SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE
REQUIRED]
For the fiscal year ended: July 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from _____ to _____
Commission file number: 1-4423
A. Full title of the plan and address of the
plan, if different from that of the issuer
named below:
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
B. Name of issuer of the securities held pursuant
to the plan and the address of its principal
executive office:
HEWLETT-PACKARD COMPANY
3000 Hanover Street
Palo Alto, CA 94304
REQUIRED INFORMATION
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Index to Financial Statements
Page
Report of Independent Accountants 1
Financial Statements
Statement of Net Assets Available for Benefits
at July 31, 1994 and 1993 2
Statement of Changes in Net Assets Available for
Benefits for the Years Ended July 31, 1994 and 1993 3
Statement of Net Assets Available for Benefits
with Fund Information at July 31, 1994 and 1993 4-5
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Years Ended July 31,
1994 and 1993 6-7
Notes to Financial Statements 8-12
Additional Information
Schedule I - Assets Held for Investment at
July 31, 1994 13
Schedule II - Transactions Occurring During the Year
Ended July 31, 1994 Which Were in
Excess of 5% of the Current Value of
Plan Assets as of the Beginning
of the Year (August 1, 1993). 14
Note: Other schedules required by Section 2520.103-10
of the Department of Labor's Rules and Regulations
for Reporting and Disclosure under ERISA have been
omitted because they are not applicable.
(b) Exhibits:
1. Hewlett-Packard Company Tax Saving
Capital Accumulation Plan, as Amended and
Restated Effective November 1, 1988,
which was filed as Exhibit 4A to
Registrant's Post-Effective Amendment No.
3 to Form S-8 Registration Statement No.
2-92331, and which is incorporated herein
by reference.
2. Description of Tax Saving Capital
Accumulation Plan included in the 1994
Edition of "Your Hewlett-Packard Benefits
Summary" booklet which is distributed to
employees of Hewlett-Packard Company and
its U.S. subsidiaries.
3. Consent of Independent Accountants.
SIGNATURES
The Plan. Pursuant to the requirements of
the Securities Exchange Act of 1934, the trustees
(or other persons who administer the employee
benefit plan) have duly caused this annual report
to be signed by the undersigned thereunto duly
authorized.
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
/s/ Ann O. Baskins
------------------
Ann O. Baskins
Assistant Secretary and
Managing Counsel,
Hewlett-Packard Company, Plan Administrator
Date: December 21, 1994
Report of Independent Accountants
September 30, 1994
To the Participants and Administrator of
the Hewlett-Packard Company Tax Saving
Capital Accumulation Plan
In our opinion, the accompanying statements of net assets available for
benefits, and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of the Hewlett-Packard Company Tax Saving Capital Accumulation
Plan (the Plan) at July 31, 1994 and 1993, and the changes in net assets
available for benefits for the years then ended, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental Schedules I
and II are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974. The Fund Information in the statement of net assets and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental Schedules and Fund Information have been subjected
to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
Price Waterhouse LLP
San Francisco, California
<PAGE>
<TABLE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Statement of Net Assets Available for Benefits
(In thousands)
July 31,
1994 1993
<S> <C> <C>
Assets:
Investments at fair value:
Hewlett-Packard Company Common Stock
(Cost: $224,457 and $209,316 at July 31, 1994
and July 31, 1993, respectively) $ 312,370 $ 300,524
Fidelity Contrafund
(Cost: $75,703 at July 31, 1994) 71,427
Fidelity Magellan Fund
(Cost: $601,199 and $445,231 at July 31, 1994
and July 31, 1993, respectively) 583,716 471,609
Fidelity Growth & Income Portfolio
(Cost: $33,925 at July 31, 1994) 33,796
Fidelity U.S. Equity Index Portfolio
(Cost: $48,640 and $40,530 at July 31, 1994
and July 31, 1993, respectively) 50,202 42,800
Fidelity Intermediate Bond Fund
(Cost: $51,680 and $45,889 at July 31, 1994
and July 31, 1993, respectively) 49,421 47,274
Fidelity Retirement Money Market Portfolio
(Cost: $145,548 and $131,780 at July 31, 1994
and July 31, 1993, respectively) 145,548 131,780
Fidelity Institutional Cash Portfolio Money Market
(Cost: $23,873 at July 31, 1993) 23,873
Fidelity U.S. Government Reserves Portfolio
(Cost: $2,416 and $4,008 at July 31, 1994
and July 31, 1993, respectively) 2,416 4,008
Loans receivable from participants 64,763 57,087
---------- ----------
Total assets held for investment 1,313,659 1,078,955
Receivables:
Receivable from Hewlett-Packard Company 29,642 15,664
Due from brokers for securities sold 657 537
Miscellaneous receivables 14 892
---------- ----------
Total assets 1,343,972 1,096,048
---------- ----------
Liabilities:
Miscellaneous payables 782 935
Administrative expenses payable 225 174
---------- ----------
Total liabilities 1,007 1,109
---------- ----------
Net assets available for benefits $1,342,965 $1,094,939
========== ==========
The accompanying notes are an integral part of these financial statements.
-2-
</TABLE>
<PAGE>
<TABLE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Statement of Changes in Net Assets Available for Benefits
(In thousands)
For the year ended
July 31,
1994 1993
<S> <C> <C>
Contributions:
Employees $ 139,764 $ 96,853
Company 59,516 29,483
Noncash 31,426 28,372
Investment income:
Net appreciation in fair value
of investments:
Hewlett-Packard Company Common Stock 27,900 102
Net investment gain (loss) from registered
investment companies:
Fidelity Contrafund (2,050)
Fidelity Magellan Fund 15,127 79,232
Fidelity Growth & Income Portfolio 391
Fidelity U.S. Equity Index Portfolio 2,296 2,690
Fidelity Intermediate Bond Fund 365 3,947
Loan interest income 4,247 3,907
Interest income 4,643 3,993
Dividend income 4,204 3,681
Transfer from merged plans 3,560 21,502
---------- ----------
Total additions 291,389 273,762
Benefits paid to participants 40,861 48,881
Loans deemed repaid due to termination 1,578 2,117
Administrative expenses 924 900
---------- ----------
Total deductions 43,363 51,898
Net additions 248,026 221,864
Net assets available for benefits:
Beginning of year 1,094,939 873,075
---------- ----------
End of year $1,342,965 $1,094,939
========== ==========
The accompanying notes are an integral part of these financial statements.
-3-
</TABLE>
<PAGE>
<TABLE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Statement of Net Assets Available for Benefits with Fund Information
July 31, 1994
(In thousands)
Growth & Equity Money
Stock Contrafund Magellan Income Index Bond Market Loan Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at fair value:
Hewlett-Packard Company
Common Stock $312,370 $ 312,370
Fidelity Contrafund $71,427 71,427
Fidelity Magellan Fund $583,716 583,716
Fidelity Growth & Income
Portfolio $33,796 33,796
Fidelity U.S. Equity Index
Portfolio $50,202 50,202
Fidelity Intermediate Bond Fund $49,421 49,421
Fidelity Retirement Money Market
Portfolio $145,548 145,548
Fidelity U.S. Government Reserves
Portfolio 2,416 2,416
Loans receivable from participants $64,763 64,763
-------- ------- -------- ------- ------- ------- -------- ------- ----------
Total assets held for investment 314,786 71,427 583,716 33,796 50,202 49,421 145,548 64,763 1,313,659
Receivables:
Receivable from Hewlett-Packard
Company 4,966 3,011 14,301 1,398 1,510 1,317 3,139 29,642
Due from brokers for securities sold 657 657
Miscellaneous receivables 14 14
-------- ------- -------- ------- ------- ------- -------- ------- ----------
Total assets 320,423 74,438 598,017 35,194 51,712 50,738 148,687 64,763 1,343,972
-------- ------- -------- ------- ------- ------- -------- ------- ----------
Liabilities:
Miscellaneous payables 782 782
Administrative expenses payable 31 2 76 12 14 21 69 225
-------- ------- -------- ------- ------- ------- -------- ------- ----------
Total liabilities 813 2 76 12 14 21 69 1,007
-------- ------- -------- ------- ------- ------- -------- ------- ----------
Net assets available for benefits $319,610 $74,436 $597,941 $35,182 $51,698 $50,717 $148,618 $64,763 $1,342,965
======== ======= ======== ======= ======= ======= ======== ======= ==========
The accompanying notes are an integral part of these financial statements.
-4-
</TABLE>
<PAGE>
<TABLE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Statement of Net Assets Available for Benefits with Fund Information
July 31, 1993
(In thousands)
Stock Magellan Equity Index Bond Money Market Loan Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at fair value:
Hewlett-Packard Company
Common Stock $300,524 $ 300,524
Fidelity Magellan Fund $471,609 471,609
Fidelity U.S. Equity Index Portfolio $42,800 42,800
Fidelity Intermediate Bond Fund $47,274 47,274
Fidelity Retirement Money
Market Portfolio $131,780 131,780
Fidelity Institutional Cash
Portfolio Money Market 23,873 23,873
Fidelity U.S. Government
Reserves Portfolio 4,008 4,008
Loans receivable from participants $57,087 57,087
-------- -------- ------- ------- -------- ------- ----------
Total assets held for investment 328,405 471,609 42,800 47,274 131,780 57,087 1,078,955
Receivables:
Receivable from Hewlett-
Packard Company 3,464 7,978 1,059 925 2,238 15,664
Due from brokers for securities sold 537 537
Miscellaneous receivables 892 892
Fund transfer to be made (18,859) 12,175 1,671 1,432 3,581 0
-------- -------- ------- ------- -------- ------- ----------
Total assets 314,439 491,762 45,530 49,631 137,599 57,087 1,096,048
-------- -------- ------- ------- -------- ------- ----------
Liabilities:
Miscellaneous payables 935 935
Administrative expenses payable 35 54 8 14 63 174
-------- -------- ------- ------- -------- ------- ----------
Total liabilities 970 54 8 14 63 1,109
-------- -------- ------- ------- -------- ------- ----------
Net assets available
for benefits $313,469 $491,708 $45,522 $49,617 $137,536 $57,087 $1,094,939
======== ======== ======= ======= ======== ======= ==========
The accompanying notes are an integral part of these financial statements.
-5-
</TABLE>
<PAGE>
<TABLE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the Year Ended July 31, 1994
(In thousands)
Growth & Equity Money
Stock Contrafund Magellan Income Index Bond Market Loan Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 5,329 $11,691 $74,837 $ 5,529 $ 9,087 $ 7,956 $ 25,231 $ 104 $ 139,764
Company 6,024 35,395 2,816 3,933 3,518 7,830 59,516
Noncash 31,426 31,426
Investment income:
Net appreciation in fair value
of investments:
Hewlett-Packard Company
Common Stock 27,900 27,900
Net investment gain (loss) from
registered investment companies:
Fidelity Contrafund (2,050) (2,050)
Fidelity Magellan Fund 15,127 15,127
Fidelity Growth & Income
Portfolio 391 391
Fidelity U.S. Equity Index
Portfolio 2,296 2,296
Fidelity Intermediate Bond Fund 365 365
Loan interest income 1,148 216 1,909 90 162 164 558 4,247
Interest income 111 4,532 4,643
Dividend income 4,204 4,204
Transfer from merged plans 1,008 282 974 922 374 3,560
-------- ------- -------- ------- ------- ------- -------- ------- ----------
Total additions 70,118 15,881 128,276 9,108 16,452 12,925 38,525 104 291,389
Benefits paid to participants 10,178 720 17,895 379 1,914 2,376 7,399 40,861
Loans deemed repaid due to termination 1,578 1,578
Administrative expenses 129 6 283 31 49 79 269 78 924
-------- ------- -------- ------- ------- ------- -------- ------- ----------
Total deductions 10,307 726 18,178 410 1,963 2,455 7,668 1,656 43,363
Asset transfers between funds:
Loans issued (7,691) (267) (18,828) (774) (2,445) (3,093) (10,890) 43,988 0
Loan repayments 8,626 2,047 16,030 767 1,324 1,337 4,629 (34,760) 0
Amounts reallocated among funds (54,605) 57,501 (1,067) 26,491 (7,192) (7,614) (13,514) 0
-------- ------- -------- ------- ------- ------- -------- ------- ----------
Net additions 6,141 74,436 106,233 35,182 6,176 1,100 11,082 7,676 248,026
Net assets available for benefits:
Beginning of year 313,469 491,708 45,522 49,617 137,536 57,087 1,094,939
-------- ------- -------- ------- ------- ------- -------- ------- ----------
End of year $319,610 $74,436 $597,941 $35,182 $51,698 $50,717 $148,618 $64,763 $1,342,965
======== ======= ======== ======= ======= ======= ======== ======= ==========
The accompanying notes are an integral part of these financial statements.
-6-
</TABLE>
<PAGE>
<TABLE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the Year Ended July 31, 1993
(In thousands)
Equity Money
Stock Magellan Index Bond Market Loan Total
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 3,787 $ 56,937 $ 8,579 $ 7,955 $ 19,369 $ 226 $ 96,853
Company 1,118 18,117 2,399 2,128 5,721 29,483
Noncash 28,372 28,372
Investment income:
Net appreciation in fair value
of investments:
Hewlett-Packard Company Common Stock 102 102
Net investment gain from registered
investment companies:
Fidelity Magellan Fund 79,232 79,232
Fidelity U.S. Equity Index Portfolio 2,690 2,690
Fidelity Intermediate Bond Fund 3,947 3,947
Loan interest income 1,287 1,693 152 158 617 3,907
Interest income 87 3,906 3,993
Dividend income 3,681 3,681
Transfer from merged plans 3,536 17,966 21,502
-------- -------- ------- ------- -------- ------- ----------
Total additions 38,434 159,515 13,820 14,188 47,579 226 273,762
Benefits paid to participants 13,337 19,378 1,664 2,563 11,939 48,881
Loans deemed repaid due to termination 2,117 2,117
Administrative expenses 147 202 28 49 248 226 900
-------- -------- ------- ------- -------- ------- ----------
Total deductions 13,484 19,580 1,692 2,612 12,187 2,343 51,898
Asset transfers between funds:
Loans issued (8,899) (16,046) (1,945) (2,800) (12,038) 41,728 0
Loans repayments 9,011 12,923 1,164 1,264 4,685 (29,047) 0
Amounts reallocated among funds (34,022) 17,680 9,374 9,146 (2,178) 0
-------- -------- ------- ------- -------- ------- ----------
Net additions/(deductions) (8,960) 154,492 20,721 19,186 25,861 10,564 221,864
Net assets available for benefits:
Beginning of year 322,429 337,216 24,801 30,431 111,675 46,523 873,075
-------- -------- ------- ------- -------- ------- ----------
End of year $313,469 $491,708 $45,522 $49,617 $137,536 $57,087 $1,094,939
======== ======== ======= ======= ======== ======= ==========
The accompanying notes are an integral part of these financial statements.
-7-
</TABLE>
<PAGE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Notes to Financial Statements
1. Plan Description
Purpose and Plan Benefits
The purpose of the Hewlett-Packard Company (the Company)
Tax Saving Capital Accumulation Plan (the Plan) is to provide
eligible employees an opportunity for regular savings of tax-
deferred dollars for their retirement to supplement benefits
provided under the Company's Retirement Program and the
Federal Social Security Act. The following brief description of
the Plan is provided for general information purposes only.
Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
The Plan is designed to qualify as a stock bonus plan under
Section 401(a) of the Internal Revenue Code of 1986, as
amended (the Code), and to meet the requirements set forth in
Section 401(k) of the Code. The Plan is also intended to
qualify as an individual account plan which permits each
participant to exercise control over certain assets of the Plan
pursuant to Section 404(c) of the Employee Retirement Income
Security Act (ERISA).
Fidelity Investments provides investment management,
recordkeeping and trustee services for the Plan. The Company
determines questions of eligibility for participation, interprets
the Plan, communicates with participants and their beneficiaries
and is otherwise generally responsible for Plan operations.
Eligibility
Employees who are eligible to participate in the Plan include
those employees of the Company and designated domestic
subsidiaries who are on the U.S. payroll and who are employed
as regular full-time or regular part-time employees by the
Company one year after their original hire date. Participation
in the Plan is at the election of the employee.
Employee Contributions
Participating employees may have their salary deferred by the
Company through payroll deductions and contributions made
directly to their 401(k) account. Employee contributions are
deposited into their trust account after the end of each pay
period. Prior to August 1, 1993, deposits to individual trust
accounts were transferred after the end of each fiscal quarter.
Company Contributions
The Company contributes to the employee's account a
percentage of the amount which has been deferred and
contributed by the employee. The Company contributes an
amount equal to the employee's deferral for the first 3%
deferred and an amount equal to half of the employee's deferral
for the next 2% deferred. The Company matching contribution
-8-
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Notes to Financial Statements
is deposited into the individual employee's 401(k) account after
the end of each fiscal quarter. Prior to November 1, 1993, the
Company matching contribution to the employee's account was
one third of the amount of the employee's deferral and was net
of interest earned on the deferrals during the fiscal quarter.
Vesting
Participants are one hundred percent vested in the Plan at all
times.
Participant Accounts
Employees can invest their account balance and/or future
contributions in any combination of the seven investment
options, and can transfer their invested funds among the
investment options and/or change the investment of their future
contributions daily as desired. These transfers and changes
must be made in whole percent increments. On November 1,
1993, the number of investment options in the Plan increased
from five to seven to include the Fidelity Growth & Income
Portfolio and the Fidelity Contrafund.
All contributions made under the Plan are paid to and invested
by the trustee in one or more of the available investment
options. Six of the seven investment options are mutual funds
of Fidelity Investments, managed by the Fidelity Management
and Research Company. The seven investment funds are:
Stock - A fund comprised primarily of
Hewlett-Packard Company
Common Stock purchased on the
open market or contributed by the
Company. The fund also includes
the Fidelity U.S. Government
Reserves Portfolio, and prior to
August 1, 1993, the Fidelity
Institutional Cash Portfolio Money
Market.
Contrafund - A fund comprised of investments in the Fidelity
Contrafund. The investment manager invests in
securities of domestic and foreign companies and
seeks out undervalued companies undergoing
positive changes and turnarounds.
Magellan - A fund comprised of investments in the
Fidelity Magellan Fund. The fund
manager makes investments primarily in
common stock and securities convertible
into common stock.
Growth & Income - A fund comprised of investments in the
Fidelity Growth & Income Portfolio. The
investment manager invests in a broad
combination of stocks, convertibles, and
fixed-income securities, not limited by type
or quality, to seek current income and
growth of income.
-9-
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Notes to Financial Statements
Equity Index - A fund comprised of investments in the
Fidelity U.S. Equity Index Portfolio. The
fund manager makes investments in equity
securities and attempts to duplicate the
composition and total returns of the
Standard & Poor's Daily Stock Price Index
of 500 Common Stocks.
Bond - A fund comprised of investments in
Fidelity Intermediate Bond Fund.
Investments are made primarily in
bonds rated BBB or better with a
dollar-weighted average maturity of
between three and ten years.
Money Market - A fund comprised of investments in
Fidelity Retirement Money Market
Portfolio. Investments are made in high
quality, U.S. dollar-denominated money
market instruments of U.S. and foreign
issuers, including short-term obligations of
banks, governments and their agencies and
corporations.
Loans and Distributions
Participants are permitted to borrow portions of their account
balance. The loan amount and term are limited by the Code
and ERISA. Funds for the loans are obtained by liquidating the
investments in the employee's account. Principal and interest
payments, representing repayments of loans taken by
participants, are typically made through payroll deductions and
are paid directly into the employee's account after the end of
each semi-monthly payroll period. Loans may be repaid in full
at any time following the issuance of the loan.
The Plan also provides for hardship withdrawals subject to
certain restrictions and for in-service withdrawals at age 59-1/2.
Plan Termination
Although the Company has no present intention to terminate
the Plan, the Plan provides that in the event of Plan
termination, participants' interests accrued to the date of
termination shall be nonforfeitable. Benefits shall continue to
be distributed in accordance with the Plan. The trustee shall
continue in its capacity until all assets of the Plan have been
distributed to the participants. Benefits are payable in a lump
sum. Certain participants from certain companies acquired by
the Company may elect to take their benefits as an annuity or
in installments.
-10-
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Notes to Financial Statements
2. Summary of Significant Accounting Policies
The financial statements are prepared on the accrual basis of
accounting with investments being carried at current market
value, as quoted on the active market. Loans to participants
are valued at their outstanding principal amount.
Realized gains/losses on investments sold and the unrealized
gains/losses on investments held during the year are determined
on a revalued cost basis.
All dividends and capital distributions received from the Fidelity
Contrafund, the Fidelity Magellan Fund, the Fidelity Growth &
Income Portfolio, Fidelity U.S. Equity Index Portfolio, and
Fidelity Intermediate Bond Fund are reinvested, and are
recognized as part of the net investment gains from registered
investment companies.
All direct administrative expenses are borne by the Plan
participants as allowed by law.
3. Contributions
Employee and Company contributions are made in cash for all
Funds except the Stock Fund. Contributions to the Stock Fund
may be made in either cash or Hewlett-Packard Company
common stock. Stock contributions attributable to employee
deferrals totaled $19,088,000 in 1994 and $21,279,000 in 1993.
Stock contributions attributable to Company contributions
totaled $12,338,000 in 1994 and $7,093,000 in 1993.
Contributions of Hewlett-Packard Company common stock are
valued at their fair market value, as quoted on the active
market, on the date of contribution.
4. Investments
For the years ended July 31, 1994 and 1993, the net
appreciation in the fair market value of the Hewlett-Packard
Company common stock held during the year was comprised of
realized gains of $9,024,000 and $2,737,000, respectively, and
unrealized gains of $18,876,000 and unrealized losses of
$2,635,000, respectively.
5. Taxes
The Company has received a favorable determination letter
from the Internal Revenue Service (IRS) as to the initial
qualified status of the Plan. Additionally, the Company had
received a favorable determination letter as to the amendments
adopted relating to the Retirement Equity and Deficit
Reduction Acts of 1984 and to the Tax Equity and Fiscal
Responsibility Act of 1982. The Company has filed for a
determination letter from the IRS with respect to all Plan
amendments subsequent to the last determination letter to
cover compliance with the Tax Reform Act of 1986 and
applicable subsequent legislation.
-11-
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
Notes to Financial Statements
The Company's management is of the opinion that the Plan and
the trust which forms a part of the Plan have been maintained
in accordance with Section 401(a) of the Internal Revenue
Code, and therefore, it is believed that the Plan continues to be
qualified. Accordingly, there has been no provision made for
federal or state income tax.
Deferrals made on behalf of the employees and the Company's
matching contributions are not subject to federal income taxes
until such time as the employees' funds are withdrawn from the
Plan. At withdrawal, the employees' funds may qualify for
special tax treatment. Pursuant to the Unemployment
Compensation amendments of 1992, all "eligible rollover
distributions" which are not paid out in the form of a direct
rollover are subject to a mandatory 20% federal income tax
withholding. Loans taken by employees against their 401(k)
account are not subject to federal income taxes if they are
repaid within five years.
6. Transfer of Plan Assets
During 1994 and 1993, the Company acquired various
companies to compliment its business. Certain of those
acquisitions had clauses which included the merging of plan
assets from the acquired plans to the Plan. During the plan
years ended July 31, 1994 and 1993, plan assets acquired by the
Company in the amount of $3,560,000 from the Colorado
Memory Systems, EEsof Inc. and Avantek, Inc. acquisitions, and
in the amount of $21,502,000 from the Avantek, Inc. acquisition,
were merged into the Plan, respectively.
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<PAGE>
<TABLE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan (Plan 004) Form 5500
Employer Identification Number 94-1081436 (Item 27a - Schedule of Assets
Schedule I - Assets Held for Investment Held for Investment Purposes)
July 31, 1994
(In thousands except number of shares/loans)
Number of Historical Current
Issuer Description Shares/Loans Cost Value
<S> <C> <C> <C> <C>
Hewlett-Packard Company Common Stock, $1.00 par value 4,024,085 $224,457 $312,370
Fidelity Investments
Fidelity Contrafund Equity Mutual Fund, no par value 2,401,703 75,703 71,427
Fidelity Investments
Fidelity Magellan Fund Equity Mutual Fund, no par value 8,833,470 601,199 583,716
Fidelity Investment
Fidelity Growth & Income Portfolio Equity Mutual Fund, no par value 1,523,707 33,925 33,796
Fidelity Investments
Fidelity U.S. Equity Index Portfolio Equity Mutual Fund, no par value 2,961,754 48,640 50,202
Fidelity Investments
Fidelity Intermediate Bond Fund Fixed Income Mutual Fund, no par value 4,902,877 51,680 49,421
Fidelity Investments
Fidelity Retirement Money
Market Portfolio Money Market Fund, $1.00 par value 145,547,641 145,548 145,548
Fidelity Investments
Fidelity U.S. Government Reserves
Portfolio Money Market Fund, $1.00 par value 2,416,249 2,416 2,416
Participant Loans Loans issued for terms of 1 - 4 years, with 6.50%-
7.75% interest during the 1994 Plan year 15,517 64,763
----------
Total Assets Held for Investment $1,313,659
==========
-13-
</TABLE>
<PAGE>
<TABLE>
Hewlett-Packard Company
Tax Saving Capital Accumulation Plan (Plan 004)
Employer Identification Number 94-1081436 Form 5500
Schedule II - Transactions Occurring During the Year Ended July 31, 1994 (Item 27d - Schedule of
Which Were in Excess of 5% of the Current Value of Plan Assets Reportable Transactions)
as of the Beginning of the Year (August 1, 1993)
Series of Transactions in the Same Security
(In thousands except number of transactions)
Number Proceeds Cost of Net
Identity of Party Involved of from Assets Realized
Description of Asset Transactions Purchases Sales Disposed Gain/(Loss)
<S> <C> <C> <C> <C> <C>
Fidelity U.S. Government Reserves Portfolio
Money Market Fund 264 $ 76,602 $ 78,194 $ 78,194 $ ---
Fidelity Retirement Money Market Portfolio
Money Market Fund 255 142,551 128,784 128,784 ---
Fidelity Intermediate Bond Fund
Fixed Income Mutual Fund 255 37,543 31,799 31,752 (483)
Fidelity Magellan Fund
Equity Mutual Fund 252 275,906 125,047 119,937 1,912
Fidelity Contrafund
Equity Mutual Fund 188 88,961 12,833 13,257 (347)
Hewlett-Packard Company
Common Stock 152 73,360 89,308 58,219 9,024
Note: Cost of Assets Disposed is stated at historical cost. Net realized gain/(loss) is calculated as described in Note 2
to the financial statements. The normal expenses associated with asset purchases and sales are built into the
cost records and therefore are not shown separately here. Additionally, the number of transactions represent
record keeping transaction activity, not the gross numbers of purchases and sales.
-14-
</TABLE>
Tax Saving Capital Accumulation Plan
You Will Find Information About: On Page:
What TAXCAP Offers You . . . . . . . . . . . . . 155
Who Can Join The Plan. . . . . . . . . . . . . . 156
When You May Join The Plan . . . . . . . . . . . 156
How Much You May Defer . . . . . . . . . . . . . 156
How Your Deferrals Can Reduce Your Current
Taxes . . . . . . . . . . . . . . . . . . . . 157
How Much HP Contributes. . . . . . . . . . . . . 157
How Your TAXCAP Account Is Invested. . . . . . . 157
When Payouts Are Made. . . . . . . . . . . . . . 159
How You Can Borrow From Your Account . . . . . . 161
Special Rules For Acquisition Employees . . . . 162
How to Make Changes or Receive Your Money. . . . 163
How To Claim Benefits . . . . . . . . . . . . . 164
If a Claim Is Denied . . . . . . . . . . . . . . 164
How You Can Make Rollover Contributions. . . . . 164
What Circumstances Can Affect Your Benefits . . 165
How The Plan Is Funded . . . . . . . . . . . . . 167
How The Stock Purchase Plan Compares To TAXCAP . 168
154
What TAXCAP Offers You
Your retirement income comes from three sources: HP
retirement benefits, Social Security benefits and your
personal savings. The Company offers the
Hewlett-Packard Company Tax Saving Capital Accumulation
Plan (TAXCAP), as an integral part of the
Hewlett-Packard Retirement Program to help you
accumulate personal savings for retirement.
TAXCAP provides you an incentive to save regularly for
retirement on a pretax basis and gain additional
contributions from HP.
The Plan in Brief
HP administers and sponsors TAXCAP. HP determines
eligibility for participation and benefits, interprets
the Plan and authorizes transactions.
Fidelity Investments (Fidelity), a group of affiliated
financial service companies, is the full-service
provider for TAXCAP. Full service is a package which
offers recordkeeping, trustee and investment management
services. Headquartered in Boston, with 75 branches
nationwide, Fidelity is one of the largest and best
known investment management organizations in the
country. The firm currently manages more than $240
billion for more than ten million individual and
institutional accounts. As a leader in the mutual fund
industry, Fidelity has developed both investment
products and services that are now standard for the
industry.
If you are a regular full-time or regular part-time
employee, you become eligible to join TAXCAP on the
first February 1, May 1, August 1, or November 1 which
is one year after your original hire date. You may
also join the first of any month after you have
satisfied the eligibility requirements.
Effective November 1, 1993, under TAXCAP, generally you
can elect to have HP defer one to eight percent of your
pay into your TAXCAP account through payroll
deductions. However, if your plan year compensation is
less than an amount defined by federal tax laws
($62,345 for the plan year ending July 31, 1993), you
can defer up to 12 percent for the following plan year
(beginning August 1, 1993). You will be informed on
your first earnings statement in August of each year
whether your TAXCAP limit is eight percent or twelve
percent.
You may participate in both TAXCAP and the Stock
Purchase Plan. If you contribute to the Stock Purchase
Plan at five percent or less, you may contribute to
TAXCAP as described above. If you contribute to the
Stock Purchase Plan at 6 percent or more, your TAXCAP
and Stock Purchase Plan contributions cannot exceed ten
percent.
HP contributes $1 for every $1 you contribute of the
first one percent, two percent or three percent of your
pay. HP contributes $.50 for every $1 you contribute
on the next two percent of your pay. Contributions
above five percent of your pay are not matched by HP.
You choose how you want to invest your TAXCAP account
among seven options: six mutual funds from the Fidelity
family of funds plus the HP Stock Fund. These options
reflect risk versus investment return opportunities
ranging from conservative to aggressive.
Saving in TAXCAP reduces your current income taxes.
This is because deferrals to your TAXCAP account are
made before federal and most state income taxes are
calculated. In addition, you do not pay any taxes on
amounts in your account as long as they remain in
TAXCAP.
TAXCAP is offered to help you meet your long range
retirement goals. Your full account value is paid when
you leave HP or die. Because of the tax advantages the
Plan offers you, the government limits withdrawals of
your account before these events. While you are an
active employee, you can make in-service withdrawals
either after you reach age 59 1/2 or for reasons of
hardship. You can also borrow money from your account
while you are an active employee.
The following pages describe the main provisions of
TAXCAP. The ERISA Information section of this book
contains administrative details and other information
about the Plan.
The following special terms used to describe the
provisions of the Plan are more fully defined in the
Glossary.
defer or deferrals
fiscal quarter
fiscal year
pay
Pension Benefit Guaranty Corporation (PBGC)
TAXCAP
valuation date
vested
years of service
155
Who Can Join The Plan
You are eligible to join the Plan only if you are a
regular full-time or regular part-time employee on the
U.S. payroll except employees in Puerto Rico. You are
not eligible to join the Plan if you are classified in
any other employment status. If you meet the
eligibility requirements, you may enroll in the Plan--
enrollment is not automatic.
When You May Join The Plan
You may join TAXCAP at the beginning of any month,
starting with the first entry date one year after your
original hire date. Entry dates are February 1, May 1,
August 1, and November 1. Your Entity or Regional
Personnel Department will let you know when you first
become eligible.
For Example:
If your hire date is May 3, 1993, (the first business
day of the quarter), you may first enroll on May 1,
1994, your first entry date. If you choose not to
enroll on May 1, 1994, you may enroll as of the first
day of any following month.
You can enroll in TAXCAP via HP's Telephone Activated
Benefits System--TABS. TABS phone number is 800-262-
TABS or Telnet 857-TABS. When you call TABS you must
enter your desired deferral percentage and specify the
investment mix you want in whole percent increments.
Investment mixes must total 100 percent. Once you have
enrolled in TAXCAP via TABS, your participation will
begin in the first pay period after you become
eligible.
Your Beneficiary
Once you enroll via TABS, you should also name a
beneficiary to receive your TAXCAP benefits at your
death. A beneficiary form can be obtained from your
Entity or Regional Personnel Department or service
center. If you are married, your spouse will
automatically be your sole beneficiary. If you wish to
name someone other than your spouse as beneficiary for
any part of your TAXCAP benefit, federal law requires
that you obtain your spouse's written consent. This
consent must be witnessed by a Plan representative or a
notary public. If your spouse does not provide
consent, the full value of your account will be paid to
your spouse in the event of your death, regardless of
whom you have named as beneficiary. If you remarry,
any previous consent is no longer valid and you must
obtain your new spouse's consent. To change your
beneficiary, you must complete a new beneficiary form
and submit it to your Entity or Regional Personnel
Department.
If you do not name a beneficiary--or if your
beneficiary is not living at the time of your death--
payment of your TAXCAP account will be made, in the
following order, to:
your surviving spouse
your surviving children--in equal portions
your surviving parents--in equal portions
your estate
How Much You May Defer
You may defer up to eight percent or twelve percent of
your pay. You will be informed on your earnings
statement for the July 31 pay period the maximum
percentage you are eligible to defer for the following
Plan year. Generally, pay is your regular wage or
salary, including commissions and shift differential,
but not including overtime or bonuses. Pay is defined
more completely in the Glossary.
You may participate in both TAXCAP and the Stock
Purchase Plan. If you contribute to the Stock Purchase
Plan at five percent or less, you may contribute to
TAXCAP as described above. If you contribute to the
Stock Purchase Plan at six percent or more, your TAXCAP
and Stock Purchase Plan contributions cannot exceed ten
percent. See the following table for contribution
limits:
Stock Purchase TAXCAP Combined
Contribution Maximum Maximum
(%) Contribution Contribution
(%) (%)
10 O 10
9 1 10
8 2 10
7 3 10
6 4 10
5 12 or 8* 17 or 13*
4 12 or 8* 16 or 12*
3 12 or 8* 15 or 11*
2 12 or 8* 14 or 10*
1 12 or 8* 13 or 9*
0 12 or 8* 12 or 8*
*The higher limit applies to you only if your TAXCAP
Plan Year compensation is less than an amount defined
by federal tax laws ($62,345 for the Plan year ending
July 31, 1993).
156
You may change your deferral rate any pay period. You
can stop your deferrals at any time. However, when
your deferrals stop, so do HP's contributions. Once
you have stopped, you can resume your deferrals as of
any February 1, May 1, August 1, or November 1. Your
deferrals are paid into the trust and invested in your
designated investment options on the scheduled HP
paydays.
How Your Deferrals Can Reduce Your Current Taxes
Federal and most state income taxes are based on the
portion of your pay remaining after your deferrals have
been taken. Therefore, participating in TAXCAP lowers
your current federal taxable income and possibly lowers
current state and local taxable income.
For Example:
Assume your annual pay is $35,000 and you elect to
defer 6 percent in TAXCAP. Your annual deferral will
be $2,100. Although your actual pay is $35,000, your
taxable pay will be $32,900. This is because you are
deferring $2,100 in the Plan before taxes.
As of late 1993, the state of Pennsylvania and some
cities are the only tax-levying entities that consider
your contributions to be part of your taxable income.
Your contributions are also subject to FICA (Social
Security withholding tax).
How Much HP Contributes
HP contributes $1 for every $1 you contribute of the
first one percent, two percent or three percent of your
pay. HP contributes $.50 for every $1 on the next two
percent you defer in the Plan. Contributions above
five percent are not matched by HP. You do not pay any
income taxes on HP's contributions until you receive
them from the Plan.
Your Contributions HP Contributions
1 percent of your pay 1 percent of your pay
2 percent 2 percent
3 percent 3 percent
4 percent 3 1/2 percent
5 percent 4 percent
6 percent or more 4 percent
HP's contributions are paid into the trust and are
invested in your designated investment options after
the end of each fiscal quarter. HP's contributions
will be added to your account if you:
Are an employee on the last business day of the
fiscal quarter.
Retired from HP during the fiscal quarter at age 55
or older with at least 15 years of service, as
defined in the Retirement Plan.
Died during the fiscal quarter.
How Your TAXCAP Account Is Invested
You can choose to invest the money in your TAXCAP
account among the seven investment options described
below. Investment earnings or dividends will be
reinvested in the options you have chosen and included
in your account balance. You can invest your account
entirely in one option or you can divide it among the
seven options, in any whole percentage combination.
Investment mixes must total 100 percent.
For Example:
You can choose to invest 100 percent in one option or
choose to invest 15 percent in one option, 64 percent
in another, 16 percent in a third, and five percent in
a fourth.
After the end of each pay period, your deferrals are
invested as you choose. In the following paragraphs,
the options are described beginning with the most
conservative and ending with the most aggressive.
Fidelity Retirement Money Market Portfolio--
Retirement Money Market Portfolio is a money market
fund. It seeks as high a level of current income as
is consistent with the preservation of principal and
liquidity. It invests in high-quality, U.S.
dollar-denominated money market instruments of U.S.
and foreign issuers. While the Portfolio seeks to
maintain a $1.00 share price, there is no assurance
that it will be able to do so. An investment in the
Portfolio is not insured or guaranteed by the U.S.
government. The Portfolio's yield will fluctuate.
Retirement Money Market Portfolio is a conservative,
relatively low-risk investment.
Fidelity Intermediate Bond Fund--Intermediate Bond
Fund is an income fund. It seeks a high level of
current income by investing primarily in high and
medium grade fixed income obligations. These fixed
income obligations include corporate bonds, mortgage
securities, bank obligations and U.S. government and
agency securities. The Fund's dollar-weighted
average portfolio maturity ranges between three and
ten years. The Fund's share price, yield and return
will fluctuate.
157
Fidelity U.S. Equity Index Portfolio--U.S. Equity
Index Portfolio is a growth and income fund. It
seeks investment results that correspond to the total
return performance of the S&P 500 Index, which is
comprised of common stocks. Dividend amounts will
vary. The Portfolio's share price and return will
fluctuate.
Fidelity Growth & Income Portfolio--Fidelity Growth &
Income Portfolio is a growth and income fund. It
seeks long-term capital growth, current income and
growth of income. It invests primarily in the
securities of companies with the potential for growth
of earnings while paying current dividends.
Consistent with the objective, the Portfolio's
manager will generally sell securities of companies
for which dividends fall to a level lower than the
yield of the S&P 500. The Fund's share price, yield,
and return will fluctuate.
Fidelity Magellan Fund--Magellan Fund is a growth
fund. It seeks long-term capital appreciation by
investing in the stocks of both well-known and lesser
known companies with potentially above-average growth
potential and a correspondingly higher level of risk.
Securities may be of foreign and domestic companies.
The Fund's share price and return will fluctuate.
Fidelity Contrafund--Fidelity Contrafund is a
diversified growth fund. It seeks capital
appreciation. It invests in the securities of
companies that are believed to be undervalued or out
of favor with the market. Contrafund invests in the
common stock and securities convertible into common
stock of all types of companies, and in all
industries. Contrafund generally invests in smaller
to medium size companies which may carry a higher
degree of risk. From time to time, international
securities may be purchased by the Fund. When market
conditions warrant, the Fund may also invest
temporarily in debt securities. The Fund's share
price and return will fluctuate.
Hewlett-Packard Stock Fund--The Hewlett-Packard Stock
Fund enables you to become a stockholder in the
Company and to participate in HP's growth by
investing almost exclusively in Hewlett-Packard
Common Stock. Like a mutual fund, this option holds
a small percentage of high-quality money market
instruments providing the option with same day
exchangeability without the five-day-settlement
period normally associated with purchases and sales
of common stocks. Unlike a mutual fund, this option
is neither a managed nor diversified portfolio and is
subject to both the normal external factors affecting
the general level of stock prices and to specific
factors affecting HP. As a TAXCAP participant
investing in the Hewlett-Packard Stock Fund, you have
the right to vote the full shares of stock
represented by your TAXCAP account. Each year before
the annual meeting, information will be mailed to you
that will enable you to exercise your voting right.
If you do not specify how your account is to be
invested when enrolling through TABS, the entire amount
will automatically be invested in the Fidelity
Retirement Money Market Portfolio which is the most
conservative investment. This also applies when you
enroll through the TAXCAP activity form.
Once you have enrolled in TAXCAP you may change your
investment mixes for future contributions in one
percent increments as often as you feel necessary by
calling Fidelity at their toll free number
800-457-4015. You may also exchange your current
account balance as often as you feel necessary by
calling Fidelity at this number.
Fund Information
To obtain your current account balances or performance
and investment information about the Fidelity funds
offered in TAXCAP, call the Fidelity toll-free
automated phone line at 800-457-4015, 24 hours a day,
seven days a week. To access your account, you must
have your Social Security number, and your Personal
Identification Number (PIN) with Fidelity. To
establish a Fidelity PIN, you will need to pass the
security check by providing your Social Security
number, your date of birth, and your employee number
(eight digits--you must enter leading zeros). The fund
codes are:
Fidelity Retirement Money Market Portfolio 0630
Fidelity Intermediate Bond Fund 0032
Fidelity U.S. Equity Index Portfolio 0650
Fidelity Growth & Income Portfolio 0027
Fidelity Magellan Fund 0021
Fidelity Contrafund 0022
HP Stock Fund 8655
158
To exchange existing assets from one investment option
to another or to redirect your future contributions to
a different investment option with the help of a
Fidelity representative, you can call the same
toll-free number, 800-457-4015. A Fidelity
representative is on duty from 8:30 am to 8:00 pm
Eastern Time. FIDELITY REPRESENTATIVES CAN ONLY GIVE
INFORMATION ABOUT THE FUNDS AND LIMITED PLAN
INFORMATION. THEY CANNOT PROVIDE FINANCIAL ADVICE.
If you have a hearing impairment, you can call Fidelity
toll-free at 800-835-5089 to conduct account
transactions or to get specific information about your
TAXCAP account. A Fidelity representative will be
available to answer your questions any business day
from 8:30 am to 8:00 pm Eastern Time.
Quarterly Participant Statements
Approximately four weeks after the end of each fiscal
quarter you will receive a statement from Fidelity
summarizing all of your account activity and
administrative costs since the last statement and the
total value of your account.
The information provided includes:
the beginning balance, which is the closing balance
from the previous statement
investment performance (gains or losses)
investment elections (mixes)
any fund exchange activities that you authorized for
the quarter
your deferrals for the quarter
loan information
HP's contributions for the quarter
your ending balance
administrative costs
Administrative costs for TAXCAP include administrative
costs for both Fidelity and TAXCAP Administration in HP
Corporate Offices. The costs are divided among
participants based on the number of individuals
enrolled in the Plan. The administrative costs are
expected to be $18 to $20 per participant, per year and
are a line item on the TAXCAP quarterly participant
statement.
How You Vest in Your Account
You are 100 percent vested in the value of all funds
contributed to your account from the moment they are
placed in your account. This includes your deferrals,
HP's contributions, rollover contributions, and gains
or losses. The trustee holds the assets for your
exclusive benefit and they cannot be used for any other
purpose.
Being immediately 100 percent vested does not mean you
have immediate access to the funds. Rather, it means
that 100 percent of your account can be distributed if
you leave HP or die.
When Payouts Are Made
The primary purpose of TAXCAP is to help you meet your
retirement goals. Therefore, your account value is
only payable when you leave HP or die. EXCEPTIONS:
While you are still an HP employee, you can request an
in-service hardship withdrawal, or after you reach age
59 1/2, you can withdraw all or part of your account.
When Your HP Career Ends
The full value of your TAXCAP account is payable when
you leave HP or die.
You must elect a distribution option on the TAXCAP
Payment Application at Termination of Participant form
before you leave HP. The distribution options you have
are:
lump sum amount in cash
HP stock and cash (only available if you are invested
in the HP Stock Fund)
a direct rollover from TAXCAP to a Fidelity
Investments Individual Retirement Account (IRA)
a direct rollover from TAXCAP to any other Individual
Retirement Arrangement or another qualified plan
If you elect a direct rollover form of payment, no
federal or state income tax withholding will apply to
the amount directly rolled over. If you elect to have
a portion of your TAXCAP account paid directly to you,
that portion of the distribution and any loan amount
outstanding in your account will be subject to
mandatory 20 percent federal income tax withholding
and, where applicable, elective state income tax
withholding. You can avoid the mandatory federal
income tax withholding by electing to roll over 100
percent of your distribution through the direct
rollover options.
159
If you elect a direct rollover to a Fidelity
Investments IRA and if Fidelity does not receive a
completed Fidelity Rollover Application form from you
within 60 days of your election, your account will be
liquidated. A check will be mailed to you payable to
Fidelity Investment for your benefit.
If you elect to be paid in HP stock for your
investments in the HP Stock Fund, you will receive an
HP stock certificate for the equivalent number of whole
shares in your HP Stock Fund. The remainder of your
TAXCAP account after the stock shares are issued will
be paid in cash. This distribution is subject to the
mandatory 20 percent federal income tax withholding.
However, income tax will be withheld only to the extent
that cash is available.
If you do not make a distribution election within 60
days after the time of termination and your account
balance is $3,500 or less, or your account balance
exceeds $3,500 and you have a loan outstanding, then
your full account balance will default to payment in
cash and the 20 percent mandatory federal income tax
withholding will apply.
If you do not elect a form of payment at the time of
termination and your account balance exceeds $3,500,
and you have no loan outstanding, distribution of your
account balance will not be made until TAXCAP
Administration receives a signed TAXCAP Payment
Application at Termination of Participant form.
Any benefit paid from the Plan will be based on the
valuation date immediately following the next HP payday
after Fidelity's receipt of your claim from HP. See
the Glossary for the definition of "valuation date" for
TAXCAP.
While You Are an HP Employee--Age 59 1/2 and Hardship
Withdrawals
Withdrawals from TAXCAP are available after age 59 1/2.
After you reach age 59 1/2, you may withdraw all or
part of your account. The minimum amount you can
withdraw is $1,000, or if there is less in the account,
the entire value of the account. The withdrawal will
be subject to mandatory 20 percent federal income tax
withholding unless it is directly rolled over. The
withdrawal will not be subject to the 10 percent early
withdrawal tax penalty.
Hardship withdrawals are available to participants who
meet certain stringent Internal Revenue Service (IRS)
requirements. The maximum withdrawal amount available
is specified by IRS Regulations. The following
financial needs qualify a participant for a TAXCAP
hardship withdrawal:
Unreimbursed medical expenses for you, your spouse or
dependents.
Purchase or construction of your principal residence.
Payment of tuition and related educational fees for
the next 12 months of post-secondary education for
you, your spouse, your children, or dependents.
Prevention of eviction from or foreclosure on the
mortgage on your principal residence.
Funeral expenses of a family member.
As a further requirement for applying for a hardship
withdrawal, you must exhaust all other financial
resources available to you. One of these resources is
loans available through TAXCAP. You must have two
TAXCAP loans outstanding prior to applying for a
hardship withdrawal. If you are not eligible to apply
for a loan, then you may apply for a hardship
withdrawal directly.
As a condition of receiving your hardship withdrawal,
the IRS requires that you will be unable to contribute
to TAXCAP or the Stock Purchase Plan until the
beginning of the quarter following one year from the
date of your hardship withdrawal. The combined amount
of your deferrals into TAXCAP for the year you request
a hardship withdrawal and the next calendar year will
be limited to the next year's maximum employee pre-tax
contribution limit as set by the IRS.
The minimum withdrawal amount is the lesser of $1,000
or all that is available. All withdrawals are subject
to mandatory twenty percent federal income tax
withholding unless directly rolled over. Hardship
withdrawals may be subject to a ten percent early
withdrawal tax penalty. There are exceptions to the
ten percent tax penalty so you should consult your
accountant or tax advisor. Withdrawals are funded
through the sale of your TAXCAP investments beginning
with the most conservative and progressing to the most
aggressive investment fund.
To request a withdrawal, call Fidelity at 800-457-4015
for your maximum available withdrawal amount and an
application. Fill out the required information and
mail the application to Hewlett-Packard Company, TAXCAP
Administration, 3000 Hanover Street, Palo Alto,
California, 94304, MS 20BAX.
In-service withdrawal requests are processed each
business day by TAXCAP Administration, and checks are
issued from Fidelity within seven business days after
the application is received by TAXCAP Administration.
Special rules apply for in-service withdrawals for
acquisition employees, (see page 162 for details).
160
How You Can Borrow From Your Account
While you are an active employee, regular full-time or
regular part-time, you can borrow from your TAXCAP
account. You cannot borrow from your account if you
are on a medical, military, personal or Family and
Medical Leave Act leave of absence, or receiving
benefits under the Income Protection Plan.
The maximum amount available is 50 percent of the
account balance (including outstanding loan amounts) on
the date of valuation less any loan balance
outstanding. The total of all loans is limited to
$50,000 minus the highest loan balance outstanding
during the prior 12-month period. Loans are subject to
a $1,000 minimum. No more than two loans can be
outstanding at any time.
This chart shows the maximum outstanding loan amount
you may have at any one time.
If your TAXCAP account The maximum/outstanding
balance is... loan amount is...
$2,000-$100,000 50 percent of
account balance
$100,000+ $50,000
To initiate a loan, call Fidelity at 800-457-4015.
Once you have provided the proper security information,
the Fidelity representative will guide you through the
steps of the loan process and inform you of any
restrictions that may apply (maximum allowable loan
amount, etc.).
Your eligibility for a loan is based on your account
value as of the date you call Fidelity to request a
loan.
Once the details of the loan transaction have been
agreed to and confirmed by phone, the Fidelity
representative will generate a TAXCAP Loan Agreement
and Promissory Note that will be mailed to your home
address on file at Fidelity. Upon receipt of the
TAXCAP Loan Agreement and Promissory Note, you must
review the information to make sure everything is
correct. The loan amount will be liquidated from your
account on the same day that you call (if the call is
received at Fidelity before 4:00 p.m. Eastern Time).
Your loan check will automatically be generated from
Fidelity and mailed to your home address on file at
Fidelity on the second business day after the original
call from you to initiate the loan. There is
endorsement disclosure information on the back of the
loan check that states by endorsing the loan check, you
have entered a legally binding contract with TAXCAP,
and that you have agreed to all the terms and
conditions under the loan provisions in the Hewlett-
Packard Company Tax Saving Capital Accumulation Plan.
If the terms in the TAXCAP Loan Agreement and
Promissory Note are not correct, do not sign, cash or
deposit your loan check. Call a Fidelity plan
representative immediately at 1-800-457-4015.
Special rules apply for loans for acquisition
employees, (see page 162 for details).
How Your Loan Is Funded
Your loan will be funded through the sale of your
TAXCAP investments in the following order:
Fidelity Retirement Money Market Portfolio
Fidelity Intermediate Bond Fund
Fidelity U.S. Equity Index Portfolio
Fidelity Growth & Income Portfolio
Fidelity Magellan Fund
Fidelity Contrafund
Hewlett-Packard Stock Fund
For Example:
You have a total of $30,000 in TAXCAP investments. You
have $10,000 in the Retirement Money Market Portfolio,
$10,000 in the Intermediate Bond Fund and $10,000 in
the Magellan Fund. If you want to take a $15,000 loan,
$10,000 will come from your Retirement Money Market
Portfolio and the remaining $5,000 will come from your
Intermediate Bond Fund.
How You Repay Your Loan
You repay your loan through automatic, irrevocable
payroll deductions. You can choose to repay the loan
over one, two, three, or four years. TAXCAP loan
interest rates are determined by the prime rate on the
last business day of the month preceding the loan
request plus 1/2 percent. The loan interest rate may
change monthly. TAXCAP loans are amortized on a
semi-monthly basis. Amounts repaid are reinvested
semi-monthly based on your investment elections (mixes)
in effect at the time of reinvestment.
Payroll deductions for your loan will begin
approximately two weeks after receipt of the loan
distribution check. Repayments, including interest
paid, will be taken out of your paycheck each payday.
Payroll deductions CANNOT be discontinued until the
loan is fully repaid.
Loan Prepayment
If you wish, you may prepay the full amount of the
outstanding principal and accrued interest without
penalty. You cannot make partial prepayments except in
the case of certain personal leaves of absence.
To initiate a prepayment, you can call Fidelity at
800-457-4015. Once you have provided the proper
security information, the Fidelity representative will
guide you through the steps of the prepayment process.
The Fidelity representative will provide you with the
prepayment amount and the terms of the prepayment
transaction.
161
If you want to have your prepayment effective for the
end of the current month, you must call Fidelity on or
before the second payday of the month. If the request
is made after this date, Fidelity will inform you that
the prepayment will be effective for the next month.
Once you have agreed to the terms of the prepayment,
Fidelity will process your loan prepayment application
and send it to you. Upon receipt of the application,
you must sign it, attach a money order, cashier's check
or HP Credit Union teller check--payable to Fidelity
Investments--and send both the application and check to
TAXCAP Administration in HP Corporate Offices.
In order to have your prepayment effective in the
current month, TAXCAP Administration must receive the
completed application and check from you on or before
the last business day of the month. If your application
is received after this time, the prepayment application
is void. All prepayment applications received by
TAXCAP Administration by the last business day of the
month will be forwarded to Fidelity. Fidelity will
process your loan prepayment on the following payday.
The prepayment will be invested according to your
investment elections (mixes) on file at the time of
repayment to the TAXCAP trust fund. The next statement
that you receive will reflect that your loan is paid in
full.
If you are transferring to a foreign entity or to HP's
Flex Force as an On-Contract or On-Call employee, you
must prepay your loan in full prior to transfer.
Loan Repayment Due to Leave of Absence
IRS restrictions regarding loans prohibit the employee
from defaulting on a loan. The loan MUST be repaid per
the terms of the loan. If you are going on a medical
leave of absence and you have an outstanding TAXCAP
loan, you do not have to prepay your loan unless you so
desire. However, if you are taking a military or
personal or Family and Medical Leave Act leave, you
must prepay ALL anticipated missed payments during your
leave. In some instances, you may be required to
prepay the entire loan before being granted time off
for a leave.
The loan repayment procedure for leaves is as follows.
You and your personnel representative will determine
the amount of the repayment. Personnel will forward
your money order, cashier's check, or HP Credit Union
teller check--made payable to Fidelity Investments--to
TAXCAP Administration for review and processing on the
last business day of each pay period. Fidelity will
process the repayment on the payday following receipt.
Your repayments will either be entered as individual
payments (if payroll deductions were just interrupted
and you will be returning from leave) or as a lump sum
(if the amount is a full repayment). If applicable,
you will resume payroll deductions upon returning to
work. Repayments will be invested according to your
investment election (mixes) on file at the time of
repayment to the TAXCAP trust fund.
Loan Outstanding at Termination
If you leave HP while a loan is outstanding, the amount
you owe will be subtracted from the payout of your
TAXCAP account. For income tax purposes, HP will
report the amount you owe on your loan as part of the
total payout you received from the Plan. Therefore,
the entire amount distributed from the Plan--including
the outstanding loan amount and interest due--is
taxable income and subject to 20 percent mandatory
federal income tax withholding unless the part of your
account actually distributed from TAXCAP is subject to
a direct rollover. You can defer taxation on your loan
amount by rolling over this amount to an Individual
Retirement Arrangement (IRA) or another qualified plan
within 60 days of the distribution.
Special Rules for Acquisition Employees
If you were formerly employed by Avantek, AOT or
Colorado Memory Systems (CMS) and had money transferred
from the Avantek, AOT or CMS plan to TAXCAP, there are
special TAXCAP rules described in this section that
apply to you. In addition to cash or HP stock
distributions upon termination of employment, you may
also receive your distribution in installments or
various annuity forms of benefit--single life, joint
and survivor or term certain annuities. Former Avantek
and CMS plan participants may also elect an in-service
withdrawal of any money formerly attributed to a
"rollover account" in the Avantek and CMS plan.
Upon termination of employment, you will need
spousal consent to receive your distribution in any
form other than a joint and survivor annuity. You will
also need spousal consent to receive in-service
withdrawals (at age 59 1/2, for hardship, or for an
Avantek rollover account) as well as for loans.
Loan requests for acquisition employees will be
processed through TAXCAP Administration on a daily
basis. Acquisition employees can call Fidelity at
1-800-457-4015 to request a loan application. Fidelity
will mail the application to the home address on file.
You will need to check the appropriate marital status
on the application, sign the application, and, if you
are married, have your spouse sign the consent for the
withdrawal and have the spousal consent form witnessed
by either a plan representative or a notary public.
The completed forms need to be mailed to TAXCAP
Administration at Corporate offices for processing.
TAXCAP Administration will review the application for
accuracy and release the loan for processing by
Fidelity. Fidelity will issue the loan check on the
next business day after the loan application has been
approved and released by TAXCAP Administration.
162
How to Make Changes or Receive Your Money
This chart provides a brief summary of how to change
the way you are participating in TAXCAP and to receive
money from you account.
If You Want To... You Need To...
Enroll in the Plan. Call TABS at 800-262-TABS or
Telnet 857-TABS and enroll
in TAXCAP. You must enter
your desired TAXCAP deferral
percentage and specify the
investment mix you want in
whole percent increments.
Investment mixes must total
100 percent. Once you have
enrolled in TAXCAP, your
participation will begin in
the first pay period after
you become eligible. It is
your responsibility to
complete a beneficiary
designation form for TAXCAP
and return it to your
personnel representative upon
enrollment.
Change your deferral Call TABS and make the
percentage. desired TAXCAP deferral
percentage changes. TABS will
tell you when your changes
will become effective.
Stop making deferrals Call TABS and change your
into TAXCAP (that is, deferral to 0 percent. Your
change the percentage deferral will stop as of the
to zero). first possible pay period
after you call TABS. TABS
will tell you when your
deferrals will be stopped.
Resume making deferrals Call TABS to re-enroll. TABS
to TAXCAP after you will tell you when you are
have stopped. eligible to begin deferrals
again.
Resume making deferrals Take no action. Your
after a period of deferrals will resume
suspension due to automatically at the previous
a formal leave of percentage when you
absence. return. If you wish to
change your percentage or
cease deferrals entirely,
call TABS upon your return.
TABS will tell you when your
deferral amount will be
changed or stopped.
Change your Complete a new beneficiary
beneficiaries. form. If you are married and
your spouse is not named as
your sole beneficiary, your
TAXCAP account will be
distributed to your spouse
upon your death unless the
spousal consent section on
the beneficiary form is
completed. The change in
beneficiary will be effective
when the completed
beneficiary form is received
by your Entity or Regional
Personnel Department.
Apply for a withdrawal Call Fidelity Investments at
after age 59 1/2.* 800-457-4015 to obtain an
application. Once Fidelity
mails you the application,
sign it and send it to TAXCAP
Administration.
Apply for a hardship Call Fidelity Investments at
withdrawal.* 800-457-4015 to obtain an
application. Once Fidelity
mails you the application,
sign it and send it to TAXCAP
Administration.
Apply for a loan.* Call Fidelity Investments at
800-457-4015 to initiate a
loan. Once you have agreed
to the terms of your loan,
your account will be
liquidated for the loan
amount. The TAXCAP Loan
Agreement and Promissory Note
and loan check will be mailed
to you.
Elect payout options.* Complete a TAXCAP Payment
Application at Termination of
Participant form and return
it to your Entity or Regional
Personnel Department prior to
termination of employment
with HP.
*Special rules for acquisition employees apply here
(see page 162 for details).
163
The rules regarding beneficiary designations described
at page 156 will apply to you. In addition, if you
name someone other than your spouse as beneficiary
before the plan year in which you turn age 35, you must
complete a new beneficiary form in the plan year you
turn age 35 or your spouse will automatically become
your beneficiary.
Special claim forms for former Avantek, AOT, and CMS
plan participants have been prepared and will be
provided to you as needed. These forms will reflect
the special rules described in this section.
How To Claim Benefits
To receive payment of your TAXCAP account balance, you
should complete and return the TAXCAP Payment
Application at Termination of Participant form to your
Entity or Regional Personnel Department prior to
leaving HP. A TAXCAP Payment Application at
Termination of Participant form is available from your
Entity or Regional Personnel Department.
If information provided results in incorrect benefit
amounts (whether the information is false, wrong or
incomplete), the benefit amount will be adjusted. If
HP pays a larger benefit amount than it should have,
reasonable steps will be taken to recover the
overpayment.
If a Qualified Domestic Relations Order has required
the Plan to set aside a portion of your account for
payment to your ex-spouse or children, you will have no
rights to that portion of the value of your account.
If HP determines that a person who is to receive
benefits has become unable to handle them properly, HP
may make any reasonable arrangement to distribute the
benefits on the person's behalf.
If a Claim Is Denied
If all or part of a claim is denied, HP will notify the
claimant (you or your beneficiary) in writing, within
90 days after the claim is received. This notice will
explain:
Why the claim was denied and the specific Plan
provisions on which the denial is based.
What additional information is needed and why.
How to appeal the denial.
The Plan's review procedure.
If you or your beneficiary do not receive this notice
within 90 days after HP receives the claim, you or your
beneficiary can consider the claim denied. To appeal a
claim denial, use the procedure described in the next
section.
How to Appeal a Denied Claim
You or your beneficiary can appeal a denied claim by
submitting a written request for the appeal to the
Plan's Review Panel. You or your beneficiary must make
the request within 60 days after the date of the
denial. If you or your beneficiary do not receive a
written denial, you must make the request within 150
days after the date you first filed the claim.
Send the written request to:
Review Panel Under the Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
3000 Hanover Street, 20BAX
Palo Alto, CA 94304
The request must explain why you or your beneficiary
believe an appeal is in order and it must include
supporting facts and any other pertinent information.
HP will let you or your beneficiary review any
pertinent documents which legally can be disclosed in
preparing the request.
The Review Panel will act upon the request within 60
days after receiving it. The Panel may ask for
additional time, but a decision, in writing, will be
given within 120 days after the date of the written
request for appeal. You or your beneficiary will
receive a written explanation of the reasons for the
Panel's decision. If you or your beneficiary do not
receive notice of the Panel's decision by the end of
the 120-day period, you may consider the appeal
denied.
If the Panel decides that benefits should have been
paid, HP will take whatever action is necessary to pay
them as soon as possible after receiving notice of the
Panel's decision.
You Cannot Assign Benefits
No action can be taken to assign your interest in the
Plan or your account to anyone other than you.
However, a court order that divides your benefits under
this Plan as part of a marital settlement agreement
will be allowed if it is a Qualified Domestic Relations
Order as defined by law and approved by HP.
How You Can Make Rollover Contributions
If you are a newly hired or rehired employee, you may
be able to make a rollover contribution to the Plan
before you are otherwise eligible to enroll. You may
do this as described in this section if the check is
made payable to you. You may also make a direct
rollover, as prescribed by law, into TAXCAP if the
check is made payable to Fidelity Investments as
trustee of the TAXCAP.
164
A rollover contribution is a contribution you make to
the Plan with the funds distributed to you from
another qualified retirement plan in order to preserve
the tax deferred status of the money. A rollover
contribution will be allowed if HP decides that all IRS
requirements have been met.
There are two situations when you may make a rollover
contribution to TAXCAP with a payout from a qualified
retirement plan from a previous employer:
You are still in possession of this payout and less
than 60 days have elapsed since the date the payout
was received by you.
You originally rolled the payout into a new and
separate IRA.
See your Entity or Regional Personnel Department for a
rollover contribution form if you think you are
qualified.
If You Leave and Are Rehired
If you leave HP and are rehired, your eligibility to
enroll will be measured from your original hire date,
as if you had never left. It does not matter whether
you had previously participated in TAXCAP or not.
Therefore, if less than a year has passed since your
original hire date, you become eligible to enroll,
after you are on HP's payroll, on the same entry date
on which you would have been eligible when you were
first hired. If more than a year has passed since your
original hire date and you are already eligible to
enroll when you return, you may enroll immediately or
on the first day of any following month, after you are
on HP's payroll.
Under no circumstances will you receive a payout while
on HP's payroll. Payment cannot be made until you
leave HP or die.
What Circumstances Can Affect Your Benefits
The chart below describes situations which can affect
your benefits.
This Situation Has This Effect on Your
Account
You leave HP. Your deferrals and HP's
contributions end. You
elect a payout option of HP
stock, and/or cash, or
direct rollover to a
Fidelity Investments or
other IRA, or qualified plan
of your choice. TAXCAP
termination distributions
are processed semi-monthly
after payout options have
been entered into HP's
payroll/benefits system.
You take an unpaid Your deferrals and HP's
personal, medical, contributions are suspended
military or Family during leave of absence.
and Medical Leave Your deferrals and HP's
Act leave of absence. contributions resume
automatically once you
return to active employment
status. You are not
eligible to take a loan
while on leave.
You are disabled and You may continue your
on the HP Income deferrals and HP's
Protection Plan, contributions under TAXCAP.
integrating FTO The amount contributed will
and in the first be a percentage of both your
90 days of disability. IPP benefits and the pay you
receive from HP while on
IPP. You are not eligible
to take a loan while on IPP.
You are disabled and As with FTO accrual, cash
have been on the Income profit-sharing and the Stock
Protection Plan for 90 Purchase Plan, you will no
days. You are still longer be able to continue
integrating benefits. deferrals to TAXCAP. You
are not eligible to take a
loan while on IPP.
You die. Your deferrals and HP's
contributions end. Your
beneficiaries may elect a
payout option of HP stock,
and/or cash or a direct
rollover to an IRA. TAXCAP
termination distributions
are processed semi-monthly
after payment application
forms from the beneficiary
are received by TAXCAP
Administration.
165
When Your Participation Is Automatically Suspended
Your participation in TAXCAP is automatically suspended
while you are on:
a leave of absence without pay
military leave
a non-U.S. Hewlett-Packard payroll
the HP Income Protection Plan after 90 days of
disability (The suspension will start with the pay
period after the 90th day. However, your deferrals
before the 90th day will be eligible for HP's
contributions.)
During this time, you cannot make deferrals and HP will
not make any contributions to your account. Your
account will continue to share in the performance of
the investment options you have selected. Your
deferrals will automatically resume when you return to
active employment status.
How Your Deferrals May Be Limited
The Internal Revenue Code places a limit on the amount
you may defer in TAXCAP during a calendar year. This
limit is $9,240 for calendar year 1994. This limit
does not include HP's contributions.
In addition, the IRS requires the Plan to pass a
special test--called a non-discrimination test--
designed to ensure a fair mix of deferrals and HP's
contributions among employees at all income levels. If
the Plan does not meet the test, it may be necessary to
reduce the deferral rate of higher-paid participants
from time to time. If so, the percentage of pay that
those participants may defer may be reduced below 8
percent. You will be notified if you are affected by
this test.
TAXCAP Participation Does Not Affect Your Other HP
Benefits
Although participating in TAXCAP reduces your taxable
pay, it does not affect your Social Security or other
pay-related-HP benefits, nor will participation affect
future pay increases.
How Contributions May Be Limited
TAXCAP deferrals may only be taken from the first
$235,840 of covered compensation (that is, wages or
salary, commissions and shift differential) in the plan
year August 1, 1993 through July 31, 1994. The Omnibus
Budget Reconciliation Act of 1993 (OBRA) has reduced
this covered compensation to $150,000 for the plan year
beginning August 1, 1994. This limitation will be
adjusted for cost of living by the Secretary of the
Treasury.
Changing or Ending the Plan
Although HP expects to continue the Plan indefinitely,
HP reserves the right to amend or terminate the Plan at
any time. No amendment of the Plan will reduce the
benefits that any participant has accumulated before
the date the amendment is adopted, except as allowed by
law.
The assets of the trust fund exist to provide benefits
under the Plan and to pay reasonable expenses of
administering the Plan. No amendment may divert any
part of the assets for other purposes.
If the Plan is terminated, each participant retains a
100 percent vested non-forfeitable right in his or her
Plan accounts. No part of the trust funds will revert
to HP.
Under present law, the Pension Benefit Guaranty
Corporation does not insure the adequacy of trusts such
as TAXCAP. Therefore, benefits under TAXCAP are not
insured.
This Plan is subject to Internal Revenue Service
approval under the Internal Revenue Code. The Plan and
this book are subject to any changes required by the
Internal Revenue Service to meet applicable federal
rules and regulations.
Income Tax Withholding
The Unemployment Compensation Amendments of 1992,
imposes a mandatory 20 percent federal tax withholding
rate on distributions that are not directly and
immediately rolled over to an individual retirement
account or individual retirement annuity (both referred
to as IRAs) or to another qualified plan.
If you request that any portion of your TAXCAP account
balance be paid directly to you, you will have 20
percent of that distribution withheld as federal income
taxes. In general, this applies to most distributions,
e.g., a distribution upon termination from HP, a
withdrawal at or after age 59 1/2 or a hardship
withdrawal -- but not a TAXCAP loan.
166
The Company will provide you with a statement entitled
TAXCAP Special Tax Notice Regarding Plan Payments
whenever you make a withdrawal from the Plan. This
statement will give you general information about
taxation of your benefits at the time your benefits are
payable.
Special rules apply for payments made to individuals
who live outside the U.S.
How The Plan Is Funded
HP makes its contributions to the Plan's trust fund
based on the amount contributed by Plan participants.
Assets in this trust are invested according to the
directions of the Plan participants within the
guidelines established by HP.
All the money in this trust is used exclusively for
providing Plan benefits to eligible employees and
beneficiaries and for paying the cost of administering
the Plan.
167
How The Stock Purchase Plan Compares To TAXCAP
The following chart compares the Stock Purchase Plan to
TAXCAP.
A Comparison
Stock Purchase Plan TAXCAP
Eligibility Regular full-time Regular full-time
and regular part- and regular part-
time employees time employees
after one year of one year after
active service. the original hire
date.
Earliest Date February 1, May 1, February 1, May 1,
Participation August 1, or August 1, or
Starts November 1, after November 1, after
meeting eligibility meeting
requirements. eligibility
requirements.
Employee Generally 1 to 10 Generally 1 to 8
Contributions percent of pay. percent of pay,
or Deferrals Combined maximum or 1 to 12
(see table, of 10 percent if percent of pay
page 156) you are in both depending on your
Plans, and deferring TAXCAP annual
more than 5 percent compensation.
in the Stock (For combined
Purchase Plan. plan rules, see
table on page
156).
Company Shares For every two One dollar for
or Contri- Employee Shares every one dollar
butions purchased, HP the employee
contributes one contributes for
additional share. the first 1
The Company Shares percent, 2
are subject to a percent or 3
two-year restriction percent of the
period. employee's pay.
$.50 for every
dollar on the
next 2 percent
of the employee's
pay. No HP match
above 5 percent
of employee's
pay.
Income Taxes Income taxes are Income taxes are
on Employee withheld from not withheld from
Contributions contributions. deferral amounts.
or Deferrals Taxes are also
withheld at the
time of purchase
at quarter end, if
the valuation
price is greater
than the purchase
price.
Withholding Income taxes are Income taxes are
Taxes on withheld on Company not withheld from
Company Shares at the end of company contribu-
Contributions the restriction tions.
period.
Access to Unrestricted shares Leaving HP or
Funds can be withdrawn upon death; in-
or sold at any time. service with-
To receive Company drawals ($1,000
Shares, employees minimum) are
must hold their available at
Employee Shares for age 59 1/2; in-
two years; or upon service hardship
retirement or death. withdrawals are
available upon
meeting certain
IRS requirements.
Loans From Not allowed. Allowed--$1,000
Account minimum.
Form of HP stock or cash. HP stock, cash,
Payout or a combination.
Stopping If due to with- Stays in trust,
Contributions drawal from Stock HP contributions
or Deferrals Purchase Plan, re- are made at the
During funded and no end of the
Quarter company contribu- quarter.
tions. If due to
leave of absence,
purchase and match
will occur.
168
EXHIBIT 3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement constituting part of Post-Effective Amendment
No. 3 to the Registration Statement on Form S-8 (registration
No. 2-92331) of the Hewlett-Packard Company Tax Saving Capital
Accumulation Plan of our report dated September 30, 1994 appearing
on page 1 of this Form 11-K.
Price Waterhouse LLP
San Francisco, California
December 21, 1994
