid on hire, subject to repayment if Mr. Bradley terminates or is terminated for cause within one year.
       

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Benefits
 
Mr. Bradley is eligible to participate in HP's employee benefit plans, policies and arrangements applicable to other executive officers including: participation in the Share Ownership Plan, the HP 401(k) Plan, deferred compensation plan, cash balance retirement plan, medical, dental, vision and life and disability insurance.

Perquisites
 
Mr. Bradley is eligible for HP perquisites at the same level as other senior executive officers including financial counseling and executive physicals.

Time Off
 
Mr. Bradley will receive paid time off in accordance with HP policy for other senior executive officers. In no event will Mr. Bradley receive fewer than 20 days of paid time off per calendar year.

Relocation Benefit
 
Mr. Bradley will receive the standard relocation package with the following adjustments:
    — Three month relocation allowance of $180,000;
    — Extended time period for home purchasing closing cost from 90 days to up to one year from hire date;
    — Mortgage interest subsidy for four years;
    — Extended time period for beginning mortgage subsidy program from 90 days to up to one year from hire date;
    — Temporary housing for up to six months;
    — Increase in household goods shipment weight limit to 30,000 pounds; and
    — Extended household goods storage up to six months, renewable for an additional six months if necessary.

Severance
 
For 36 months from the date of hire, if Mr. Bradley's employment is terminated other than for cause, death or permanent disability, or if Mr. Bradley voluntarily terminates his employment due to specified constructive termination events, Mr. Bradley will receive:
    — A one-time cash payment equal to two times Mr. Bradley's base salary;
    — A lump-sum payment equivalent to any guaranteed bonuses for fiscal 2005 and fiscal 2006 to the extent such bonus has not been previously paid;
    — A prorated payment of any LTPC awarded during a period of 36 months following commencement of employment, the amount of which will be determined based on the actual achievement of goals under the Long-Term Performance Cash Program;
    — A prorated payment of any earned PfR bonus to the extent such bonus has not been previously paid;
    — Prorated vesting on any existing restricted stock awarded during the 36 month period following commencement of employment based on number of active months;
    — 50% vesting on any unvested stock options awarded during a period of 36 months following commencement of employment and a one year post termination exercise period for vested options; and
    — Financial counseling, outplacement services and similar amounts as are typically granted to senior executives upon termination of employment.
       

54


 
 
After the 36 month period following commencement of employment, Mr. Bradley will be eligible to participate in the then-current Severance Program for Executives.

Confidential Information and Intellectual Property
 
Mr. Bradley has been required to execute HP's Agreement Regarding Confidential Information and Proprietary Developments.

Attorneys' Fees
 
HP will reimburse Mr. Bradley for reasonable legal fees incurred in connection with this agreement.

Indemnification
 
HP also agreed to provide indemnification from and against any claims, suits, judgments, losses, costs, or expenses (including reasonable legal fees) resulting from any actions taken against Mr. Bradley by his former employer as a result of his acceptance of employment with HP.
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