UPDATE 1-HP shareholders reject investor ballot access plan

(Adds background on board spying, court hearing, byline)

By Duncan Martell

SANTA CLARA, Calif., March 14 (Reuters) - Hewlett-Packard Co. (HPQ.N: Quote, Profile, Research, Stock Buzz) shareholders on Wednesday rejected a proposal that would have given investors the right to nominate directors to the computer maker's board.

About 39 percent of HP shares entitled to vote at the company's annual shareholder meeting favored the measure, which was supported by funds including Calpers, the largest U.S. pension fund, and the California State Teachers' Retirement System, the No. 3 fund.

The vote at HP's annual shareholder meeting in Santa Clara, California, was short of the 66.7 percent required for ratification.

It came on the same day that a California judge dismissed a criminal charge against former HP Chairman Patricia Dunn involving her role in a boardroom spying scandal.

The judge also plans to dismiss charges against three others if they complete court-ordered community service.

Some investors including Calpers had called for improved corporate governance at HP following the scandal. Among other measures, they pushed for the ballot-access proposal to give shareholders a greater say in director elections.

The board opposed the proposal, however, saying it could lead to "tremendously disruptive" elections and jockeying by special interest groups, Chairman and Chief Executive Mark Hurd told about 250 shareholders at Wednesday's meeting.