In The Matter Of Hewlett-Packard Co. Exchange Act Release No.

55801 (2007)

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Nature of the Case

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Facts

D’s common stock is registered with the Commission pursuant to Section 12(b) of the Exchange Act and is listed on the New York Stock Exchange under the stock symbol “HPQ.” D believed that one of its directors was leaking confidential information. D initiated an investigation to determine the source of the leaks. Perkins, Chairman of the Board’s Nominating and Governance Committee (whose responsibility was establishing board member qualifications and evaluating board operations), was informed of the inquiry. Perkins believed that he and d’s Chairman had agreed that, upon completion of the investigation, they would approach any individual implicated privately, obtain an assurance that it would not happen again, and inform the full Board that the matter had been resolved without identifying the source of the leak. They determined the source of the leak and D’s Chief Executive Officer, General Counsel, outside counsel, and Chairman of the Audit Committee, the Chairman of the Board determined that the findings should be presented to the full Board. The identity of the director who provided information for the January 2006 article was revealed. The director addressed the Board, explained his actions, and left the room to permit additional deliberations. During the course of the Board’s deliberations, ( 90 minutes), Perkins voiced his strong objections to the manner in which the matter was being handled. He repeatedly told the Board that the source of the leak should have been approached “off-line” for an explanation and a warning, rather than identified to the whole Board. He questioned the wisdom of requesting the director to resign over what he perceived to be a relatively minor offense, noting that the director had made significant contributions to HP. The Board, by a secret written ballot, passed a motion to ask the director to resign from the Board. Perkins continued to voice disagreement. Perkins then resigned from the Board and departed the meeting at approximately 2:00 p.m. The director identified by the leak investigation was asked to resign following the vote but declined to resign at that time. D filed a report on Form 8-K Perkins’ resignation but did not comply with Item 5.02(a) to disclose that there had been a disagreement with the company. D also filed a press release, which announced that Perkins had resigned without disclosing the circumstances of his disagreement. D contends that Perkins merely had a disagreement with the company’s Chairman, and not a disagreement with the company on a matter relating to its operations, policies, or practices.