Carly tells Curly: "Bog Off!", as politely as she would

For the past 18 months, I have had the privilege of working closely with Michael Capellas. Throughout this period, Michael has earned the admiration of employees and customers alike.

It is only natural, however, that as a former CEO, Michael would want to become a CEO again. Today we announced that Michael will leave HP to pursue other career options.

Michael made a commitment to see the merger through, and now, thanks to the hard work of the entire team, we are meeting or exceeding all of our integration targets and our market momentum is increasing. He and I both felt that given our excellent progress, this was a natural time for his transition.

With Michael's departure, HP's four business groups and worldwide operations will report directly to me. We do not plan to fill the position of president.

I have great confidence in our management team and our ability to continue to execute the strategies and plans we have put in place. HP will report fourth quarter earnings next week, and I look forward to giving you an update on our performance and our priorities for fiscal 2003.

On behalf of the board of directors and the management team, I want to thank Michael for all he has contributed to HP. I know that you join me in wishing him well - not simply as a departing executive but as a good friend who brought many talents and a lot of enthusiasm to this endeavor.

Carly

Lengthy Capellas Reply

To: HP Global Team From: Michael Capellas

I've spent a lot of time during the past few months meeting with customers, partners and employees, and one thing is very clear - we have come a long way in building the new HP. We have one of the best portfolios of technology, products and services in the industry. We have defined strong, three-year product roadmaps. And our customers believe in this company. There is no question in my mind that we have the market momentum to build on our leadership and redefine the information technology landscape.

Although my decision to leave HP was not an easy one, I felt I could make this move because of the significant progress we?ve made with the integration and the strength of the management team we have put in place. It is, in my opinion, the best management team in the industry. I could not be more proud of our accomplishments or more confident in the future of HP.

Great companies are defined not only by the strength of their products and services but by the talent and dedication of their employees. I have had the honor of working, first, with the people of Compaq and now with the people of HP. I have never worked with a more talented or dedicated group of people in my career. I am grateful for your support.

I particularly want to thank Carly for her leadership and her friendship. I have come to know her well during the past two years, and I have tremendous respect for her - not only as a leader but as someone who combines clear vision with the ability to execute on that vision. She is a woman of courage, strong convictions and deep faith in HP and its employees. And I know she will lead HP to great success.

Although I?m leaving, nothing will change the love I have for this company and its people. Rest assured that as I continue my career in the technology business, I will continue to be a customer, a partner and always a friend of HP.

I wish you all the best.

Michael --