EXHIBIT 10.12

                                         Amended January 25, 1996



                   COMPAQ COMPUTER CORPORATION

               NONQUALIFIED STOCK OPTION PLAN FOR
                     NON-EMPLOYEE DIRECTORS



     SECTION 1.  Amendment and Restatement.  The Compaq Computer
Corporation Nonqualified Stock Option Plan for Non-Employee
Directors (the "Plan") amends and restates in its entirety the
Compaq Computer Corporation 1987 Nonqualified Stock Option Plan
for Non-Employee Directors.

     SECTION  2.   Purpose.   The purposes of the Plan are to
attract and retain the services of experienced and knowledgeable
non-employee directors, to encourage eligible directors of Compaq
Computer Corporation (the "Company") to acquire a proprietary and
vested interest in the growth and performance of the Company, and
to generate an increased incentive for directors to contribute to
the Company's future success and prosperity, thus enhancing the
value of the Company for the benefit of its stockholders.

     SECTION 3.  Definitions.  As used in the Plan, the following
terms shall have the meanings set forth below:

     (a)  "Amendment Date" shall mean January 25, 1996, the
effective date of the amendment and restatement of the Plan.

     (b)  "Annual Retainer" shall mean the amount that an
Eligible Director would be entitled to receive for serving as a
director in the year following an Election Date, but shall not
include fees associated with service on any committee of the
Board, any meeting fees, or any fees associated with other
services to be provided to the Company.

     (c)  "Board" shall mean the Board of Directors of the
Company.

     (d)  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

     (e)  "Company" shall mean Compaq Computer Corporation.

     (f)  "Election Date" shall mean with respect to an Option
hereunder the date of the appointment, election, or  re-election
of the Director that prompted the grant of such Option.

     (g)  "Eligible Director" shall mean each director of the
Company who is not an employee of the Company or any of the
Company's subsidiaries (as defined in Section 425(f) of the
Code).

     (h)  "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.

     (i)  "Fair Market Value" shall mean with respect to the
Common Stock (i) the last sale price of the Common Stock on the
date on which such value is determined, as reported on the
consolidated tape of New York Stock Exchange issues or, if there
shall be no trades on such date, on the date nearest preceding
such date;  (ii)  if the Common Stock is not then listed for
trading on the New York Stock Exchange, the last sale price of
the Common Stock on the date on which such value is determined,
as reported on another recognized securities exchange or on the
NASDAQ National Market System if the Common Stock shall then be
listed and traded upon such exchange or system or, if there shall
be no trades on such date, on the date nearest preceding  such
date; or (iii) the mean between the bid and asked quotations for
such stock on such date (as reported by a recognized stock
quotation service) or, in the event that there shall be no bid or
asked quotations on such date, then upon the basis of the mean
between the bid and asked quotations on the date nearest
preceding such date.

     (j)  "Option" shall mean any right granted to a Participant
allowing such Participant to purchase Shares at such price or
prices and during such period or periods as set forth under the
Plan.  All Options shall be nonqualified options not entitled to
special tax treatment under Section 422A of Code.

     (k)  "Option Agreement" shall mean a written agreement,
contract, or other instrument evidencing an Option granted
hereunder and signed by both the Company and the Participant.

     (l)  "Participant" shall mean an Eligible Director who
receives an Option under the Plan.

     (m)  "Price Percentage" shall mean 50 percent unless
adjusted in accordance with Section 8(e).

     (n)  "Release Date" shall mean the fifth business day
occurring after the Company's earnings release for the preceding
fiscal period.  In calculating the Release Date, the day of an
earnings release shall be counted if the earnings release is made
before the opening of trading on the New York Stock Exchange and
shall not be counted if such release is made after the opening of
trading.

     (o)  "Share Percentage" shall be 50 percent unless  adjusted
in accordance with Section 8(e).

     (p)  "Shares" shall mean shares of the common stock, $.01
par value, of the Company.

     (q)  "Window" shall mean a period of time beginning on a
Release Date and ending at the end of the second month of the
fiscal quarter in which such Release Date occurs.

     SECTION 4.  Administration.  The Plan shall be administered
by the Board.  Subject to the terms of the Plan, the Board shall
have the power to interpret the provisions and supervise the
administration of the Plan.

     SECTION 5.  Shares Subject to the Plan.

     (a)  Total  Number.  Subject to adjustment as provided in
this Section, the total number of Shares as to which Options may
be granted under the Plan shall be 1,500,000 Shares.  Any Shares
issued pursuant to Options hereunder may consist, in whole or  in
part, of authorized and unissued shares or treasury shares.

     (b)  Reduction of Shares Available.

          (i)  The grant of an Option will reduce the Shares as
to which Options may be granted by the number of Shares subject
to such Option.

          (ii)  Any Shares issued by the Company through the
assumption or substitution of outstanding grants from an acquired
company shall not reduce the Shares available for grants under
the Plan.

     (c)  Increase of Shares Available.  The lapse, cancellation,
or other termination of an Option that has not been fully
exercised shall increase the available Shares by the number of
Shares that have not been issued upon exercise of such Option.

     (d)  Other Adjustments.  The total number and kind of shares
available for Options under the Plan or which may be allocated to
any one Participant, the number and kind of shares of Common
Stock subject to outstanding Options, and the exercise price for
such Options shall be appropriately adjusted by the Board for any
increase or decrease in the number of outstanding Shares
resulting from a stock dividend, subdivision, combination of
Shares, reclassification, or other change in corporate structure
affecting the Shares or for any conversion of the Shares into or
exchange of the Shares for other shares as a result of any merger
or consolidation (including a sale of assets) or other
recapitalization as may be necessary to maintain the
proportionate interest of the Option holder.

     SECTION 6.  Initial Options.  Initial Options shall be
granted to Eligible Directors as follows:

     (a) Initial Grants.  Each Eligible Director who is first
elected or appointed to the Board during the period beginning on
the Amendment Date and ending April 24, 1996, shall be granted
one Option to acquire 30,000 Shares.  Each Eligible Director who
is first elected or appointed to the Board on or after April 25,
1996, shall be granted one Option to acquire 12,500 Shares.  In
the event that the Election Date occurs during the Window, such
Option shall be granted on the Election Date with respect to such
Option.  In the event that such Director's election or
appointment does not occur during the Window, then such Option
shall be granted on the next Release Date.

     (b)  Terms and Conditions.  Any Option granted under this
Section 6 shall be subject to the following terms and conditions:

          (i)  Option Price.  The purchase price per Share
purchasable under an Option granted under Section 6 shall be 100%
of the Fair Market Value of a Share on the date of the grant of
the Option.

          (ii)  Exercisability.  An Option granted under  Section
6(a) shall be exercisable on the first anniversary of the
Election Date.

     SECTION 7.  Annual Options.  Annual Options shall be granted
to Eligible Directors as follows:

     (a) Reelected Directors.  Each Eligible Director who is
reelected to the Board at an annual meeting of the Company's
stockholders on or after the Amendment Date and who has not
received a grant under Section 6 during the period since the most
recent previous annual meeting of the Company's stockholders
shall be granted  an Option to acquire 10,000 Shares on each
Election Date on which he is reelected.

     (b)  Chairman of the Board.  Each Eligible Director who is
elected or re-elected Chairman of the Board by the Board at its
meeting following an annual meeting of the Company's stockholders
on or after the Amendment Date and who has not received a grant
under Section 6 during the period since the most recent annual
meeting of the Company's stockholders shall be granted on each
Election Date on which he is elected or reelected Chairman of the
Board an Option to acquire 2,500 Shares in addition to any
applicable Option granted under Section 7(a).

     (c)  Terms and Conditions.  Any Option granted under this
Section 7 shall be subject to the following terms and conditions:

          (i)  Option Price.  The purchase price per Share
purchasable under an Option shall be 100% of the Fair Market
Value of a Share on the date of the grant of the Option.

          (ii)  Exercisability.  An Option granted under this
Section 7 shall be exercisable (A) with respect to 50% of the
Shares thereunder on the first anniversary of the Election Date
related to such Option and (B) with respect to the remaining 50%
of the Shares thereunder on the second anniversary of such
Election Date.

     SECTION  8.  Options in Lieu of Cash Compensation.  Options
shall be granted to Directors in lieu of cash compensation as
follows:

     (a)  Election to Receive Option.  An option shall be granted
automatically to any Eligible Director who six months prior to an
Election Date on which such director is re-elected to the Board
by the Company's stockholders, files with the Secretary of the
Company an irrevocable election to receive an Option in lieu of
all or a portion of his or her Annual Retainer.  On the following
Election Date, each Eligible Director making such a filing under
this Section 8(a) shall be granted an Option for the number of
Shares determined under Section 8(b) below.

     (b)  Option Formula.  The number of Option shares granted on
an Election Date to any Eligible Director under this Section 8
shall be equal to the nearest number of whole shares determined
in accordance with the following formula:

          (Elected Portion)(Annual Retainer)     =   Number of
          -----------------------------------
          (Share Percentage) (Fair Market Value)      Shares

where Elected Portion refers to the portion of Annual Retainers
elected under Section 8(a) and Fair Market Value refers to the
Fair Market Value of a Share on the date of grant.

     (c)  Option Price.  The purchase price per Share covered by
each Option granted under this Section 8 shall be the Fair Market
Value of a Share on the date of grant multiplied by the Price
Percentage.

     (d)  Exercisability.  An Option granted under this Section 8
shall be exercisable one year from the date of grant.

     (e)  Adjustment.  In the event that any law, ruling, or
regulation shall be proposed, promulgated, or adopted after the
Amendment Date that provides that a higher Option price shall be
required so that Options granted under Section 8 of the Plan will
be treated as options for tax purposes, the Share Percentage and
Price Percentage of Options granted hereafter under this  Section
8 shall be automatically adjusted to comply therewith; provided,
however, the sum of the Share Percentage and the Price Percentage
shall remain 100 percent.

     SECTION  9.  General Terms.  The following provisions shall
apply to any Option granted under the Plan.

     (a)  Option Period.  Each Option shall expire ten years from
its date of grant.  Each Option shall be subject to termination
before its date of expiration as hereinafter provided.

     (b)  Termination of Service as Director.  If a Participant's
service as a Director is terminated for any reason other than
death or disability, the Participant or his beneficiary shall
have the right to exercise any Option to the extent it was
exercisable at the date of such termination of service and shall
not have been exercised.  The right to exercise such Option to
the extent set forth herein shall continue until the expiration
of the Option.

     (c)  Death or Disability.  If the Participant's service as a
Director is terminated by death or disability, the Participant
shall have the right to exercise a prorated number of the Shares
under any Option that is not fully exercisable prior to such
event, such number to be determined by multiplying (i) the total
number of Shares subject to such Option by (ii) a fraction equal
to (A) the total of number of completed months of service since
the Election Date related to such Option divided by (B) the total
number of completed months of service from the Election Date
related to such Option until such Option would have become fully
exercisable.  The right to exercise such Option to the extent set
forth herein shall continue until the expiration of the Option.

     (d)  Method of Exercise.  Any Option may be exercised by the
Participant in whole or in part at such time or times and by such
methods as the Board may specify.  The applicable Option
Agreement may provide that the Participant may make payment of
the Option price in cash, Shares, or such other consideration as
the Board may specify, or any combination thereof, having a Fair
Market Value on the exercise date equal to the total option
price.

     SECTION 10.  Change in Control.

     (a)  Immediate Vesting.  Notwithstanding any other provision
of the Plan to the contrary, upon a Change in Control, as defined
below, all outstanding Options shall vest and become  immediately
exercisable.

     (b)  Change  in  Control.  A "Change in  Control" shall be
deemed to have occurred if:  (i)  any "person" as such term is
used in Sections 13(d) and 14(d) of the Exchange Act (other than
the Company, any trustee or other fiduciary holding securities
under any employee benefit plan of the Company, or any company
owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of Stock
of the Company), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding
securities; (ii) during any period of two consecutive years (not
including any period prior to January 18, 1989), individuals who
at the beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in clause (i), (iii), or (iv) of this
Section 10(b)) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who
either were directors at the beginning of the two-year period or
whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
of the Board of Directors; (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than 30% of
the combined voting power of the Company's then outstanding
securities shall not constitute a Change in Control of the
Company; or (iv) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of
the Company's assets.

SECTION 11.  Amendments and Termination.

     (a)  Board Authority.  The Board may amend, alter, or
discontinue the Plan, but no amendment, alteration, or
discontinuation shall be made (i) that would impair the rights of
a Participant under an Option theretofore granted, without the
Participant's consent, or (ii) without the approval of the
stockholders if such approval is necessary to comply with any tax
or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief
from Section 16(b) of the Exchange Act, or (iii) to Section 6,
Section 7 or Section 8 more often than once every six months.

     (b)  Prior Stockholder and Participant Approval.  Anything
herein to the contrary notwithstanding, in the event that
amendments to the Plan are required in order that the Plan or any
other stock-based compensation plan of the Company comply with
the requirements of Rule 16b-3 issued under the Exchange Act as
amended from time to time or any successor rules promulgated by
the Securities and Exchange Commission related to the treatment
of benefit and compensation plans under Section 16 of the
Exchange Act, the Board is authorized to make such amendments
without the consent of Participants or the stockholders of the
Company.

     SECTION 12.  General Provisions.

     (a)  No Assignment.  No Option shall be assignable or
transferable by a Participant otherwise than by will or by the
laws of descent and distribution.  Each Option shall be
exercisable, during the Participant's lifetime, only by the
Participant or, if permissible under applicable law, by the
Participant's guardian or legal representative.

     (b)  Compliance Requirements.  All certificates for Shares
delivered under the Plan pursuant to any Option shall be subject
to such stock-transfer orders and other restrictions as the Board
may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares are then listed, and any
applicable federal or state securities law, and the Board of
Directors may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
The Company shall not be required to issue or deliver any Shares
under the Plan prior to the completion of any registration or
qualification of such Shares under any federal or state law, or
under any ruling or regulation of any governmental body or
national securities exchange that the Board in its sole
discretion shall deem to be necessary or appropriate.

     (c)  Other Plans.  Nothing contained in this Plan shall
prevent the Board from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is
required by applicable law or the rules of any stock exchange on
which the Common Stock is then listed; and such arrangements may
be either generally applicable or applicable only in specific
cases.

     (d)  Governing Law.  The validity, construction, and effect
of the Plan and any rules and regulations relating to the Plan
shall be determined in accordance with the laws of the State of
Delaware and applicable federal law.

     (e)  Conformity With Law.  If any provision of this Plan is
or becomes or is deemed invalid, illegal, or unenforceable in any
jurisdiction, or would disqualify the Plan or any Option under
any law deemed applicable by the Board, such provision shall be
construed or deemed amended in such jurisdiction to conform to
applicable laws or if it cannot be construed or deemed amended
without, in the determination of the Board, materially altering
the intent of the Plan, it shall be stricken and the remainder of
the Plan shall remain in full force and effect.

     SECTION 13.  Amendment Date and Expiration.  The amendment
of the Compaq Computer Corporation 1987 Nonqualified Stock Option
Plan for Non-Employee Directors shall be effective March 15,
1990, subject to approval by the Company's stockholders within
one  year thereafter.  Options may be granted at any time after
the Amendment Date and prior to termination of the Plan by the
Board.  The Plan will expire when no Shares are available for
issuance.