Hewlett-Packard (HPQ)

Narrative to the Fiscal 2007 Nonqualified Deferred Compensation Table

        HP sponsors the EDCP, a nonqualified deferred compensation plan that permits eligible U.S. employees to defer base pay and bonus amounts. In addition, effective January 1, 2006, the EDCP was amended to permit eligible employees who do not accrue a benefit under a U.S. pension plan to receive a 6% matching contribution on deferrals from base pay up to two times the compensation limit that applies to the qualified HP 401(k) Plan, to the extent such base pay exceeds such compensation limit.

        Mr. Hurd and Mr. Robison were eligible for this 6% matching contribution during this fiscal year. The remaining NEOs will become eligible for the 6% matching contribution under the EDCP effective January 1, 2008, following the cessation of their pension accruals under the HP Retirement Plan and the HP Excess Benefit Plan effective December 31, 2007.

        At the time participation is elected, employees must specify the amount of base pay and/or the percentage of bonus to be deferred, as well as the time and form of payment. If termination of employment occurs before retirement (defined as at least age 55 with 15 years of service), distribution is made in the form of a lump sum in January of the year following the year of termination, subject to any timing restriction otherwise applicable under Section 409A of the Code. In the event of retirement, benefits are paid according to the distribution election made by the participant at the time of the deferral election, also subject to any timing restrictions applicable under Section 409A of the Code.

        Amounts deferred or credited under the EDCP are credited with hypothetical investment earnings based on participant investment elections made from among investment options available under the HP 401(k) Plan. No amounts are credited with above-market earnings.

        Accounts maintained for participants under the EDCP are not held in trust, and all such amounts are available to general creditors of HP.

51

Potential Payments Upon Termination or Change In Control

        The amounts in the following table assume that the NEOs terminated HP employment effective October 31, 2007. The closing price of HP common stock was $51.68 on that date. These amounts are in addition to benefits generally available to U.S. employees upon termination of employment, such as distributions from the HP 401(k) Plan and payment of accrued vacation. No NEO is currently eligible for "retirement" status, which is generally defined in the United States as termination on or after age 55 with at least 15 years of qualifying service.

(1)

Total does not include amounts earned or benefits accumulated due to continued service by the NEO through October 31, 2007, including vested stock options, accrued retirement benefits, and vested balances in HP Executive Deferred Compensation Plan (the "EDCP"), all as detailed in the preceding tables.

(2)

Reflects the cash benefit payable in the event of a qualifying termination under the HP Severance Plan for Executive Officers.

(3)

An employee who is employed through the end of the fiscal year is eligible to receive a bonus under the annual Pay-for-Results Plan (the "PfR Plan"); an employee who voluntarily terminates or is terminated for cause before the last day of the fiscal year is generally not eligible for a prorated bonus under the PfR Plan for that period. The amounts in this column assume employment through October 31, 2007, so that the NEO would have been eligible for the annual incentive amount that was earned for fiscal 2007, but in the case of NEOs other than Mr. Hurd, this amount could be downward-adjusted or eliminated by the HR and Compensation Committee (the "Committee") (prior to payment) for any reason. Mr. Hurd's employment agreement provides that upon termination of his employment for any reason, he shall be paid the "earned and accrued annual incentive for any complete year as of his termination of employment."

(4)

Under the HP equity plans, the HP Board of Directors and the Committee have the discretion to accelerate vesting of options and to release restrictions on restricted stock and cash awards in the case of a change in control, as well as in connection with individual employment terminations. The information reported in these three columns assumes that the Board or the Committee would exercise discretion to accelerate vesting and release restrictions in both of these circumstances, except that in the case of a "not for cause" termination of Mr. Hurd, the amounts reported reflect the minimum amounts required to be paid under the terms of his employment agreement. From time to time, however, certain HP executives have received less than full acceleration of vesting on stock options, and no (or less than full) release of the restrictions on restricted stock and cash awards, so the amounts actually paid to an NEO upon a "not for cause" termination may be lower in some circumstances. In addition, in the case of Mr. Hurd, the Board or the Committee could exercise its discretion to provide for full acceleration of his vested options and full release of restrictions on any restricted stock and cash awards so the amounts actually paid to him upon a "not for cause" termination could be higher.

(5)

Under the terms of Mr. Hurd's employment agreement, a "not for cause" termination includes a substantial reduction in his duties as CEO without his consent and his failure to be re-elected to the Board of Directors during the term of his employment. In addition, upon Mr. Hurd's termination of employment for any reason, he is eligible to be indemnified to the maximum extent permitted under HP's Certificate of Incorporation and Bylaws.

52