Hewlett-Packard (HPQ)

Grants of Special Performance-Based Cash Awards for Fiscal 2009

        At its May 2008 meeting, the Committee approved special performance-based cash incentive awards for Ms. Livermore and Mr. Bradley. In addition, the Committee recommended to the independent members of the Board, and the independent members of the Board approved, a similarly-structured performance-based cash incentive award for Mr. Hurd. The awards were to become payable, if at all, upon achievement against the metric of cash flow from operations as a percentage of revenue during fiscal 2009. The cash-flow goals under these awards were the same as the goals set by the Committee for fiscal 2009 performance under the PRU Program.

        Based on the Committee's certification of achievement against the target set for fiscal 2009 cash-flow under the LTPC Program and the PRU Program, payment under these special incentive awards was made to the designated NEOs in the amounts included in the Summary Compensation Table and detailed in footnote (5).

Grants of Special Performance-Based Cash Awards for Fiscal 2009

        At its May 2008 meeting, the Committee approved special performance-based cash incentive awards for Mr. Bradley, Ms. Livermore and one other executive officer who is not an NEO. In addition, the Committee recommended to the Board, and the Board (excluding Mr. Hurd) approved, a similarly-structured performance-based cash incentive award for Mr. Hurd. The awards, made under the HP 2004 Stock Incentive Plan in amounts detailed in the Fiscal 2008 Grants of Plan-Based Awards Table, will become payable, if at all, upon achievement against the metric of cash flow from operations as a percentage of revenue during fiscal 2009. The cash-flow goals under these awards will be the same as the goals set by the Committee for fiscal 2009 performance under the PRU Program.

        In considering the granting of these awards, the Committee and the Board analyzed the compensation levels of these executives against the compensation of those occupying comparable positions at peer companies and considered the value-creation that could result to HP over the long-term from retention of these executives. With input from the independent consultant, the Committee and the Board determined that this special action was appropriate to address these concerns.