HEWLETT-PACKARD\nCOMPANY<\/b><\/p>\n\n\n\n
1997\nDIRECTOR STOCK PLAN<\/b><\/p>\n\n\n\n
(AMENDED\nAND RESTATED, EFFECTIVE NOVEMBER 1, 2005)<\/b><\/p>\n\n\n\n\n\n
PART 1. PLAN\nADMINISTRATION AND ELIGIBILITY<\/p>\n\n
I. Purpose<\/p>\n\n
The purpose of\nthis amended and restated 1997 Director Stock Plan (the \u0093Plan\u0094) of\nHewlett-Packard Company (\u0093HP\u0094) is to encourage ownership in HP by outside\ndirectors of HP (each, a \u0093Non-Employee Director,\u0094 or collectively, the \u0093Non-Employee\nDirectors\u0094) whose continued services are considered essential to HP\u0092s continued\nprogress and thus to provide them with a further incentive to remain as\ndirectors of HP.<\/p>\n\n
II. Administration<\/p>\n\n
The\nBoard of Directors (the \u0093Board\u0094) of HP or any committee (the \u0093Committee\u0094) of\nthe Board that will satisfy Rule 16b-3 of the Securities Exchange Act of\n1934, as amended (the \u0093Exchange Act\u0094), and any regulations promulgated\nthereunder, as from time to time in effect, including any successor rule (\u0093Rule 16b-3\u0094),\nshall supervise and administer the Plan. The Committee shall consist solely of\ntwo or more non-employee directors of HP, who shall be appointed by the Board.\nA member of the Board shall be deemed to be a \u0093non-employee director\u0094 only if\nhe satisfies such requirements as the Securities and Exchange Commission may\nestablish for non-employee directors under Rule 16b-3. Members of the\nBoard receive no additional compensation for their services in connection with\nthe administration of the Plan.<\/p>\n\n
The\nBoard or the Committee may adopt such rules or guidelines as it deems\nappropriate to implement the Plan. All questions of interpretation of the Plan\nor of any shares issued under it shall be determined by the Board or the\nCommittee and such determination shall be final and binding upon all persons\nhaving an interest in the Plan. Any or all powers and discretion vested in the\nBoard or the Committee under this Plan may be exercised by any subcommittee so\nauthorized by the Board or the Committee and satisfying the requirements of Rule 16b-3.<\/p>\n\n
III. Participation in the\nPlan<\/p>\n\n\n\n
Each\nmember of the Board who is not an employee of HP or any of its subsidiaries or\naffiliates and who is providing service to HP as a member of the Board at the\nbeginning of the Plan Year shall be eligible to receive an Annual Retainer (as\ndefined in Section XII below) under the Plan.<\/p>\n\n
Any\nmember of the Board who enters service after the beginning of the Plan Year may\nbe eligible to receive a prorated Annual Retainer under the Plan as the Board\nor the Committee determines in its discretion.<\/p>\n\n\n\n
IV. Stock Subject to the\nPlan<\/p>\n\n\n\n
The\nmaximum number of shares of HP\u0092s $0.01 par value Common Stock (\u0093Common Stock\u0094)\nwhich may be issued under the Plan shall be Two Million (2,000,000). The\nlimitation on the number of shares which may be issued under the Plan shall be\nsubject to adjustment as provided in Section X of the Plan.<\/p>\n\n
If any\noutstanding option under the Plan for any reason expires or is terminated\nwithout having been exercised in full, the shares allocable to the unexercised\nportion of such option shall again become available for grant pursuant to the\nPlan.<\/p>\n\n
PART 2. TERMS OF\nTHE PLAN<\/p>\n\n
V. Effective Date of\nthe Plan<\/p>\n\n\n\n
The\nPlan shall take effect on the date of adoption by the shareholders of HP. The Plan shall terminate on February 24,\n2007, unless earlier terminated by the Board of Directors or the Committee.<\/p>\n\n
VI. Time for Granting\nOptions and Issuing Shares<\/p>\n\n\n\n
No\noptions shall be granted, and no Common Stock Payments (as defined in Section VII\nbelow) shall be made, after the date on which this Plan terminates. The\napplicable terms of this Plan, and any terms and conditions applicable to the\noptions granted or the shares issued prior to such date,\nshall survive the termination of the Plan and continue to apply to such options\nand shares.<\/p>\n\n
VII. Terms and Conditions<\/p>\n\n\n\n
A.<\/i> <\/i>Compensation Alternatives<\/i>.<\/i><\/p>\n\n\n\n
1. Within (i) 25 days after\nthe beginning of the Plan Year (as defined in Section XII below), or (ii) if\nthe Non-Employee Director elects to participate in the Hewlett-Packard Company\n2005 Executive Deferred Compensation Plan (the \u0093EDCP\u0094) then in the calendar\nyear preceding the first day of the Plan Year, each Non-Employee Director will\nbe entitled to select one of the following alternative means of payment for the\nvalue of his Annual Retainer:<\/p>\n\n\n\n
(i) A\nminimum of seventy-five percent of the value of his Annual Retainer in the form\nof a Common Stock payment (a \u0093Common Stock Payment\u0094) and the balance in cash (a\n\u0093Cash Payment\u0094); or<\/p>\n\n\n\n
(ii) A\nminimum of seventy-five percent of the value of his Annual Retainer in the form\nof an option to purchase shares of Common Stock (an \u0093Option Payment\u0094) and a\nCash Payment.<\/p>\n\n\n\n
2. If any Non-Employee Director\nfails to notify the Secretary of HP in writing by 25 days after the beginning\nof the Plan Year of his desired means to receive payment of the Annual Retainer\nfor the Plan Year, then he shall be deemed to have elected an Option Payment\nfor fifty percent of the value of his Annual Retainer, with the remaining fifty\npercent in cash. Any such election, or any modification or termination of such\nan election, shall be filed with HP on a form prescribed by HP for this\npurpose. If a Non-Employee Director does\nnot elect to participate in the EDCP and does not select his or her means of\npayment in Section VII(A)(1) above within the prescribed time, then\nsuch Non-Employee Director shall not be permitted to participate in the EDCP\nfor the applicable Plan Year.<\/p>\n\n\n\n
B.<\/i> <\/i>Common Stock Payment<\/i>.<\/i><\/p>\n\n\n\n
1. Date of Payment. The shares\nconstituting any Common Stock Payment shall be issued automatically one month\nafter the beginning of each Plan Year (or, if such date is not a business day,\non the next succeeding business day) (the \u0093Grant Date\u0094), with the first payment\nunder this Plan commencing March 1, 1997. Each award of a Common Stock\nPayment shall be evidenced by an agreement which shall reflect the terms and\nconditions of the Common Stock Payment and such additional terms and conditions\nas may be determined by the Board or the Committee.<\/p>\n\n\n\n
2. Number of Shares Subject to\nCommon Stock Payment. The total number of shares of Common Stock included in\neach Common Stock Payment shall be determined by dividing the amount of the\nAnnual Retainer that is to be paid in stock by the Fair Market Value (as\ndefined in Section XII below) of a share of Common Stock on the Grant\nDate. It shall be rounded up to the largest number of whole shares determined\nas follows:<\/p>\n\n\n\n<\/pre>\n
| \n 75% or more, if | \n <\/td>\n | \n = Number of | ||||
| \n Fair Market Value on the Grant Date<\/p>\n<\/td>\n | \n <\/td>\n<\/tr>\n<\/table>\n Any 3. Holding Period for Common Stock C.<\/i> <\/i>Option Payment<\/i>.<\/i><\/p>\n Subject to Section VII.A. above, each Non-Employee Director may specify the amount of 1. Date of Payment. The option 2. Number of Shares Subject to The
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