Mercury News Tuesday 12th September 2006

Dunn to step down as HP chairwoman in January

REMAINS ON BOARD, REPLACED BY CEO MARK HURD

By Michelle Quinn, Therese Poletti and Scott Duke Harris

Hewlett-Packard said Chairman Patricia Dunn will step down in January, to be replaced by Chief Executive Mark Hurd, amid the fallout from the widening scandal from boardroom leaks. The company also said today that board member George ``Jay'' Keyworth, the company's longest-standing board member, will resign immediately. In a statement, Keyworth admitted that he leaked information to CNET, and that he believed his comments were ``in the best interest of the company and also did not involve the disclosure of confidential or damaging information.'' Keyworth said he was frequently asked by the company to speak with reporters, both on the record, and on background, and that his comments were always praised by senior company officials. HP also issued an apology to former board member Tom Perkins. ``On behalf of HP, I apologize to Tom Perkins for the intrusion into his privacy,'' Hurd said in a statement. ``I thank Tom for his contributions, his principles and his help in getting HP past this episode toward its rightful place as the envy of corporate America.'' HP also said that while it did have Keyworth speak frequently with the press to explain HP's interests, the board does not believe his contact with CNET in January 2006 was ``vetted through appropriate channels.'' Chairman Dunn also expressed regret for the intrusion into Keyworth's privacy.

Paul Sakuma / Associated Press archives Hewlett-Packard's Patricia Dunn speaks during a news conference about then-new HP CEO Mark Hurd on March 30, 2005.

The Palo Alto company also said that retired HP executive Richard Hackborn, who has served on the board since 1992, will become the company's lead independent director, also in January. Hackborn worked for 33 years at HP and served as board chairman in 2000.

The move to change the role of Dunn, who will remain an HP director, was prompted by a widening scandal involving an investigation into board leaks that she ordered and which involved questionable checks of the telephone records of board members and reporters.

The fact that Dunn will remain on the board may indicate that she has strong support among fellow board members. Investors reacted to the announcement by pushing the price of HP stock up about 1 percent to $36.75 a share in early trading.

In a statement, Dunn defended the company's investigation into board room leaks to the media but apologized for the method of the investigation.

``Recent events that have taken place follow an important investigation that was required after the board sought to resolve the persistent disclosure of confidential information from within its ranks,'' she said.

``These leaks had the potential to affect not only the stock price of HP but also that of other publicly traded companies. Unfortunately, the investigation, which was conducted with third parties, included certain inappropriate techniques. These went beyond what we understood them to be, and I apologize that they were employed.''

• HP scandal: Previous coverage and related documents
• Langberg: HP's response to spy scandal falls short

http://www.mercurynews.com/mld/mercurynews/15500975.htm

This is the day when the news really broke concerning Patti Dunn's resignation as Chairman of Hewlett-Packard's Board of Directors to be effective 18th January 2007. This was revealed in an 8K filing with the US Securities and Exchange Commission along with the excellent coverage as noted above by Mercury News. I've left the links in above to their coverage and comment. They provide past articles in the days leading up to this event, some hard documentation and comment. It's the best coverage I've found so far. As noted, she will continue as a Director of Hewlett-Packard. I wrote the following Email guessing at a possible Email address.

---------- Forwarded Message ----------

Subject: You were not naive. You were doing your job: hang in there.
Date: Tuesday 12 September 2006 22:49
From: Gary D Chance
To: Patricia Dunn

I've seen the news in the Financial Times online and read the Newsweek article online which I thought was very well done. You were doing your job as Chair of the HP Board. Tom Perkins came off in the article as a gunslinging cowboy who wanted to act as the chief executive of HP. His character displayed by his novel writing and "yachting" extravaganza plus promotion for these were offensive revealing a character unsuitable to stability and lacking a foundation which anyone could respect. How did he get on the HP Board in the first place? He came off as someone who was trying to run HP from the Board and tangled with you.

Unfortunately, while doing the right thing in identifying the source of the leaks which revealed extremely confidential corporate important planning review information (I assume this because I have not seen the leaked information), you got caught out by rogues way out on the periphery after having properly gone through the legal department who appears to have actually done the work in getting the investigation underway including yourself.

You were absolutely correct in not letting the leaking continue to grow to what it had been before and did exactly the right thing in the right way. Sadly, those carrying out the work failed to carry out an investigation that was free of dark implications with respect to legality.

I am terribly sorry to read about your battle with various cancers. I have great empathy with all that you are going through at the moment since I've been there myself as you well know including the cancer about which you do not know. I had melanoma surgery in August 1979 and was out for about ten days while in hospital. I did not tell anyone except Dick Francis since it was my obligation to do so. That was a mistake, but it's also another story.

I had the good fortune to be treated by Frederick M Golomb MD who saved my life as you can see. I do not know if he is still practising or not, but as I was told by the dermatologist, 'you cannot find a better oncological surgeon in the US.' He was right. He taught surgery at NYU Medical School and had a private practise. He is the best of the best in every way. Please try to track him down if he is still practising and get his opinion to see if he can offer any help.

I will never forget those years leading up to 1983, my dealings with WFIA, Bill and the dinner we three had at the Washington Square Bar & Grill in January 1983. You were a "safe pair of hands" then and now without a doubt. I have every confidence in your integrity and ability and know that you were doing your best to do the job which was your responsibility now as you did then in all the turmoil which occurred toward the end of 1982 and into 1983 at WFIA.

You certainly have all my support. I just wanted to let you know how I see this from London after reading the news reports and knowing you and Bill. All the best to both of you. I'm guessing that you have this Email address because I wanted to send this along immediately. It will either bounce or probably be buried under a mass of other Emails.

I note that you have a place in Hawaii. I was born there a year after Pearl Harbour was attacked. My father was a Naval officer stationed there at that time. He survived by not taking a Chinese Junk out to Ford Island at the last minute. It was scheduled for departure at 07:45 that Sunday morning. He changed his mind at the last minute. It saved his life. He's now buried in Arlington Cemetery.

During the Korean War he was captain of a food cargo ship, USS Merapi, that sailed out of Oakland taking supplies to Korea. We lived in Oakland then in 1951 and to the end of 1952. I went out into San Francisco Bay once on his ship when it came out of dry dock for trial runs. For a nine-year-old that was quite an experience to be out on the Bay in a Naval ship. It was even more incredible that he took me aboard. Somehow I think that might be frowned upon.

So, you see the Bay area was part of my life back in the days when Howdy Doody et al where on the tube. That was the first television I had every seen.

Fight your corner, lady, and never give up. There's much to preserve and protect, and many bandits who want to take it away. I hope this gets through.

*****End of the Email*****

The Email address I used turned up a Patricia Dunn in Hewlett-Packard's legal department. It's either very difficult at present to have the same name as the Chairman of the Board, or this is a dummy account for people like me. Anyway, here's the Out of Office reply. I hope that it gets forwarded. If not, here it is in public. I suspect that Pattie Dunn has little time for anything at the moment.

---------- Forwarded Message ----------

Subject: Out of Office AutoReply: You were not naive. You were doing your job: hang in there.
Date: Tuesday 12 September 2006 22:48
From: "Dunn, Patricia (Legal)"
To: "Gary D Chance"

Hello,

I will be out of the office Wednesday, September 13. I will not be checking messages during my absence. I will respond to mesages when I return to the office on Thursday, September 14.

Patty

Patricia Dunn
Legal Specialist
HP Corporate Legal Department

*****End of the Email*****

CNNMoney.com September 12 2006: 2:01 PM EDT

The long rise of HP's chair Patricia Dunn

From secretary to executive, Dunn's out-of-control investigation helped her lose her post.

NEW YORK (CNNMoney.com) -- HP Chairman Patricia Dunn, who will leave her post after after the company's Jan. 18 meeting, came to the position after a long and well regarded career first at Barclay's Global Investors.

Dunn, 52, became the center of a boardroom storm in the last week after revelations that an outside investigator for the company's board may have used illegal methods to spy on some directors as well as reporters as it probed leaks of sensitive company information.

Patricia Dunn will step down as HP chairwoman next year, to be succeeded by CEO Mark Hurd.

HP named Dunn non-executive chairman immediately after CEO Carly Fiorina stepped down from the position on February 9, 2005, according to the company.

http://money.cnn.com/2006/09/12/news/newsmakers/dunn_bio/index.htm?postversion=2006091214