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                                                                   Exhibit 10.18

                          TANDEM COMPUTERS INCORPORATED

                                 1997 STOCK PLAN

 1.      Establishment, Purpose, and Definitions.

         (a)  There is hereby adopted the 1997 Stock Plan (the "Plan") of TANDEM
              COMPUTERS INCORPORATED (the "Company").

         (b)  The purpose of the Plan is to provide a means whereby eligible
              individuals (as defined in paragraph 4, below) can acquire common
              stock of the Company (the "Stock"). The Plan provides employees
              (including officers and directors who are employees) of the
              Company and of Subsidiaries an opportunity to purchase shares of
              Stock pursuant to options which may qualify as incentive stock
              options under Section 422 of the Internal Revenue Code, as amended
              (referred to as "incentive stock options"), and employees
              (including officers and directors who are employees), directors
              who are not employees ("Non-Employee Directors"), independent
              contractors, and consultants of the Company and of Affiliates an
              opportunity to purchase shares of Stock pursuant to options which
              are not described in Section 422 or 423 of the Internal Revenue
              Code (referred to as "nonqualified stock options"). The Plan also
              provides for the transfer or sale of Stock to eligible individuals
              in connection with the performance of services for the Company or
              Affiliates.

         (c)  The term "Subsidiary" as used in the Plan means any corporation at
              least 50 percent of the voting stock of which is owned, directly
              or indirectly, by the Company. The term "Affiliates" refers to
              Subsidiaries and any entity which has a business relationship with
              the Company. The terms "Subsidiaries" and "Affiliates" include
              entities which become Subsidiaries or Affiliates after the
              adoption of the Plan.

2.       Administration of the Plan.

         (a)  The Plan shall be administered by the Committee. The Committee
              shall consist exclusively of two or more directors of the Company,
              who shall be appointed by the Board. In addition, the compensation
              of the Committee shall satisfy:

                  (i) Such requirements as the Securities and Exchange
                  Commission may establish for administrators acting under plans
                  intended to qualify for exemption under Rule 16b-3 (or its
                  successor) under the Exchange Act; and

                  (ii) Such requirements as the Internal Revenue Service may
                  establish for outside directors acting under plans intended to
                  qualify for exemption under section 162(m)(4)(C) of the Code.

              The Board may also appoint one or more separate committees of the
              Board, each composed of one or more directors of the Company who
              need not satisfy the foregoing requirements, who may administer
              the Plan with respect to Employees and Consultants who are not
              considered officers or directors of the Company under section 16
              of the Exchange Act, may grant Awards under the Plan to such
              Employees and Consultants and
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                  may determine all terms of such Awards.

         (b)      The Committee shall determine which eligible individuals (as
                  defined in paragraph 4, below) shall be granted options under
                  the Plan, the timing of such grants, the terms thereof
                  (including any restrictions on the Stock), and the number of
                  shares for which an option or options shall be granted to an
                  optionee. The Committee may establish a standard schedule of
                  options to be granted automatically on an eligible
                  individual's date of hire and date of promotion.

         (c)      The Committee may amend the terms of any outstanding option
                  granted under this Plan, but any amendment which would
                  adversely affect the optionee's rights under an outstanding
                  option shall not be made without the optionee's written
                  consent. The Committee may cancel any outstanding stock option
                  or accept any outstanding stock option in exchange for a new
                  option.

         (d)      The Committee shall also determine which eligible individuals
                  (as defined in paragraph 4, below) shall be issued Stock under
                  the Plan, the timing of such grants, the terms thereof
                  (including any restrictions), and the number of shares to be
                  granted. The Stock shall be issued for such consideration as
                  the Committee deems appropriate, including past services;
                  provided, however, that such consideration shall have a fair
                  market value at least equal to fifty percent (50%) of the fair
                  market value of the Stock on the date of issuance. Stock
                  issued subject to restrictions shall be evidenced by a written
                  agreement (the "Restricted Stock Agreement"). The Committee
                  may amend any Restricted Stock Agreement, but any amendment
                  which would adversely affect the individual's rights to the
                  Stock shall not be made without his or her written consent.

         (e)      The Committee shall have the sole authority, in its absolute
                  discretion, to adopt, amend and rescind such rules and
                  regulations as, in its opinion, may be advisable in the
                  administration of the Plan, to construe and interpret the
                  Plan, the rules and the regulations, and the instruments
                  evidencing options or Stock granted under the Plan and to make
                  all other determinations deemed necessary or advisable for the
                  administration of the Plan. All decisions, determinations and
                  interpretations of the Committee shall be binding on all
                  optionees.

         (f)      Notwithstanding the foregoing, the Committee shall have no
                  discretion as to certain grants to Non-Employee Directors
                  pursuant to paragraph 7 below, including the Non- Employee
                  Directors to whom options are to be granted, the timing of
                  such grants, the number of shares subject to any such option,
                  and the exercise price of any such option, which, in each
                  case, shall be as provided pursuant to paragraph 7.

3.       Stock Subject to the Plan.

         (a)      The number of shares of Stock available for the grant of
                  options or the issuance of Stock under the Plan to eligible
                  individuals shall be equal to the sum of (i) 1,115,000 shares
                  plus (ii) the number of shares remaining available for
                  issuance under the Tandem Computers Incorporated 1989 Stock
                  Plan (the "Prior Plan") as of January 28, 1997. If an option
                  granted under this Plan or the Prior Plan for any reason
                  ceases to be exercisable in whole or in part (including
                  options cancelled in exchange for new grants), the shares
                  which were subject to such option but as to which the option
                  had not been exercised shall continue to


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                  be available under this Plan. Shares of Stock repurchased by
                  the Company pursuant to repurchase rights retained under this
                  Plan or the Prior Plan and shares of Stock withheld by the
                  Company under paragraph 12 to satisfy applicable tax
                  obligations shall not be available for subsequent option
                  grants or Stock issuances under this Plan.

         (b)      In the event of a subdivision of the outstanding shares of
                  Stock, a declaration of a dividend of more than two percent
                  payable in shares of Stock, a declaration of a dividend
                  payable in a form other than shares of Stock in an amount that
                  has a material effect of the price of shares of Stock, a
                  combination or consolidation of the outstanding shares of
                  Stock (by reclassification or otherwise) into a lesser number
                  of shares of Stock, a recapitalization, a spin-off or a
                  similar occurrence, the Committee shall make such adjustments
                  as it, in its sole discretion, deems appropriate in one or
                  more of the (i) the number of shares of Stock available for
                  future grants under paragraph 3(a), above, (ii) the limitation
                  set forth in paragraph 6(e), below, (iii) the number of shares
                  of Stock covered by each outstanding option, (iv) the exercise
                  price under each outstanding option and (v) the number of
                  options to be granted to Non-Employee Directors under
                  paragraph 7, below. Except as provided in this paragraph 3(b),
                  a participant shall have no rights by reason of any issue by
                  the Company of stock of any class or securities convertible
                  into stock of any class, any subdivision or consolidation of
                  shares of Stock of any class, the payment of any stock
                  dividend or any other increase or decrease in the number of
                  shares of Stock of any class.

         (c)      In the event that the Company is a party to a merger or other
                  reorganization, outstanding options and shares subject to a
                  Restricted Stock Agreement shall be subject to the agreement
                  of merger or reorganization. Such agreement may provide,
                  without limitation, for the assumption of outstanding grants
                  by the surviving corporation or its parent, for their
                  continuation by the Company (if the Company is a surviving
                  corporation), for accelerated vesting and accelerated
                  expiration, or for settlement in cash.

4.       Eligible Individuals.

         Individuals who shall be eligible to have granted to them the options
         or Stock provided for by the Plan shall be such employees (including
         officers and directors who are bona fide employees), Non-Employee
         Directors, independent contractors, and consultants of the Company or
         an Affiliate as the Committee, in its discretion, shall designate from
         time to time. Only employees of the Company or a Subsidiary shall be
         eligible to receive incentive stock options.

5.       The Option Price.

         (a)      The exercise price of the Stock covered by each incentive
                  stock option shall be not less than the per share fair market
                  value of such Stock on the date the option is granted. The
                  exercise price of the Stock covered by each nonqualified stock
                  option shall be as determined by the Committee, but in no
                  event shall such price be less than fifty percent (50%) of the
                  per share fair market value of the Stock on the date the
                  option is granted. Notwithstanding the foregoing, in the case
                  of an incentive stock option granted to a person possessing
                  more than ten percent of the combined voting power of the
                  Company or a Subsidiary, the exercise price shall be not less
                  than 110 percent of the fair market value of the Stock on the
                  date the option is granted. The exercise price of an option
                  shall be subject to adjustment to the extent provided in
                  paragraph 3(b), above.





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         (b)      For purposes of paragraph 5(a) above and for all other
                  valuation purposes under the Plan, the fair market value per
                  share of Stock on any relevant date shall be the closing
                  selling price per share of Stock on the New York Stock
                  Exchange on the date in question, as such price is quoted on
                  the composite tape of transactions on such exchange. If there
                  is no reported sale of the Stock on the New York Stock
                  Exchange on the date in question, then the fair market value
                  shall be the closing selling price on such exchange on the
                  last preceding date for which such quotation exists.

6.       Terms and Conditions of Options.

         (a)      Each option granted pursuant to the Plan will be evidenced by
                  a written Stock Option Agreement executed by the Company and
                  the person to whom such option is granted.

         (b)      The Committee shall determine the term of each option granted
                  under the Plan which shall not be for more than ten years;
                  provided, however, that in the case of an option granted to a
                  person possessing more than ten percent of the combined voting
                  power of the Company or a Subsidiary the term of each
                  incentive stock option shall be for no more than five years.

         (c)      The Stock Option Agreement may contain such other terms,
                  provisions, and conditions as may be determined by the
                  Committee (not inconsistent with this Plan). If an option, or
                  any part thereof is intended to qualify as an incentive stock
                  option, the Stock Option Agreement shall contain those terms
                  and conditions which are necessary to so qualify it.

         (d)      Notwithstanding any provision of the Plan to the contrary, the
                  Stock Option Agreement evidencing options granted to an
                  employee who is a "French Employee" (as that term is defined
                  in Appendix A to the Plan) or a "Dutch Employee" (as that term
                  is defined in Appendix B to the Plan) shall include the
                  provisions set forth in Appendix A or B, respectively.

         (e)      Options granted to any employee in a single fiscal year shall
                  in no event cover more than 700,000 shares of stock, subject
                  to adjustment in accordance with paragraph 3(b), above.

7.   Additional Terms and Conditions of Options Granted to Non-Employee 
     Directors.

         (a)      On February 15, 1996, each person who was a Non-Employee
                  Director as of February 15, 1996 shall automatically receive
                  an option for 15,000 shares of Stock. In addition, on February
                  15, 1996, each person who was both a Non-Employee Director and
                  the chairman of the Audit Committee, the Compensation/Option
                  Committee and/or the Nominating Committee as of February 15,
                  1996 shall automatically receive an option for 10,000 shares
                  Stock with respect to each chairmanship.

         (b)      On the date that a person first becomes a Non-Employee
                  Director (other than a person who previously had been an
                  employee) which occurs after February 15, 1996, such person
                  shall automatically receive an option for 15,000 shares of
                  Stock.

         (c)      On the date that a Non-Employee Director first becomes the
                  chairman of the Audit Committee, the Compensation/Option
                  Committee and/or the Nominating Committee which occurs after
                  February 15, 1996, such Non-Employee Director shall
                  automatically receive an option for 10,000 shares of Stock
                  with respect to each chairmanship.



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         (d)      Each option granted to Non-Employee Directors pursuant to the
                  Plan shall be evidenced by a written Stock Option Agreement
                  executed by the Company and the person to whom such option is
                  granted.

         (e)      The term of each option granted to Non-Employee Directors
                  pursuant to the Plan shall be ten years.

         (f)      The exercise price of the Stock covered by each option granted
                  to Non-Employee Directors pursuant to the Plan shall be equal
                  to the per share fair value of such Stock on the date the
                  option is granted.

         (g)      On the date that a Non-Employee Director ceases to be a member
                  of the Board for any reason (the "Cessation Date"), all
                  unexercisable options held by the Non-Employee Director as of
                  the Cessation Date shall immediately terminate and all
                  exercisable options held by the Non-Employee Director as of
                  the Cessation Date shall terminate at the earlier of (i) the
                  end of the 12-month period following the Cessation Date or
                  (ii) the date the option would otherwise expire, pursuant to
                  paragraph 7(e), above. Notwithstanding the foregoing, an
                  option granted to a Non-Employee Director pursuant to the Plan
                  within the six-month period that ends on the Cessation Date
                  shall automatically and immediately terminate on the Cessation
                  Date.

         (h)      The Stock Option Agreement may contain such other terms,
                  provisions, and conditions as may be determined by the
                  Committee (not inconsistent with this Plan).

8.       Use of Proceeds.

         Any cash proceeds realized from the sale of Stock pursuant to options
         granted or Stock issued under the Plan shall constitute general funds
         of the Company.

9.       Amendment, Suspension or Termination of the Plan.

         (a)      The Board or the Committee may at any time amend, suspend or
                  terminate the Plan as it deems advisable; provided, however,
                  except as provided in paragraph 3(b), above, the Board or the
                  Committee shall not amend the Plan without the consent of
                  stockholders to the extent required by applicable law,
                  regulation or rule.

         (b)      No option may be granted nor any Stock issued under the Plan
                  during any suspension or after the termination of the Plan,
                  and no amendment, suspension or termination of the Plan shall,
                  without the affected individual's consent, alter or impair any
                  rights or obligations under any option previously granted
                  under the Plan. The Plan shall terminate on February 15, 2006
                  unless previously terminated by the Board pursuant to this
                  paragraph 9.

10.      Assignability.

         Each option granted pursuant to the Plan shall, during the optionee's
         lifetime, be exercisable only by him, and neither the option nor any
         right thereunder shall be transferable by the optionee by operation of
         law or otherwise, other than by will or the laws of descent and
         distribution. Stock subject to a Restricted Stock Agreement shall be
         transferable only as provided in such Agreement.

11.      Payment Upon Exercise.


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         Payment of the purchase price upon exercise of any option granted under
         this Plan shall be made (i) in cash, (ii) with shares of Stock owned by
         the optionee, (iii) by delivery of an irrevocable direction to a
         securities broker approved by the Committee to sell shares and deliver
         all or a portion of the proceeds to the Company in payment for the
         Stock, (iv) by delivery of the optionee's promissory note with such
         recourse, interest, security and redemption provisions as the Committee
         in its discretion determines appropriate, or (v) in any combination of
         the foregoing. Any Stock used to exercise options shall be valued at
         its fair market value on the date of the exercise of the option.

12.      Withholding of Shares.

         To the extent permitted by the option agreement, an optionee may
         satisfy federal, state and local tax obligations incident to the
         exercise of stock options under the Plan, or other purchase or receipt
         of Stock under the Plan, with shares of the Company's Common Stock
         (whether acquired through exercise of a stock option or otherwise).

13.      Restrictions on Transfer of Shares.

         The Stock acquired pursuant to the Plan shall be subject to such
         restrictions and agreements regarding sale, assignment, encumbrances,
         or other transfer as are in effect among the stockholders of the
         Company at the time such Stock is acquired, as well as to such other
         restrictions as the Committee shall deem advisable.

14.      Stockholder Approval.

         This Plan shall become effective upon its approval by a majority of the
         stockholders voting (in person or by proxy) at a stockholders' meeting
         held within 12 months of the Board's adoption of the Plan. The
         Committee may grant options under the Plan prior to the stockholders'
         meeting, but until stockholder approval of the Plan is obtained, Stock
         shall not be issued pursuant to the Plan (whether or not for
         consideration) and no option shall be exercisable.

15.      Change in Control.

         Upon the actual consummation of a Change in Control, all outstanding
         repurchase rights of the Company shall automatically expire and cease
         to have effect with respect to any and all shares of Stock purchased
         under the Plan. Upon the actual consummation of a Change in Control,
         all outstanding options shall immediately become exercisable in full.
         The foregoing not withstanding, the Board may otherwise provide in
         connection with such Change in Control or any attempt to effect such
         Change in Control.

         For purposes of applying the vesting acceleration provisions of this
         paragraph 15, the following provisions shall be controlling:

         A "Change in Control" shall be deemed to be effected upon:

         (i)      the acquisition by any Person, other than the Company or one
                  or more persons controlling, controlled by or under common
                  control with the Company, of bene ficial ownership (as
                  determined pursuant to Rule 13d-3 under the Securities
                  Exchange Act of 1934, as amended) of eighty-five percent (85%)
                  or more of the Company's outstanding voting securities
                  pursuant to a transaction which the 


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                  majority of the Continuing Directors does not at any time
                  recommend the Company's stockholders to accept or approve, or

         (ii)     a change in the composition of the Board over any period of
                  thirty-six (36) consecutive months or less such that a
                  majority of the Board members (determined by rounding up the
                  next whole number) cease to be comprised of individuals who
                  either (A) were Continuing Directors at the start of such
                  period or (B) were elected or nominated for election as Board
                  members during such period by at least a majority of the
                  Continuing Directors in office at the time such election or
                  nomination was approved by the Board.

         Continuing Director shall mean any member of the Board who has served
         continuously as such Board member from and before the commencement of
         the transaction resulting in the Change in Control.

         Person shall mean any individual, firm, partnership, corporation or
         other entity and shall include any successor of such entity and all
         Affiliates, Associates and Subsidiaries (as such terms are defined in
         Rule 12b-2 of the Securities Exchange Act of 1934, as amended) of such
         entity.

         The 85% test in subparagraph (i) of the Change in Control definition
         shall be measured at the time the transaction resulting in the Change
         in Control first commences, and there shall be excluded from such
         calculation, to the extent provided pursuant to Section 203 (or any
         successor provision) of the Delaware General Corporation Law, shares
         owned by (i) persons who are both officers and directors of the Company
         and (ii) employee stock plans in which employee-participants do not
         have the right to determine confidentially whether shares held subject
         to the plan are to be tendered in a tender or exchange offer.



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                                   APPENDIX A

                        OPTION GRANTS TO FRENCH EMPLOYEES

         This Appendix A to the Tandem Computers Incorporated 1997 Stock Plan
(the "Plan") sets forth special rules under which options shall be granted to
individuals who are employees of Tandem Computers Europe Incorporated or of a
Tandem Subsidiary in France (collectively referred to as the "French Companies")
and whose salary is paid in French currency on the date of the grant. To the
extent the rules in this Appendix A are not consistent with the provisions of
the Plan, this Appendix A shall govern. To the extent that there is no
inconsistency between the provisions of the Plan and this Appendix A, the
provisions of the Plan shall govern.

         1.       ELIGIBILITY. Options shall not be granted to French Employees
                  possessing shares representing ten percent (10%) or more of
                  Tandem's capital stock.

         2.       VESTING. Options granted shall vest daily over a four-year
                  period that begins on the effective date of the option and
                  ends on the earlier of (i) the fourth (4th) anniversary of the
                  effective date or (ii) the date the French Employee terminates
                  employment with the French Companies.

         3.       OPTION PRICE. The purchase price of the shares of stock
                  covered by an option shall not be less than eighty percent
                  (80%) of the closing stock price on the NYSE, averaged over a
                  period of twenty (20) consecutive trading days ending on the
                  date of grant. The option price shall not be changed and shall
                  be adjusted only upon the occurrence of the events specified
                  under the July 24, 1966 corporate law, section 208-5, in
                  accordance with French law.

         4.       EXERCISE OF OPTIONS.

                  (a)      When Exercisable. An option cannot be exercised by a
                           French Employee unless it is vested pursuant to
                           paragraph 2 above.

                  (b)      Death. Upon the death of a French Employee, his or
                           her options shall remain exercisable for a period of
                           six (6) months following the date of death to the
                           extent that such options were vested pursuant to
                           paragraph 2 above on the date of death.

                  (c)      Method of Exercise. An option is exercisable by a
                           French Employee upon written notice to Tandem. This
                           written notice must state the number of shares being
                           exercised and must be accompanied by full payment for
                           the stock being purchased. Payment may be in the form
                           of cash, check or money order.

         5.       TERM OF PLAN.

                  No options with respect to treasury shares shall be granted to
                  French Employees more than five (5) years after the date when
                  the stockholders of Tandem approve the Plan.

         6.       DEFINITIONS.

                  (a)      "French Employee" shall mean an individual who is an
                           employee of Tandem Computers Europe Incorporated or
                           of a Tandem Subsidiary or Affiliate, in France, and
                           whose salary is paid in French currency on the date
                           the option is granted.

                  (b)      "Tandem Subsidiary" shall mean a company in which
                           Tandem has a fifty percent



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                           (50%) or greater equity interest, directly or
                           indirectly, or a corporation of which Tandem owns
                           fifty percent (50%) or more of the voting shares,
                           either directly or indirectly.

                  (c)      "Tandem Affiliate" shall mean a company with which
                           Tandem has a business relationship.



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                                   APPENDIX B

                        OPTION GRANTS TO DUTCH EMPLOYEES

         This Appendix B to the Tandem Computers Incorporated 1997 Stock Plan
(the "Plan") sets forth special rules under which options shall be granted to
individuals who are employees of Tandem Computers Europe Incorporated or a
Tandem Subsidiary in The Netherlands (collectively referred to as the "Dutch
Companies") whose salary is paid in Dutch currency on the date of grant. To the
extent the rules in this Appendix B are not consistent with the provisions of
the Plan, this Appendix B shall govern.

 To the extent that there is no inconsistency between the provisions of the Plan
and this Appendix B, the provisions of the Plan shall govern.

         1.       VESTING. Options granted to a Dutch Employee will vest
                  immediately upon grant.

         2.       RIGHT OF REPURCHASE. If a Dutch Employee ceases to be employed
                  by the Dutch Companies before the fourth anniversary of the
                  Effective Date, Tandem shall have the right to repurchase a
                  limited number of shares from the Dutch Employee. The
                  repurchase price shall be the option price. The number of
                  shares to which this right of repurchase applies shall be
                  determined according to the following formula:

         (Total Number of Shares Purchased) minus [(Total Number of Shares Under
         Option) x (Number of Days of Continuous Employment Following the
         Effective Date) x (0.000685)]

         3.       EXERCISE OF OPTIONS. An option granted to a Dutch Employee
                  cannot be exercised after the fifth anniversary of the date of
                  grant.

         4.       DEFINITIONS.

                  (a)      "Dutch Employee" shall mean an individual who is an
                           employee of Tandem Computers Europe Incorporated or
                           of a Tandem Subsidiary or Affiliate, in the
                           Netherlands, and whose salary is paid in Dutch
                           currency on the date the option is granted.

                  (b)      "Tandem Subsidiary" shall mean a company in which
                           Tandem has a 50 percent equity interest, directly or
                           indirectly or a corporation of which Tandem owns 50
                           percent or more of the voting shares, either directly
                           or indirectly.

                  (c)      "Tandem Affiliate" shall mean a company with which
                           Tandem has a business relationship.


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