Hewlett-Packard (HPQ)

·                  You will have until the close of the market on November 22, 2006 to exercise your options that are vested as of September 28, 2006.

·                  In addition, your unvested outstanding stock options as of September 28, 2006 will expire on November 22, 2006. On November 20, 2006, the vesting of a number of your unvested outstanding stock options, beginning with the stock options with the lowest exercise price and continuing with stock options having increasingly higher exercise prices, will be accelerated so that the aggregate intrinsic value of the accelerated stock options equals $1 million on November 20, 2006.  The intrinsic value of an accelerated option is equal to the excess of the average of the high and low prices of a share of the Company’s common stock on November 20, 2006 over the exercise price of such accelerated option. You will have until the close of the market on November 22, 2006 to exercise such accelerated options.

·      If the structure or timing of the stock option treatment causes or would cause you to incur penalties, fines, or extraordinary tax consequences under Section 409A of the Internal Revenue Code, and any or all of such negative consequences can be cured by restructuring the equity payment but without any additional financial consequences to HP, the parties agree to restructure the stock option treatment in good faith and within reason to cure such curable negative consequences, and to do so by amending this Agreement promptly, on your request.  You will notify HP in care of Charles N. Charnas at charles.charnas@hp.com of any request to restructure no later than Noon Pacific time, September 29, 2006.

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