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                                                                   Exhibit 10(c)

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     Digital Equipment Corporation

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         Retirement Arrangement for Non-Employee Directors
               (as amended on June 12, 1997 and April 23, 1998)

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                  I.  Name and Purpose

                  The name of this plan is the Digital Equipment Corporation
                  Retirement Arrangement for Non-Employee Directors (the
                  "Plan"). Its purpose is to recognize and reward the valuable
                  service provided to Digital Equipment Corporation by its
                  non-employee directors by supplementing their retirement
                  income.

                  II.  Effective Date

                  The Plan shall become effective for any non-employee director
                  terminating service with the Digital Equipment Corporation
                  Board of Directors (the "Board") on or after 18 May 1987.

                  III.  Eligibility for Participation

                  All non-employee directors of Digital Equipment Corporation on
                  18 May 1987 shall be eligible to participate and shall begin
                  participation in the Plan on 18 May 1987. All non-employee
                  directors of Digital Equipment Corporation who are appointed
                  to the Board on or after 19 May 1987 shall be eligible to
                  participate in the Plan and shall begin participation upon the
                  effective date of their appointment or election to the Board.
                  Any director who begins participation shall be a participant
                  (a "Participant") in the Plan for life. Notwithstanding the
                  foregoing paragraph, effective upon and subject to the
                  approval of the 1995 Stock Option Plan for Non-Employee
                  Directors by the stockholders of Digital Equipment
                  Corporation, eligibility to participate in the Plan shall be
                  limited only to those individuals who commenced service as a
                  director prior to January 1, 1995; AND FURTHER, effective as
                  of the date of the 1997 Annual Meeting of Stockholders of
                  Digital Equipment Corporation, eligibility to participate in
                  the Plan shall be limited only to those individuals who
                  commenced service as a director prior to January 1, 1995 AND
                  are 65 years of age or older as of such date.

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                  IV. Entitlement to Retirement Benefit

                  Any Participant in the Plan as of 18 May 1987, and any other
                  Participant in the Plan having reached age seventy (70) and
                  with at least five (5) years of service as a non-employee
                  director of Digital Equipment Corporation, who terminates
                  service with the Board on or after 18 May 1987 shall be
                  entitled to an annualized benefit for life which is equal in
                  amount to the annual retainer in effect for non-employee
                  directors as of the Participant's date of termination of
                  service on the Board. Notwithstanding the foregoing, upon
                  consummation of the Corporation's pending merger ("Merger")
                  with Compaq Computer Corporation ("Compaq") pursuant to the
                  Amended and Restated Agreement and Plan of Merger between the
                  Corporation, Compaq and Compaq Merger Inc. dated as of January
                  25, 1998, any Participant in the Plan whose service is
                  terminated in connection with the Merger shall be entitled to
                  an annualized benefit for life which is equal in amount to the
                  annual retainer in effect for non-employee directors as of the
                  date of the Participant's termination of service. For purposes
                  of determining years of service for purposes of this Section
                  IV., time for which a Participant receives a disability
                  benefit under Section VI. of this Plan shall be considered
                  time included in years of service. Furthermore, termination of
                  service for purposes of this Section IV. shall mean the later
                  of actual termination of service and cessation of disability
                  benefits under Section VI. hereof, if applicable.

                  V. Payment of Retirement Benefit

                  The benefit due to a Participant under this Plan shall be paid
                  as quarterly installments, each equal to one-fourth of the
                  annual benefit provided for in IV. above. Installments shall
                  become due and payable as of the first day of each calendar
                  quarter. The first such payment shall become due and payable
                  as of the first day of the calendar quarter next following the
                  date on which the Participant terminates service as a director
                  of Digital Equipment Corporation. The last such payment shall
                  become due and payable as of the first day of the calendar
                  quarter in which the Participant dies. Payment shall be mailed
                  to the last known address of the Participant. It shall be the
                  responsibility of the Participant to ensure that Digital
                  Equipment Corporation is provided his or her correct address.
                  There shall be no death benefit hereunder.

                  VI. Entitlement to Disability Benefit

                  Any Participant in the Plan who terminates service on the
                  Board as a result of a total disability on or after 18 May
                  1987 at a time when he or she does not qualify for a
                  retirement benefit under Section IV. above shall be entitled
                  to an annual benefit for the period of time during which he or
                  she is disabled or until he or she

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                  attains the age and service requirements for a retirement
                  benefit under IV. above, whichever is shorter, which is equal
                  in amount to the annual retainer in effect for non-employee
                  directors as of his or her date of termination of service on
                  the Board. Total disability shall mean a physical or mental
                  condition which, in the sole and unfettered discretion of the
                  Board, makes continued service on the Board impossible or
                  undesirable.

                  VII. Payment of Disability Benefit

                  Any payments under Section VI. hereof shall be paid according
                  to the provisions of Section V. hereof as if such disability
                  benefit were a retirement benefit and as if the termination of
                  the Participant's service on the Board as a result of total
                  disability were termination of service after age seventy (70)
                  with five (5) full years of service on the Board. The
                  disability benefit hereunder shall cease on ending of the
                  disability or on the attainment of the age and service
                  requirements for a retirement benefit and no disability
                  payment shall be made after the date on which the disability
                  ends or the said requirements have been met. No duplication of
                  benefits between disability benefits and retirement benefits
                  shall be permitted.

                  VIII. Participant's Rights in Benefit

                  A Participant shall not have any interest in the benefits
                  under this Plan until they are distributed in accordance with
                  the Plan. Until paid, all amounts payable under the Plan shall
                  remain the sole property of the Corporation, subject to the
                  claims of its general creditors and available for its use for
                  whatever purposes are desired. With respect to unpaid
                  benefits, a Participant is merely a general creditor of the
                  Corporation, and the obligation of the Corporation hereunder
                  is purely contractual and shall not be funded or secured in
                  any way. This Plan is not, and is not intended to be, for
                  employees of Digital Equipment Corporation and is not a plan
                  subject to the provisions of the Employee Retirement Income
                  Security Act of 1974 (ERISA).

                  IX. Non-Assignability

                  The right of a Participant to the payment of benefits as
                  provided in the Plan shall not be assigned, transferred,
                  pledged or encumbered or be subject in any manner to
                  alienation or anticipation.

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                  X. Administration

                  The Administrator of this Plan shall be the Office of the
                  President of the Corporation. The Administrator shall have
                  authority to adopt rules and regulations for carrying out the
                  Plan and to interpret, construe and implement the provisions
                  hereof, and may delegate the authority to administer the Plan
                  to such delegee as the Administrator of its sole and
                  unfettered discretion believes appropriate.

                  XI. Amendment and Termination

                  The Plan may at any time be amended, modified, or terminated
                  by the Board of Directors of the Corporation. No amendment,
                  modification or termination shall, without the consent of a
                  Participant, adversely affect such Participant's right with
                  respect to benefits accrued as of the date of amendment,
                  modification, or termination. An accrued benefit as of a
                  particular date shall mean that benefit to which a Participant
                  would be entitled under the Plan if it had remained in
                  existence after the date of termination of the Plan, but with
                  no additional service performed by the Participant and with no
                  change of disability status by the Participant after the
                  termination date.




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