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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________________ TO ________________
COMMISSION FILE NUMBER: 1-4423
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HEWLETT-PACKARD COMPANY
Exact name of registrant as specified in its charter:
DELAWARE 94-1081436
State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization: No.:
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES:
3000 Hanover Street, Palo Alto, California 94304
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(650) 857-1501
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock par value $0.01 per share New York Stock Exchange, Inc.
The Pacific Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of the registrant's common stock held by
nonaffiliates as of December 28, 1998 was $55,781,546,732.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of December 28, 1998: 1,015,098,000 shares of $0.01 par value
common stock.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT DESCRIPTION 10-K PART
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Pages 31-64 (excluding order data and "Statement of Management Responsibility") and the inside back
cover of the registrant's 1998 Annual Report to Stockholders I, II, IV
Pages 5-8 and 11-28 of the registrant's Notice of Annual Meeting of Stockholders and Proxy Statement
dated January 12, 1999 III
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FORWARD-LOOKING STATEMENTS
From time to time Hewlett-Packard Company, together with its consolidated
subsidiaries (the "Registrant" or the "Company"), and its representatives may
provide information, whether orally or in writing, including certain statements
incorporated by reference or included in this Form 10-K under "Management's
Discussion and Analysis of Results of Operations and Financial Condition," which
are deemed to be "forward-looking" within the meaning of the Private Securities
Litigation Reform Act of 1995 ("Litigation Reform Act"). These forward-looking
statements and other information relating to the Company are based on the
beliefs of management as well as assumptions made by and information currently
available to management.
The words "anticipate," "believe," "estimate," "expect," "intend," "will,"
and similar expressions, as they relate to the Company or the Company's
management, including such items discussed in "Factors that may affect future
results" set forth on pages 36-39 of the Company's 1998 Annual Report to
Stockholders, which pages are incorporated herein by reference, are intended to
identify forward-looking statements. Such statements reflect the current views
of the Registrant with respect to future events and are subject to certain
risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated or expected. The Registrant does not intend to update these
forward-looking statements.
In accordance with the provisions of the Litigation Reform Act, we are
making investors aware that such "forward-looking" statements, because they
relate to future events, are by their very nature subject to many important
factors which could cause actual results to differ materially from those
contained in the "forward-looking" statements.
PART I
ITEM 1. BUSINESS
PRODUCTS AND SERVICES
Hewlett-Packard Company was incorporated in 1947 under the laws of the State
of California as the successor to a partnership founded in 1939 by William R.
Hewlett and David Packard. Effective May 20, 1998, Hewlett-Packard Company
changed its state of incorporation from California to Delaware.
On a worldwide basis, Hewlett-Packard Company, together with its
consolidated subsidiaries, designs, manufactures and services equipment and
systems for measurement, computation and communications. The Company offers a
wide variety of systems and standalone products, including computer systems;
personal computers ("PCs"); printers and other hardcopy and imaging products;
calculators and other personal information products; electronic test equipment
and systems; medical electronic equipment; components based on optoelectronic,
silicon and compound semiconductor technologies; and instrumentation for
chemical analysis. Services such as systems integration, selective-outsourcing
management, consulting, education, product financing and rentals, as well as
customer support and maintenance, are also an integral part of the Company's
offerings. These products and services are used in industry, business,
engineering, science, medicine and education. A summary of the Company's net
revenue as contributed by its major groupings of similar products and services
is found on page 63 of the Company's 1998 Annual Report to Stockholders, which
page (excluding order data) is incorporated herein by reference.
The Company's computer systems, computers, personal information products,
and hardcopy and imaging products are used in a variety of applications,
including scientific and engineering computation and analysis; instrument
control; and business information management. The Company's core computing
products and technologies include its PA-RISC architecture for systems and
workstations; its Explicitly Parallel Instruction Computing technology, jointly
developed with Intel Corp., that will provide the foundation for
next-generation, 64-bit high-end systems; and software infrastructure for open
systems. The Company's general-purpose computers and computer systems include
scalable families of PCs, servers and systems for use in homes, home offices and
small offices, small workgroups, larger departments and entire enterprises. Key
product families include the HP 9000 series, which runs HP-UX (1), the Company's
implementation of the UNIX -Registered Trademark- (2) operating system, and
comprises multiuser computers for both technical and commercial applications and
workstations with powerful computational and graphics capabilities; the HP
NetServer series of PC servers; the HP Vectra series of PCs for use in business,
engineering, manufacturing and chemical analysis; and the HP Pavilion multimedia
home PCs. The Company offers associated services in software programming,
networking, distributed systems and data management. Customers of the Company's
computers, computer systems and software infrastructure products include
original equipment manufacturers, dealers, value-added resellers and retailers,
as well as end users for a variety of applications.
In the field of computing during fiscal 1998, the Company introduced a wide
variety of new products and systems, including HP 9000 A- and R-Class servers,
which are targeted at Internet Service Providers (ISPs), HP 9000 K-Class
midrange servers; and the HP NetServer LH3 midrange system, which uses Intel's
Pentium -Registered Trademark- (3) Pro 350MHz and 400MHz microprocessors.
This year the Company also introduced new HP Brio 7000 business PCs, which
feature an industry-first, subcompact "microtower" design; HP Brio 8000 business
PCs, which offer an Intel 400MHz Pentium processor; the HP Jornada handheld PC,
which weighs less than 3 pounds and has twelve-hour battery life; and the HP
Kayak XU and XW PC workstations, which deliver advanced 2-D and 3-D graphics
capabilities for software developers, design engineers, financial analysts and
multimedia-authoring professionals.
In addition to services such as systems integration, networked systems
management outsourcing, consulting, education, product financing and rentals,
the Company provides service for its equipment, systems, and hardcopy and
imaging products, including support and maintenance services, parts and supplies
for design and manufacturing systems, office and information systems,
general-purpose instruments, computers and computer systems, networking,
hardcopy and imaging products. In fiscal 1998, the Company derived 15 percent of
its revenue from such services. Key service introductions in fiscal 1998
included a range of offerings for SAP/R3 computing environments and for Windows
NT -Registered Trademark- (4) environments, as well as the HP Customer Care
Promise, a program in which the Company guarantees an answer to all HP Pavilion
PC support calls in three minutes or less, 24 hours a day, 365 days a year.
Key software events in fiscal 1998 included more than 40 new and enhanced HP
OpenView IT management solutions; HP Changengine 2.0 Admin Edition, which
enables organizations to streamline business processes without rewriting
applications; Chai software products that enable devices such as printers and
cellular phones to communicate more intelligently via the World Wide Web; and HP
OpenPix ImageIgniter, which enables users to zoom in on, pan across and share
Internet photos.
The Company's hardcopy and imaging products include a variety of system and
desktop printers, such as the HP LaserJet family, and the HP DeskJet family,
which is based on the Company's thermal inkjet technology. The Company also
markets large-format printers, scanners, PC photography products and all-in-one
products that perform copying, printing, scanning and faxing functions. Key
introductions in these product families in fiscal 1998 included the HP Color
LaserJet 4500 workgroup printer, which offers speed and cost-per-page on a par
with leading monochrome workgroup printers; the HP Color LaserJet 8500, which
prints at 6 pages per minute on paper ranging in size from that of postcards to
11" X 17"; the HP 9100C Digital Sender, a compact, desktop sending device that
converts color paper documents into digital information that can be sent via
e-mail, network fax, network PC or network printer; the HP 2000C Professional
Series color inkjet printer, which incorporates the Company's Modular Ink
Delivery System; the HP OfficeJet Series 700 all-in-one product, which combines
printing, copying and faxing capabilities; and the HP DeskJet 895C printer,
which comes with HP Instant Delivery publishing software.
In the information-storage business, the Company brought out a number of
CD-ReWritable read/write CD-based solutions, which enable people to write,
erase, rewrite and update large files on CD-RW media.
The Company also produces systems that are used for a wide range of testing
and measurement functions in electronics, medicine and chemical analysis. Key
introductions in test and measurement in fiscal 1998 included the HP 95000 High
Speed Memory Series for high-volume production testing of high-speed RDRAM
semiconductors; the HP 3070 Series 3 family of board-test systems; and the HP
Service Advisor, a "tablet" test platform for testing a wide range of
telecommunications services. In the Company's medical business, the Company
acquired Heartstream, Inc. during fiscal 1998. The Heartstream ForeRunner is an
automatic, portable external defibrillator that delivers therapy to victims of
sudden cardiac arrest. In the chemical-analysis business, the Company acquired
MTI Analytical Instruments, a manufacturer of high-speed, portable, laboratory
and continuous-measurement gas chromatographs.
The Company also makes electronic component products, consisting principally
of microwave semiconductor, fiber-optic and optoelectronic devices, including
light-emitting diodes (LEDs). These products are sold primarily to other
manufacturers for use in their electronic products, but many of the Company's
products incorporate them as well. In fiscal 1998, the Company introduced the
MT-RJ transceiver, which supports advanced fiber-optic cabling systems and helps
make "fiber-to-the-desk" more practical.
MARKETING
CUSTOMERS. The Company has approximately 600 sales and support offices and
distributorships in more than 130 countries. Sales are made to industrial and
commercial customers, educational and scientific institutions, healthcare
providers (including individual doctors, hospitals, clinics and research
laboratories), and, in the case of its PCs, hardcopy, imaging and other
personal-information products, to individuals for personal use.
SALES ORGANIZATION. More than half of the Company's net revenue is derived
through reseller channels, including retailers, dealers and original equipment
manufacturers. The remaining revenue
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results from the efforts of its own sales organization. These direct sales
operations are supported by field service engineers, sales representatives,
service personnel and administrative support staff. The financial health of
these resellers, and the Company's continuing relationships with such resellers,
are important to the Company's success. Some of these companies are thinly
capitalized and may be unable to withstand changes in business conditions. The
Company's financial results could be adversely affected if the financial
condition of certain of these resellers substantially weakens, or if the
Company's relationship with such resellers deteriorates.
Resellers constantly adjust their ordering patterns in response to the
supply by the Company and its competitors into the channel, and in response to
the timing of their new product introductions and relative feature sets, as well
as seasonal fluctuations in end-user demand, such as the back-to-school and
holiday selling periods. Resellers may increase orders during times of
shortages, cancel orders if the channel is filled with currently available
products, or delay orders in anticipation of new products.
INTERNATIONAL. The Company's net revenue originating outside the United
States, as a percentage of the Company's total net revenue, was approximately 54
percent in fiscal 1998 and 56 percent in fiscal 1997 and 1996, the majority of
which was from customers other than foreign governments. Approximately
two-thirds of the Company's international revenue in each of the last three
fiscal years was derived from Europe, with most of the balance coming from
Japan, other countries in Asia Pacific, Latin America and Canada.
Most of the Company's sales in international markets are made by foreign
sales subsidiaries. In countries with low sales volumes, sales are made through
various representatives and distributors. However, the Company makes certain
sales in international markets directly from the United States.
The Company's international business is subject to risks customarily
encountered in foreign operations, including changes in a specific country's or
region's political or economic conditions, trade protection measures, import or
export licensing requirements, the overlap of different tax structures,
unexpected changes in regulatory requirements and natural disasters. The Company
is also exposed to foreign currency exchange rate risk inherent in its sales
commitments, anticipated sales and assets and liabilities denominated in
currencies other than the U.S. dollar, as well as interest rate risk inherent in
the Company's debt, investment and finance receivable portfolios. The Company's
risk management strategy utilizes derivative financial instruments, including
forwards, swaps and purchased options to hedge certain foreign currency and
interest rate exposures. As of October 31, 1998 and 1997, a sensitivity analysis
performed by the Company indicated that adverse movements in foreign exchange
rates and interest rates applied to hedging contracts and underlying exposures
described above would not have a material effect on the Company's consolidated
financial position, results of operations or cash flows. Annual gains and losses
in the future may differ materially from that analysis, however, based on
changes in the timing and amount of interest rate and foreign currency exchange
rate movements and the Company's actual exposures and hedges.
In 1997, the Company established a dedicated task force to address the
issues raised by the introduction of a European single currency (the Euro) for
initial implementation as of January 1, 1999 and during the transition period
through January 1, 2002. The Company's primary focus has been on the changes
needed to deal with a mix of Euro and local denomination transactions from the
first day of changeover--January 1, 1999. A detailed discussion of the adoption
of the Euro is set forth on page 43 of the Company's 1998 Annual Report to
Stockholders which page is incorporated herein by reference.
The Company believes that its international diversification provides
stability to its worldwide operations and reduces the impact on the Company of
adverse economic changes in any single country. A summary of the Company's net
revenue, earnings from operations and identifiable assets by geographic area is
set forth on page 61 of the Company's 1998 Annual Report to Stockholders, which
page is incorporated herein by reference.
3
COMPETITION
The Company encounters aggressive competition in all areas of its business
activity. The Company's competitors are numerous, ranging from some of the
world's largest corporations to many relatively small and highly specialized
firms. The Company competes primarily on the basis of technology, performance,
price, quality, reliability, distribution and customer service and support. The
Company's reputation, the ease of use of its products and the ready availability
of multiple software applications and customer training are also important
competitive factors.
The computer market is characterized by vigorous competition among major
corporations with long-established positions and a large number of new and
rapidly growing firms. Product life cycles are short, and to remain competitive
the Company must develop new products and services, periodically enhance its
existing products and services and compete effectively on the basis of the
factors listed above. In particular, the Company anticipates that it will have
to continue to adjust prices of many of its products and services to stay
competitive, and thus effectively manage financial returns with correspondingly
reduced gross margins.
While the absence of reliable statistics makes it difficult to state the
Company's relative position with certainty, the Company believes that it is the
second-largest U.S.-based manufacturer of general-purpose computers,
personal-information, hardcopy and imaging products such as printers for
industrial, scientific and business applications. The markets for
test-and-measurement equipment are influenced by specialized manufacturers that
often have great strength in narrow market niches. In general, however, the
Company believes that it is one of the principal suppliers in these markets.
BACKLOG
The Company believes that backlog is not a meaningful indicator of future
business prospects due to the large volume of products delivered from shelf
inventories, the shortening of product life cycles and the portion of revenue
related to its service and support business. Therefore, the Company believes
that backlog information is not material to an understanding of its business.
YEAR 2000
The Year 2000 problem arises from the use of a two-digit field to identify
years in computer programs, e.g., 85=1985, and the assumption of a single
century, the 1900s. Any program so created may read, or attempt to read, "00" as
the year 1900. There are two other related issues which could also lead to
incorrect calculations or failure, such as (i) some systems' programming assigns
special meaning to certain dates, such as 9/9/99, and (ii) the year 2000 is a
leap year. Accordingly, some computer hardware and software, including programs
embedded within machinery and parts, will need to be modified prior to the year
2000 in order to remain functional. The Company's Year 2000 initiatives are
focused primarily on four areas of potential impact: internal information
technology (IT) systems; internal non-IT systems, including services and
embedded chips (controllers); The Company's products and services; and the
readiness of significant third parties with whom the Company has material
business relationships. The Company expects to implement successfully the
systems and programming changes necessary to address Year 2000 internal IT and
non-IT readiness issues. Based on current estimates, the Company does not
believe that the costs associated with such actions will have a material effect
on the Company's results of operations or financial condition. There can be no
assurance, however, that there will not be a delay in, or increased costs
associated with, the implementation of such changes. In addition, failure to
achieve Year 2000 readiness for the Company's internal systems could delay its
ability to manufacture and ship products and deliver services, disrupt its
customer service and technical support facilities, and interrupt customer access
to its online products and services. The Company's inability to perform these
functions could have an adverse effect on future results of operations or
financial condition. A detailed discussion of the Year 2000
4
problem is set forth on pages 40-43 of the Company's 1998 Annual Report to
Stockholders, which pages are incorporated herein by reference.
PATENTS
The Company's general policy has been to seek patent protection for those
inventions and improvements likely to be incorporated into its products and
services or to give the Company a competitive advantage. While the Company
believes that its patents and applications have value, in general no single
patent is in itself essential. In addition, there can be no assurance that any
of the Company's proprietary rights will not be challenged, invalidated or
circumvented, or that any such rights will provide significant competitive
advantages.
MATERIALS
The Company's manufacturing operations employ a wide variety of
semiconductors, electromechanical components and assemblies, and raw materials
such as plastic resins and sheet metal. The Company believes that the materials
and supplies necessary for its manufacturing operations are presently available
in the quantities required. The Company purchases materials, supplies and
product subassemblies from a substantial number of vendors. For many of its
products, the Company has existing alternate sources of supply, or such sources
are readily available. In certain instances, however, the Company enters into
non-cancelable purchase commitments with, or makes advance payments to, certain
suppliers to ensure supply. Portions of the Company's manufacturing operations
are dependent on the ability of suppliers to deliver quality components,
subassemblies and completed products in time to meet critical manufacturing and
distribution schedules. The failure of suppliers to deliver these components,
subassemblies and products in a timely manner may adversely affect the Company's
operating results until alternate sources could be developed. In addition, the
Company periodically experiences constrained supply of certain component parts
in some product lines as a result of strong demand in the industry for those
parts. Such constraints, if persistent, may adversely affect the Company's
operating results. However, the Company believes that alternate suppliers or
design solutions could be arranged within a reasonable time so that material
long-term adverse impacts would be minimized.
RESEARCH AND DEVELOPMENT
The process of developing new high-technology products and solutions is
inherently complex and uncertain. It requires, among other things, innovation
and accurate anticipation of customers' changing needs and emerging
technological trends. Without the introduction of new products, services and
enhancements, the Company's products and services are likely to become
technologically obsolete over time, in which case revenues would be materially
and adversely affected. There can be no assurance that such new products and
services, if and when introduced, will achieve market acceptance. After the
products and services are developed, the Company must quickly manufacture and
deliver such products and services in sufficient volumes at acceptable costs to
meet demand.
Expenditures for research and development increased 9 percent in fiscal 1998
to $3.4 billion, compared with 13 percent growth and expenditures of $3.1
billion in fiscal 1997 and 18 percent growth and expenditures of $2.7 billion in
fiscal 1996. In fiscal 1998, research and development expenditures were 7.1
percent of net revenue, compared with 7.2 percent in fiscal 1997 and 7.1 percent
in fiscal 1996. The Company anticipates that it will continue to have
significant research and development expenditures in order to maintain its
competitive position with a continuing flow of innovative, high-quality products
and services.
5
ENVIRONMENT
Certain of the Company's operations involve the use of substances regulated
under various federal, state and international laws governing the environment.
It is the Company's policy to apply strict standards for environmental
protection to sites inside and outside the U.S., even if not subject to
regulations imposed by local governments. The liability for environmental
remediation and related costs is accrued when it is considered probable and the
costs can be reasonably estimated. Environmental costs are presently not
material to the Company's operations or financial position.
EMPLOYEES
The Company had approximately 124,600 employees worldwide at October 31,
1998.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding the executive officers of the Company is set forth in
Part III below.
(1) HP-UX Release 10.20 and later and HP-UX release 11.00 and later on all HP
9000 computers are Open Group UNIX 95 branded products.
(2) UNIX is a registered trademark of The Open Group.
(3) Pentium is a U.S. registered trademark of Intel Corp.
(4) Windows is a U.S. registered trademark of Microsoft Corporation.
Windows NT is a U.S. registered trademark of Microsoft Corporation
6
ITEM 2. PROPERTIES.
The principal executive offices of the Company are located at 3000 Hanover
Street, Palo Alto, California 94304. As of October 31, 1998, the Company owned
or leased a total of approximately 53.1 million square feet of space worldwide.
The Company believes that its existing properties are in good condition and
suitable for the conduct of its business.
The Company's plants are equipped with machinery, most of which is owned by
the Company and is in part developed by it to meet the special requirements for
manufacturing computers, peripherals, precision electronic instruments and
systems. At the end of fiscal year 1998, the Company was productively utilizing
the vast majority of the space in its facilities, while actively disposing of
space determined to be excess.
The Company anticipates that most of the capital necessary for expansion
will continue to be obtained from internally generated funds. Investment in new
property, plant and equipment amounted to $2.0 billion in fiscal 1998, $2.3
billion in fiscal 1997 and $2.2 billion in fiscal 1996.
As of October 31, 1998, the Company's marketing operations occupied
approximately 13.1 million square feet, of which 5.5 million square feet were
located within the United States. The Company owns 49% of the space used for
marketing activities and leases the remaining 51%.
The Company's manufacturing plants, research and development facilities and
warehouse and administrative facilities occupied 40.0 million square feet, of
which 27.3 million square feet were located within the United States. The
Company owns 73% of its manufacturing, research and development, warehouse and
administrative space and leases the remaining 27%. None of the property owned by
the Company is held subject to any major encumbrances.
The locations of the Company's geographic operations are listed on the
inside back cover of the Company's 1998 Annual Report to Stockholders, which
page is incorporated herein by reference. The
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locations of the Company's major product development and manufacturing
facilities and the Hewlett-Packard Laboratories are listed below:
PRODUCT DEVELOPMENT
AND MANUFACTURING
AMERICAS Lake Stevens, Seattle, ASIA PACIFIC
Cupertino, Costa Mesa, Spokane and Vancouver, Melbourne, Australia
Fremont, Mountain Washington Beijing, Qingdao and
View, Newark, Palo Alto, Sao Paulo, Brazil Shanghai, China
Rohnert Park, Roseville, San Calgary, Canada Bangalore, India
Diego, San Jose, Santa Clara, Guadalajara, Mexico Hachioji and Kobe, Japan
Santa Rosa, Sunnyvale and EUROPE Seoul, Korea
Westlake Village, California Grenoble, France Penang, Malaysia
Colorado Springs, Fort Boblingen and Waldbonn, Singapore
Collins, Greeley and Germany Taiwan
Loveland, Colorado Dublin, Ireland HEWLETT-PACKARD LABORATORIES
Wilmington, Delaware Bergamo, Italy Palo Alto, California
Boise, Idaho Amersfoort, The Netherlands Haifa, Israel
Andover, Massachusetts Barcelona, Spain Tokyo, Japan
Rockaway, New Jersey Bristol, Ipswich and South Bristol, United Kingdom
Corvallis, Oregon Queensferry, United Kingdom
Aguadilla, Puerto Rico
Richardson, Texas
Salt Lake City, Utah
ITEM 3. LEGAL PROCEEDINGS.
There are presently pending no legal proceedings, other than routine
litigation incidental to the Company's business, to which the Company is a party
or to which any of its property is subject.
The Company is a party to, or otherwise involved in, proceedings brought by
federal or state environmental agencies under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), known as "Superfund," or
state laws similar to CERCLA. The Company is also conducting environmental
investigations or remediations at several of its current or former operating
sites pursuant to administrative orders or consent agreements with state
environmental agencies. Any liability from such proceedings, in the aggregate,
is not expected to be material to the operations or financial position of the
Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
8
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
Information regarding the market prices of the Company's Common Stock and
the markets for that stock may be found on page 64 and the inside back cover,
respectively, of the Company's 1998 Annual Report to Stockholders. The number of
stockholders and information concerning the Company's current dividend rate are
set forth in the section entitled "Common Stock and Dividends" found on the
inside back cover of that report. Additional information concerning dividends
may be found on pages 31, 46, 47 and 64 of the Company's 1998 Annual Report to
Stockholders. Such pages (excluding order data) are incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the Company is set forth on page 31 of the
Company's 1998 Annual Report to Stockholders, which page (excluding order data)
is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
A discussion of the Company's financial condition, changes in financial
condition and results of operations appears in the "Financial Review" found on
pages 32-43 of the Company's 1998 Annual Report to Stockholders. Such pages are
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
A discussion of the Company's exposure to, and management of, market risk
appears in the "Financial Review" found on page 38 of the Company's 1998 Annual
Report to Stockholders. Such page is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of the Company, together with the
report thereon of PricewaterhouseCoopers LLP, independent accountants, and the
unaudited "Quarterly Summary" are set forth on pages 44-62 and 64 of the
Company's 1998 Annual Report to Stockholders, which pages (excluding order data
and "Statement of Management Responsibility") are incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding directors of the Company who are standing for
reelection is set forth under "Election of Directors" on pages 6-8 of the
Company's Notice of Annual Meeting of Stockholders and Proxy Statement, dated
January 12, 1999 (the "Notice and Proxy Statement"), which pages are
incorporated herein by reference.
The names of the executive officers of the Company, and their ages, titles
and biographies as of December 28, 1998, are set forth below. All officers are
elected for one-year terms.
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EXECUTIVE OFFICERS:
EDWARD W. BARNHOLT; AGE 55; EXECUTIVE VICE PRESIDENT AND GENERAL MANAGER,
MEASUREMENT ORGANIZATION.
Mr. Barnholt was elected a Vice President of the Company in 1988, a Senior
Vice President in 1993 and an Executive Vice President in 1996. He assumed his
current position in 1998, when the Company's Medical Products, Chemical Analysis
and Component Groups from the former Measurement Systems Organization were added
to the Test and Measurement Organization to form the Measurement Organization.
He was General Manager of the Test and Measurement Organization from 1990 to
1998. He is a director of KLA-Tencor Instruments Corporation.
JOEL S. BIRNBAUM; AGE 61; SENIOR VICE PRESIDENT, RESEARCH AND DEVELOPMENT AND
DIRECTOR, HP LABORATORIES.
Dr. Birnbaum was elected a Senior Vice President in 1993. He became Vice
President, Research and Development and Director, HP Laboratories in 1991. He
was elected a Vice President in 1984. He is a director of the Corporation for
National Research Initiatives, the Monterey Bay Aquarium Research Institute and
Multimedia Medical Systems.
SUSAN D. BOWICK; AGE 50; VICE PRESIDENT, HUMAN RESOURCES.
Ms. Bowick was appointed a Vice President in 1997. She previously held
positions as Business Personnel Manager for the Computer Organization in 1995
and Personnel Manager for the San Diego Site in 1993.
S.T. JACK BRIGHAM III; AGE 59; SENIOR VICE PRESIDENT, CORPORATE AFFAIRS AND
GENERAL COUNSEL.
Mr. Brigham was elected a Senior Vice President in 1995 and a Vice President
in 1982. He became Vice President, Corporate Affairs in 1992. He has served as
General Counsel since 1976.
RAYMOND W. COOKINGHAM; AGE 55; VICE PRESIDENT AND CONTROLLER.
Mr. Cookingham was elected a Vice President in 1993. He has served as
Controller since 1986.
ANN M. LIVERMORE; AGE 40; VICE PRESIDENT AND GENERAL MANAGER, ENTERPRISE
COMPUTING SOLUTIONS ORGANIZATION.
Ms. Livermore was elected a Vice President in 1995 and became General
Manager of Worldwide Customer Support Operations in 1996. From 1993 to 1995, she
was a Sales and Marketing Manager of Worldwide Customer Support. She assumed her
current position with the Enterprise Computing Solutions Organization in 1998.
Ms. Livermore is a director of United Parcel Service.
ANTONIO M. PEREZ; AGE 53; VICE PRESIDENT AND GENERAL MANAGER, INKJET PRODUCTS
GROUP.
Mr. Perez was elected a Vice President and named General Manager of the
Inkjet Products Group in 1995 and has held those positions since then. From 1993
to 1995, he was General Manager of the Hardcopy Imaging Group.
LEWIS E. PLATT; AGE 57; CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AND CHAIRMAN OF THE EXECUTIVE COMMITTEE.
Mr. Platt has served as a director of the Company, President and Chief
Executive Officer since 1992 and has served as Chairman since 1993. He was an
Executive Vice President from 1987 to 1992. Mr. Platt held a number of
management positions in the Company prior to becoming its President, including
10
managing the Computer Systems Organization from 1990 to 1992. He is a director
of the David and Lucile Packard Foundation and serves on the Wharton School
Board of Overseers and the Cornell University Council.
WILLIAM V. RUSSELL; AGE 46; VICE PRESIDENT AND GENERAL MANAGER, ENTERPRISE
SYSTEMS AND SOFTWARE GROUP.
Mr. Russell was elected a Vice President and assumed his current post in
1998. In 1993, he was General Manager of the Computer Systems Organization in
the U.K. He was General Manager of Europe, Africa and the Middle East for the
Computer Systems Organization from 1994 to 1996, and became General Manager of
the Enterprise Systems Group in 1997.
CAROLYN M. TICKNOR; AGE 51; VICE PRESIDENT AND GENERAL MANAGER, LASERJET
SOLUTIONS GROUP.
Ms. Ticknor was named General Manager of the LaserJet Printer Group in 1994.
She was elected a Vice President in 1995 when the group reorganized and was
renamed the LaserJet Solutions Group. Ms. Ticknor is a director of FileNET
Corporation.
LEE S. TING; AGE 56; VICE PRESIDENT AND MANAGING DIRECTOR, GEOGRAPHIC
OPERATIONS, MANAGING DIRECTOR, AMERICAS OPERATIONS.
Mr. Ting assumed his current position as Vice President and Managing
Director, Geographic Operations in 1996. He had been Managing Director of the
Company's Asia Pacific region since 1993 and a Vice President since 1995. He was
Managing Director of Northeast Asia Operations from 1991 to 1993. He is a
director of Structured InterNetworks, Inc.
ROBERT P. WAYMAN; AGE 53; EXECUTIVE VICE PRESIDENT, FINANCE AND ADMINISTRATION
AND CHIEF FINANCIAL OFFICER.
Mr. Wayman has served as a director of the Company since December 1993. He
has been an Executive Vice President responsible for finance and administration
since 1992. He has held a number of financial management positions in the
Company and was elected a Vice President and Chief Financial Officer in 1984. He
is a director of CNF Transportation, Inc. and Sybase Inc. He also serves as a
member of the Kellogg Advisory Board to Northwestern University School of
Business and is Chairman of the Private Sector Council.
DUANE E. ZITZNER; AGE 51; VICE PRESIDENT AND GENERAL MANAGER, PERSONAL SYSTEMS
GROUP.
Mr. Zitzner was elected a Vice President and named General Manager of the
Personal Information Products Group in 1996. In 1993, he was General Manager of
the Network Server Division. From 1994 to 1996, he was General Manager of the
Networked Systems Business Unit. He continued as General Manager when the
Personal System Group became a group within the Computer Organization in 1997.
Information regarding compliance with Section 16(a) of the Securities
Exchange Act of 1934 is set forth on page 15 of the Notice and Proxy Statement,
which page is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding the Company's compensation of its named executive
officers is set forth on pages 16-28 of the Notice and Proxy Statement, which
pages are incorporated herein by reference. Information regarding the Company's
compensation of its directors is set forth on page 5 of the Notice and Proxy
Statement, which pages are incorporated herein by reference.
11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information regarding security ownership of certain beneficial owners and
management is set forth on pages 11-15 of the Notice and Proxy Statement, which
pages are incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements:
PAGE IN
ANNUAL REPORT
TO STOCKHOLDERS(*)
-------------------
Report of Independent Accountants.......................................... 62
Consolidated Statement of Earnings for the three years ended October 31,
1998..................................................................... 44
Consolidated Balance Sheet at October 31, 1998 and 1997.................... 45
Consolidated Statement of Cash Flows for the three years ended October 31,
1998..................................................................... 46
Consolidated Statement of Stockholders' Equity for the three years ended
October 31, 1998......................................................... 47
Notes to Consolidated Financial Statements................................. 48-61
- ------------------------
* Incorporated by reference from the indicated pages of the Company's 1998
Annual Report to Stockholders (excluding "Statement of Management
Responsibility" on page 62).
12
2. Financial Statement Schedules:
None.
3. Exhibits:
1. Not applicable.
2. None.
3(a). Registrant's Amended and Restated Articles of Incorporation, which appears as
Exhibit 3(a) to Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 30, 1998, which exhibit is incorporated herein by
reference.
3(b). Registrant's Amended By-Laws.
4. None.
5-8. Not applicable.
9. None.
10(a). Registrant's 1979 Incentive Stock Option Plan, which appears as Exhibit 10(a)
to Registrant's Annual Report on Form 10-K for the fiscal year ended October
31, 1983, which exhibit is incorporated herein by reference.*
10(b). Registrant's 1979 Incentive Stock Option Plan Agreements, which appear as
Exhibit 10(b) to Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1983, which exhibit is incorporated herein by reference.*
10(c). Letter dated September 24, 1984 to optionees advising them of amendment to
1979 Incentive Stock Option Plan Agreements (Exhibit 10(b) above), which
appears as Exhibit 10(c) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1984, which exhibit is incorporated herein by
reference.*
10(d). Registrant's Officers Early Retirement Plan, amended and restated as of
January 1, 1996, and First Amendment effective December 1, 1996 to the
Officers Early Retirement Plan, which appears as Exhibit 10(d) to Registrant's
Annual Report on Form 10-K for the fiscal year ended October 31, 1996, which
exhibit is incorporated herein by reference.*
10(e). Registrant's 1985 Incentive Compensation Plan, which appears as Exhibit 10(e)
to Registrant's Annual Report on Form 10-K for the fiscal year ended October
31, 1984, which exhibit is incorporated herein by reference.*
10(f). Registrant's 1985 Incentive Compensation Plan Stock Option Agreements, which
appear as Exhibit 10(f) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1984, which exhibit is incorporated herein by
reference.*
10(g). Registrant's Excess Benefit Retirement Plan, amended and restated as of
November 1, 1994, which appears as Exhibit 10(g) to Registrant's Annual Report
on Form 10-K for the fiscal year ended October 31, 1996, which exhibit is
incorporated herein by reference.*
10(h). Registrant's 1985 Incentive Compensation Plan restricted stock agreements,
which appear as Exhibit 10(h) to Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1985, which exhibit is incorporated herein
by reference.*
10(i). Registrant's 1987 Director Option Plan, which appears as Appendix A to
Registrant's Proxy Statement dated January 16, 1987, which appendix is
incorporated herein by reference.*
13
10(j). Registrant's 1989 Independent Director Deferred Compensation Program, which
appears as Exhibit 10(j) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1989, which exhibit is incorporated herein by
reference.*
10(k). Registrant's 1990 Incentive Stock Plan, which appears as Appendix A to
Registrant's Proxy Statement dated January 11, 1990, which appendix is
incorporated herein by reference.*
10(l). Registrant's 1990 Incentive Stock Plan stock option and restricted stock
agreements, which appear as Exhibit 10(l) to Registrant's Annual Report on
Form 10-K for the fiscal year ended October 31, 1990, which exhibit is
incorporated herein by reference.*
10(m). Resolution dated July 17, 1991 adopting amendment to Registrant's 1979
Incentive Stock Option Plan, which appears as Exhibit 10(m) to Registrant's
Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which
exhibit is incorporated herein by reference.*
10(n). Resolution dated July 17, 1991 adopting amendment to Registrant's 1985
Incentive Compensation Plan, which appears as Exhibit 10(n) to Registrant's
Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which
exhibit is incorporated herein by reference.*
10(o). Resolution dated July 17, 1991 adopting amendment to Registrant's 1987
Director Option Plan, which appears as Exhibit 10(o) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1991, which exhibit
is incorporated herein by reference.*
10(p). Resolution dated July 17, 1991 adopting amendment to Registrant's 1990
Incentive Stock Plan, which appears as Exhibit 10(p) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1991, which exhibit
is incorporated herein by reference.*
10(q). Registrant's 1995 Incentive Stock Plan, which appears as Appendix A to
Registrant's Proxy Statement dated January 13, 1995, which appendix is
incorporated herein by reference.*
10(r). Executive Severance Package dated January 10, 1996 between the Registrant and
Willem P. Roelandts, which appears as Exhibit 10(r) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1995, which exhibit
is incorporated herein by reference.*
10(s). Registrant's 1995 Incentive Stock Plan stock option and restricted stock
agreements, which appear as Exhibit 10(s) to Registrant's Annual Report on
Form 10-K for the fiscal year ended October 31, 1996, which exhibit is
incorporated herein by reference.*
10(t). Amendment dated November 21, 1996 adopting amendment to Registrant's 1995
Incentive Stock Plan, 1990 Incentive Stock Option Plan, 1987 Director Option
Plan, 1985 Incentive Compensation Plan, 1979 Incentive Stock Option Plan,
which appear as Exhibit 10(t) to Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1996, which exhibit is incorporated herein
by reference.*
10(u). Registrant's Executive Deferred Compensation Plan, Amended and Restated as of
November 21, 1996, which appears as Exhibit 10(u) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1996, which exhibit
is incorporated herein by reference.*
10(v). Registrant's 1997 Director Stock Plan which appears as exhibit 99 to
Registrant's Form S-8 filed on March 7, 1997, which exhibit is incorporated
herein by reference.*
14
10(w). VeriFone, Inc. Amended and Restated 1992 Non-Employee Directors' Stock Option
Plan which appears as exhibit 99.1 to Registrant's Form S-8 filed on July 1,
1997, which exhibit is incorporated herein by reference.*
10(x). VeriFone, Inc. Amended and Restated Incentive Stock Option Plan and form of
agreement which appears as exhibit 99.2 to Registrant's Form S-8 filed on July
1, 1997, which exhibit is incorporated herein by reference.*
10(y). VeriFone, Inc. Amended and Restated 1987 Supplemental Stock Option Plan and
form of agreement which appears as exhibit 99.3 to Registrant's Form S-8 filed
on July 1, 1997, which exhibit is incorporated herein by reference.*
10(z). Enterprise Integration Technologies Corporation 1991 Stock Plan and form of
agreement which appears as exhibit 99.4 to Registrant's Form S-8 filed on July
1, 1997, which exhibit is incorporated herein by reference.*
10(aa). VeriFone, Inc. Amended and Restated Employee Stock Purchase Plan which appears
as exhibit 99.1 to Registrant's Form S-8 filed on July 1, 1997, which exhibit
is incorporated herein by reference.*
10(bb). Registrant's Variable Pay Plan which appears as Appendix D to Registrant's
Proxy Statement dated January 12, 1998, which appendix is incorporated herein
by reference.*
10(cc). Registrant's 1998 Subsidiary Employee Stock Purchase Plan and the Subscription
Agreement which appear as Appendices E and E-1 to Registrant's Proxy Statement
dated January 12, 1998, respectively, which appendices are incorporated herein
by reference.*
10(dd). Registrant's 1999 Variable Pay Plan which appears as Appendix A to
Registrant's Proxy Statement dated January 12, 1999, which appendix is
incorporated herein by reference.*
11. Statement of computation of per share earnings.
12. Statement of computation of ratio of earnings to fixed charges.
13. Pages 31-64 (excluding order data and "Statement of Management
Responsibility") and the inside back cover of Registrant's 1998 Annual Report
to Stockholders.
14-17. Not applicable.
18. None.
19-20. Not applicable.
21. Subsidiaries of Registrant as of January 14, 1999.
22. None.
23. Consent of Independent Accountants.
24. Powers of Attorney. Contained in page 17 of this Annual Report on Form 10-K
and incorporated herein by reference.
25-26. Not applicable.
27. Financial Data Schedule.
28. None.
99. 1998 Employee Stock Purchase Plan Annual Report on Form 11-K.
- ------------------------
* Indicates management contract or compensatory plan, contract or arrangement.
Exhibit numbers may not correspond in all cases to those numbers in Item 601
of Regulation S-K because of special requirements applicable to EDGAR filers.
(b) Reports on Form 8-K
None
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HEWLETT-PACKARD COMPANY
Date: January 15, 1999
By /s/ D. CRAIG NORDLUND
-----------------------------------------
D. Craig Nordlund
Associate General Counsel and Secretary
16
POWER OF ATTORNEY
Know All Persons By These Presents, that each person whose signature appears
below constitutes and appoints D. Craig Nordlund and Ann O. Baskins, or either
of them, his or her attorneys-in-fact, for such person in any and all
capacities, to sign any amendments to this report and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
either of said attorneys-in-fact, or substitute or substitutes, may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------------------------------------------- --------------------------------------------- -------------------
/s/ RAYMOND W. COOKINGHAM Vice President and Controller January 14, 1999
----------------------------------- (Principal Accounting Officer)
Raymond W. Cookingham
/s/ PHILIP M. CONDIT Director January 14, 1999
-----------------------------------
Philip M. Condit
/s/ PATRICIA C. DUNN Director January 14, 1999
-----------------------------------
Patricia C. Dunn
/s/ THOMAS E. EVERHART Director January 14, 1999
-----------------------------------
Thomas E. Everhart
/s/ JOHN B. FERY Director January 14, 1999
-----------------------------------
John B. Fery
/s/ JEAN-PAUL G. GIMON Director January 14, 1999
-----------------------------------
Jean-Paul G. Gimon
Director January , 1999
-----------------------------------
Sam Ginn
/s/ RICHARD A. HACKBORN Director January 14, 1999
-----------------------------------
Richard A. Hackborn
17
SIGNATURE TITLE DATE
- --------------------------------------------- --------------------------------------------- -------------------
/s/ WALTER B. HEWLETT Director January 14, 1999
-----------------------------------
Walter B. Hewlett
/s/ GEORGE A. KEYWORTH II Director January 14, 1999
-----------------------------------
George A. Keyworth II
/s/ DAVID M. LAWRENCE Director January 14, 1999
-----------------------------------
David M. Lawrence
/s/ SUSAN P. ORR Director January 14, 1999
-----------------------------------
Susan P. Orr
/s/ DAVID W. PACKARD Director January 14, 1999
-----------------------------------
David W. Packard
/s/ LEWIS E. PLATT Chairman, President and January 14, 1999
----------------------------------- Chief Executive Officer and
Lewis E. Platt Director (Principal Executive Officer)
/s/ ROBERT P. WAYMAN Executive Vice President January 14, 1999
----------------------------------- Finance and Administration,
Robert P. Wayman Chief Financial Officer and
Director (Principal Financial Officer)
18
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------------
1. Not applicable.
2. None.
3(a). Registrant's Amended and Restated Articles of Incorporation, which appears as Exhibit 3(a) to
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 1998, which exhibit is
incorporated herein by reference.
3(b). Registrant's Amended By-Laws.
4. None.
5-8. Not applicable.
9. None.
10(a). Registrant's 1979 Incentive Stock Option Plan, which appears as Exhibit 10(a) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1983, which exhibit is incorporated herein by
reference.*
10(b). Registrant's 1979 Incentive Stock Option Plan Agreements, which appear as Exhibit 10(b) to Registrant's
Annual Report on Form 10-K for the fiscal year ended October 31, 1983, which exhibit is incorporated
herein by reference.*
10(c). Letter dated September 24, 1984 to optionees advising them of amendment to 1979 Incentive Stock Option
Plan Agreements (Exhibit 10(b) above), which appears as Exhibit 10(c) to Registrant's Annual Report on
Form 10-K for the fiscal year ended October 31, 1984, which exhibit is incorporated herein by
reference.*
10(d). Registrant's Officers Early Retirement Plan, amended and restated as of January 1, 1996, and First
Amendment effective December 1, 1996 to the Officers Early Retirement Plan, which appear as Exhibit
10(d) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1996, which
exhibit is incorporated herein by reference.*
10(e). Registrant's 1985 Incentive Compensation Plan, which appear as Exhibit 10(e) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1984, which exhibit is incorporated herein by
reference.*
10(f). Registrant's 1985 Incentive Compensation Plan Stock Option Agreements, which appear as Exhibit 10(f) to
Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1984, which exhibit is
incorporated herein by reference.*
10(g). Registrant's Excess Benefit Retirement Plan, amended and restated as of November 1, 1994, which appears
as Exhibit 10(g) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1996,
which exhibit is incorporated herein by reference.*
10(h). Registrant's 1985 Incentive Compensation Plan restricted stock agreements, which appear as Exhibit 10(h)
to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1985, which exhibit is
incorporated herein by reference.*
10(i). Registrant's 1987 Director Option Plan, which appears as Appendix A to Registrant's Proxy Statement
dated January 16, 1987, which appendix is incorporated herein by reference.*
19
EXHIBIT
NUMBER DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------------
10(j). Registrant's 1989 Independent Director Deferred Compensation Program, which appears as Exhibit 10(j) to
Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1989, which exhibit is
incorporated herein by reference.*
10(k). Registrant's 1990 Incentive Stock Plan, which appears as Appendix A to Registrant's Proxy Statement
dated January 11, 1990, which appendix is incorporated herein by reference.*
10(l). Registrant's 1990 Incentive Stock Plan stock option and restricted stock agreements, which appear as
Exhibit 10(l) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1990,
which exhibit is incorporated herein by reference.*
10(m). Resolution dated July 17, 1991 adopting amendment to Registrant's 1979 Incentive Stock Option Plan,
which appears as Exhibit 10(m) to Registrant's Annual Report on Form 10-K for the fiscal year ended
October 31, 1991, which exhibit is incorporated herein by reference.*
10(n). Resolution dated July 17, 1991 adopting amendment to Registrant's 1985 Incentive Compensation Plan,
which appears as Exhibit 10(n) to Registrant's Annual Report on Form 10-K for the fiscal year ended
October 31, 1991, which exhibit is incorporated herein by reference.*
10(o). Resolution dated July 17, 1991 adopting amendment to Registrant's 1987 Director Option Plan, which
appears as Exhibit 10(o) to Registrant's Annual Report on Form 10-K for the fiscal year ended October
31, 1991, which exhibit is incorporated herein by reference.*
10(p). Resolution dated July 17, 1991 adopting amendment to Registrant's 1990 Incentive Stock Plan, which
appears as Exhibit 10(p) to Registrant's Annual Report on Form 10-K for the fiscal year ended October
31, 1991, which exhibit is incorporated herein by reference.*
10(q). Registrant's 1995 Incentive Stock Plan, which appears as Appendix A to Registrant's Proxy Statement
dated January 13, 1995, which appendix is incorporated herein by reference.*
10(r). Executive Severance Package dated January 10, 1996 between the Registrant and Willem P. Roelandts, which
appears as Exhibit 10(r) to Registrant's Annual Report on Form 10-K for the fiscal year ended October
31, 1995, which exhibit is incorporated herein by reference.*
10(s). Registrant's 1995 Incentive Stock Plan stock option and restricted stock agreements, which appear as
Exhibit 10(s) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1996,
which exhibit is incorporated herein by reference.*
10(t). Amendment dated November 21, 1996 adopting amendment to Registrant's 1995 Incentive Stock Plan, 1990
Incentive Stock Option Plan, 1987 Director Option Plan, 1985 Incentive Compensation Plan, 1979 Incentive
Stock Option Plan, which appear as Exhibit 10(t) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1996, which exhibit is incorporated herein by reference.*
10(u). Registrant's Executive Deferred Compensation Plan, Amended and Restated as of November 21, 1996, which
appears as Exhibit 10(u) to Registrant's Annual Report on Form 10-K for the fiscal year ended October
31, 1996, which exhibit is incorporated herein by reference.*
10(v). Registrant's 1997 Director Stock Plan which appears as exhibit 99 to Registrant's Form S-8 filed on
March 7, 1997, which exhibit is incorporated herein by reference.*
10(w). VeriFone, Inc. Amended and Restated 1992 Non-Employee Directors' Stock Option Plan which appears as
exhibit 99.1 to Registrant's Form S-8 filed on July 1, 1997, which exhibit is incorporated herein by
reference.*
20
EXHIBIT
NUMBER DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------------
10(x). VeriFone, Inc. Amended and Restated Incentive Stock Option Plan and form of agreement which appears as
exhibit 99.2 to Registrant's Form S-8 filed on July 1, 1997, which exhibit is incorporated herein by
reference.*
10(y). VeriFone, Inc. Amended and Restated 1987 Supplemental Stock Option Plan and form of agreement which
appears as exhibit 99.3 to Registrant's Form S-8 filed on July 1, 1997, which exhibit is incorporated
herein by reference.*
10(z). Enterprise Integration Technologies Corporation 1991 Stock Plan and form of agreement which appears as
exhibit 99.4 to Registrant's Form S-8 filed on July 1, 1997, which exhibit is incorporated herein by
reference.*
10(aa). VeriFone, Inc. Amended and Restated Employee Stock Purchase Plan which appears as exhibit 99.1 to
Registrant's Form S-8 filed on July 1, 1997, which exhibit is incorporated herein by reference.*
10(bb). Registrant's Variable Pay Plan which appears as Appendix D to Registrant's Proxy Statement dated January
12, 1998, which appendix is incorporated herein by reference.*
10(cc). Registrant's 1998 Subsidiary Employee Stock Purchase Plan and the Subscription Agreement which appear as
Appendices E and E-1 to Registrant's Proxy Statement dated January 12, 1998, respectively, which
appendices are incorporated herein by reference.*
10(dd). Registrant's 1999 Variable Pay Plan which appears as Appendix A to Registrant's Proxy Statement dated
January 12, 1999, which appendix is incorporated herein by reference.*
11. Statement of computation of per share earnings.
12. Statement of computation of ratio of earnings to fixed charges.
13. Pages 31-64 (excluding order data and "Statement of Management Responsibility") and the inside back
cover of Registrant's 1998 Annual Report to Stockholders.
14-17. Not applicable.
18. None.
19-20. Not applicable.
21. Subsidiaries of Registrant as of January 14, 1999.
22. None.
23. Consent of Independent Accountants.
24. Powers of Attorney. Contained in page 17 of this Annual Report on Form 10-K and incorporated herein by
reference.
25-26. Not applicable.
27. Financial Data Schedule.
28. None.
99. 1998 Employee Stock Purchase Plan Annual Report on Form 11-K.
- ------------------------
* Indicates management contract or compensatory plan, contract or arrangement.
21