SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
__X__ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997
_____ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXHANGE
ACT OF 1934
For the transition period from ______ to ______.
Commission file number: 1-9026
A. Full title of the plan and the address of the plan, if different from that of
the issuer below:
COMPAQ COMPUTER CORPORATION
INVESTMENT PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
COMPAQ COMPUTER CORPORATION
20555 SH 249, Houston, Texas 77070
(281) 370-0670
<PAGE>
COMPAQ COMPUTER CORPORATION INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS, ADDITIONAL INFORMATION, AND EXHIBITS
The following plan financial statements, schedules, and reports have been
prepared in accordance with the financial reporting requirements of ERISA.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants 3
Financial Statements:
Statement of Net Assets Available for Plan Benefits
at December 31, 1997 and 1996 4
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1997 5
Notes to Financial Statements 6-12
Additional Information:*
Item 27a - Schedule of Plan Assets Held for Investment
Purposes at December 31, 1997 13
Item 27d - Schedule of Reportable Transactions for the
Year Ended December 31, 1997 14
Exhibits:
(1) Consent of Independent Accountants 17
<FN>
* Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for reporting and disclosure under ERISA have been omitted
because they are not applicable.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative Committee of the
Compaq Computer Corporation Investment Plan
In our opinion, the accompanying Statement of Net Assets Available for Plan
Benefits and the related Statement of Changes in Net Assets Available for Plan
Benefits present fairly, in all material respects, the net assets available for
plan benefits of the Compaq Computer Corporation Investment Plan at December 31,
1997 and 1996, and the changes in net assets available for plan benefits for the
year ended December 31, 1997, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
the schedules listed in the accompanying index is presented for purposes of
additional analysis and is not a required part of the basic financial statements
but is additional information required by ERISA. The information in Note 6, Net
Assets Available For Plan Benefits by Investment Fund and Note 7, Changes in Net
Assets Available for Plan Benefits by Investment Fund is presented for the
purpose of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. The schedules listed in the accompanying index and the information by
fund have been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Houston, Texas
June 30, 1998
<PAGE>
COMPAQ COMPUTER CORPORATION INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
December 31,
1997 1996
------------- ------------
<S> <C> <C>
Investments, at fair value (Notes 2 and 6) $ 863,571,747 $530,701,147
Loans to participants 34,431,947 27,412,263
------------- ------------
Net assets available for plan benefits $ 898,003,694 $558,113,410
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
COMPAQ COMPUTER CORPORATION INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Additions to net assets attributed to:
Employee contributions $ 39,952,557
Employer contributions, less forfeitures of $2,090,000 24,862,424
Rollover contributions 16,856,088
Interest on participant loans 2,779,485
Investment income 13,451,490
Net appreciation in fair market value of investments 280,738,999
------------
378,641,043
Deductions from net assets attributed to:
Benefits paid to participants 38,188,544
Administrative expenses 562,215
------------
38,750,759
Net increase 339,890,284
Net assets available for plan benefits:
Beginning of year 558,113,410
------------
End of year $898,003,694
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
COMPAQ COMPUTER CORPORATION INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of the Plan and Significant Accounting Policies:
Compaq Computer Corporation (the Company) initially adopted the Compaq Computer
Corporation Savings Plan effective April 1, 1985, to establish a savings and
investment plan for the benefit of the Company's employees and their
beneficiaries. The Compaq Computer Corporation Savings Plan was renamed the
Compaq Computer Corporation Investment Plan (the Plan) effective January 1,
1986, pursuant to a Plan amendment on October 28, 1986. There were no material
changes in the Plan as a result of amendments in 1997.
The following description of the Plan provides only general information.
Eligible employees may refer to the official Investment Plan document, as
amended, for a more complete description of the Plan's provisions. Capitalized
terms used and not otherwise defined herein are as defined in the Plan.
Basis of Accounting -
The financial statements of the Plan are prepared under the accrual method of
accounting.
Investment Valuation and Income Recognition -
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent the net
asset value of shares held by the Plan at year end. The Company stock is valued
at its quoted market price. Loans to participants are valued at cost which
approximates fair value. Purchases and sales of securities are recorded on a
trade-date basis. Interest income is recorded on the accrual basis.
Payment of Benefits -
Benefits are recorded when paid.
Participation -
The Plan is a voluntary defined contribution plan. Employees are eligible to
participate at the beginning of any month after completion of six months of
service with the Company. Participants may contribute to the Plan, through
salary reduction, an amount between 1% and 14% of Base Compensation.
Participants may change their (i) contribution percentage at the beginning of
any month, (ii) allocation of contributions to the funds (in 1% increments) on a
daily basis, and (iii) allocation of investment balances in the Company's Common
Stock Fund and the mutual funds on a daily basis. All participating employees of
the Company are required to adhere to the Company's policy regarding insider
trading, and executive officers are required to adhere to rules issued by the
Securities and Exchange Commission under Section 16 of the Securities Exchange
Act of 1934, as amended. Each Participant's annual salary reduction contribution
is limited to the maximum amount permitted by the Secretary of the Treasury
($9,500 in 1997).
Contributions -
The Company is required to make monthly matching contributions to the Plan in an
amount equal to the respective Participant's salary reduction contribution,
subject to a maximum of 6% of the Participant's Base Compensation up to a
maximum of $160,000. The Company may also make, in its discretion, additional
matching contributions at the end of the Plan Year out of current or accumulated
earnings. At its discretion, the Company may make additional Company
contributions to the accounts of certain Participants to the extent necessary to
meet tests imposed by the Internal Revenue Code (Code).
<PAGE>
Investment Options -
Participants are permitted to direct the investment of all Company matching
contribution and Participant salary reduction contributions into any of the
following eight funds:
* Warburg Pincus Institutional International Equity Fund, a fund that seeks
long-term capital appreciation by investing in a broadly diversified portfolio
of equity securities of companies that have their principal business activities
and interests outside the United States.
* Vanguard Explorer Fund, a fund that seeks to provide long-term capital
appreciation by investing in the common stocks of relatively small, unseasoned
or embryonic companies.
* Vanguard Money Market Prime Portfolio Fund, a money market fund, seeks
maximum current income consistent with the preservation of capital and
liquidity.
* Vanguard Short-Term Corporate Bond Fund seeks to provide the highest level
of current income consistent with the conservation of capital and the investment
policy of the fund.
* Vanguard Index 500 Portfolio Fund, a stock market index fund that attempts
to replicate the investments and returns of the U.S. equity market, as
represented by the Standard & Poor's 500 Index.
* Vanguard Primecap Fund, a fund that invests primarily in dividend-paying
common stocks selected on the basis of greater-than-average earnings growth
potential, consistency of earnings growth, and quality of management.
* Vanguard Equity Income Funds seeks to provide a stable, high level of
dividend income and long-term growth of income and capital.
* The Compaq Stock Fund, a fund that is comprised of common stock of the
Company.
Participants' Accounts -
Each Participant's account is credited with his or her elective deferral
contribution, the Company's matching contribution, any rollover contribution,
and an allocation of Plan earnings or losses. Allocations of Plan earnings or
losses are based upon the earnings or losses of the fund or funds in which a
Participant has directed the investments of his or her account balances, on a
pro rata basis. The benefit to which a Participant is entitled is the benefit
that can be provided from the Participant's vested account balances net of any
outstanding loans against those vested amounts.
Vesting -
Participants are immediately vested in their elective deferral contributions and
rollover contribution, and any net earnings thereon. Within the Participant's
first five years of service with the Company, the Company matching contributions
vest one-third on December 31 of the year of contribution, one-third on December
31 of the first succeeding year and one-third on December 31 of the second
succeeding year. All Company matching contributions become 100% vested after a
Participant has attained five years of service with the Company. The Plan
provides for full vesting in the respective Company matching contributions for
Participants who attain the age of 65, die while employed by the Company,
terminate employment on or after age 55, or terminate employment due to total
and permanent disability.
Loans -
Participants may borrow up to 50% of the current value of their vested account
balances, including any earnings or losses. The minimum amount that may be
borrowed is $1,000 ($100 for a loan for certain hardship purposes) and the
maximum is $50,000 less the highest outstanding principal balance of any loan
outstanding within the past twelve months. Loan terms range up to 5 years
or up to 30 years for the purchase of a primary residence. The loans are
secured by the balance in the participant's account and bear interest at a
fixed rate of 1 percent above the prime rate for the term of the loan. A
Participant may originate three loans within a calendar year and can have no
more than three loans outstanding at any given time. The carrying value of
Participant loans approximates fair value.
<PAGE>
Forfeitures -
Forfeitures of terminated Participants' nonvested accounts serve to reduce
subsequent Company contributions and to pay reasonable administrative expenses.
Forfeitures aggregated $2,495,629 (exclusive of subsequent earnings) and
$2,090,000 was used to reduce Company contributions for the year ended December
31, 1997. An additional $521,296 was used to pay administrative expenses.
Administration -
Vanguard Group, Inc. is trustee for the administration of the Plan assets.
Expenses incidental to the administration of the Plan and Trust are paid by the
Trust, unless paid by the Company. The Plan paid $562,215 during 1997, of which
$521,296 were paid by the Company out of forfeitures and $40,919 were charged
against earnings in the Warburg Pincus Institutional International Equity Fund.
Payment of Benefits -
Participants or their designated beneficiaries are entitled to receive a
lump-sum distribution of all vested amounts net of any outstanding loans against
those vested amounts in the event of termination of service or death. In
addition, a participant who has reached age 59 1/2 may make withdrawals of his
vested amounts while employed by the Company.
Estimates-
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Management believes the
estimates are reasonable.
Note 2 - Investments
The number of shares and net asset values or quoted market price for each fund
are as follows:
<TABLE>
<CAPTION>
Number of Net Asset Value/
Shares Market Price
---------- -----------------
<S> <C> <C>
Warburg Pincus Institutional International Equity Fund 1,183,895 $ 14.50
Vanguard Explorer Fund 407,722 55.30
Vanguard Money Market Prime Portfolio Fund 48,859,864 1.00
Vanguard Short-Term Corporate Bond Fund 1,034,310 10.81
Vanguard Index 500 Portfolio Fund 1,252,742 90.07
Vanguard Primecap Fund 2,159,498 39.57
Vanguard Equity Income Fund 58,186 22.39
Compaq Stock Fund 19,994,820 28.22
</TABLE>
Net realized gains determined based on the current value method related to sales
of the Company's stock and related to the sales of mutual fund investments for
year ended December 31, 1997 are $31,635,891 and $10,745,746 respectively.
Proceeds and costs related to sales of the Company's stock and related to the
sales of mutual fund investments for the year ended December 31, 1997 are
$152,348,789 and $120,712,898 and $259,010,178 and $248,264,432 respectively.
The Compaq share price reflects a five-for-two stock split in July 1997 and a
two-for-one stock split in January 1998.
<PAGE>
Note 3 - Plan Termination:
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan termination,
Participants will be credited with a 100% vested interest in their respective
Company matching contributions and net earnings thereon.
Note 4 - Federal Income Tax Status:
Management believes that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the Code and therefore the
related trust is exempt from taxation under Code Section 501(a). In connection
with certain amendments to the Plan, the Internal Revenue Service granted a
favorable letter of determination to the Plan in January 1995.
Note 5 - Party-in-Interest Transactions:
During 1997, the Plan held certain assets in mutual funds managed by Vanguard
Group, Inc. Any purchases and sales of these funds are open market transactions
at fair market value. Consequently, such transactions are permitted under the
provisions of the Plan and are exempt from prohibition of party-in-interest
transactions under the Code and ERISA.
<PAGE>
Note 6 - Net Assets Available For Plan Benefits by Investment Fund:
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Warburg
Pincus Vanguard Vanguard Vanguard
Institutional Vanguard Money Market Short-Term Index 500 Vanguard
International Explorer Prime Corporate Portfolio Primecap
Equity Fund Fund Portfolio Fund* Bond Fund Fund* Fund*
-------------- ----------- ---------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value $ 17,166,491 $22,547,035 $ 48,859,864 $11,180,891 $112,834,490 $85,451,349
Loans to participants
-------------- ----------- ---------------- ----------- ------------ ------------
Net assets available for plan benefits $ 17,166,491 $22,547,035 $ 48,859,864 $11,180,891 $112,834,490 $85,451,349
============== =========== ================ =========== ============ ===========
Vanguard
Equity Company
Income Stock Participant
Fund Fund* Loans Total
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investments, at fair value $1,302,801 $564,228,826 $863,571,747
Loans to participants $ 34,431,947 34,431,947
---------- ------------ ------------ ------------
Net assets available for plan benefits $1,302,801 $564,228,826 $ 34,431,947 $898,003,694
========== ============ ============ ============
<FN>
*Fund balance represents more than 5% of total net assets available for plan benefits.
</TABLE>
<PAGE>
Note 6 (continued) - Net Assets Available For Plan Benefits by Investment Fund:
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Warburg Pincus
Vanguard Vanguard Vanguard
Institutional Vanguard Money Market Short-Term Index 500 Vangaurd
International Explorer Prime Corporate Portfolio Primecap
Equity Fund Fund Portfolio Fund* Bond Fund Fund* Fund*
--------------- ------------ ---------------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value $ 19,837,930 $ 22,981,647 $ 66,559,573 $ 9,975,751 $ 88,850,986 $ 62,287,111
Loans to participants
--------------- ------------ ---------------- ----------- ------------ -------------
Net assets available for plan benefits $ 19,837,930 $ 22,981,647 $ 66,559,573 $ 9,975,751 $ 88,850,986 $ 62,287,111
=============== ============ ================ =========== ============ =============
Company
Stock Participant
Fund* Loans Total
------------- ------------ ------------
<S> <C> <C> <C>
Investments, at fair value $ 260,208,149 $530,701,147
Loans to participants $ 27,412,263 27,412,263
------------- ------------ ------------
Net assets available for plan benefits $ 260,208,149 $ 27,412,263 $558,113,410
============= ============ ============
<FN>
*Fund balance represent more than 5% of total net assets available for plan benefits.
</TABLE>
<PAGE>
Note 7 - Changes in Net Assets Available For Plan Benefits by Investment Fund:
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Warburg Vanguard
Pincus Money Vanguard Vanguard
Institutional Vanguard Market Short-Term Index 500
International Explorer Prime Corporate Portfolio
Equity Fund Fund Portfolio Bond Fund Fund
--------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employee contributions $ 1,728,807 $ 2,414,434 $ 4,360,114 $ 1,080,495 $ 7,439,389
Employer contributions, less forfeitures 1,150,146 1,588,099 1,093,381 760,458 4,985,192
Rollover contributions 332,969 752,459 2,410,287 788,323 3,843,694
Interest on participant loans 71,103 90,642 465,165 46,363 412,021
Investment income 1,509,612 2,233,435 3,399,510 661,226 2,433,833
Net appreciation in fair market value of investments (1,788,315) 1,158,632 - 61,984 27,549,231
--------------- ------------ ------------- ------------ -------------
3,004,322 8,237,701 11,728,457 3,398,849 46,663,360
Deductions from net assets attributed to:
Benefits paid to participants (1,129,133) (1,120,431) (8,491,037) (990,388) (5,806,909)
Administrative expenses (40,919) - (521,296) - -
Interfund transfers (4,505,709) (7,551,882) (20,415,833) (1,203,321) (16,872,947)
Net increase/decrease (2,671,439) (434,612) (17,699,709) 1,205,140 23,983,504
Net assets available at the Beginning of Period 19,837,930 22,981,647 66,559,573 9,975,751 88,850,986
--------------- ------------ ------------- ------------ -------------
NET ASSETS AVAILABLE AT END OF PERIOD $ 17,166,491 $22,547,035 $ 48,859,864 $11,180,891 $112,834,490
=============== ============ ============= ============ =============
Vanguard Vanguard Compaq
Primecap Equity Income Stock Participant
Fund Fund Fund Loans Total
------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employee contributions $ 6,174,253 $ 40,074 $ 16,714,991 - $ 39,952,557
Employer contributions, less forfeitures 4,098,741 26,704 11,159,703 - 24,862,424
Rollover contributions 2,629,263 68,900 6,030,193 - 16,856,088
Interest on participant loans 314,948 1,570 1,377,673 - 2,779,485
Investment income 3,143,155 70,719 - - 13,451,490
Net appreciation in fair market value of investments 20,714,381 9,681 233,033,405 - 280,738,999
------------- --------------- ------------- ------------- -------------
37,074,741 217,648 268,315,965 - 378,641,043
Deductions from net assets attributed to:
Benefits paid to participants (3,566,339) (2,883) (15,636,506) $ (1,444,918) (38,188,544)
Administrative expenses - - - - (562,215)
Interfund transfers (10,344,165) 1,088,036 51,341,218 8,464,603
------------- --------------- ------------ -------------- -------------
Net increase/decrease 23,164,237 1,302,801 304,020,677 7,019,685 339,890,284
Net assets available at the Beginning of Period 62,287,112 - 260,208,149 27,412,262 558,113,410
------------- --------------- ------------- ------------- -------------
NET ASSETS AVAILABLE AT END OF PERIOD $ 85,451,349 $ 1,302,801 $564,228,826 $ 34,431,947 $898,003,694
============= =============== ============= ============= =============
</TABLE>
<PAGE>
COMPAQ COMPUTER CORPORATION INVESTMENT PLAN
LINE 27A - SCHEDULE OF PLAN ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Description of Current
Identity of issue investment Cost value
------------------------------------------------------- ---------------- ------------- -------------
<C> <S> <C> <C> <C>
* Warburg Pincus Institutional International Equity Fund Mutual Fund $ 18,104,010 $ 17,166,491
* Vanguard Explorer Fund Mutual Fund 21,615,017 22,547,035
* Vanguard Money Market Prime Portfolio Fund Mutual Fund 48,859,864 48,859,864
* Vanguard Short-Term Corporate Bond Fund Mutual Fund 11,139,054 11,180,891
* Vanguard Index 500 Portfolio Fund Mutual Fund 80,418,033 112,834,490
* Vanguard Primecap Fund Mutual Fund 65,535,643 85,451,349
* Vanguard Equity Income Fund Mutual Fund 1,296,559 1,302,801
* Compaq Stock Fund Common Stock 233,334,921 564,228,826
$ .01 par value
* Participant Loans ** 34,431,947 34,431,947
------------- -------------
Plan assets held for investment $ 514,735,048 $ 898,003,694
============= =============
<FN>
* Represents an investment associated with a party-in-interest.
**Participant loans consist of general purpose and home purchase loans made to Participants from their account balances,
which have repayment periods not to exceed five and thirty years, respectively. The interest rates at December 31, 1997
range from 6% to 11.5%
</TABLE>
<PAGE>
COMPAQ COMPUTER CORPORATION INVESTMENT PLAN
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Identity of party involved Description Purchase Expense
of asset price Selling price Lease Rental Incurred Cost of asset
- ----------------------------- ------------- ------------- --------------- ------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Compaq Stock Fund Common stock $ 224,277,713
Compaq Stock Fund Common stock $ 152,348,789 $ 103,773,702
Vanguard Index 500 Porfolio Mutual Fund 39,775,966
Fund
Vanguard Index 500 Portfolio Mutual Fund 43,131,942 34,726,341
Fund
Vanguard Money Market Mutual Fund 129,448,598
Reserves-Prime Portfolio
Vanguard Money Market Mutual Fund 148,747,710 148,747,710
Reserves-Prime Portfolio
Vanguard Primecap Fund Mutual Fund 35,813,022
Vanguard Primecap Fund Mutual Fund 33,274,456 27,320,658
(a) (h) (i)
Current value on Number of
Identity of party involved transaction date Net gain or (loss) Number of Sales Purchases
- ----------------------------- ------------------ ------------------- --------------- -------------------
<S> <C> <C> <C> <C>
252
Compaq Stock Fund $ 224,277,713
Compaq Stock Fund 152,348,789 $ 48,575,087 251
Vanguard Index 500 Porfolio 39,775,966 250
Fund
Vanguard Index 500 Portfolio 43,131,942 8,405,601 253
Fund
Vanguard Money Market 129,448,598 256
Reserves-Prime Portfolio
Vanguard Money Market 148,747,710 253
Reserves-Prime Portfolio
Vanguard Primecap Fund 35,813,022 248
Vanguard Primecap Fund 33,274,456 5,953,798 251
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
COMPAQ COMPUTER CORPORATION
INVESTMENT PLAN
Date: June 26, 1998 By: /s/Linda Auwers
------------------
Linda Auwers
Vice President and Associate General Counsel,
Corporate Compliance
Compaq Computer Corporation
<PAGE>
EXHIBIT 1
<PAGE>
EXHIBIT 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-8 (No. 33-10106) of
Compaq Computer Corporation of our report dated June 15, 1997 appearing on page
3 of this Form 11-K.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Houston, Texas
June 30, 1998
