HP Reaches Resolution with California Attorney General of Claims
Arising from Board Leak Investigation


PALO ALTO, Calif.--(BUSINESS WIRE)--HP (NYSE:HPQ)(Nasdaq:HPQ) today
announced that it has entered into an agreement Editorial with the
California Attorney General to resolve civil claims arising from the
previously disclosed investigation into leaks from its board of
directors.

The agreement, filed today in Santa Clara County Superior Court, calls
for HP to pay $14.5 million and to implement a series of measures
designed to ensure that its internal investigations are conducted in
accordance with California law and with the company's high ethical
standards.

"We are pleased to settle this matter with the Attorney General and
are committed to ensuring that HP regains its standing as a global
leader in corporate ethics and responsibility," said Mark Hurd, HP
chairman and chief executive officer.

There was no finding of liability against HP as part of the
settlement, which includes an injunction and agreement that the
California Attorney General will not pursue civil claims against HP or
against its current and former directors, officers and employees.

Under the agreement, $13.5 million of HP's payment will be used to
create a Privacy and Piracy Fund to assist California state
prosecutors in investigating and prosecuting consumer privacy and
information piracy violations. In addition, $650,000 will be used to
pay statutory damages and $350,000 will reimburse the Attorney
General's office for the costs of its investigation.

The agreement sets out a number of internal processes and controls
which HP determined in consultation with the Attorney General and will
maintain for five years. Among these are:
The designation of an independent director to review and report on
HP's compliance with legal and ethical requirements related to the
conduct of investigations to the board;
The appointment of a chief ethics and compliance officer, whom HP
named in October, and whose job will include oversight of compliance
with legal requirements and ethical standards in HP's investigative
practices;
The retention of an expert in the field of investigative practices,
already secured in September, designated as a "Qualified Authority,"
to conduct a comprehensive review of HP's investigative practices and
to assist the chief ethics and compliance officer in making
improvements where appropriate;
The expansion of the role of HP's chief privacy officer to include
review of HP's investigation practices to ensure that they address
matters related to privacy and ethics;
The expansion of HP's employee and vendor codes to ensure that they
include legal and ethical standards applicable to the conduct of
investigations;
The creation of a Compliance Council within HP that will be
responsible for developing, initiating, maintaining and revising
policies and procedures for the general operation of HP's ethics and
compliance programs consistent with applicable laws and regulations;
and
The redesign of HP's annual training requirement to ensure that
business ethics plays a more prominent role, and the provision of
additional training to employees engaged in the conduct of
investigations for HP.

The board has designated its newest member, G. Kennedy Thompson, who
serves as chief executive officer of Wachovia Corp., as its
independent director with responsibility for reviewing and reporting
on HP's compliance with legal and ethical requirements related to the
conduct of investigations to the board.

"HP has traditionally been a leader in the area of business ethics and
I look forward to working with the management team to help ensure that
the company operates with the highest standards of integrity,"
Thompson said.

Oversight of the ethics and compliance program will be run by Jon
Hoak, whom the company appointed in October to the newly created
position of chief ethics and compliance officer. Hoak had previously
served for more than 12 years as senior vice president and general
counsel for NCR, where he oversaw the ethics organization.

As "Qualified Authority," HP is utilizing the services of Bart M.
Schwartz to review its investigative processes. Schwartz was retained
by HP in September and previously served under U.S. Attorney Rudolph
Giuliani as chief of the Criminal Division in the Southern District of
New York.

The company's chief privacy officer, Scott Taylor, named to his post
in June, will expand his role to include review of HP's investigative
processes to ensure that they appropriately address matters related to
privacy and ethics. He will also continue to work on assuring the
privacy of information obtained by HP in the normal course of
business.

The Compliance Council will be headed by the chief compliance officer
and will include the chief privacy officer along with other
representatives from the company's legal and ethics functions.

HP is engaged in reviewing its employee and vendor codes to ensure
that they comply with the undertakings provided to the Attorney
General.

About HP

HP is a technology solutions provider to consumers, businesses and
institutions globally. The company's offerings span IT infrastructure,
global services, business and home computing, and imaging and
printing. For the four fiscal quarters ended Oct. 31, 2006, HP revenue
totaled $91.7 billion. More information about HP is available at
www.hp.com.

Forward-looking statements

This news release contains forward-looking statements that involve
risks, uncertainties and assumptions. If such risks or uncertainties
materialize or such assumptions prove incorrect, the results of HP and
its consolidated subsidiaries could differ materially from those
expressed or implied by such forward-looking statements and
assumptions. All statements other than statements of historical fact
are statements that could be deemed forward-looking statements,
including but not limited to statements regarding the future
implementation of internal processes and controls; statements
regarding future compliance with legal requirements and ethical
standards; statements regarding the outcome of pending inquiries or
investigations; any statements of expectation or belief; and any
statements of assumptions underlying any of the foregoing. Risks,
uncertainties and assumptions include risks associated with the
performance of the parties' obligations under the settlement
agreement; risks pertaining to the future implementation of internal
processes and controls; assumptions relating to the anticipated
outcome of pending inquiries and investigations; and other risks that
are described from time to time in HP's Securities and Exchange
Commission reports, including but not limited to the risks described
in HP's Quarterly Report on Form 10-Q for the fiscal quarter ended
July 31, 2006, and other reports filed after HP's Annual Report on
Form 10-K for the fiscal year ended Oct. 31, 2005. HP assumes no
obligation and does not intend to update these forward-looking
statements.

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(c) 2006 Hewlett-Packard Development Company, L.P. The information
contained herein is subject to change without notice. HP shall not be
liable for technical or editorial errors or omissions contained
herein.