Hewlett-Packard (HPQ)

Equity Granting Process

        There were no grants of stock options to Section 16 officers during fiscal 2008. Grants of restricted stock and PRUs during fiscal 2008 to Section 16 officers and other employees (or in the case of employees outside the United States, restricted stock units, where appropriate under local law) are approved by the HR and Compensation Committee at a regularly-scheduled meeting, or occasionally by unanimous written consent. If approval is made at a meeting, the grant date of the award is generally the date of the meeting; if approval is by unanimous written consent, the grant date of the award is generally the day the last HR and Compensation Committee member signs the consent. The Committee may act in advance to approve equity grants for newly-hired Section 16 officers and other

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executives, in which case the grant effective date may be the first day of employment or a later, pre-established date.

        Stock options for employees who are not Section 16 officers (or in the case of employees outside the United States, non-U.S. stock appreciation rights or other comparable vehicle determined appropriate under local law) may be granted by the HP Plan Committee, pursuant to delegation by the HR and Compensation Committee, subject to certain guidelines and an overall share limitation. The Plan Committee is chaired by HP's Executive Vice President of Human Resources, and its members include HP's General Counsel, the Treasurer and the Controller. Its members serve at the pleasure of the HR and Compensation Committee. The Plan Committee approves option grants to non-Section 16 employees on a monthly basis by unanimous written consent. The grant price is the fair market value of HP stock on the day that the last Plan Committee member signs the consent. "Fair market value" is defined as the closing price of HP stock on the NYSE.

        HP has no practice of timing option grants or restricted stock awards to coordinate with the release of material non-public information, and HP has not timed the release of material non-public information for the purpose of affecting the value of NEO compensation.

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HR and Compensation Committee Report on Executive Compensation

        The HR and Compensation Committee of the Board of Directors of Hewlett-Packard Company has reviewed and discussed with management this Compensation Discussion and Analysis. Based on this review and discussion, it has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in the Annual Report on Form 10-K of Hewlett-Packard Company filed for the fiscal year ended October 31, 2008.

HR and Compensation Committee of the Board of Directors

Lawrence T. Babbio, Jr., Chair
John H. Hammergren
Joel Z. Hyatt
Lucille S. Salhany