Exhibit
10(a)(1)


 


COMPAQ COMPUTER
CORPORATION


1985 NONQUALIFIED STOCK
OPTION AGREEMENT


 


 


This Stock Option Agreement is between COMPAQ COMPUTER
CORPORATION, a Delaware corporation (the “Company”), and
________________________ (the “Options”).


 


W  I  T  N  E  S
S  E  T  H:


 


WHEREAS, the Company has
adopted the COMPAQ COMPUTER CORPORATION 1985 Nonqualified Stock Option Plan,
which plan is incorporated herein by reference and made a part of this
agreement;


 


WHEREAS, the Company has determined that it would be
in the best interests of the Company, and its shareholders to grant the option
provided for herein (the “Option”) to Optionee pursuant to the Plan and the
terms set forth herein as an inducement to remain in the service of the Company
and as an incentive for increased efforts during such service;


 


NOW THEREFORE, for and in consideration of these
premises it is agreed as follows:


 


1.             Option.   Subject
to the terms and conditions contained herein, the Company hereby grants to
Optionee an option to purchase from the Company _________shares of the
Company’s common stock, $.01 par value (“Common Stock”) at a price of _________
per share.


 


2.             Exercise
of Option.  


 


(a)           Providing
the conditions of subparagraphs (b), (c), (d), and (e) of this paragraph 2 have
been satisfied, Optionee may exercise this Option to purchase a number of
shares of Stock which shall not exceed the difference between A and B, where


 


A  =                                   the product of the number of shares
subject to this Option multiplied by a fraction, the numerator of which is the
number of whole months which have elapsed since _____________________________
(not to exceed (48) and the demoninator of which is 48.


 


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B  =                                       the number of shares of Stock previously
acquired by Optionee’s partial exercise of this Option.


 


(b)           Optionee must have been a full time
employee of the Company for a period of three (3) months prior to any exercise,
in whole or part, of the Option.


 


(c)           This
Option may be exercised in whole or in part at any time during the period
beginning one year after Optionee’s date of employment and ending ten years
from the date of this Agreement, provided that Optionee may not exercise this
option more often than twice during any calendar year. The Option is not
transferable or assignable by the Optionee other than by will or the laws of
descent and distribution. The Option shall be exercisable by the Optionee only
during his lifetime.


 


(d)           Options
may be exercised in whole or in part with respect to whole shares only within
the period permitted for exercise thereof, and shall be exercised by written
notice of intent to exercise the Option with respect to a specified number of
shares delivered to the Company at its principal office and payment in full to
the Company at its principal office in the amount of the option price for the
number of shares of the Common Stock with respect to which the Option is then
being exercised. The payment of the option price shall be made in cash or, with
the consent of the Committee, in whole or in part in Common Stock valued at
Fair Market Value which is owned by the Optionee.


 


(e)           This
Option may not be exercised prior to the registration of the Stock with the
Securities and Exchange Commission and any applicable state agencies. However,
this condition may be waived by the Committee if it determines that such
registration is not necessary in order to legally issue shares of Stock to
Optionee.


 


(f)            Upon
the Company’s determination that the Option has been validly exercised as to
any of the Stock, the Secretary of the Company shall issue or cause to be
issued certificates in the Optionee’s name for the number of shares set forth
in his written notice. However, the Company shall not be liable to the Optionee
for damages relating to any delays in issuing the certificates to him, any loss
of the certificates, or any mistakes or errors in the issuance of the
certificates or in the certificates themselves.


 


3.             Employment
of Optionee.  Subject to the terms
of any employment contract to the contrary, the Company shall have the right to
terminate or change the terms of employment of Optlonee at any time and for any
reason whatsoever.


 


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4.             Death
of Optionee.  Upon the death of
optionee, all options hereunder exercisable at the date of such death shall be
thereafter exercisable by Optionee’s executor or administrator, or the person
or persons to whom his rights under this Agreement shall pass by will or by the
laws of descent and distribution as the case may be, until the termination of the option in accordance with
this Agreement and the COMPAQ COMPUTER CORPORATION 1985 Nonqualified
Stock Option Plan.  In no event may any
option be exercised after the end of the Option Period.


 


5.             Transferability
of Option.  This option shall not be
transferable by Optionee otherwise than
by Optionee’s will or by the laws of descent and distribution.  During the lifetime of Optionee, the option
shall be exercisable only by him. Any heir or legatee of Optionee shall take
rights herein granted subject to the terms and conditions hereof.  No such transfer of this Agreement to heirs
or legatees of Optionee shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of such
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and
conditions hereof.


 


6.             Stockholder
Rights.  Optionee shall have no
rights as a stockholder with respect to any shares of Common Stock covered by
this Agreement until the date of issuance of a certificate for shares of Common
Stock purchased pursuant to this Agreement. 
Until such time, Optionee shall not be entitled to dividends or to vote
at meetings of the stockholders of the Company. Except as provided in paragraph
8 hereof, no adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash or securities or other property) paid or distributions or other
rights granted in respect of any share of Common Stock for which the record
date for such payment, distribution or grant is prior to the date upon which the  Optionee shall have been
issued share certificates, as provided hereinabove.


 


7.             Extraordinary   Corporate  
Transactions.  New option
rights may be substituted for the option rights granted hereunder or the
Company’s duties as to options granted pursuant to this Agreement may be
assumed, by a corporation other than the Company, or by a parent or subsidiary
of the Company or such corporation, in connection
with any merger, consolidation, acquisition, separation, reorganization,
liquidation or like occurrence in which the Company is involved.  Notwithstanding the foregoing or the
provisions of paragraph 8 hereof, in the event such corporation, or parent or
subsidiary of the Company or such corporation, does not substitute new option
rights for, and substantially equivalent to, the option rights granted
hereunder, or assume the option rights granted hereunder, the option rights
granted hereunder shall terminate and thereupon become null and void (i) upon
dissolution or liquidation of the Company, or similar occurrence, (ii) upon any
merger, consolidation, acquisition,
separation, reorganization, or 
similar occurrence,


 


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where the Company will not be a surviving entity or (iii) upon a
transfer of substantially all of the assets of the Company or more than 60% of
the outstanding Common Stock; provided, however, that the Optionee shall have
the right immediately prior to or concurrently with such dissolution,
liquidation, merger, consolidation, acquisition, separation, reorganization or
similar occurrence, to exercise any unexpired option rights granted hereunder
to the extent such option rights are then exercisable.


 


8.             Changes
in Capital Structure.  The  existence 
of outstanding options shall not affect in any way the right or power of
the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or
any issuance of bonds, debentures, preferred or prior preference stock ahead of
or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of  the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceedings, whether of a similar character or otherwise. Provided,
however, that if the outstanding shares of Common Stock of the Company shall at
any time be changed or exchanged by declaration of a stock dividend, stock
split, combination of shares, or recapitalization, the number and kind of
shares subject to the Plan or subject to any options theretofore granted, and
the option prices, shall be appropriately and equitably adjusted so as to
maintain the proportionate number of shares without changing the aggregate
option price.


 


                9.             Compliance with Securities Laws.  Upon the acquisition of any shares pursuant
to the exercise of the option herein granted, Optionee (or any person acting
under paragraph 5) will enter into such written representations, warranties and
agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Agreement.


 


10.           Resolution
of Disputes.  As a condition of the
granting of the option hereby, the Optionee and his heirs and successors agree
that any dispute or disagreement which may arise hereunder shall be determined
by the Committee in its sole discretion and judgment, and that any such
determination and any interpretation by the Committee of the terms of this
Agreement shall be final and shall be binding and conclusive, for all purposes,
upon the Company, Optionee, his heirs and personal representatives.


 


11.           Legend
on Certificates.  The certificates
representing the shares of Common Stock purchased by exercise of an option may
be stamped or otherwise imprinted with a legend in such form as the Company or
its counsel may require with respect to any applicable statutory, contractual
or other restrictions on sale or transfer and the stock transfer records of the
Company may reflect stop-transfer instructions with respect to such shares.


 


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12.           Notices.  Every notice hereunder shall be in writing
and shall be given by registered or certified mail. All notices of the exercise
of any option hereunder shall be directed to COMPAQ Computer Corporation, 20555
FM 149, Houston, Texas 77070, Attention: President.  Any notice given by the Company to Optionee directed to him at
his address on file with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company shall be under no
obligation whatsoever to advise Optionee of the existence, maturity or
termination of any of Optionee’s rights hereunder and Optionee shall be deemed
to have familiarized himself with all matters contained herein and in the Plan
which may affect any of Optionee’s rights or privileges hereunder.


 


13.           Interpretation.  Whenever the term “Optionee” is used herein
under circumstances applicable to any other person or persons to whom this
award, in accordance with the provisions of paragraph 4 hereof, may be
transferred, the word “Optionee” shall be deemed to include such person or
persons. References to the masculine gender herein also include the feminine
gender for all purposes.


 


14.           Other
Restrictions.  Notwithstanding any
of the other provisions hereof, Optionee agrees that he will not exercise the
option(s) granted hereby, and that the Company will not be obligated to issue
any shares pursuant to this Agreement, if the exercise of the optlon(s) or the
Issuance of such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or regulation of any
governmental authority or national securities exchange.


 


15.           Agreement
Subject to Plan.  This Agreement is
subject to the Plan.  The terms and
provisions of the plan (including any subsequent amendments thereto) are hereby
incorporated herein by reference thereto. In the event of a conflict between
any term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail. All
definitions of words and terms contained in the Plan shall be applicable to
this Agreement.


 


IN WITNESS WHEREOF, 
this Agreement has been executed as of the ________ day of ____________
1986.


 


 


	
  Attested By:

  	
  COMPAQ Computer Corporation

  
	
  ________________________

  	
  By: 
  _________________________

  
	
   

  	
   

  
	
   

  	
  Date: ________________________

  
	
   

  	
   

  
	
   

  	
  Optionee

  
	
   

  	
  _____________________________

  



 


 


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