2012 Canadian Enhanced Early Retirement Program

Transcription

1 Hewlett-Packard (Canada) C Canadian Enhanced Early Retirement Prgram Summary Plan Descriptin August 2012

2 Overview The 2012 Canadian Enhanced Early Retirement (EER) Prgram is a vluntary prgram being ffered by Hewlett-Packard (Canada) C. (HP) t eligible Canadian emplyees prjected t have 65 r mre pints (age plus years f qualifying service) as f August 31, HP is ffering the EER Prgram as a special pprtunity fr Canadian emplyees clser t retirement t cnsider vluntarily retiring frm HP with enhanced benefits. Please nte that nt all eligible emplyees are guaranteed acceptance int the EER Prgram. Althugh eligible emplyees must have 65 pints t apply fr participatin, HP will determine the final age-plus-service pints required t be accepted based n the ttal number that apply and the EER Prgram s target funding. Yu will be ntified whether yur applicatin has been accepted and, if accepted, when yu will retire frm HP. This means yu may need t have mre than 65 pints in rder t be accepted and retire under the EER Prgram. If yu are nt accepted in the EER Prgram, yur applicatin will be kept cnfidential and will nt have any effect n yur emplyment with HP. If yu qualify fr retirement under the EER Prgram, yu will qualify fr: 1. Retirement incentive 2. Special health benefit cntinuatin during the incentive perid 3. Special Equity Award treatment 4. Retirement cunselling and career transitin supprt 5. Certain benefits nrmally available t HP retirees These EER Prgram features are in additin t benefits yu may have already earned under the HP Retirement and Savings Prgram and stck prgrams. The 2012 Canadian Enhanced Early Retirement Prgram is cmpletely vluntary, but is nly available during a special electin perid frm August 16 t September 21, If yu apply and are accepted fr participatin in the EER Prgram, yu must retire n the retirement date designated by HP and cmmunicated t yu fllwing yur electin t retire. Designated retirement dates will generally be Nvember 30, 2012, but may be delayed fr up t a year based n business needs (nt later than Nvember 30, 2013) fr a limited number f emplyees slely at HP s discretin. Retirement dates fall n the last day each mnth. Participants in the EER Prgram will nt have the pprtunity t revke their electin fllwing the end f the EER Prgram electin perid, and failure t cntinue emplyment with HP until the designated retirement date will result in frfeiture f all EER Prgram benefits. If yu are eligible t apply fr the EER Prgram, yu will receive a persnalized benefit statement that estimates the benefits yu may expect t receive if yu are accepted fr retirement. In additin t this summary, answers t frequently asked questins ( FAQs ) are available n the EER site at and will be updated peridically based n questins received. If yu have mre questins abut the EER Prgram that are nt answered in any f these materials, please pen a Cntact HR case. The fllwing chart summarizes the benefits ffered under the EER Prgram. The infrmatin in the fllwing chart describes the mre specific terms and cnditins that must be met in rder t receive the benefits f the EER Prgram. August Canadian EER Summary Plan Descriptin HP Cnfidential 1

3 EER Prgram Feature 1. Retirement Incentive 2. Special Health Benefit Cntinuatin Highlights f 2012 Canadian Enhanced Early Retirement Prgram Eligible emplyees will receive three weeks base pay (r n-target earnings, where applicable) fr each year f service. The minimum payment is three mnths pay; the maximum is 18 mnths pay. In additin, emplyees with less than 20 years f service will receive an additinal incentive f tw mnths base pay (r n-target earnings, where applicable), and thse with 20 r mre years f service will receive an additinal incentive f six mnths base pay (r n-target earnings, where applicable). Yur incentive perid is the ttal f the three weeks per year f service (up t 18 mnths) plus either tw mnths r six mnths, depending n whether yu have 20 r mre years service. Fr example, an emplyee with 25 years service will have an incentive perid f 75 weeks (which is less than 18 mnths) plus an additinal 6 mnths fr having mre than 20 years service, fr a ttal f 101week- lng incentive perid. Special tax-sheltering arrangements, such as transferring a prtin f the payment t the HP Retirement and Savings Prgram, will als be available. Yu may add all r part f yur Retirement Incentive Amunt t the HP Retirement and Savings Prgram, which includes a Grup RRSP, defined cntributin (DC), and defined benefit (DB) cmpnents. Yu may als elect t have all r a prtin f yur Retirement Incentive Amunt t be paid as taxable cash. If yur incentive is added t yur existing HP DB pensin benefit: yur retirement incentive will be applied t enhance yur benefit under the pensin plan and will be summarized n yur retirement ptin frm t be prvided by the HP Benefits Centre. Yur first mnthly pensin payment will include the value f the enhanced benefit. If yur incentive is added t yur existing HP DC pensin benefit, transferred t the Sun Life Grup RRSP r yur persnal RRSP, r paid in cash: these payments will be made thrugh HP Payrll. Benefits will typically be paid within 30 days after yu have terminated yur emplyment and submitted yur signed Release Agreement. If yu have previus service under an HP defined benefit (DB) pensin plan, yu will have the ptin t use sme r all f yur EER Prgram payment t enhance yur DB plan benefits. Fr example, if under the EER Prgram yu retire befre age 65, yu may chse t purchase a bridge benefit with a prtin f yur retirement incentive payment. A bridge benefit is an additinal mnthly payment that enhances the value f yur mnthly DB pensin payments between the age that yu retire and age 65. Alternatively, yu may chse t have yur incentive amunt paid in cash. In this case, these payments will be made thrugh HP Payrll and are subject t tax withhlding. Benefits will nt be eligible fr rllver r ther special tax treatment, and will be taxable as rdinary incme in the year f receipt. We will prvide yu with the pprtunity t cntinue yur active medical and dental cverage at the same cst as when yu were an active emplyee thrughut the incentive perid. If yu are eligible under ne f the grandfathered retiree benefits plans, yu will be able t transfer t the applicable retiree benefit prgram when yur extended active medical and dental cverage end. August Canadian EER Summary Plan Descriptin HP Cnfidential 2

4 3. Special Equity Award Treatment 4. Career Transitin and Outplacement Supprt 5. Other Retirement Benefits Participatin in the EER Prgram will qualify sme emplyees fr the special treatment accrded t a retiree under the HP stck plans. The particular treatment depends n the plan yur awards were issued under, as well as the terms f yur award and the circumstances f yur terminatin f emplyment. Details are shwn in the Equity Award sectin, later in this dcument. HP will prvide yu with access free f charge t career transitin and utplacement supprt services with Lee Hecht Harrisn (LHH). LHH is a prfessinal services firm with lcatins acrss Canada specializing in career transitin cnsulting ( During yur decisin-making perid, LHH will: prvide yu with the supprt f a persnal Career Cach deliver infrmative webinars help yu deal with persnal reactins, identify critical decisin-making criteria, understand the jb market, cnsider ptins, cnnect t resurces If yu are accepted t the EER Prgram, LHH will: prvide ne-n-ne Career Cach t prvide strategy and guidance help yu prepare a resume preparatin and marketing plan help imprve yur interviewing and negtiating skills prvide n-line prfile develpment give yu access t the LHH Career Resurce Netwrk Current HP retirees enjy the fllwing pst-retirement benefits: Life and accidental death & dismemberment insurance cnversin ptins Discunts and/r rebates n the purchase f HP prducts and wide variety f gds and services These benefits will be extended t yu under the EER Prgram. Eligibility fr the EER Prgram Yu are eligible t apply fr retirement under the 2012 Canadian Enhanced Early Retirement Prgram if yu are a regular fulltime r regular part-time Canadian emplyee (scheduled t wrk 20 r mre hurs per week) n an HP Canadian payrll, and the cmbinatin f yur age and qualifying years f service are prjected t be 65 r mre as f August 31, The cmbinatin f yur age and years f qualifying service is referred t as pints. Pints are calculated as fllws, and are als shwn n yur persnalized benefit statement: Yur age is calculated as bth full and partial years, with partial mnths runded up t the next full mnth. Fr example, if yu were brn n July 29, 1955, yu will be 57 years, ne mnth and 2 days n August 31, This is runded up t 57 years and tw mnths. Yur years f qualifying service are calculated the same way, but using yur service date as reflected n the HP Glbal Human Resurces Management System. Yur service date is als the date used t determine yur annual vacatin amunts, but keep in mind it may nt be the same as yur hire date r yur cmpany senirity date. It may be different, fr example, if yu left HP in the past and were rehired, r yu ve taken certain types f leave f absence, r yu were part f a cmpany that was acquired by r merged with HP. Yu may view yur service date n the jb histry panel n prtal. G t the main page f prtal > Careers, Plicies & Ttal Rewards > Persnal Infrmatin > Persnal Data > Jb Histry. (Be sure t reference yur "service date", nt yur hire date r cmpany senirity date.) As an example, if yur service date is July 10, 1995, yu will have 17 years and tw mnths f qualifying service n August 31, Yur pints are calculated by adding tgether yur age and years f qualifying service as f August 31, Using the examples abve, the age f 57 years and tw mnths are cmbined with 17 years and tw mnths f service, resulting in 74 years and fur mnths, r 74 and 4/12 years. The resulting pints, including credit fr partial years f age plus service, are August Canadian EER Summary Plan Descriptin HP Cnfidential 3

5 Even if yu meet these requirements, yu are nt eligible fr the EER Prgram if any f the fllwing apply: Yu wrk less than 20 hurs per week Yu are an HP Canada Winnipeg uninized emplyee Yu are an emplyee f HP Advanced Slutins Emplyees nt paid n the HP Canadian payrll, including Inpats (thse emplyees frm ther cuntries wrking in Canada, but still n the freign cuntry s payrll system) Yu are an intern, temprary emplyee, r Limited Term Emplyee Yur mst recent hire r rehire date with HP is n r after January 1, 2011 Yu transferred t Canada frm a nn-canadian HP affiliate n r after January 1, 2011 Yu are a member f the Cuntry Leadership Team Yu are a Senir Vice President r higher Emplyees in a lng-term disability status as f July 1, 2012 and wh d nt return during the electin windw HP emplyees assigned t the CIBC HRO accunt that have been ntified f terminatin (r advised f pending terminatin) as a result f accunt clsure. Nte: Emplyees n Shrt-Term Disability (STD) as at August 1, 2012 are eligible t apply t the EER Prgram, but if they are apprved under the Prgram, they wuld frfeit any future disability benefits as f their retirement date. In additin t being pen t eligible emplyees wh are actively at wrk (r n certain apprved leaves f absence) during the electin perid, the EER Prgram is als pen t therwise eligible emplyees wh have the required number f pints and wh previusly terminated under a WFR Prgram r retired between May 23 and August 15, Keep in mind that there may be a limit n the number f emplyees permitted t retire under the EER Prgram, and nt all eligible emplyees are guaranteed acceptance. Acceptance int the EER Prgram will be determined as fllws: After the electin perid ends, we will assess prjected EER Prgram csts based n the number f emplyees wh applied fr participatin. We will then determine the final age-plus-service pints required t be accepted under the EER Prgram. All electing emplyees will be ntified f their acceptance status as sn as pssible after the electin perid ends n September 21, Only emplyees wh have applied, are eligible, and wh satisfy the final pints requirement will qualify fr retirement under the EER Prgram. Emplyees with fewer pints than the final required minimum will nt be accepted. Infrmatin shwn n yur 2012 Canada EER Prgram Statement Yur 2012 Canada EER retirement incentive payment has been determined using yur mnthly base pay rate (r n-target earnings, fr cmmissined salespeple with an established target pay rate) as f July 2, 2012, and assumes yu leave HP n the Prgram's required retirement date (generally Nvember 30, 2012, but ptentially up t 12 mnths later, if a later date is cmmunicated t yu after yu elect t participate). Yur final EER benefit will be based n yur pay rate as f July 2, 2012, and eligible service earned thrugh yur actual retirement date. Yur 2012 Canada EER retirement incentive payment will be ffset (reduced) by the amunt f any similar benefits r payments yu may have received if yu left HP r EDS under a previus EER prgram, r if yu received (r are eligible t receive) severance benefits as part f a wrkfrce reductin, Vluntary Severance Incentive (VSI) prgram, r ther arrangement fr any terminatins that have ccurred r will ccur between January 1, 2000 and the end f the 2012 Canada EER Prgram. If applicable, an estimate f the ffset amunt fr which HP has data is shwn n the first page f yur Persnal Statement; this amunt is subject t further review and audit. Yur 2012 Canada EER Prgram Persnal Statement was prepared based n available data and has been carefully reviewed fr accuracy. Hwever, if there is any discrepancy between the infrmatin shwn n yur Persnal Statement and the terms f the 2012 Canada EER Prgram, the Prgram terms will gvern. All data used in the preparatin f yur Persnal Statement is subject t further audit and verificatin. August Canadian EER Summary Plan Descriptin HP Cnfidential 4

6 If yu are a part-time emplyee, the EER retirement incentive payment shwn n yur 2012 EER Prgram Persnal Statement has been calculated using yur part-time base pay. Hwever, if yu wrked 80% r mre f yur HP career as a full-time emplyee, yur base pay rate has been adjusted t reflect equivalent full-time pay. Electing t Participate in the EER Prgram In rder t participate in the EER Prgram: Yu must submit an electin frm in the frm and manner specified by HP during the enrlment perid that begins n August 16, 2012, and ends n September 21, 2012 at 5:00 p.m. Pacific Time; Yu must have age-plus-service pints (as defined abve) equal t r greater than the final EER Prgram requirement determined by HP after the electin perid ends; Yu must retire frm HP n the retirement date designated by HP (generally Nvember 30, 2012, but ptentially as late as Nvember 30, 2013, at HP s discretin) which will be cmmunicated t yu fllwing yur apprval t retire under the EER Prgram; and Yu must sign and return the applicable Release Agreement n later than 45 days after yur retirement date. If yu d nt submit an electin frm by 5:00 p.m., Pacific Time n September 21, 2012, yu will nt be eligible t elect participatin in the EER Prgram at a later date. Changing Yur Electin If yu elect t participate in the EER Prgram but then change yur mind, yu may revke yur electin by returning t the nline electin frm and selecting N at the bttm f the frm; hwever, yu must d this befre the final September 21 deadline. Any changes t yur electin received after 5:00 p.m. Pacific Time n September 21, 2012 will nt be accepted. Retiring under the EER Prgram In rder t participate in the EER Prgram, yu must have age-plus-service pints equal t r greater than the final EER Prgram requirement and yu must terminate yur HP emplyment n the retirement date designated by HP (generally Nvember 30, 2012, but ptentially as late as Nvember 30, 2013 fr a limited number f emplyees at HP s discretin). Signing and Returning the Release Agreement In rder t receive benefits under the EER Prgram, yu will need t submit the applicable signed EER Release Agreement. Yu have up t 45 days after yur retirement date t return yur signed Release Agreement, but yu may turn it in anytime n r after yur retirement date. Emplyees in a Directr-level psitin r higher must cmplete the versin f the Release Agreement that applies t Directr-level psitins. If yu are accepted but yu d nt return the applicable Release Agreement r yu mdify it in any way, yu will be cnsidered t have vluntarily terminated yur emplyment with HP and yur emplyment will be terminated n yur designated retirement date, but yu will nt receive EER Prgram benefits. WFR and EER Release Agreements Emplyees wh previusly terminated under a WFR Prgram between May 23 and August 15, 2012 will be required t sign the WFR Release as well as the EER Prgram Release Agreement. If yu qualify fr EER Prgram participatin, the EER Prgram Release Agreement will need t be returned t Canada HR Operatins within 45 days after the date yu are ntified f acceptance int the EER Prgram (r within 45 days f yur HP terminatin date, if later). August Canadian EER Summary Plan Descriptin HP Cnfidential 5

7 EER Prgram Benefits The vluntary EER Prgram is an enhanced benefits prgram ffered t eligible emplyees in recgnitin f their significant cntributin and service t HP. If yu enrl and are accepted int the prgram, yu will benefit frm the fllwing five EER Prgram cmpnents: 1. Retirement incentives 2. Special health benefit cntinuatin during yur incentive perid 3. Special Equity Award treatment 4. Retirement cunselling and career transitin supprt 5. Certain benefits nrmally available t HP retirees 1. Retirement Incentives Eligible emplyees will receive three weeks base pay (r n-target earnings, where applicable) fr each year f service. The minimum payment is three mnths pay; the maximum is 18 mnths pay. In additin, emplyees with less than 20 years f service will receive an additinal retirement incentive f tw mnths base pay (r n-target earnings, where applicable), and thse with 20 r mre years f service will receive an additinal retirement incentive f six mnths base pay (r n-target earnings), where applicable. Special tax-sheltering arrangements, such as transferring a prtin f the payment t the HP Retirement and Savings Prgram, will als be available. Calculating Yur Retirement Incentive Yur retirement incentive is made up f tw cmpnents: a service-based prtin and an additinal tw mnths' base pay r n-target earnings, where applicable (six mnths fr emplyees with 20 r mre years f service). The cmbinatin f these tw pieces makes up the ttal Retirement Incentive Amunt. If yu have previus service under an HP defined benefit (DB) pensin plan, yu will have the ptin t use sme r all f yur EER Prgram payment t enhance yur DB plan benefits. Otherwise, yur Retirement Incentive Amunt will be paid in cash. Special tax-sheltering arrangements, such as transferring a prtin f the payment t the HP Retirement and Savings Prgram r yur persnal RRSP (including designating a prtin as an eligible retiring allwance, if applicable), will als be available. Calculating Yur Years f Service The service-based prtin f the retirement incentive is determined by yur years f service with HP, frm yur service date thrugh yur date f retirement under the EER Prgram (ranging frm Nvember 30, 2012 t Nvember 30, 2013 fr mst participants). Yur service date is the same date used t determine vacatin accrual and used in the calculatin f yur pints (as described abve). Yu can view yur service date n the jb histry panel n prtal. G t the main page f prtal > Careers, Plicies & Ttal Rewards > Persnal Infrmatin > Persnal Data > Jb Histry. Be sure t reference yur service date, nt yur hire date r cmpany senirity date. Just like the calculatin f eligibility pints, yur years f service are determined as full years and mnths, with partial mnths runded up t full mnths. Hwever, service is nt prjected, and instead is calculated as f the date yu actually terminate emplyment. Fr example, Mike has a service date f April 26, 1989 and may be eligible t retire under the EER Prgram n Nvember 30, He will have 23 years, seven mnths and 4 days f service as f the date f his retirement. This is runded up t 23 years and eight mnths. August Canadian EER Summary Plan Descriptin HP Cnfidential 6

8 Calculating Yur Mnthly Base Pay Yur mnthly base pay is generally determined based n yur scheduled hurs and pay rate as f July 2, 2012, withut adjustment fr any changes ccurring after July 2, Items such as vertime, shift differential and bnuses are nt part f base pay. If yu are a cmmissined salespersn with an established target pay amunt, yur mnthly base pay is determined using yur target pay. If yu are eligible but left HP befre July 2, 2012, yur mnthly base pay is determined as f yur terminatin date. If yu wrk part-time, yur mnthly base pay is determined based n yur scheduled hurs. If yu currently wrk part-time but wrked full-time fr 80% r mre f yur HP career, yur mnthly base pay is calculated as the full-time equivalent fr purpses f the EER Prgram. The 2012 Canadian EER Retirement Incentive Examples: Allan has wrked fr HP fr 22 years and earns a weekly base pay f $1,000. He will receive a payment f $66,000 (three weeks x 22 years). Since he has mre than 20 years f service, he will als receive six mnths pay, r $26,000 (26 weeks x $1,000), fr a ttal EER prgram payment f $92,000 ($66,000 + $26,000). Betty has wrked fr HP fr 15 years and earns a weekly base pay f $1,000. She will receive a payment f $45,000 (3 weeks x 15 years). Since she has less than 20 years f service, she will als receive tw mnths pay, r $8,600, fr a ttal EER prgram payment f $53,600 ($45,000 + $8,600). Offset fr Other Severance-type Payments The EER Prgram benefit payable t yu will be ffset (reduced) by any ther EER r severance-type benefit that yu have received, r is payable t yu, since January 1, All severance-type payments are cvered, including: Amunts paid r payable as a result f yur participatin in the 2003 HP EER prgrams; A Vluntary Severance Incentive benefit; An Alternate Offer under HP s Redeplyment Prgram; Payments under HP s Wrkfrce Management Prgrams; Payments under an HP Wrkfrce Reductin Prgram; Payments made under a mutual separatin agreement r ther individual severance arrangement; and Payments under any similar early retirement, severance, wrkfrce reductin, redeplyment r separatin prgrams ffered by Electrnic Data Systems (EDS). Tax-Sheltering Payment Optins Special tax-sheltering arrangements, such as receiving a prtin f the payment as a tax-deferred retiring allwance, r transferring a prtin f the payment t the HP Retirement and Savings Prgram r yur persnal RRSP (including designating a prtin as an eligible retiring allwance if applicable), will als be available. Yu may receive yur Retirement Incentive Amunt as a cntributin t yur defined cntributin pensin accunt, up t Incme Tax Act (ITA) limits. The ITA limit fr ttal cntributins during the year, including emplyee and emplyer defined cntributin pensin cntributins made up t Nvember 30, 2012, cannt exceed the lesser f 18% f yur 2012 earnings r $23,820. Enhancing yur Defined Benefit Pensin If yu have a defined benefit (DB) pensin with HP, yu have the ptin t use yur Retirement Incentive Amunt t purchase ne r mre f the fllwing DB pensin enhancements: Imprved bridge benefit (up t age 65) Imprved early retirement benefit Please visit the HP Retirement Navigatr t estimate the amunt f imprved benefits that can be purchased with yur lump sum. August Canadian EER Summary Plan Descriptin HP Cnfidential 7

9 Payment f Yur Retirement Incentive Amunt If yur Retirement Incentive Amunt is added t yur existing HP defined benefit pensin, yur retirement incentive will be applied t enhance yur benefit under the pensin plan and will be summarized n yur retirement ptin frm t be prvided by the HP Benefits Centre in Nvember. Yur first mnthly pensin payment will include the value f the enhanced benefit. Yu shuld allw apprximately 30 t 90 days fllwing yur retirement date t cmplete the necessary applicatin frms and receive yur payment. If yur Retirement Incentive Amunt is paid in cash, these payments will be made thrugh HP Payrll. Benefits will typically be paid within 30 days after yu have terminated yur emplyment and submitted yur signed Release Agreement. Incme Tax Act (ITA) Implicatins Taxatin f yur retirement incentive amunt will depend n hw it is paid t yu: If yur incentive is added t yur existing HP pensin benefit, there will be n tax withheld at the time f such transfer f the lump sum retirement incentive. If yur incentive is paid in cash, these payments will be made thrugh HP Payrll and are subject t tax withhlding. Benefits will nt be eligible fr rllver r ther special tax treatment, and will be taxable as rdinary incme in the year f receipt. Yu may receive yur Retirement Incentive Amunt as a cntributin t yur defined cntributin pensin accunt, up t Incme Tax Act (ITA) limits. The ITA limit fr ttal cntributins during the year, including emplyee and emplyer defined cntributin pensin cntributins made up t Nvember 30, 2012, cannt exceed the lesser f 18% f yur 2012 earnings r $23,820. The ITA places limits n the amunt f any temprary bridge pensin payable up t age 65, and requires an early retirement reductin t be applied t yur lifetime pensin, if yu begin receiving yur pensin befre attaining the earliest f age 60, 30 years f service, r 80 age plus service pints. The ITA als places limits n the annual cntributin that can be made t yur defined cntributin accunt. If Yu Die During the EER Prgram Perid If yu are eligible fr the EER Prgram and die during the electin perid befre making an electin t participate, r after making an electin but befre yu take payment f yur EER Prgram benefit, yur spuse r ther beneficiary will be eligible fr benefits. 2. Special Health Benefit Cntinuatin Yu will cntinue t be eligible fr active medical and dental cverage, subject t the emplyee cst share fr the duratin f yur incentive perid. Upn terminatin f active medical and dental cverage, yu will be able t participate in a grandfathered retiree benefits prgram, if yu are eligible t d s. Infrmatin abut retiree prgram csts is available at the Retiree Site at Keep in mind active and retiree premium rates are subject t change annually starting January 1. T determine if yu qualify fr retiree health benefits, and details f the cverage and premium rates, please access the YBR site, and click n the categry that best describes yu. August Canadian EER Summary Plan Descriptin HP Cnfidential 8

10 3. Equity Awards Participatin in the EER Prgram will qualify sme emplyees fr the special treatment accrded t a retiree under the HP stck plans. The particular treatment depends n the plan yur awards were issued under, as well as the terms f yur award, and the circumstances f yur terminatin f emplyment. Fr mst EER participants (see exceptins, belw), the fllwing rules apply: PRUs - Yu will receive a release f shares (if any) in cnnectin with any perfrmance-based restricted units (PRUs) yu currently hld frm HP sharehlder-apprved plans based n the actual perfrmance results f thse PRU prgrams at the end f the 3-year perfrmance perid. Any release f shares with respect t yur PRU grants will be pr-rated based n yur number f whle mnths f active service during the perfrmance perid f each prgram under which yu hld a grant. If actual perfrmance is belw the minimum threshld, n shares will be released. Restricted Stck - Any restricted stck awards r restricted stck units yu currently hld frm HP sharehlder-apprved plans will either cntinue t vest r vest in full upn terminatin, depending n the terms and cnditins f the applicable award agreement. Stck Optins - Any nn-qualified stck ptins r Stck Appreciatin Rights (SARs) yu currently hld frm HP sharehlder-apprved plans (fr example, the 2004 Stck Incentive Plan) will autmatically vest, and yu will have up t three years t exercise utstanding nn-qualified stck ptins r SARs (r until the riginal expiratin date, if earlier). This treatment als applies t Cmpaq plan awards granted after May 2002 and EDS plan awards granted after August 26, This generally prvides a lnger exercise perid than wuld therwise apply fr a vluntary r invluntary terminatin. Fr stck ptins and SARs issued pursuant t plans r agreements that were assumed by HP as part f a merger r acquisitin, the treatment will depend n yur terminatin status and the terms f the applicable plans r agreements. Fr example, retirees hlding pre-merger EDS awards will generally receive accelerated vesting and a tw-year perid t exercise utstanding nn-qualified stck ptins (r until the riginal expiratin date, if earlier). The expiratin date shwn n the Merrill Lynch website is the last day that yur stck ptin(s) is available fr exercise. Yu must exercise yur stck ptin(s), if at all, n a day that the New Yrk Stck Exchange is pen fr trading and befre the Expiratin/Last Date t Exercise, which is shwn n the Grant Summary page lcated in the Equity Plans tab n the Merrill Lynch website. The New Yrk Stck Exchange is pen frm Mnday thrugh Friday, 9:30 a.m. t 4:00 p.m. (Eastern Time), except fr stck exchange hlidays. Yu are slely respnsible fr tracking yur wn stck ptin expiratin dates. Exceptins The exceptins described in the fllwing chart will apply t the Equity Award treatment described abve. Exceptin Grup Equity Award Treatment EER Prgram participants wh either: Terminated emplyment between May 23 and August 15, 2012 due t a WFR r similar invluntary terminatin; r Were ntified f a WFR r similar invluntary terminatin between May 23 and August 15, 2012, regardless f terminatin date. Yur equity award treatment will be the same as fr all ther EER Prgram participants with respect t PRUs and restricted stck. Hwever, yur stck ptins will retain the treatment prvided under the WFR r similar invluntary terminatin prgram. Fr WFR, unvested stck ptins will be frfeited and vested stck ptins must be exercised, if at all, within 3 mnths f terminatin r befre the riginal expiratin date, if earlier. Fr questins abut yur equity awards, please access the Merrill Lynch website at r call Merrill Lynch at August Canadian EER Summary Plan Descriptin HP Cnfidential 9

11 4. Retirement Cunselling and Career Transitin Supprt Lee Hecht Harrisn (LHH) has been retained by HP t prvide EER participants with career-related services. These services are designed t help yu make infrmed decisins abut yur future, as well as supprt a transitin t a new career, whether that is a mve t anther cmpany, the pursuit f entrepreneurial pprtunities r active retirement frm the wrkfrce. Thrugh a cmbinatin f webinars, as well as the supprt f an LHH Career Cach, the Career Decisin Prgram is available thrughut the EER electin perid and can help yu t: Deal effectively with yur persnal reactins Identify the critical decisin criteria that are unique t yu Understand the jb market and the changing wrld f wrk Assess yur wn ptins including wrk, retirement, entrepreneurial paths and mre Cnnect t resurces Take actin If yu are accepted int the EER prgram and chse t wrk with LHH during yur career transitin, yu will have access t services that will supprt yu n matter what yur future fcus. If yu are cnsidering ther career pprtunities, LHH can prvide yu with the necessary skills t cnduct effective jb searches, r if yu are cnsidering active retirement, LHH can prvide guidance n alternative appraches t cnventinal retirement. Other resurces include resume develpment, assistance in develping search strategies and netwrking and interview training. Regardless f the path yu chse t take, LHH can tailr their services t meet yur needs. Rehire Plicy Emplyees wh retire under the EER Prgram will nt be eligible t be rehired r t wrk as a cntractr fr HP fr a perid f 24 mnths fllwing retirement. 5. Benefits nrmally available t HP retirees T review infrmatin regarding benefits available t HP retirees, please visit ur Retiree Health and Wellness Benefits site by accessing the YBR tl (Yur Benefits Resurces). Other Infrmatin Yu Shuld Knw The 2012 Canadian Enhanced Early Retirement Prgram includes a Retirement Incentive Amunt, eligibility fr special health benefit cntinuatin during yur incentive perid, retirement cunselling and career transitin supprt, and ther certain benefits available t HP retirees. Special treatment fr certain stck awards applies t sme participants. This summary describes the special benefits r treatment resulting frm participatin in the EER Prgram, but des nt describe all f the terms and cnditins that apply in rder t be eligible fr r receive benefits frm the HP Retirement and Savings Prgram, retiree benefit prgrams and ther benefit plans. Yu shuld refer t the fficial plan dcuments fr additinal infrmatin abut the pensin and retiree benefit prgrams. The terms and cnditins fr participatin in the EER are als gverned by the applicable plan dcuments fr each f its five cmpnents. In the event f a cnflict between this summary r ther materials and the fficial plan dcuments, the terms f the fficial plans will be cnsidered as crrect. HP has full discretin t interpret the terms f all f HP s emplyee benefit plans, including eligibility prvisins and benefit amunts under the EER Prgram. HP reserves the right t amend and terminate any f its benefit plans at any time. Retirement under the EER Prgram des nt change this. August Canadian EER Summary Plan Descriptin HP Cnfidential 10

12 Key Dates August 14: August 16 September 21: August 16: Late August Early September: September 21: September 28: Octber 31: Nvember 30: Detailed infrmatin packages, including FAQs and persnalized statements are distributed Electin perid Online chice-maker tl as part f the HP Retirement Navigatr ges live Emplyee briefing sessins in select lcatins and webcast infrmatin sessins begin Cmpleted electin frms are due Cnfirmatin sent t emplyees accepted t participate in the EER Cnfirmatin f the retirement date sent t emplyees and their managers Retirements begin (sme peple may retire at a later date, under special circumstances) Administrative Infrmatin Claiming Benefits If yu are eligible fr the EER Prgram, yu shuld have received an annuncement letter n August 14, 2012, and yur persnalized statement shuld arrive at yur hme address shrtly after that. If yu believe yu shuld be eligible but did nt receive an annuncement letter r statement, please submit a Cntact HR case. In rder t participate in and claim benefits under this EER Prgram, yu must file an electin frm (in the manner specified by HP) during the perid beginning August 16 and ending September 21, 2012 at 5:00 p.m. Pacific Time, yu must have sufficient pints t qualify fr acceptance, and yu must terminate yur HP emplyment n the retirement date designated by HP. In additin t the electin frm, participants receiving the EER Prgram retirement incentive in an HP pensin plan must cmplete all frms regularly required t receive benefits frm the applicable pensin plan. Denial f Benefits If yu believe yu are eligible t participate in the 2012 Canadian Enhanced Early Retirement Prgram but did nt receive an EER Prgram infrmatin packet mailed t yur hme, that yu shuld have qualified fr acceptance int the EER Prgram based n yur ttal pints, r yu believe that yur EER Prgram retirement incentive r benefits have nt been determined crrectly, yu shuld first submit yur inquiry thrugh a Cntact HR case. If yur eligibility r ther cncerns cannt be reslved thrugh this channel, yu may escalate yur cncerns t: Canada Ttal Rewards c/ Tanya McLaughlin Hewlett-Packard Canada 419 King Street West, Suite 3550 Oshawa, ON L1J 2K5 August Canadian EER Summary Plan Descriptin HP Cnfidential 11

13 Planning fr Retirement Planning fr retirement includes mre than yur cmpany-prvided pensin. It als includes yur persnal savings and gvernment benefits. Persnal incme surces play a key rle in yur retirement incme and may include registered savings (retirement savings plans, tax-free savings accunts), nn-registered savings (stcks, bnds, GICs, mutual funds, real estate) and incme frm part-time r cntract emplyment, rental incme and ther pst-retirement investments. Gvernment Benefits are als an imprtant surce f retirement incme. Canada/Quebec Pensin Plan (C/QPP) is payable as early as age 60 t retired emplyees. As f January 2012, the maximum C/QPP mnthly pensin payable at age 65 is $987 per mnth. C/QPP payments increase annually in accrdance with the Cnsumer Price Index. Old Age Security (OAS) Payable at age 65. As f July 2012, the maximum OAS mnthly pensin payable at age 65 is $545 per mnth. OAS benefits increase quarterly, based n the Cnsumer Price Index. The C/QPP and OAS figures abve are nt specific t yu but are indicative f maximums available t Canadians wh meet the required C/QPP and OAS eligibility criteria fr such amunts. Fr mre infrmatin abut gvernment benefits, please visit the Human Resurces and Skills Develpment Canada website at: r the Régie des rentes du Québec website at The decisin is yurs We understand this is an imprtant decisin. We are cmmitted t prviding yu with the materials yu need t make an infrmed chice. The fllwing infrmatin surces will help with yur decisin: Annuncement and detailed letter Persnalized statement Chice-maker tl n the HP Retirement Navigatr Live emplyee briefing sessins (in select lcatins) and emplyee webcasts Please take the time t thrughly review the materials t help ensure yu make the best decisin fr bth yu and yur family. If yu have additinal questins, please submit a case t Cntact HR. August Canadian EER Summary Plan Descriptin HP Cnfidential 12