HP’s Omerta?

According to several news reports that surfaced this morning, including one from CNET’s News.com, Hewlett-Packard General Counsel Ann Baskins has resigned her position with the company, effectively immediately.

The timing is uncanny, because Baskins, through her lawyers, also announced that she will not  testify today before a U.S. House of Representatives subcommittee that is investigating HP’s bizarre and potentially illegal probe into leaks from its board of directors to journalists.

Baskins, again through her legal representatives, said she had every intention of testifying at the subcommittee hearing, but that she was advised to invoke her constitutional right to remain silent.

As reported in today’s edition of the Wall Street Journal, Ms. Baskins’s lawyers, K. Lee Blalack at O’Melveny & Myers and Cristina Arguedas of Arguedas, Cassman & Headley in Berkeley, Calif., issued the following statement:

Please understand, however, that Ms. Baskins very much wants to testify and discuss these matters with the Subcommittee. Were she to do so, we are firmly convinced that the Subcommittee would recognize that she acted legally and ethically at all times. Given the current environment, however, Ms. Baskins simply has no choice.

Yes, that last sentence, particularly the reference to the "current environment," puzzles me, too.

The "current environment" includes a separation agreement between Baskins and Hewlett-Packard. In exchange for her agreement to aid HP with its investigation into the board leaks and to refrain from suing the company, Baskins will be indemnified by HP, which will also pay her legal expenses.

What’s more, Baskins retains rights to exercise vested stock options, valued at nearly $3.7 million as of Sept. 27. HP also has agreed to accelerate the vesting of other options so that the "aggregate intrinsic value" of the unvested options equals $1 million on November 20.

It’s no wonder Baskins has declined to provide testimony today to the House subcommittee. It clearly is not in her interest to talk.

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