IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
WALTER B. HEWLETT, WALTER )
B. HEWLETT as Trustee of the >
WILLIAM R. HEWLETT >
REVOCABLE TRUST, EDWIN )
E. van BRONKHORST, as >
Co-Trustee of the WILLIAM R. )
HEWLETT REVOCABLE TRUST, > C.A. No. 19513-NC
>
Plaintiffs, >1
V . )1
HEWLETT-PACKARD COMPANY, >
a Delaware corporation, >)
Defendant. >
O P I N I O N
Date Submitted: April 27,2002
Date Decided: April 30,2002
Lawrence C. Ashby, Stephen E. Jenkins, Richard D. Heins, Philip Trainer, Jr.,
Richard I. G. Jones, Jr., Carolyn Hake, Tiffany L. Geyer, of ASHBY & GEDDES,
Wilmington, Delaware; OF COUNSEL: Stephen C. Neal, James Donato, Linda
Callison, Neal Stephens; of COOLEY GODWARD LLP, Palo Alto, California; Paul
H. Schwartz, Steven G. Sklaver, J. Lucas McFarland, of COOLEY GODWARD LLP,
Broomfield, Colorado, Attorneys for Plaintiffs.
Robert K. Payson, Donald J. Wolfe, Jr., Peter J. Walsh, Jr., John F. Grossbauer,
Matthew E. Fischer, Nancy N. Waterman, Richard L. Renck, of POTTER
ANDERSON & CORROON LLP, Wilmington, Delaware; OF COUNSEL: Steven
M. Schatz, Boris Feldman, David J. Berger, Douglas J. Clark, Ignacio E. Salceda,
Ellen H. Solomon, Cynthia A. Dy, John Stigi, Daniel W. Turbow, Kimberley A.
Fonner, of WILSON SONSINI GOODRICH & ROSATI, Palo Alto, California,
Attorneys for Defendant.
CHANDLER, Chancellor
This lawsuit challenges the shareholder vote in connection with the proposed
merger of defendant Hewlett-Packard Company ("HP") and Compaq Computer
Corporation ("Compaq"). HP is a publicly traded Delaware corporation with its
principal place of business in Palo Alto, California. Compaq is a publicly traded
SNIPPETS:
Defendant.
Callison, Neal Stephens; of COOLEY GODWARD LLP, Palo Alto, California; Paul H. Schwartz,
This lawsuit challenges the shareholder vote in connection with the proposed
merger of defendant Hewlett-Packard Company and Compaq Computer
Delaware corporation with its principal place of business in Houston,
He is the son of the late William R. Hewlett,
special meeting on March 19, 2002, by a very slim margin.
Hewlett Parties filed this action pursuant to 8 Del.
they assert that HP management knowingly misrepresented material facts about the
integration of the two companies throughout the proxy campaign;
contend that HP management improperly coerced and enticed Deutsche Bank into
voting 17 million HP shares in favor of the transaction.
228:23 (Fiorina).
These two items reappear later as the $2.5 billion cost synergy and 4.9% revenue loss numbers
Robert Wayman, and others, believed that the integration of the two companies
The factors that HP identified but decided not to include in external communications were
DTX 7
Citations to "PTX" are to the plaintiffs' trial exhibits.
for each of four business units; 13 teams representing "horizontal processes," such
prior business relationship with HP,' and since August 2001 Deutsche Bank's
Pursuant to this agreement, Deutsche Bank performed a variety of services for HP, including
November 8 VCU was generated primarily from clean team reports,
According to a VCU dated January 30,
Accordingly, at a Goldman Sachs Technology Conference on February 4, Fiorina
Fiorina described this aspect of the process as follows: What happens in February that is
54 DTX 49 (ISS recommendation) at HPE 0594.
Voting decisions for shares held by DBAM are made by a five-member
The PWG, and more generally DBAM, usually follows ISS recommendations on questions of
management that Deutsche Bank's future business relationship with HP would
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