UNITED STATES 
                      SECURITIES AND EXCHANGE COMMISSION 
                         Washington, D.C. 20549 
    
                                Form S-8 
   
                         REGISTRATION STATEMENT  
                                Under  
                       THE SECURITIES ACT OF 1933 
                                             
              Exact name of issuer as specified in its charter: 
   
                         HEWLETT-PACKARD COMPANY 
   
   State or other jurisdiction of               I.R.S. Employer 
   incorporation or organization:               Identification No.: 
           California                              94-1081436 
   
                  Address of principal executive offices: 
              3000 Hanover Street, Palo Alto, California 94304 
   
                         Full title of the plan: 
              HEWLETT-PACKARD COMPANY 1997 DIRECTOR STOCK PLAN 
   
                   Name and address of agent for service: 
                           D. CRAIG NORDLUND 
              3000 Hanover Street, Palo Alto, California 94304 
   
  Telephone Number, including area code, of agent for service: (415)857-1501 
   
   
                    CALCULATION OF REGISTRATION FEE 
   
  Title of                      Proposed        Proposed          
  Securities       Amount       Maximum         Maximum          Amount of 
  To be            To Be        Offering Price  Aggregate        Registration 
  Registered       Registered   Per Share*      Offering Price*  Fee 
 ---------------------------------------------------------------------------- 
  Common Stock 
  Par Value $1.00  
  per Share        1,000,000    $56.50          $56,500,000      $19,483 
    
  *Estimated pursuant to Rule 457 solely for purposes of calculating the 
  registration fee.  The price  is based upon the average of  the high and 
  low prices of the Common Stock on March 3, 1997, as reported on the New 
  York Stock Exchange Composite Tape. 
   
    <PAGE>
 
                                
                                 PART II 
                                 
             INFORMATION REQUIRED IN THE REGISTRATION STATEMENT 
   
  Item 3.   Incorporation of Documents by Reference. 
       
            Hewlett-Packard Company (the "Company") hereby incorporates by 
  reference in this registration statement the following documents: 
   
           (a)   Annual Report on Form 10-K for the fiscal year ended October 
                 31, 1996; 
   
           (b)   None; and 
   
           (c)   The description of the Company's capital stock contained in 
                 the Company's Registration Statement under the Exchange Act 
                 filed on or about November 6, 1957 and the Amended and  
                 Restated Articles of Incorporation which appeared as  
                 Exhibit 3(a) to the Annual Report on Form 10-K for the 
                 fiscal year ended October 31, 1996. 
   
            All documents subsequently filed by the Company pursuant to  
  Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the 
  filing of a post-effective amendment to this registration statement which 
  indicates that all securities offered hereby have been sold or which 
  deregisters all securities remaining unsold, shall be deemed to be 
  incorporated by reference in this registration statement and to be a part 
  hereof from the date of the filing of such documents. 
   
  Item 4.   Description of Securities. 
            
            Not Applicable      
                 
  Item 5.   Interests of Named Experts and Counsel. 
   
            Inapplicable. 
   
  Item 6.   Indemnification of Directors and Officers. 
   
            Section 204 of the General Corporation Law of the State of  
  California ("California Law") authorizes a corporation to adopt a provision 
  in its articles of incorporation eliminating the personal liability of  
  directors to corporations and their shareholders for monetary damages for 

  breach or alleged breach of directors' "duty of care."  Following a 
  California corporation's adoption of such a provision, its directors are 
  not accountable to corporations and their shareholders for monetary damages 
  for conduct constituting negligence (or gross negligence) in the exercise 
  of their fiduciary duties; however, directors continue to be subject to 
  equitable remedies such as injunction or rescission.  Under California 
  Law, a director also continues to be liable for (1) a breach of his or her 
  duty of loyalty; (2) acts or omissions not in good faith or involving 
  intentional misconduct or knowing violations of law; (3) illegal payments 
  of dividends; and (4) approval of any transaction from which a director 
  derives an improper personal benefit.  The adoption of such a provision in 
  the articles of incorporation also does not limit directors' liability for 
  violations of the federal securities laws. 
   
            Section 317 of the California Law makes a provision for the 
  indemnification of officers, directors and other corporate agents in terms 
  sufficiently broad to indemnify such persons, under certain circumstances, 
  for liabilities (including reimbursement for expenses incurred) arising 
  under the Securities Act of 1933, as amended (the "Securities Act").  An 
  amendment to Section 317 provides that the indemnification provided by 
  this section is not exclusive to the extent additional rights are 
  authorized in a corporation's articles of incorporation. 
   
            The Company has adopted provisions in its Amended Articles of 
  Incorporation which eliminate the personal liability of its directors to 
  the Company and its shareholders for monetary damages for breach of the 
  directors' fiduciary duties in certain circumstances and authorize the 
  Company to indemnify its officers, directors and other agents to the 
  fullest extent permitted by law.   
   
  Item 7.   Exemption from Registration Claimed. 
   
            Inapplicable. 
       
  Item 8.   Exhibits. 
   
            See Exhibit Index. 
   
  Item 9.   Undertakings. 
   
            (a)   Rule 415 Offering. 
   
                 The undersigned registrant hereby undertakes: 
   
            (1)  To file, during any period in which offers or sales are 
                 being made, a post-effective amendment to this registration 
                 statement: 
   
                 (i)  To include any prospectus required by Section 10(a)(3) 
                      of the Securities Act; 
   
                (ii)  To reflect in the prospectus any facts or events 
                      arising after the effective date of the registration 
                      statement (or the most recent post-effective amendment 
                      thereof) which, individually or in the aggregate, 
                      represent a fundamental change in the information set 
                      forth in the registration statement; 
   
               (iii)  To include any material information with respect to the 
                      plan of distribution not previously disclosed in the 
                      registration statement or any material change to such 

                      information in the registration statement;  
   
            Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do 
  not apply if the registration statement is on Form S-3 or Form S-8, and  
  the information required to be included in a post-effective amendment by  
  those paragraphs is contained in periodic reports filed by the registrant 
  pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated 
  by reference in the registration statement. 
    
            (2)  That, for the purpose of determining any liability under  
  the Securities Act, each such post-effective amendment shall be deemed to 
  be a new registration statement relating to the securities offered therein, 
  and the offering of such securities at that time shall be deemed to be the 
  initial bona fide offering thereof. 
   
           (3)  To remove from registration by means of a post-effective 
  amendment any of the securities being registered which remain unsold at 
  the termination of the offering. 
   
           (b) Filings Incorporating Subsequent Exchange Act Documents by 
               Reference. 
   
           The undersigned registrant hereby undertakes that, for purposes  
  of determining any liability under the Securities Act, each filing of the 
  registrant's annual report pursuant to Section 13(a) or Section 15(d) of 
  the Exchange Act that is incorporated by reference in the registration 
  statement shall be deemed to be a new registration statement relating to 
  the securities offered therein, and the offering of such securities at 
  that time shall be deemed to be the initial bona fide offering thereof. 
   
           (c) Request for Acceleration of Effective Date or Filing of 
  Registration Statement on Form S-8. 
   
           Insofar as indemnification for liabilities arising under the 
  Securities Act may be permitted to directors, officers and controlling 
  persons of the registrant pursuant to the foregoing provisions, or 
  otherwise, the registrant has been advised that in the opinion of the 
  Commission such indemnification is against public policy as expressed in 
  the Securities Act and is, therefore, unenforceable.  In the event that a 
  claim for indemnification against such liabilities (other than the payment 
  by the registrant of expenses incurred or paid by a director, officer or 
  controlling person of the registrant in the successful defense of any 
  action, suit or proceeding) is asserted by such director, officer or 
  controlling person in connection with the securities being registered, the 
  registrant will, unless in the opinion of its counsel the matter has been 
  settled by controlling precedent, submit to a court of appropriate 
  jurisdiction the question whether such indemnification by it is against 
  public policy as expressed in the Securities Act and will be governed by 
  the final adjudication of such issue. 
 
 
    <PAGE>
 
 
                                SIGNATURES 
   
            Pursuant to the requirements of the Securities Act of 1933, as 
  amended, the registrant certifies that it has reasonable grounds to 
  believe that it meets all of the requirements for filing on Form S-8 and 
  has duly caused this registration statement to be signed on its behalf by 
  the undersigned, thereunto duly authorized, in the City of Palo Alto, 
  State of California, on this 7th day of March, 1997.  
   
 
                                               HEWLETT-PACKARD COMPANY 
                                               By: /s/Ann O. Baskins
                                                   -----------------          
                                                   Ann O. Baskins          
                                                   Assistant Secretary  
                                                   & Managing Counsel 
  

                            POWER OF ATTORNEY 
 
       KNOW ALL MEN BY THESE PRESENTS, that the persons whose signatures  
  appear below constitute and appoint D. Craig Nordlund and Ann O. Baskins, 
  and each of them, as true and lawful attorneys-in-fact and agents with  
  full power of substitution and resubstitution, for him or her and in his  
  or her name, place and stead, in any and all capacities to sign the Form 
  S-8 Registration Statement pertaining to the Hewlett-Packard Company 1997 
  Director Stock Plan, and any or all amendments (including post-effective 
  amendments) to said Form S-8 Registration Statement, and to file the 
  same,  with all exhibits thereto, and other documents in connection 
  therewith, with the Securities and Exchange Commission, granting unto 
  said attorneys-in-fact and agents full power and authority to do and 
  perform each and every act and thing requisite and necessary to be done,
  as fully to all intents and purposes as he or she might or could do in
  person, hereby ratifying and confirming all that said attorneys-in-fact 
  and agents or their substitute or substitutes may lawfully do or cause to
  be done by virtue hereof. 
 
      Pursuant to the requirements of the Securities Act of 1933, this  
  Registration Statement has been signed below by the following persons 
  in the capacities and on the dates indicated.  Moreover, the undersigned 
  hereby also certify that to the best of their knowledge and belief the
  issuer meets all of the requirements for filing on Form S-8. 
 
  Signature                              Title                    Date 
 
 /s/Raymond W. Cookingham    Vice President and Controller  March 3, 1997   
  ------------------------    (Principal Accounting Officer) 
 Raymond W. Cookingham 
 
 /s/Thomas E. Everhart                 Director             February 28, 1997 
 ------------------------  
 Thomas E. Everhart 
 
 /s/John B. Fery                       Director             February 28, 1997 
 ------------------------ 
 John B. Fery     
 
 /s/Jean-Paul G. Gimon                Director              March 3,1997
 ------------------------               
 Jean-Paul G. Gimon                                    
 
 /s/Sam Ginn                           Director             February 28, 1997 
 ------------------------ 
 Sam Ginn          
 
 /s/Richard A. Hackborn                Director             February 28, 1997 
 ------------------------ 
 Richard A. Hackborn 
 
                                       Director                        
 ------------------------ 
 Walter B. Hewlett                      
 
 /s/George A. Keyworth II              Director             February 28, 1997 
  ------------------------ 
 George A. Keyworth II 
 
                                       Director    
 ------------------------               
 David M Lawrence, M.D.                             
 
 /s/Paul F. Miller, Jr.                Director             March 3, 1997   
 ------------------------ 
 Paul F. Miller, Jr.                                 
 
 /s/Susan P. Orr                       Director             February 28, 1997 
 ------------------------     
 Susan P. Orr 
                                               
                                       Director                     
 ------------------------ 
 David W. Packard                                 
 
 /s/Lewis E. Platt             Chairman, President and      March 2, 1997   
 ------------------------      Chief Executive Officer 
 Lewis E. Platt             (Principal Executive Officer) 
 
 /s/Robert P. Wayman          Executive Vice President,     February 26, 1997 
 ------------------------     Finance and Administration 
 Robert P. Wayman             (Chief Financial Officer) 
                                    and Director 
<PAGE>
               
 

                                  EXHIBIT INDEX 
   
   
        Exhibit No. 
   
        1-4              Not applicable. 
   
        5                Opinion re legality. 
     
        6-22             Not applicable.   
   
        23.1             Consent of Independent Accountants.  Found 
                         at page 8 of this registration statement and 
                         incorporated herein by reference. 
   
        23.2             Consent of Counsel.  Contained with the 
                         opinion filed as Exhibit 5 hereto and 
                         incorporated herein by reference. 
   
        24               Powers of attorney.  Contained in the signature  
                         pages (pages 5 - 6) of this Form S-8 registration 
                         statement and incorporated herein by reference. 
   
        25-98            Not applicable. 
   
        99               Hewlett-Packard Company 1997 Director Stock 
                         Plan. 
 
 
    <PAGE>
    
 
                                EXHIBIT 5 
  March 7, 1997 
 
  Hewlett-Packard Company  
  3000 Hanover Street 
  Palo Alto, California 94304 
 
         1,000,000 Shares of Common Stock of Hewlett-Packard Company 
         Offered pursuant to the 1997 Director Stock Plan 
 
  Dear Sir or Madam: 
 
  I have examined the proceedings taken and the instruments executed  
  in connection with the organization and present capitalization of  
  Hewlett-Packard Company (the "Company") and the reservation for issuance  
  and authorization of the sale and issuance from time to time of not in  
  excess of 1,000,000 shares of the Company's Common Stock (the "Shares")  
  pursuant to the terms of the Company's 1997 Director Stock Plan.  The  
  Shares are the subject of a Registration Statement on Form S-8 under  
  the Securities Act of 1933, as amended, which is being filed with the  
  Securities and Exchange Commission and to which this opinion is to be  
  attached as an exhibit. 
 
  Upon the basis of such examination, I am of the following opinion: 
 
  1.  The authorized shares of the Company consist of 300,000,000 shares of 
  Preferred Stock and 2,400,000,000 shares of Common Stock. 
 
  2.  The proper corporate proceedings necessary to the reservation for  
  issuance and the authorization of the sale and issuance from time to time 
  of not in excess of 1,000,000 shares of the Common Stock of the Company  
  pursuant to the Company's 1997 Director Stock Plan have been duly taken 
  and, when issued pursuant to such plan, the Shares will be duly and  
  validly issued and fully paid and nonassessable. 
 
  3.  When the above-mentioned registration statement relating to the Shares 
  has become effective and when the listing of the Shares on the New York  
  and Pacific Stock Exchanges has been authorized, all authorizations,  
  consents, approvals, or other orders of all United States regulatory  
  authorities required for the issuance of Shares will have been obtained. 
 
      You are further advised that I consent to the use of this opinion as an  
  exhibit to the above-mentioned Registration Statement. 
 
                                              Very truly yours, 
 
                                              /s/Ann O. Baskins
                                              -----------------              
                                              Ann O. Baskins 
                                              Assistant Secretary 
                                              and Managing Counsel 
 
 
<PAGE>
 
 
                                 Exhibit 23.1 
 
                      CONSENT OF INDEPENDENT ACCOUNTANTS 
 
 
  We hereby consent to the incorporation by reference in this Registration 
  Statement on Form S-8 of our report dated November 18, 1996, which appears 
  on page 52 of the 1996 Annual Report to the Shareholders of Hewlett-Packard 
  Company, which is incorporated by reference in Hewlett-Packard Company's  
  Annual Report on Form 10-K for the year ended October 31, 1996. 
 
 
 
  /s/Price Waterhouse LLP 
  Price Waterhouse LLP 
  San Jose, California 
  March 3, 1997 

 
  <PAGE>
 
                                Exhibit 23.2 

                              CONSENT OF COUNSEL 
 
  Contained with the opinion filed as Exhibit 5 hereto and incorporated  
  herein by reference. 
 
 
<PAGE>
                               
                                 Exhibit 99 
 
                           HEWLETT-PACKARD COMPANY 
                                
                          1997 DIRECTOR STOCK PLAN 
                                
               PART 1.   PLAN ADMINISTRATION AND ELIGIBILITY 
  
  I.     Purpose 
  
          The purpose of this 1997 Director Stock Plan (the "Plan") of
  Hewlett-Packard Company (the "Company") is to encourage ownership in the
  Company by outside directors of the Company (each, a "Non-Employee
  Director," or collectively, the "Non-Employee Directors") whose continued
  services are considered essential to the Company's continued progress and
  thus to provide them with a further incentive to remain as directors of
  the Company. 
  
  II.    Administration 
  
         The Board of Directors (the "Board") of the Company or any
  committee (the "Committee") of the Board that will satisfy Rule 16b-3 of
  the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
  any regulations promulgated thereunder, as from time to time in effect,
  including any  successor rule ("Rule 16b-3"), shall supervise and
  administer the Plan. The Committee shall consist solely of two or more
  non-employee directors of the Company, who shall be appointed by the Board.
  A member of the Board shall be deemed to be a "non-employee director" only
  if he satisfies such requirements as the Securities and Exchange Commission
  may establish for non-employee directors under Rule 16b-3. Members of the
  Board receive no additional compensation for their services in connection
  with the administration of the Plan. 
  
      The Board or the Committee may adopt such rules or guidelines as it
  deems appropriate to implement the Plan. All questions of interpretation
  of the Plan or of any shares issued under it shall be determined by the
  Board or the Committee and such determination shall be final and binding
  upon all persons having an interest in the Plan. Any or all powers and
  discretion vested in the Board or the Committee under this Plan may be
  exercised by any subcommittee so authorized by the Board or the Committee
  and satisfying the requirements of Rule 16b-3. 
  
  III.    Participation in the Plan 
  
          Each member of the Board who is not an employee of the Company or
  any of its subsidiaries or affiliates shall be eligible to receive payment
  for his Annual Retainer (as defined in Section XII below) under the Plan. 
  
  IV.     Stock Subject to the Plan 
  
          The maximum number of shares of the Company's $1 par value Common
  Stock ("Common Stock") which may be issued under the Plan shall be One
  Million (1,000,000). The limitation on the number of shares which may be
  issued under the Plan shall be subject to adjustment as provided in Section
  X of the Plan. 
  
         If any outstanding option under the Plan for any reason expires or
  is terminated without having been exercised in full, the shares allocable
  to the unexercised portion of such option shall again become available for
  grant pursuant to the Plan. 

    <PAGE>

                          PART 2.   TERMS OF THE PLAN 
                                
  V.     Effective Date of the Plan 
  
         The Plan shall take effect on the date of adoption by the
  shareholders of the Company.  The Plan shall terminate on February 24,
  2007, unless earlier terminated by the Board of Directors or the
  Committee. 
  
  VI.    Time for Granting Options and Issuing Shares 
  
         No options shall be granted, and no Common Stock Payments (as
  defined in Section VII below) shall be made, after the date on which this
  Plan terminates. The applicable terms of this Plan, and any terms and
  conditions applicable to the options granted or the shares issued prior to
  such date, shall survive the termination of the Plan and continue to apply
  to such options and shares. 
  
  VII.   Terms and Conditions 
  
       A. Compensation Alternatives. 
  
          1. Beginning with the 1997 Plan Year (as defined in Section XII
  below), each Non-Employee Director will be entitled to select one of the
  following alternative means of payment for the value of his Annual
  Retainer: 
  
            (i)  A minimum of fifty percent of the value of his Annual
                 Retainer in the form of a Common Stock payment (a "Common
                 Stock Payment") and the balance in cash (a "Cash Payment");
                 or 
  
            (ii) A minimum of fifty percent of the value of his Annual
                 Retainer in the form of an option to purchase shares of
                 Common Stock (an "Option Payment") and a Cash Payment. 
  
          2. If any Non-Employee Director fails to notify the Secretary of 
  the Company in writing by February 1 of the preceding Plan Year (or by
  February 15, 1997 for the Plan Year commencing March 1, 1997) of his
  desired means to receive payment of the Annual Retainer for the next Plan
  Year, then he shall be deemed to have elected an Option Payment for fifty
  percent of the value of his Annual Retainer, with the remaining fifty
  percent in cash. Any such election, or any modification or termination of
  such an election, shall be filed with the Company on a form prescribed by
  the Board or the Committee for this purpose. 
  
       B. Common Stock Payment. 
  
          1.  Date of Payment. The shares constituting any Common Stock 
  Payment shall be issued automatically on March 1 of each Plan Year (or, 
  if March 1 is not a business day, on the next succeeding business day),
  commencing March 1, 1997. Each award of a Common Stock Payment shall be
  evidenced by an agreement which shall reflect the terms and conditions 
  of the Common Stock Payment and such additional terms and conditions as 
  may be determined by the Board or the Committee. 
  
         2.  Number of Shares Subject to Common Stock Payment. The total
  number of shares of Common Stock included in each Common Stock Payment 
  shall be determined by dividing the amount of the Annual Retainer that is
  to be paid in stock by the Fair Market Value (as defined in Section XII
  below) of a share of Common Stock on March 1 (or, if March 1 is not a 
  business day, on the next succeeding business day). It shall be equal to
  the largest number of whole shares determined as follows: 
  
          50% or more, if applicable, of Annual Retainer    
          ---------------------------------------------- = Number of 
                 Fair Market Value on March 1              Shares 
       
            Any payment for a fractional share automatically shall be paid in
  cash based upon the Fair Market Value on March 1 of such fractional share. 
  
         3.  Holding Period for Common Stock Payment Shares. The shares of
  Common Stock included in each Common Stock Payment shall be deposited in
  certificate or book entry form in escrow with the Company's Secretary
  until the six-month anniversary of the date of issuance. The Non-Employee
  Director shall retain all rights in the shares while they are held in
  escrow, including, but not limited to, voting rights and the right to
  receive dividends; provided, however, that the Non-Employee Director shall
  not have the right to pledge, sell or otherwise assign such shares until
  all restrictions pertaining to such shares are terminated. Promptly after
  the six-month anniversary of the issuance date, the Company's Secretary
  shall release the shares from escrow and deliver any applicable stock
  certificates to the Non-Employee Director or release any applicable
  restrictions on the Non-Employee Director's book entry account. 
  
       C. Option Payment. 
  
          Subject to Section VII.A. above, each Non-Employee Director may
  specify the amount of his Annual Retainer to be received in the form of a
  non-statutory option not entitled to special tax treatment under Section
  422 of the Internal Revenue Code of 1986, as amended. Each option granted
  under this Plan shall be evidenced by a written agreement in such form as
  the Board or Committee shall from time to time approve, which Agreements
  shall comply with and be subject to the following terms and conditions and
  such additional terms and conditions as may be determined by the Board or
  Committee: 
  
          1. Date of Payment. The option constituting any Option Payment
  shall be granted automatically on March 1 of each Plan Year (or, if March 1 is
  not a business day, on the next succeeding business day), commencing March
  1, 1997. 
  
          2. Number of Shares Subject to Option. The number of shares to be
  subject to any option granted pursuant to the Plan shall be an amount
  necessary to make such option equal in value, using a modified
  Black-Scholes option valuation model, to that portion of the Annual
  Retainer that the Non-Employee Director elected to receive in the form of
  an option. The value of the option will be calculated by assuming that the
  value of an option to purchase one share of Common Stock equals the
  product of (i) a fraction determined by dividing 1 by the Multiplier, as
  defined below, and (ii) the Fair Market Value of a share of Common Stock
  on the date of grant. 
  
         The number of shares represented by an option granted pursuant to 
  the Plan shall be determined by multiplying the number of shares determined
  in Section VII.B.2 above by a multiplier determined using a modified
  Black-Scholes option valuation method (the "Multiplier"). The Board or the
  Committee shall determine the Multiplier by March 1 of the immediately
  preceding Plan Year by considering the following factors: (i) the Fair
  Market Value of the Common Stock on the date the Multiplier is determined;
  (ii) the average length of time that Company stock options are held by
  optionees prior to exercise; (iii) the risk-free rate of return based on
  the term determined in (ii) above and U.S. government securities rates;
  (iv) the annual dividend yield for the Common Stock; and (v) the
  volatility of the Common Stock over the previous ten-year period. For the
  Plan Year commencing March 1, 1997, the Board or the Committee shall
  calculate the Multiplier by March 1, 1997. The number of shares to be
  subject to the option shall be equal to the largest number of whole shares
  determined as follows:
 
      50% or more, if applicable, of Annual Retainer                Number
      ---------------------------------------------- x Multiplier =   of 
              Fair Market Value on March 1                          Shares     
  
         3. Price of Options. The exercise price of the option will be the
  Fair Market Value of the Common Stock on the date of grant. 
  
         4. Exercise of Options. Options may be exercised only by written
  notice to the Company at its head office accompanied by payment in cash of
  the full consideration for the shares as to which they are exercised. 
  
         5. Period of Option. The option will not be exercisable until the
  one-year anniversary of the grant date, at which time it shall be vested
  as to all the shares represented by the option. No option shall be
  exercisable after the expiration of ten (10) years from the date upon
  which such option is granted. 
  
         6. Exercise by Representative Following Death of Director. A
  Non-Employee Director, by written notice to the Company, may designate one
  or more persons (and from time to time change such designation) including
  his legal representative, who, by reason of his death, shall acquire the
  right to exercise all or a portion of the option. If the person or persons
  so designated wish to exercise any portion of the option, they must do so
  within the term of the option as provided in Section VII.C.5. Any exercise
  by a representative shall be subject to the provisions of this Plan. 
  
          7. Options Nontransferable. Each option granted under the Plan by
  its terms shall not be transferable by the optionee otherwise than by
  will, or by the laws of descent and distribution, and shall be exercised
  during the lifetime of the optionee only by him. No option or interest
  therein may be transferred, assigned, pledged or hypothecated by the
  optionee during his lifetime, whether by operation of law or otherwise, or
  be made subject to execution, attachment or similar process. 
  
       D. Cash Payment 
  
          Each Cash Payment shall be made in equal quarterly installments
  commencing March 1 of each Plan Year (or, if March 1 is not a business
  day, on the next succeeding business day), with the first Cash Payment, if
  any, to be made on March 1, 1997. 
  
      E. Form of Issuance of Shares 
  
         Shares issued under the Plan shall be in either book entry form or
  in certificate form pursuant to the instructions given by the Non-Employee
  Director to the Company's transfer agent. 
  
      F. Transferability 
  
         In the event of a Non-Employee Director's death, all of such
  person's rights to receive any accrued but unpaid Common Stock Payment or
  Option Payment will transfer to the maximum extent permitted by law to
  such person's beneficiary. Each Non-Employee Director may name, from time
  to time, any beneficiary or beneficiaries (which may be named contingently
  or successively) as his beneficiary for purposes of this Plan. Each
  designation shall be on a form prescribed by the Committee, will be
  effective only when delivered to the Company and when effective will 
  revoke all prior designations by the Non-Employee Director. If a
  Non-Employee Director dies with no such beneficiary designation in 
  effect, such person's beneficiary shall be his estate and such person's
  payments will be transferable by will or pursuant to laws of descent and 
  distribution applicable to such person.

 <PAGE>
         

                           PART 3.   GENERAL PROVISIONS 
                                
  VIII.   Assignments 
  
         The rights and benefits under this Plan may not be assigned except
  for the designation of a beneficiary as provided in Section VII. 
  
  IX.     Limitation of Rights 
  
          No Right to Continue as a Director.  Neither the Plan, nor the
  issuance of shares of Common Stock nor any other action taken pursuant to
  the Plan, shall constitute or be evidence of any agreement or
  understanding, express or implied, that the Company will retain a director
  for any period of time, or at any particular rate of compensation. 
  
          No Stockholders' Rights for Options. An optionee shall have no
  rights as a stockholder with respect to the shares covered by his options
  until the date of the issuance to him of a stock certificate therefor or
  the making of a book entry with the Company's transfer agent, and no
  adjustment will be made for dividends or other rights for which the record
  date is prior to the date such certificate is issued. 
  
  X.     Changes in Present Stock 
  
         In the event of any merger, consolidation, reorganization,
  recapitalization, stock dividend, stock split, or other change in the
  corporate structure or capitalization affecting the Company's present
  Common Stock, at the time of such event the Board or the Committee shall
  make appropriate adjustments to the number (including the aggregate
  numbers specified in Section IV) and kind of shares to be issued under the
  Plan and the price of any Stock Option or Common Stock Payment. 
  
  XI.    Amendment of the Plan 
  
        The Board shall have the right to amend, modify, suspend or
  terminate the Plan at any time for any purpose; provided, that following
  the approval of the Plan by the Company's shareholders, the Company will
  seek shareholder approval for any change to the extent required by
  applicable law, regulation or rule. 
  
  XII.   Definitions 
  
         "Annual Retainer" shall mean the amount to which a Non-Employee
  Director will be entitled to receive for serving as a director in a
  relevant Plan Year, but shall not include reimbursement for expenses, fees
  associated with service on any committee of the Board or fees with respect
  to any other services to be provided to the Company. 
  
        "Fair Market Value" shall be the mean of the highest and lowest
  quoted selling prices for the Common Stock as reported on the New York
  Stock Exchange Composite Tape on the date in question, or if no sales of
  such stock were made on that date, the mean of the highest and lowest
  prices of the Common Stock on the next preceding day on which sales were
  made. 
  
        "Plan Year" shall mean the year beginning March 1 and ending
  February 28, or February 29, as the case may be, for any relevant year. 
  
  XIII.  Compliance with Section 16 of the Exchange Act 
  
         It is the Company's intent that the Plan comply in all respects with
  Rule 16b-3. If any provision of this Plan is found not to be in compliance
  with such rule and regulations, the provision shall be deemed null and
  void, and the remaining provisions of the Plan shall continue in full
  force and effect. All transactions under this Plan shall be executed in
  accordance with the requirements of Section 16 of the Exchange Act and
  regulations promulgated thereunder. The Board or the Committee may, in its
  sole discretion, modify the terms and conditions of this Plan in response
  to and consistent with any changes in applicable law, rule or regulation. 
  
  XIV.    Notice 
  
          Any written notice to the Company required by any of the provisions
  of this Plan shall be addressed to the Secretary of the Company and shall
  become effective when it is received. 
  
  XV.     Governing Law 
  
          This Plan and all determinations made and actions taken pursuant
  hereto shall be governed by the law of the State of California and
  construed accordingly.
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UNITED STATES 
                      SECURITIES AND EXCHANGE COMMISSION 
                         Washington, D.C. 20549 
    
                                Form S-8 
   
                         REGISTRATION STATEMENT  
                                Under  
                       THE SECURITIES ACT OF 1933 
                                             
              Exact name of issuer as specified in its charter: 
   
                         HEWLETT-PACKARD COMPANY 
   
   State or other jurisdiction of               I.R.S. Employer 
   incorporation or organization:               Identification No.: 
           California                              94-1081436 
   
                  Address of principal executive offices: 
              3000 Hanover Street, Palo Alto, California 94304 
   
                         Full title of the plan: 
              HEWLETT-PACKARD COMPANY 1997 DIRECTOR STOCK PLAN 
   
                   Name and address of agent for service: 
                           D. CRAIG NORDLUND 
              3000 Hanover Street, Palo Alto, California 94304 
   
  Telephone Number, including area code, of agent for service: (415)857-1501 
   
   
                    CALCULATION OF REGISTRATION FEE 
   
  Title of                      Proposed        Proposed          
  Securities       Amount       Maximum         Maximum          Amount of 
  To be            To Be        Offering Price  Aggregate        Registration 
  Registered       Registered   Per Share*      Offering Price*  Fee 
 ---------------------------------------------------------------------------- 
  Common Stock 
  Par Value $1.00  
  per Share        1,000,000    $56.50          $56,500,000      $19,483 
    
  *Estimated pursuant to Rule 457 solely for purposes of calculating the 
  registration fee.  The price  is based upon the average of  the high and 
  low prices of the Common Stock on March 3, 1997, as reported on the New 
  York Stock Exchange Composite Tape.
PART II 
                                 
             INFORMATION REQUIRED IN THE REGISTRATION STATEMENT 
   
  Item 3.   Incorporation of Documents by Reference. 
       
            Hewlett-Packard Company (the "Company") hereby incorporates by 
  reference in this registration statement the following documents: 
   
           (a)   Annual Report on Form 10-K for the fiscal year ended October 
                 31, 1996; 
   
           (b)   None; and 
   
           (c)   The description of the Company's capital stock contained in 
                 the Company's Registration Statement under the Exchange Act 
                 filed on or about November 6, 1957 and the Amended and  
                 Restated Articles of Incorporation which appeared as  
                 Exhibit 3(a) to the Annual Report on Form 10-K for the 
                 fiscal year ended October 31, 1996. 
   
            All documents subsequently filed by the Company pursuant to  
  Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the 
  filing of a post-effective amendment to this registration statement which 
  indicates that all securities offered hereby have been sold or which 
  deregisters all securities remaining unsold, shall be deemed to be 
  incorporated by reference in this registration statement and to be a part 
  hereof from the date of the filing of such documents. 
   
  Item 4.   Description of Securities. 
            
            Not Applicable      
                 
  Item 5.   Interests of Named Experts and Counsel. 
   
            Inapplicable. 
   
  Item 6.   Indemnification of Directors and Officers. 
   
            Section 204 of the General Corporation Law of the State of  
  California ("California Law") authorizes a corporation to adopt a provision 
  in its articles of incorporation eliminating the personal liability of  
  directors to corporations and their shareholders for monetary damages for 

  breach or alleged breach of directors' "duty of care."  Following a 
  California corporation's adoption of such a provision, its directors are 
  not accountable to corporations and their shareholders for monetary damages 
  for conduct constituting negligence (or gross negligence) in the exercise 
  of their fiduciary duties; however, directors continue to be subject to 
  equitable remedies such as injunction or rescission.  Under California 
  Law, a director also continues to be liable for (1) a breach of his or her 
  duty of loyalty; (2) acts or omissions not in good faith or involving 
  intentional misconduct or knowing violations of law; (3) illegal payments 
  of dividends; and (4) approval of any transaction from which a director 
  derives an improper personal benefit.  The adoption of such a provision in 
  the articles of incorporation also does not limit directors' liability for 
  violations of the federal securities laws. 
   
            Section 317 of the California Law makes a provision for the 
  indemnification of officers, directors and other corporate agents in terms 
  sufficiently broad to indemnify such persons, under certain circumstances, 
  for liabilities (including reimbursement for expenses incurred) arising 
  under the Securities Act of 1933, as amended (the "Securities Act").  An 
  amendment to Section 317 provides that the indemnification provided by 
  this section is not exclusive to the extent additional rights are 
  authorized in a corporation's articles of incorporation. 
   
            The Company has adopted provisions in its Amended Articles of 
  Incorporation which eliminate the personal liability of its directors to 
  the Company and its shareholders for monetary damages for breach of the 
  directors' fiduciary duties in certain circumstances and authorize the 
  Company to indemnify its officers, directors and other agents to the 
  fullest extent permitted by law.   
   
  Item 7.   Exemption from Registration Claimed. 
   
            Inapplicable. 
       
  Item 8.   Exhibits. 
   
            See Exhibit Index. 
   
  Item 9.   Undertakings. 
   
            (a)   Rule 415 Offering. 
   
                 The undersigned registrant hereby undertakes: 
   
            (1)  To file, during any period in which offers or sales are 
                 being made, a post-effective amendment to this registration 
                 statement: 
   
                 (i)  To include any prospectus required by Section 10(a)(3) 
                      of the Securities Act; 
   
                (ii)  To reflect in the prospectus any facts or events 
                      arising after the effective date of the registration 
                      statement (or the most recent post-effective amendment 
                      thereof) which, individually or in the aggregate, 
                      represent a fundamental change in the information set 
                      forth in the registration statement; 
   
               (iii)  To include any material information with respect to the 
                      plan of distribution not previously disclosed in the 
                      registration statement or any material change to such 

                      information in the registration statement;  
   
            Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do 
  not apply if the registration statement is on Form S-3 or Form S-8, and  
  the information required to be included in a post-effective amendment by  
  those paragraphs is contained in periodic reports filed by the registrant 
  pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated 
  by reference in the registration statement. 
    
            (2)  That, for the purpose of determining any liability under  
  the Securities Act, each such post-effective amendment shall be deemed to 
  be a new registration statement relating to the securities offered therein, 
  and the offering of such securities at that time shall be deemed to be the 
  initial bona fide offering thereof. 
   
           (3)  To remove from registration by means of a post-effective 
  amendment any of the securities being registered which remain unsold at 
  the termination of the offering. 
   
           (b) Filings Incorporating Subsequent Exchange Act Documents by 
               Reference. 
   
           The undersigned registrant hereby undertakes that, for purposes  
  of determining any liability under the Securities Act, each filing of the 
  registrant's annual report pursuant to Section 13(a) or Section 15(d) of 
  the Exchange Act that is incorporated by reference in the registration 
  statement shall be deemed to be a new registration statement relating to 
  the securities offered therein, and the offering of such securities at 
  that time shall be deemed to be the initial bona fide offering thereof. 
   
           (c) Request for Acceleration of Effective Date or Filing of 
  Registration Statement on Form S-8. 
   
           Insofar as indemnification for liabilities arising under the 
  Securities Act may be permitted to directors, officers and controlling 
  persons of the registrant pursuant to the foregoing provisions, or 
  otherwise, the registrant has been advised that in the opinion of the 
  Commission such indemnification is against public policy as expressed in 
  the Securities Act and is, therefore, unenforceable.  In the event that a 
  claim for indemnification against such liabilities (other than the payment 
  by the registrant of expenses incurred or paid by a director, officer or 
  controlling person of the registrant in the successful defense of any 
  action, suit or proceeding) is asserted by such director, officer or 
  controlling person in connection with the securities being registered, the 
  registrant will, unless in the opinion of its counsel the matter has been 
  settled by controlling precedent, submit to a court of appropriate 
  jurisdiction the question whether such indemnification by it is against 
  public policy as expressed in the Securities Act and will be governed by 
  the final adjudication of such issue.
SIGNATURES 
   
            Pursuant to the requirements of the Securities Act of 1933, as 
  amended, the registrant certifies that it has reasonable grounds to 
  believe that it meets all of the requirements for filing on Form S-8 and 
  has duly caused this registration statement to be signed on its behalf by 
  the undersigned, thereunto duly authorized, in the City of Palo Alto, 
  State of California, on this 7th day of March, 1997.  
   
 
                                               HEWLETT-PACKARD COMPANY 
                                               By: /s/Ann O. Baskins
                                                   -----------------          
                                                   Ann O. Baskins          
                                                   Assistant Secretary  
                                                   & Managing Counsel 
  

                            POWER OF ATTORNEY 
 
       KNOW ALL MEN BY THESE PRESENTS, that the persons whose signatures  
  appear below constitute and appoint D. Craig Nordlund and Ann O. Baskins, 
  and each of them, as true and lawful attorneys-in-fact and agents with  
  full power of substitution and resubstitution, for him or her and in his  
  or her name, place and stead, in any and all capacities to sign the Form 
  S-8 Registration Statement pertaining to the Hewlett-Packard Company 1997 
  Director Stock Plan, and any or all amendments (including post-effective 
  amendments) to said Form S-8 Registration Statement, and to file the 
  same,  with all exhibits thereto, and other documents in connection 
  therewith, with the Securities and Exchange Commission, granting unto 
  said attorneys-in-fact and agents full power and authority to do and 
  perform each and every act and thing requisite and necessary to be done,
  as fully to all intents and purposes as he or she might or could do in
  person, hereby ratifying and confirming all that said attorneys-in-fact 
  and agents or their substitute or substitutes may lawfully do or cause to
  be done by virtue hereof. 
 
      Pursuant to the requirements of the Securities Act of 1933, this  
  Registration Statement has been signed below by the following persons 
  in the capacities and on the dates indicated.  Moreover, the undersigned 
  hereby also certify that to the best of their knowledge and belief the
  issuer meets all of the requirements for filing on Form S-8. 
 
  Signature                              Title                    Date 
 
 /s/Raymond W. Cookingham    Vice President and Controller  March 3, 1997   
  ------------------------    (Principal Accounting Officer) 
 Raymond W. Cookingham 
 
 /s/Thomas E. Everhart                 Director             February 28, 1997 
 ------------------------  
 Thomas E. Everhart 
 
 /s/John B. Fery                       Director             February 28, 1997 
 ------------------------ 
 John B. Fery     
 
 /s/Jean-Paul G. Gimon                Director              March 3,1997
 ------------------------               
 Jean-Paul G. Gimon                                    
 
 /s/Sam Ginn                           Director             February 28, 1997 
 ------------------------ 
 Sam Ginn          
 
 /s/Richard A. Hackborn                Director             February 28, 1997 
 ------------------------ 
 Richard A. Hackborn 
 
                                       Director                        
 ------------------------ 
 Walter B. Hewlett                      
 
 /s/George A. Keyworth II              Director             February 28, 1997 
  ------------------------ 
 George A. Keyworth II 
 
                                       Director    
 ------------------------               
 David M Lawrence, M.D.                             
 
 /s/Paul F. Miller, Jr.                Director             March 3, 1997   
 ------------------------ 
 Paul F. Miller, Jr.                                 
 
 /s/Susan P. Orr                       Director             February 28, 1997 
 ------------------------     
 Susan P. Orr 
                                               
                                       Director                     
 ------------------------ 
 David W. Packard                                 
 
 /s/Lewis E. Platt             Chairman, President and      March 2, 1997   
 ------------------------      Chief Executive Officer 
 Lewis E. Platt             (Principal Executive Officer) 
 
 /s/Robert P. Wayman          Executive Vice President,     February 26, 1997 
 ------------------------     Finance and Administration 
 Robert P. Wayman             (Chief Financial Officer) 
                                    and Director
EXHIBIT INDEX 
   
   
        Exhibit No. 
   
        1-4              Not applicable. 
   
        5                Opinion re legality. 
     
        6-22             Not applicable.   
   
        23.1             Consent of Independent Accountants.  Found 
                         at page 8 of this registration statement and 
                         incorporated herein by reference. 
   
        23.2             Consent of Counsel.  Contained with the 
                         opinion filed as Exhibit 5 hereto and 
                         incorporated herein by reference. 
   
        24               Powers of attorney.  Contained in the signature  
                         pages (pages 5 - 6) of this Form S-8 registration 
                         statement and incorporated herein by reference. 
   
        25-98            Not applicable. 
   
        99               Hewlett-Packard Company 1997 Director Stock 
                         Plan.
EXHIBIT 5 
  March 7, 1997 
 
  Hewlett-Packard Company  
  3000 Hanover Street 
  Palo Alto, California 94304 
 
         1,000,000 Shares of Common Stock of Hewlett-Packard Company 
         Offered pursuant to the 1997 Director Stock Plan 
 
  Dear Sir or Madam: 
 
  I have examined the proceedings taken and the instruments executed  
  in connection with the organization and present capitalization of  
  Hewlett-Packard Company (the "Company") and the reservation for issuance  
  and authorization of the sale and issuance from time to time of not in  
  excess of 1,000,000 shares of the Company's Common Stock (the "Shares")  
  pursuant to the terms of the Company's 1997 Director Stock Plan.  The  
  Shares are the subject of a Registration Statement on Form S-8 under  
  the Securities Act of 1933, as amended, which is being filed with the  
  Securities and Exchange Commission and to which this opinion is to be  
  attached as an exhibit. 
 
  Upon the basis of such examination, I am of the following opinion: 
 
  1.  The authorized shares of the Company consist of 300,000,000 shares of 
  Preferred Stock and 2,400,000,000 shares of Common Stock. 
 
  2.  The proper corporate proceedings necessary to the reservation for  
  issuance and the authorization of the sale and issuance from time to time 
  of not in excess of 1,000,000 shares of the Common Stock of the Company  
  pursuant to the Company's 1997 Director Stock Plan have been duly taken 
  and, when issued pursuant to such plan, the Shares will be duly and  
  validly issued and fully paid and nonassessable. 
 
  3.  When the above-mentioned registration statement relating to the Shares 
  has become effective and when the listing of the Shares on the New York  
  and Pacific Stock Exchanges has been authorized, all authorizations,  
  consents, approvals, or other orders of all United States regulatory  
  authorities required for the issuance of Shares will have been obtained. 
 
      You are further advised that I consent to the use of this opinion as an  
  exhibit to the above-mentioned Registration Statement. 
 
                                              Very truly yours, 
 
                                              /s/Ann O. Baskins
                                              -----------------              
                                              Ann O. Baskins 
                                              Assistant Secretary 
                                              and Managing Counsel
Exhibit 23.1 
 
                      CONSENT OF INDEPENDENT ACCOUNTANTS 
 
 
  We hereby consent to the incorporation by reference in this Registration 
  Statement on Form S-8 of our report dated November 18, 1996, which appears 
  on page 52 of the 1996 Annual Report to the Shareholders of Hewlett-Packard 
  Company, which is incorporated by reference in Hewlett-Packard Company's  
  Annual Report on Form 10-K for the year ended October 31, 1996. 
 
 
 
  /s/Price Waterhouse LLP 
  Price Waterhouse LLP 
  San Jose, California 
  March 3, 1997
Exhibit 23.2 

                              CONSENT OF COUNSEL 
 
  Contained with the opinion filed as Exhibit 5 hereto and incorporated  
  herein by reference.
Exhibit 99 
 
                           HEWLETT-PACKARD COMPANY 
                                
                          1997 DIRECTOR STOCK PLAN 
                                
               PART 1.   PLAN ADMINISTRATION AND ELIGIBILITY 
  
  I.     Purpose 
  
          The purpose of this 1997 Director Stock Plan (the "Plan") of
  Hewlett-Packard Company (the "Company") is to encourage ownership in the
  Company by outside directors of the Company (each, a "Non-Employee
  Director," or collectively, the "Non-Employee Directors") whose continued
  services are considered essential to the Company's continued progress and
  thus to provide them with a further incentive to remain as directors of
  the Company. 
  
  II.    Administration 
  
         The Board of Directors (the "Board") of the Company or any
  committee (the "Committee") of the Board that will satisfy Rule 16b-3 of
  the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
  any regulations promulgated thereunder, as from time to time in effect,
  including any  successor rule ("Rule 16b-3"), shall supervise and
  administer the Plan. The Committee shall consist solely of two or more
  non-employee directors of the Company, who shall be appointed by the Board.
  A member of the Board shall be deemed to be a "non-employee director" only
  if he satisfies such requirements as the Securities and Exchange Commission
  may establish for non-employee directors under Rule 16b-3. Members of the
  Board receive no additional compensation for their services in connection
  with the administration of the Plan. 
  
      The Board or the Committee may adopt such rules or guidelines as it
  deems appropriate to implement the Plan. All questions of interpretation
  of the Plan or of any shares issued under it shall be determined by the
  Board or the Committee and such determination shall be final and binding
  upon all persons having an interest in the Plan. Any or all powers and
  discretion vested in the Board or the Committee under this Plan may be
  exercised by any subcommittee so authorized by the Board or the Committee
  and satisfying the requirements of Rule 16b-3. 
  
  III.    Participation in the Plan 
  
          Each member of the Board who is not an employee of the Company or
  any of its subsidiaries or affiliates shall be eligible to receive payment
  for his Annual Retainer (as defined in Section XII below) under the Plan. 
  
  IV.     Stock Subject to the Plan 
  
          The maximum number of shares of the Company's $1 par value Common
  Stock ("Common Stock") which may be issued under the Plan shall be One
  Million (1,000,000). The limitation on the number of shares which may be
  issued under the Plan shall be subject to adjustment as provided in Section
  X of the Plan. 
  
         If any outstanding option under the Plan for any reason expires or
  is terminated without having been exercised in full, the shares allocable
  to the unexercised portion of such option shall again become available for
  grant pursuant to the Plan.
PART 2.   TERMS OF THE PLAN 
                                
  V.     Effective Date of the Plan 
  
         The Plan shall take effect on the date of adoption by the
  shareholders of the Company.  The Plan shall terminate on February 24,
  2007, unless earlier terminated by the Board of Directors or the
  Committee. 
  
  VI.    Time for Granting Options and Issuing Shares 
  
         No options shall be granted, and no Common Stock Payments (as
  defined in Section VII below) shall be made, after the date on which this
  Plan terminates. The applicable terms of this Plan, and any terms and
  conditions applicable to the options granted or the shares issued prior to
  such date, shall survive the termination of the Plan and continue to apply
  to such options and shares. 
  
  VII.   Terms and Conditions 
  
       A. Compensation Alternatives. 
  
          1. Beginning with the 1997 Plan Year (as defined in Section XII
  below), each Non-Employee Director will be entitled to select one of the
  following alternative means of payment for the value of his Annual
  Retainer: 
  
            (i)  A minimum of fifty percent of the value of his Annual
                 Retainer in the form of a Common Stock payment (a "Common
                 Stock Payment") and the balance in cash (a "Cash Payment");
                 or 
  
            (ii) A minimum of fifty percent of the value of his Annual
                 Retainer in the form of an option to purchase shares of
                 Common Stock (an "Option Payment") and a Cash Payment. 
  
          2. If any Non-Employee Director fails to notify the Secretary of 
  the Company in writing by February 1 of the preceding Plan Year (or by
  February 15, 1997 for the Plan Year commencing March 1, 1997) of his
  desired means to receive payment of the Annual Retainer for the next Plan
  Year, then he shall be deemed to have elected an Option Payment for fifty
  percent of the value of his Annual Retainer, with the remaining fifty
  percent in cash. Any such election, or any modification or termination of
  such an election, shall be filed with the Company on a form prescribed by
  the Board or the Committee for this purpose. 
  
       B. Common Stock Payment. 
  
          1.  Date of Payment. The shares constituting any Common Stock 
  Payment shall be issued automatically on March 1 of each Plan Year (or, 
  if March 1 is not a business day, on the next succeeding business day),
  commencing March 1, 1997. Each award of a Common Stock Payment shall be
  evidenced by an agreement which shall reflect the terms and conditions 
  of the Common Stock Payment and such additional terms and conditions as 
  may be determined by the Board or the Committee. 
  
         2.  Number of Shares Subject to Common Stock Payment. The total
  number of shares of Common Stock included in each Common Stock Payment 
  shall be determined by dividing the amount of the Annual Retainer that is
  to be paid in stock by the Fair Market Value (as defined in Section XII
  below) of a share of Common Stock on March 1 (or, if March 1 is not a 
  business day, on the next succeeding business day). It shall be equal to
  the largest number of whole shares determined as follows: 
  
          50% or more, if applicable, of Annual Retainer    
          ---------------------------------------------- = Number of 
                 Fair Market Value on March 1              Shares 
       
            Any payment for a fractional share automatically shall be paid in
  cash based upon the Fair Market Value on March 1 of such fractional share. 
  
         3.  Holding Period for Common Stock Payment Shares. The shares of
  Common Stock included in each Common Stock Payment shall be deposited in
  certificate or book entry form in escrow with the Company's Secretary
  until the six-month anniversary of the date of issuance. The Non-Employee
  Director shall retain all rights in the shares while they are held in
  escrow, including, but not limited to, voting rights and the right to
  receive dividends; provided, however, that the Non-Employee Director shall
  not have the right to pledge, sell or otherwise assign such shares until
  all restrictions pertaining to such shares are terminated. Promptly after
  the six-month anniversary of the issuance date, the Company's Secretary
  shall release the shares from escrow and deliver any applicable stock
  certificates to the Non-Employee Director or release any applicable
  restrictions on the Non-Employee Director's book entry account. 
  
       C. Option Payment. 
  
          Subject to Section VII.A. above, each Non-Employee Director may
  specify the amount of his Annual Retainer to be received in the form of a
  non-statutory option not entitled to special tax treatment under Section
  422 of the Internal Revenue Code of 1986, as amended. Each option granted
  under this Plan shall be evidenced by a written agreement in such form as
  the Board or Committee shall from time to time approve, which Agreements
  shall comply with and be subject to the following terms and conditions and
  such additional terms and conditions as may be determined by the Board or
  Committee: 
  
          1. Date of Payment. The option constituting any Option Payment
  shall be granted automatically on March 1 of each Plan Year (or, if March 1 is
  not a business day, on the next succeeding business day), commencing March
  1, 1997. 
  
          2. Number of Shares Subject to Option. The number of shares to be
  subject to any option granted pursuant to the Plan shall be an amount
  necessary to make such option equal in value, using a modified
  Black-Scholes option valuation model, to that portion of the Annual
  Retainer that the Non-Employee Director elected to receive in the form of
  an option. The value of the option will be calculated by assuming that the
  value of an option to purchase one share of Common Stock equals the
  product of (i) a fraction determined by dividing 1 by the Multiplier, as
  defined below, and (ii) the Fair Market Value of a share of Common Stock
  on the date of grant. 
  
         The number of shares represented by an option granted pursuant to 
  the Plan shall be determined by multiplying the number of shares determined
  in Section VII.B.2 above by a multiplier determined using a modified
  Black-Scholes option valuation method (the "Multiplier"). The Board or the
  Committee shall determine the Multiplier by March 1 of the immediately
  preceding Plan Year by considering the following factors: (i) the Fair
  Market Value of the Common Stock on the date the Multiplier is determined;
  (ii) the average length of time that Company stock options are held by
  optionees prior to exercise; (iii) the risk-free rate of return based on
  the term determined in (ii) above and U.S. government securities rates;
  (iv) the annual dividend yield for the Common Stock; and (v) the
  volatility of the Common Stock over the previous ten-year period. For the
  Plan Year commencing March 1, 1997, the Board or the Committee shall
  calculate the Multiplier by March 1, 1997. The number of shares to be
  subject to the option shall be equal to the largest number of whole shares
  determined as follows:
 
      50% or more, if applicable, of Annual Retainer                Number
      ---------------------------------------------- x Multiplier =   of 
              Fair Market Value on March 1                          Shares     
  
         3. Price of Options. The exercise price of the option will be the
  Fair Market Value of the Common Stock on the date of grant. 
  
         4. Exercise of Options. Options may be exercised only by written
  notice to the Company at its head office accompanied by payment in cash of
  the full consideration for the shares as to which they are exercised. 
  
         5. Period of Option. The option will not be exercisable until the
  one-year anniversary of the grant date, at which time it shall be vested
  as to all the shares represented by the option. No option shall be
  exercisable after the expiration of ten (10) years from the date upon
  which such option is granted. 
  
         6. Exercise by Representative Following Death of Director. A
  Non-Employee Director, by written notice to the Company, may designate one
  or more persons (and from time to time change such designation) including
  his legal representative, who, by reason of his death, shall acquire the
  right to exercise all or a portion of the option. If the person or persons
  so designated wish to exercise any portion of the option, they must do so
  within the term of the option as provided in Section VII.C.5. Any exercise
  by a representative shall be subject to the provisions of this Plan. 
  
          7. Options Nontransferable. Each option granted under the Plan by
  its terms shall not be transferable by the optionee otherwise than by
  will, or by the laws of descent and distribution, and shall be exercised
  during the lifetime of the optionee only by him. No option or interest
  therein may be transferred, assigned, pledged or hypothecated by the
  optionee during his lifetime, whether by operation of law or otherwise, or
  be made subject to execution, attachment or similar process. 
  
       D. Cash Payment 
  
          Each Cash Payment shall be made in equal quarterly installments
  commencing March 1 of each Plan Year (or, if March 1 is not a business
  day, on the next succeeding business day), with the first Cash Payment, if
  any, to be made on March 1, 1997. 
  
      E. Form of Issuance of Shares 
  
         Shares issued under the Plan shall be in either book entry form or
  in certificate form pursuant to the instructions given by the Non-Employee
  Director to the Company's transfer agent. 
  
      F. Transferability 
  
         In the event of a Non-Employee Director's death, all of such
  person's rights to receive any accrued but unpaid Common Stock Payment or
  Option Payment will transfer to the maximum extent permitted by law to
  such person's beneficiary. Each Non-Employee Director may name, from time
  to time, any beneficiary or beneficiaries (which may be named contingently
  or successively) as his beneficiary for purposes of this Plan. Each
  designation shall be on a form prescribed by the Committee, will be
  effective only when delivered to the Company and when effective will 
  revoke all prior designations by the Non-Employee Director. If a
  Non-Employee Director dies with no such beneficiary designation in 
  effect, such person's beneficiary shall be his estate and such person's
  payments will be transferable by will or pursuant to laws of descent and 
  distribution applicable to such person.
PART 3.   GENERAL PROVISIONS 
                                
  VIII.   Assignments 
  
         The rights and benefits under this Plan may not be assigned except
  for the designation of a beneficiary as provided in Section VII. 
  
  IX.     Limitation of Rights 
  
          No Right to Continue as a Director.  Neither the Plan, nor the
  issuance of shares of Common Stock nor any other action taken pursuant to
  the Plan, shall constitute or be evidence of any agreement or
  understanding, express or implied, that the Company will retain a director
  for any period of time, or at any particular rate of compensation. 
  
          No Stockholders' Rights for Options. An optionee shall have no
  rights as a stockholder with respect to the shares covered by his options
  until the date of the issuance to him of a stock certificate therefor or
  the making of a book entry with the Company's transfer agent, and no
  adjustment will be made for dividends or other rights for which the record
  date is prior to the date such certificate is issued. 
  
  X.     Changes in Present Stock 
  
         In the event of any merger, consolidation, reorganization,
  recapitalization, stock dividend, stock split, or other change in the
  corporate structure or capitalization affecting the Company's present
  Common Stock, at the time of such event the Board or the Committee shall
  make appropriate adjustments to the number (including the aggregate
  numbers specified in Section IV) and kind of shares to be issued under the
  Plan and the price of any Stock Option or Common Stock Payment. 
  
  XI.    Amendment of the Plan 
  
        The Board shall have the right to amend, modify, suspend or
  terminate the Plan at any time for any purpose; provided, that following
  the approval of the Plan by the Company's shareholders, the Company will
  seek shareholder approval for any change to the extent required by
  applicable law, regulation or rule. 
  
  XII.   Definitions 
  
         "Annual Retainer" shall mean the amount to which a Non-Employee
  Director will be entitled to receive for serving as a director in a
  relevant Plan Year, but shall not include reimbursement for expenses, fees
  associated with service on any committee of the Board or fees with respect
  to any other services to be provided to the Company. 
  
        "Fair Market Value" shall be the mean of the highest and lowest
  quoted selling prices for the Common Stock as reported on the New York
  Stock Exchange Composite Tape on the date in question, or if no sales of
  such stock were made on that date, the mean of the highest and lowest
  prices of the Common Stock on the next preceding day on which sales were
  made. 
  
        "Plan Year" shall mean the year beginning March 1 and ending
  February 28, or February 29, as the case may be, for any relevant year. 
  
  XIII.  Compliance with Section 16 of the Exchange Act 
  
         It is the Company's intent that the Plan comply in all respects with
  Rule 16b-3. If any provision of this Plan is found not to be in compliance
  with such rule and regulations, the provision shall be deemed null and
  void, and the remaining provisions of the Plan shall continue in full
  force and effect. All transactions under this Plan shall be executed in
  accordance with the requirements of Section 16 of the Exchange Act and
  regulations promulgated thereunder. The Board or the Committee may, in its
  sole discretion, modify the terms and conditions of this Plan in response
  to and consistent with any changes in applicable law, rule or regulation. 
  
  XIV.    Notice 
  
          Any written notice to the Company required by any of the provisions
  of this Plan shall be addressed to the Secretary of the Company and shall
  become effective when it is received. 
  
  XV.     Governing Law 
  
          This Plan and all determinations made and actions taken pursuant
  hereto shall be governed by the law of the State of California and
  construed accordingly.