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Filed pursuant to Rule 424(b)(3)
Reg. No. 333-40729
[COMPAQ LOGO]
COMPAQ COMPUTER CORPORATION
SHAREHOLDER INVESTOR PLAN
10,000,000 Shares of Common Stock
Compaq Computer Corporation is pleased to offer you the opportunity to
participate in its Shareholder Investor Plan. The Plan is designed to provide
you with a convenient method to purchase shares of Compaq common stock and to
reinvest cash dividends in the purchase of additional shares.
Key features of the Plan:
Enrollment: If you currently own Compaq common stock, registered in
your name, you may participate in the Plan by completing and
returning an enrollment form. If you own Compaq stock but your shares
are currently held by a bank or broker in its name (that is, in
"street name"), you will need to register the shares in your name and
then complete an enrollment form.
If you do not currently own any shares of Compaq common stock, you
may join the Plan by completing an enrollment form and making an
initial cash investment of at least $250.
Additional Investments: Once you have enrolled, you may make
additional investments in any amount from $50 to $10,000 per month by
check or money order or through automatic monthly deductions from a
qualified bank account.
Dividend Reinvestments: You may reinvest all, some or none of your
cash dividends in additional shares of Compaq common stock. You may
change your reinvestment election at any time.
Safekeeping of Shares: All shares of Compaq common stock purchased
through the Plan will be held by the Plan Administrator in book-entry
form in your account. If you hold Compaq common stock certificates
outside of the Plan, you may deposit those certificates for
safekeeping with the Plan Administrator, and those shares will be
reflected in your Plan account.
Sale of Shares: You may sell all or any portion of Compaq common stock
held in book-entry form, including shares reflected in your Plan
account, through the Plan. You may also request to receive a
certificate for these shares and sell the shares outside the Plan.
Fees: There are certain enrollment, investment, brokerage and sales
fees associated with the Plan.
More Information: For more information about the Plan, call the
Plan's toll free number (1-888-218-4373) or see Compaq's website at
http://www.compaq.com.
Prospectus dated December 10, 1997
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF ANY OTHER
INFORMATION OR REPRESENTATIONS ARE GIVEN OR MADE, YOU MUST NOT RELY UPON THEM
AS HAVING BEEN AUTHORIZED.
This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy shares of Compaq common stock in any state or other jurisdiction
to any person to whom it is unlawful to make such an offer or solicitation. To
the extent required by applicable law in certain jurisdictions, shares offered
under the Plan are offered only through a registered broker/dealer in those
jurisdictions.
Neither the delivery of this Prospectus nor any sale made hereunder should
be deemed to imply that there has been no change in the affairs of Compaq since
the date of this Prospectus or that the information herein is correct as of any
time subsequent to its date.
TABLE OF CONTENTS
Page
<TABLE>
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Information About Compaq ............................................. 3
Information About the Plan ........................................... 3
Eligibility and Enrollment .................................. 3
Additional Investments....................................... 4
Dividends.................................................... 5
Source of Stock.............................................. 6
Sale of Shares .............................................. 6
How Shares are Held ......................................... 7
Gifts and Transfers of Shares................................ 7
Withdrawal from the Plan .................................... 8
Administration .............................................. 8
Additional Information ...................................... 9
Tax Consequences...................................................... 10
Available Information................................................. 10
Incorporation of Documents by Reference .............................. 11
Use of Proceeds ...................................................... 11
Legal Matters ........................................................ 11
Experts .............................................................. 12
</TABLE>
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INFORMATION ABOUT COMPAQ
Founded in 1982, Compaq Computer Corporation is a worldwide information
technology company. Compaq is the fifth largest computer company in the world
and the largest global supplier of personal computers. With worldwide sales of
$20 billion in 1996, Compaq develops and markets hardware, software, solutions
and services, including industry-leading enterprise computing solutions,
fault-tolerant business-critical solutions, networking and communication
products, commercial desktop and portable products and consumer PCs. Compaq
products are sold and supported in more than 100 countries through a network of
authorized Compaq marketing partners. Compaq markets its products primarily to
business, home, government, and education customers. Compaq's principal
executive offices are located at 20555 S.H. 249, Houston, Texas 77070,
telephone (281) 370-0670.
INFORMATION ABOUT THE PLAN
ELIGIBILITY AND ENROLLMENT
1. How does a Compaq shareholder enroll in the Plan?
If you are already a Compaq shareholder of record (that is, if you own
shares that are registered in your name, not your broker's), you may
enroll in the Plan simply by completing and returning an enrollment form.
2. I already own shares, but they are held by my bank or broker and
registered in "street name." How can I participate?
If you currently own shares of Compaq common stock that are held on your
behalf by a bank or broker (that is, in "street name"), you will need to
arrange with your bank or broker to have at least one share registered
directly in your name in order to be eligible to participate. Once the
shares are registered in your name, you can complete an enrollment form.
Alternatively, you may enroll in the Plan in the same manner as someone
who is not currently a shareholder.
3. I'm not currently a shareholder. May I participate in the Plan?
If you currently do not hold shares of Compaq common stock, you may enroll
in the Plan by completing an enrollment form for new investors and making
an initial investment of at least $250 by check or money order. An
enrollment fee of $10.00 will be deducted from your initial investment.
4. Are there fees associated with enrollment?
Participation in the Plan is subject to the following fees. These fees may
change at any time and you will be notified of any changes.
One-time enrollment fee in direct purchase plan $10.00*
Direct purchase investment fees:
For each check or money order $ 5.00
For each automatic debit $ 2.50
Brokerage trading fees:
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direct purchase fee (per share) $ .04
sales fee (per share) $ .07
Fee on each sale of shares $10.00
Fee for bounced check or rejected
automatic deductions $20.00
*If you are not a record holder, this enrollment fee will
apply and will be deducted from your initial investment.
There are no enrollment, investment or brokerage fees under the dividend
reinvestment portion of the Plan.
5. Who may participate in the Plan?
All U.S. citizens are eligible to participate, whether or not they are
currently shareholders. Foreign citizens are eligible to participate as
long as their participation would not violate any laws in their home
countries.
ADDITIONAL INVESTMENTS
6. What are the minimum and maximum amounts for additional investments?
The minimum amount for additional investments is $50 and the maximum
amount is $10,000 during any calendar month.
7. How do I make an additional investment?
You may send a check or money order payable in U.S. dollars to "Compaq
Computer Corporation Shareholder Investor Plan." Cash and third-party
checks are not allowed. Checks or money orders must be accompanied by the
appropriate section of your account statement and mailed to the Compaq
Computer Corporation Shareholder Investor Plan, c/o BankBoston, N.A., P.
O. Box 8040, Boston, Massachusetts 02266-8040.
8. May I have additional investments automatically deducted from my bank
account?
Yes. You may authorize monthly automatic deductions from an account at a
financial institution that is a member of the National Automated Clearing
House Association.
o To initiate this service, you must send a completed "Automatic
Deduction Service" form to the Plan Administrator.
o To change any aspect of the instruction, you must send a revised
"Automatic Deduction Service" form to the Plan Administrator.
o To terminate the deductions, you must notify the Plan Administrator in
writing.
Initial set-up, changes and terminations to the automatic deduction
instructions will be made as soon as practicable. Once automatic
deductions begin, funds will be deducted from your designated account on
the 15th of each month, or the next business day if the
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15th is not a business day.
9. Will I be charged fees for additional investments?
Yes. For any investment made by check or money order, an investment fee of
$5.00 will be deducted at the time of the investment. An investment fee of
$2.50 per investment will be deducted for any investment made by automatic
monthly deduction. In addition, the purchase price will include a
brokerage commission of $.04 per share.
10. How are payments with "insufficient funds" handled?
If the Plan Administrator does not receive a payment because of
insufficient funds or incorrect draft information, the requested purchase
will be deemed void, and the Plan Administrator will immediately remove
from your account any shares purchased in anticipation of receiving such
funds. If the net proceeds from the sale of such shares are insufficient to
satisfy the balance of the uncollected amounts, the Plan Administrator may
sell additional shares from your account as necessary to satisfy the
uncollected balance. In addition, an "insufficient funds" fee of $20 will
be charged. The Plan Administrator may place a hold on the Plan account
until the "insufficient funds" fee is received from you, or may sell shares
from your account to satisfy any uncollected amounts.
11. When will shares be purchased?
The Plan Administrator will buy shares each week, beginning on Tuesday (or
the next business day) if your funds are received no later than two
business days before that Tuesday.
12. What is the price of shares purchased under the Plan?
The purchase price for shares purchased by the Plan Administrator in the
open market will be the average price per share paid by the Plan
Administrator for all purchases made that week for Plan participants. The
purchase price for shares purchased from or sold to Compaq will be the
average of the high and low sales price reported on the New York Stock
Exchange consolidated tape for the day of the transaction.
For automatic monthly purchases, shares will be purchased during the week
after the week of the 15th, beginning on Tuesday of that week, if your
enrollment material is received by the last business day of the previous
month.
The Plan Administrator will use your investment to purchase as many full
shares as possible and will use any amount remaining to purchase a
fraction of a share (computed to three decimal places).
DIVIDENDS
13. Must my dividends be reinvested automatically?
No. You may elect partial or no reinvestment of your dividends by
completing the appropriate form obtained from the Plan Administrator.
Unless you make an election, all cash dividends on shares you hold outside
of the Plan will be paid to you and dividends
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on shares in your Plan account will be reinvested automatically in
additional shares of Compaq common stock. If you choose partial
investment, you must identify the percentage of shares in your account on
which you would like to receive cash payments for dividends. No fees will
be charged in connection with dividend reinvestments.
14. When will my dividends be reinvested and at what price?
The reinvestment of your dividends will generally be completed within five
business days of the dividend payment date. The price of shares purchased
with the dividends will be the weighted average price of all shares
purchased with reinvested dividends.
SOURCE OF STOCK
15. What is the source of Compaq stock purchased through the Plan?
At Compaq's option, share purchases will be made in the open market or
directly from Compaq. Share purchases in the open market may be made on
any stock exchange where Compaq common stock is traded or by negotiated
transactions on such terms as the Plan Administrator may reasonably
determine. Neither Compaq nor any participant will have any authority or
power to direct the date, time or price at which shares may be purchased
by the Plan Administrator.
SALE OF SHARES
16. How do I sell my shares?
You can sell some or all of the shares you hold in book-entry form,
including shares in your Plan account, by providing written instructions to
the Plan Administrator. Each account statement you receive will have a form
for this purpose. You can also sell your shares by calling the Plan
Administrator.
The Plan Administrator will sell shares daily. The sale price for your
shares will be the average price per share received by the Plan
Administrator for all sales made that day for Plan participants. A $10.00
service charge and a brokerage commission (currently $.07 per share) will
be deducted from your sale proceeds.
Please note that the Plan Administrator is not able to accept instructions
to sell on a specific day or at a specific price.
If you prefer, you can withdraw shares from the Plan, at no cost to you,
and sell them through a broker of your own choosing. Shares will normally
be mailed to you within five business days of receipt of your
instructions.
If you sell a portion of your shares, the Plan Administrator will continue
to reinvest the dividends on the percentage of shares authorized by you.
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HOW SHARES ARE HELD
17. How does the custodial service (book-entry shares) work?
All shares of Compaq stock that are purchased through the Plan will be held
by the Plan Administrator and reflected in book-entry form in your Plan
account on the records of the Plan Administrator. If you hold Compaq common
stock certificates outside the Plan, you may also, at any time, deposit
those certificates for safekeeping with the Plan Administrator, and the
shares represented by the deposited certificates will be included in
book-entry form in your Plan account.
18. How do I deposit my Compaq stock certificates with the Plan Administrator?
To deposit certificates into the Plan, you should send your certificates,
by registered and insured mail, to the Plan Administrator, with written
instructions to deposit those shares in your Plan account. The
certificates should not be endorsed and the assignment section should not
be completed.
19. Are there any charges associated with this custodial service?
No. There is no cost to you either for having the Plan Administrator hold
the shares purchased for you through the Plan or for depositing with the
Plan Administrator the stock certificates you hold into your account.
20. How may I receive a stock certificate?
Normally, stock certificates for shares purchased under the Plan will not
be issued, rather shares will be registered in the name of the Plan
Administrator or its nominee and credited to your Plan account. However,
you may request a stock certificate by calling the Plan Administrator.
There is no charge for this service. Stock certificates for fractional
shares will not be issued under any circumstances.
GIFTS AND TRANSFERS OF SHARES
21. Can I transfer shares that I hold in the Plan to someone else?
Yes. You may transfer ownership of some or all of your Plan shares by
sending the Plan Administrator written transfer instructions. Your
signature must be "Medallion Guaranteed" by a financial institution. Most
banks and brokers participate in the Medallion Guarantee program. The
Medallion Guarantee program ensures that the individual signing is in fact
the owner of the participant's account.
You may transfer shares to new or existing Compaq shareholders; however, a
new Plan account will not be opened for a transferee as a result of a
transfer of less than one full share. If you are opening a new Plan
account for a transferee, you must include an enrollment form with the
gift/transfer instructions.
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WITHDRAWAL FROM THE PLAN
22. How do I close my Plan account?
You may terminate your participation in the Plan either by giving written
notice to the Plan Administrator or by completing the appropriate section
of your account statement and returning it to the Plan Administrator. Upon
termination, you must elect either to receive a certificate for the number
of whole shares held in your Plan account and a check for the value of any
fractional share, or to have all of the shares in your Plan account sold
for you as described above and pay applicable fees and commissions.
The Plan Administrator will send you your proceeds, without interest, or
your certificates as soon as practicable. If a notice of withdrawal is
received on or after the record date but before the related dividend
payment date, a separate dividend check will be mailed as soon as
practicable following the payment date. Thereafter, cash dividends will be
paid out to you and not reinvested in Compaq common stock.
ADMINISTRATION
23. Who administers the Plan?
The Plan is administered by BankBoston, N.A., Compaq's stock transfer
agent, registrar and dividend disbursing agent. As Plan Administrator,
BankBoston acts as agent for Plan participants and keeps records, sends
statements and performs other duties relating to the Plan.
Purchases and sales of Compaq common stock under the Plan are made by an
independent broker-dealer acting as purchasing agent for Plan
participants. To the extent required by applicable law in certain
jurisdictions, shares offered under the Plan are offered through an
independent broker-dealer.
24. How do I contact the Plan Administrator?
To request enrollment packages or for other questions, please call:
1-888-218-4373
or write to:
Compaq Computer Corporation Shareholder Investor Plan
c/o BankBoston, N.A.
P. O. Box 8040
Boston, Massachusetts 02266-8040
or refer to the Plan Administrator's website:
http://www.EquiServe.com
When communicating with the Plan Administrator, you should have available
your account number and taxpayer identification number.
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25. What kind of reports will be sent to participants in the Plan?
You will receive a quarterly statement of account activity. Supplemental
account statements will be provided for any month in which you make a cash
investment or deposit, transfer or withdraw shares. You will also receive
transaction statements promptly after each sale of shares under the Plan.
You should retain these statements in order to establish the cost basis of
shares purchased under the Plan for income tax and other purposes. In
addition, you will receive all communications sent to other shareholders,
such as annual reports and proxy statements.
ADDITIONAL INFORMATION
26. How would a stock split or stock dividend affect my account?
Any shares resulting from a stock split or stock dividend paid on shares
held in custody for you by the Plan Administrator will be credited to your
book-entry position. Of course, you may request a certificate at any time
for any or all of your shares.
27. How do I vote my Plan shares at shareholders' meetings?
You will be sent a proxy statement in connection with each meeting of
Compaq's shareholders, together with a proxy card. This proxy card, when
duly signed and returned, will be voted as you indicate. Your voting will
be confidential in accordance with Compaq's policy on confidential voting.
Fractional shares will be aggregated and voted in accordance with the
participants' directions. If the proxy card is not returned or if it is
returned unsigned, the shares will not be voted.
28. Can the Plan be changed?
We may add to, modify or discontinue the Plan at any time. We will send
you written notice of any significant changes.
Upon discontinuance of the Plan, we will return to you any uninvested
automatic deductions from your bank account, issue free of charge a
certificate for full shares credited to your account and pay you in cash
for any fractional shares credited to your account.
29. What are the responsibilities of Compaq and the Plan Administrator?
Neither Compaq nor the Plan Administrator, Bank Boston, N.A., will be
liable for any act, or for any failure to act, as long as they have made
good faith efforts to carry out the terms of the Plan, as described in
this Prospectus and on the forms that accompany each investment or
activity.
Participants should recognize that neither Compaq nor the Plan
Administrator can promise a profit or protect against a loss on the common
stock purchased under the Plan.
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Although the Plan provides for the reinvestment of dividends, the
declaration and payment of dividends will continue to be determined by the
Compaq Board of Directors in its discretion, depending upon future
earnings, the financial condition of Compaq and other factors. The amount
and timing of dividends may be changed, or the payment of dividends
terminated, at any time without notice.
TAX CONSEQUENCES
You should consult with your tax advisor for a complete analysis of the
tax consequences of participating in the Plan. Cash dividends reinvested under
the Plan will be taxable for U.S. Federal income tax purposes as having been
received by you even though you have not actually received them in cash. You
will receive an annual statement from the Plan Administrator indicating the
amount of reinvested dividends reported to the U.S. Internal Revenue Service as
dividend income.
You will not realize gain or loss for U.S. Federal income tax purposes
upon a transfer of shares to the Plan or the withdrawal of whole shares from
the Plan. You will, however, generally realize gain or loss upon the receipt of
cash for fractional shares held in the Plan. You will also realize gain or loss
when shares are sold. The amount of gain or loss will be the difference between
the amount that you receive for the shares sold and your tax basis therefor. In
order to determine the tax basis for shares in your account, you should retain
all account and transaction statements.
Plan participants who are non-resident aliens or non-U.S. corporations,
partnerships or other entities generally are subject to a withholding tax on
dividends paid on shares held in the Plan. The Plan Administrator is required
to withhold from dividends paid the appropriate amount determined in accordance
with Internal Revenue Service regulations. Where applicable, this withholding
tax is determined by treaty between the U.S. and the country in which the
participant resides. In addition, dividends paid on shares in Plan accounts are
subject to the "backup withholding" provisions of the Internal Revenue Code.
Accordingly, the amount of any dividends, net of the applicable withholding
tax, will be credited to participant Plan accounts for investment in additional
shares of Compaq common stock.
AVAILABLE INFORMATION
Compaq files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any of these documents at
the SEC's public reference rooms in Washington, D.C., New York City and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Compaq's SEC filings are also available to the public
from commercial document retrieval services and at the web site maintained by
the SEC at http://www.sec.gov. Compaq's common stock is listed on The New York
Stock Exchange and Compaq's SEC filings and other information may also be
inspected at the offices of The New York Stock Exchange, 20 Broad Street, New
York, New York, 10005.
This Prospectus constitutes a part of a Registration Statement on Form S-3
filed by Compaq with the SEC under the Securities Act of 1933. As allowed by
SEC rules, this
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Prospectus does not contain all the information you can find in the
Registration Statement or the exhibits to the Registration Statement.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows Compaq to "incorporate by reference" information into this
Prospectus, which means important information may be disclosed to you by
referring you to another document filed separately with the SEC. The following
documents have been previously filed with the SEC and are incorporated by
reference into this Prospectus.
1. Compaq's Annual Report on Form 10-K for the year ended December
31, 1996;
2. Compaq's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997;
3. Compaq's Current Reports on Form 8-K as filed on October 16,
1997 and November 21, 1997; and
4. The description of the Compaq's common stock contained in
Compaq's Registration Statement on Form 8-A.
Compaq is also incorporating by reference additional documents that we may
file with the SEC between the date of this Prospectus and the date of the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold. To the extent that information in these documents may be different or
contradictory, you should rely on the information contained in the most recent
filing.
You may obtain documents incorporated by reference from Compaq without
charge, except the exhibits (unless we have specifically incorporated by
reference an exhibit in this Prospectus), by writing to:
Compaq Computer Corporation
20555 SH 249
Houston, Texas 77070
Telephone: (800) 433-2391
Attention: Investor Relations
web site: http://www.compaq.com
USE OF PROCEEDS
At present, we expect the Plan Administrator to purchase Compaq shares in
the open market. As a result, Compaq will not receive any proceeds. If the Plan
Administrator purchases shares for the Plan from Compaq, the net proceeds will
be used for general corporate purposes.
LEGAL MATTERS
The legality of the common stock offered by this Prospectus has been
passed upon for Compaq by Linda S. Auwers, Vice President and Associate General
Counsel of Compaq. Ms.
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Auwers has options to purchase Compaq common stock, owns shares
of Compaq common stock as a participant in an employee benefit plan, and is
eligible to participate in the Plan.
EXPERTS
The consolidated financial statements incorporated from Compaq's
Current Report on Form 8-K as filed on November 21, 1997 are incorporated by
reference in this Prospectus in reliance upon the report of Price Waterhouse
LLP, independent accountants, given on the authority of such firm as experts in
accounting and auditing.
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