AMENDED AND RESTATED AS OF JANUARY 20, 1998
                      TO REFLECT 2-FOR-1 STOCK SPLIT EFFECTED JANUARY 20, 1998



                          COMPAQ COMPUTER CORPORATION

                      NONQUALIFIED STOCK OPTION PLAN FOR
                            NON-EMPLOYEE DIRECTORS



     SECTION  1.  Amendment and Restatement.  The  Compaq Computer Corporation
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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 December 12, 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.
<PAGE>

     (j)  "Grant  Notice"  shall  mean a written notice evidencing an Option
granted  hereunder.

     (k)  "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.

     (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  7,500,000  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.
<PAGE>

     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 on or after April 25, 1996, shall be granted one Option
to  acquire  31,250 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  Eligible  Director's  election or
appointment  does  not  occur  during  the  Window,  then such Option shall be
granted  on  the  next  Release Date.  Any Eligible Director who is elected or
appointed  to  the  Board  as  the  result  of a merger of a subsidiary of the
Company with Tandem Computers Incorporated ("Tandem") will not be eligible for
an  initial  grant  as provided in this Section 6(a).  Any options to purchase
common  stock  of  Tandem  held  by  such Eligible Director at the time of the
merger  will  be  converted  into options to purchase Compaq Common Stock upon
consummation  of  the  merger.   Such converted options shall be assumed under
this  Plan and shall be exercisable on the first anniversary date of the grant
date of such options.  This conversion to Options under this Plan shall not be
considered  an  initial  grant  as  provided  in  this  Section  6(a).

     (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 25,000 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  6,250  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  Eligible  Directors  in  lieu  of  cash  compensation as follows:

     (a)  Election  to  Receive  Option.  An  option  shall  be  granted
automatically  to any Eligible Director who 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.
<PAGE>

     (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,  disability or
retirement  due  to  a  mandatory age retirement policy 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)  Mandatory  Age  Retirement.  If  the  Participant's  service  as  a
Director  is  terminated as a result of any mandatory age retirement policy of
the Board, Options granted under the Plan shall become immediately exercisable
with  respect  to 100% of the Shares on the date of such mandatory retirement.
The  right  to  exercise each such Option to the extent set forth herein shall
continue  until  the  expiration  of  such  Option.

     (e)  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.
<PAGE>

     (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;  (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)  Nontransferability. No Option shall be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a Participant, except
by  will  or  the laws of descent and distribution, provided, however, that an
Option  may  be  transferable, to the extent set forth in the applicable Grant
Notice or agreement and in accordance with procedures adopted by the Board, if
such  provisions do not disqualify such Option for exemption under Rule 16b-3.

     (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 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.
<PAGE>

     (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.  Expiration.  The  Plan  will  expire  when  no  Shares  are
                  ----------
available  for  issuance.