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                                                                    EXHIBIT 10.3

                                          Amended and Restated September 4, 2001
                                           Amended and Restated January 20, 1998
                               Reflects 5-for-2 stock split dated July 14, 1997,
                                  2-for-1 stock split dated January 20, 1998 and
                                mergers & acquisitions through September 1, 1997

                           COMPAQ COMPUTER CORPORATION
                           1995 EQUITY INCENTIVE PLAN

SECTION 1. PURPOSE. The purposes of the Compaq Computer Corporation 1995 Equity
Incentive Plan are to promote the interests of Compaq Computer Corporation and
its stockholders by (i) attracting and retaining exceptional executive personnel
and other key employees of the Company and its Affiliates, as defined below;
(ii) motivating such employees by means of performance-related incentives to
achieve long-range performance goals; and (iii) enabling such employees to
participate in the long-term growth and financial success of the Company.

SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall have the
meanings set forth below:

"AFFILIATE" shall mean (i) any entity that, directly or indirectly, is
controlled by the Company and (ii) any entity in which the Company has a
significant equity interest, in either case as determined by the Committee.

"AWARD" shall mean any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Award or other Stock-Based Award.

"AWARD AGREEMENT" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.

"BOARD" shall mean the Board of Directors of the Company.

"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 the
adoption of the Plan), individuals who at the beginning of such period
constitute the Board of Directors, 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 paragraph
whose election by the Board of Directors 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

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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 that 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. If any of the
events enumerated in clauses (i) through (iv) occur, the Board shall
determine the effective date of the Change in Control resulting therefrom,
for purposes of the Plan. For purposes of (1) applying Awards granted on or
after September 1, 2001, (2) applying the provisions of Section 9(a) to
Awards (other than Options and Stock Appreciation Rights) granted prior to
September 1, 2001, and (3) applying the provision of Section 8(a)(i) to all
Options and Stock Appreciation Rights, whenever granted, the definition of
Change in Control set forth in this paragraph shall be revised by
substituting the phrase "a merger or consolidation of the Company with any
other corporation is consummated" for the phrase "the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation" in clause (iii) of the definition above.

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

"COMMITTEE" shall mean a committee of the Board designated by the Board to
administer the Plan and composed of not less than the minimum number of persons
from time to time required by Rule 16b-3, each of whom, to the extent necessary
to comply with Rule 16b-3 only, is a "Non-Employee Director " within the meaning
of Rule 16b-3. Until otherwise determined by the Board, the Human Resources
Committee designated by the Board shall be the Committee under the Plan.

"COMPANY" shall mean Compaq Computer Corporation, together with any successor
thereto.

"EMPLOYEE" shall mean an employee of the Company or of any Affiliate.

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

"EXECUTIVE OFFICER" shall mean, at any time, an individual who is an executive
officer of the Company within the meaning of Exchange Act Rule 3b-7 as
promulgated and interpreted by the SEC under the Exchange Act, or any successor
rule or regulation thereto as in effect from time to time, or who is an officer
of the Company within the meaning of Exchange Act Rule 16a-1(f) as promulgated
and interpreted by the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.

"FAIR MARKET VALUE" shall mean the fair market value of the property or other
item being valued, as determined by the Committee in its sole discretion.

"INCENTIVE STOCK OPTION" shall mean a right to purchase Shares from the Company
that is granted under Section 6 of the Plan and that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto.

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"NON-QUALIFIED STOCK OPTION" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is not intended to
be an Incentive Stock Option.

"OPTION" shall mean an Incentive Stock Option or a Non-Qualified Stock Option
and shall include a Restoration Option.

"OTHER STOCK-BASED AWARD" shall mean any right granted under Section 10 of the
Plan.

"PARTICIPANT" shall mean any Employee selected by the Committee to receive an
Award under the Plan.

"PERFORMANCE AWARD" shall mean any right granted under Section 9 of the Plan.

"PERSON" shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

"PLAN" shall mean this Compaq Computer Corporation 1995 Equity Incentive Plan.

"RESTORATION OPTION" shall mean an Option granted pursuant to Section 6(e) of
the Plan.

"RESTRICTED STOCK" shall mean any Share granted under Section 8 of the Plan.

"RESTRICTED STOCK UNIT" shall mean any unit granted under Section 8 of the Plan.

"RULE 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by the SEC
under the Exchange Act, or any successor rule or regulation thereto as in effect
from time to time.

"SEC" shall mean the Securities and Exchange Commission or any successor thereto
and shall include the staff thereof.

"SHARES" shall mean shares of the common stock, $.0l par value, of the Company,
or such other securities of the Company as may be designated by the Committee
from time to time.

"STOCK APPRECIATION RIGHT" shall mean any right granted under Section 7 of the
Plan.

"SUBSTITUTE AWARDS" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.

"TANDEM" shall mean Tandem Computers Incorporated.

SECTION 3. ADMINISTRATION.

     (a)  AUTHORITY OF COMMITTEE. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to an
eligible Employee; (iii) determine the number of Shares to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or

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suspended and the method or methods by which Awards may be settled, exercised,
canceled, forfeited, or suspended; (vi) determine whether, to what extent, and
under what circumstances cash, Shares, other securities, other Awards, other
property, and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend,
suspend, or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan.

     (b)  COMMITTEE DISCRETION BINDING. Unless otherwise expressly provided in
the Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive, and binding upon all Persons, including the Company, any Affiliate,
any Participant, any holder or beneficiary of any Award, any stockholder and any
Employee.

SECTION 4. SHARES AVAILABLE FOR AWARDS.

     (a)  SHARES AVAILABLE. Subject to adjustment as provided in Section 4(b),
the number of Shares with respect to which Awards may be granted under the Plan
shall be 65,682,498 million. If, after the effective date of the Plan, any
Shares covered by an Award granted under the Plan or by an award granted under
any prior stock award plan of the Company, or to which such an Award or award
relates, are forfeited, or if such an Award or award is settled for cash or
otherwise terminates or is canceled without the delivery of Shares, then the
Shares covered by such Award or award, or to which such Award or award relates,
or the number of Shares otherwise counted against the aggregate number of Shares
with respect to which Awards may be granted, to the extent of any such
settlement, forfeiture, termination or cancellation, shall again become Shares
with respect to which Awards may be granted. In the event that any Option or
other Award granted hereunder or any award granted under any prior stock award
plan of the Company is exercised through the delivery of Shares or in the event
that withholding tax liabilities arising from such Award or award are satisfied
by the withholding of Shares by the Company, the number of Shares available for
Awards under the Plan shall be increased by the number of Shares so surrendered
or withheld. Notwithstanding the foregoing and subject to adjustment as provided
in Section 4(b), no Executive Officer of the Company may receive Awards under
the Plan in any calendar year that relate to more than 2,500,000 Shares;
provided, however, a new employee who begins service as Chief Executive Officer
may receive Awards that relate to up to 5,000,000 Shares in the calendar year in
which employment with the Company begins.

     (b)  ADJUSTMENTS. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
with respect to which Awards may be granted, (ii) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
subject to outstanding Awards, and (iii) the grant or exercise price with
respect to any Award, or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award; provided, in each case, that (A)
with respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would

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cause the Plan to violate Section 422(b)(1) of the Code, as from time to time
amended and (B) with respect to any Award no such adjustment shall be authorized
to the extent that such authority would be inconsistent with the Plan's meeting
the requirements of Section 162(m) of the Code, as from time to time amended.

     (c)  SUBSTITUTE AWARDS. Any Shares underlying Substitute Awards shall not,
except in the case of Shares with respect to which Substitute Awards are granted
to Employees who are officers or directors of the Company for purposes of
Section 16 of the Exchange Act or any successor section thereto, be counted
against the Shares available for Awards under the Plan.

     (d)  SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.

SECTION 5. ELIGIBILITY. Any Employee, including any officer or employee-director
of the Company or any Affiliate, who is not a member of the Committee, shall be
eligible to be designated a Participant.

SECTION 6. STOCK OPTIONS.

     (a)  GRANT. Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Employees to whom Options shall be
granted, the number of Shares to be covered by each Option, the option price
therefor and the conditions and limitations applicable to the exercise of the
Option. The Committee shall have the authority to grant Incentive Stock Options,
or to grant Non-Qualified Stock Options, or to grant both types of options. In
the case of Incentive Stock Options, the terms and conditions of such grants
shall be subject to and comply with such rules as may be prescribed by Section
422 of the Code, as from time to time amended, and any regulations implementing
such statute.

     (b)  EXERCISE PRICE. Subject to the requirement set forth in Section 6(e)
the Committee in its sole discretion shall establish the exercise price at the
time each option is granted.

     (c)  EXERCISE. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Committee may, in its sole discretion,
specify in the applicable Award Agreement or thereafter. The Committee may
impose such conditions with respect to the exercise of options, including
without limitation, any relating to the application of federal or state
securities laws, as it may deem necessary or advisable.

     (d)  PAYMENT. No Shares shall be delivered pursuant to any exercise of an
Option until payment in full of the option price therefor is received by the
Company. Such payment may be made in cash, or its equivalent, or, if and to the
extent permitted by the Committee, by exchanging Shares owned by the optionee
(which are not the subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares so tendered to the
Company as of the date of such tender is at least equal to such option price.

     (e)  RESTORATION OPTIONS. In the event that any Participant delivers Shares
in payment of the exercise price of any Option granted hereunder in accordance
with Section 6(d) or of any option granted under a prior stock award plan of the
Company, or in the event that the withholding tax liability arising upon
exercise of any such Option or option by a Participant is satisfied through the
withholding by the Company of Shares otherwise deliverable upon exercise of the
Option or option, the Committee shall have the authority to grant or provide for
the automatic grant of a Restoration Option to such Participant.

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The grant of a Restoration Option shall be subject to the satisfaction of such
conditions or criteria as the Committee in its sole discretion shall establish
from time to time. A Restoration Option shall entitle the holder thereof to
purchase a number of Shares equal to the number of such Shares so delivered or
withheld upon exercise of the original Option or option. A Restoration Option
shall have a per share exercise price of not less than 100% of the per Share
Fair Market Value on the date of grant of such Restoration Option and such other
terms and conditions as the Committee in its sole discretion shall determine.

SECTION 7. STOCK APPRECIATION RIGHTS.

     (a)  GRANT. Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Employees to whom Stock
Appreciation Rights shall be granted, the number of Shares to be covered by each
Stock Appreciation Right Award, the grant price thereof and the conditions and
limitations applicable to the exercise thereof. Stock Appreciation Rights may be
granted in tandem with another Award, in addition to another Award, or
freestanding and unrelated to another Award. Stock Appreciation Rights granted
in tandem with or in addition to an Award may be granted either at the same time
as the Award or at a later time. Stock Appreciation Rights shall not be
exercisable earlier than six months after grant, and shall have a grant price as
determined by the Committee on the date of grant.

     (b)  EXERCISE AND PAYMENT. A Stock Appreciation Right shall entitle the
Participant to receive an amount equal to the excess of the Fair Market Value of
a Share on the date of exercise of the Stock Appreciation Right over the grant
price thereof, provided that the Committee may for administrative convenience
determine that, with respect to any Stock Appreciation Right that is not related
to an Incentive Stock Option and that can only be exercised for cash during
limited periods of time in order to satisfy the conditions of Rule 16b-3, the
exercise of such Stock Appreciation Right for cash during such limited period
shall be deemed to occur for all purposes hereunder on the day during such
limited period on which the Fair Market Value of the Shares is the highest. Any
such determination by the Committee may be changed by the Committee from time to
time and may govern the exercise of Stock Appreciation Rights granted prior to
such determination as well as Stock Appreciation Rights thereafter granted. The
Committee shall determine whether a Stock Appreciation Right shall be settled in
cash, Shares or a combination of cash and Shares.

     (c)  OTHER TERMS AND CONDITIONS. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine, at or after the grant
of a Stock Appreciation Right, the term, methods of exercise, methods and form
of settlement, and any other terms and conditions of any Stock Appreciation
Right. Any such determination by the Committee may be changed by the Committee
from time to time and may govern the exercise of Stock Appreciation Rights
granted or exercised prior to such determination as well as Stock Appreciation
Rights granted or exercised thereafter. The Committee may impose such conditions
or restrictions on the exercise of any Stock Appreciation Right as it shall deem
appropriate.

SECTION 8. TERMINATION OR SUSPENSION OF EMPLOYMENT. The following provisions
shall apply in the event of the Participant's termination of employment unless
the Committee shall have provided otherwise, either at the time of the grant of
the Award or thereafter.

     (a)  NONQUALIFIED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.

          (i)  TERMINATION OF EMPLOYMENT. If the Participant's employment with
the Company or its Affiliates is terminated for any reason other than death,
permanent and total disability, or

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retirement, the Participant's right to exercise any Nonqualified Stock Option or
Stock Appreciation Right shall terminate, and such Option or Stock Appreciation
Right shall expire, on the earlier of (A) the first anniversary of such
termination of employment or (B) the date such Option or Stock Appreciation
Right would have expired had it not been for the termination of employment;
provided, however, that if, within one year following a Change in Control, the
Participant's employment is terminated in a Qualifying Termination (as defined
in subparagraph (iv) below), the Participant shall have the right to exercise
any outstanding Option or Stock Appreciation Right until the earlier of (A) the
third anniversary of such termination of employment (in the case of Options or
Stock Appreciation Rights granted prior to September 1, 2001) or the first
anniversary of the effective date of such Qualifying Termination (in the case of
Options or Stock Appreciation Rights granted on or after September 1, 2001 and
prior to the Change in Control) or (B) the date such Option or Stock
Appreciation Right would have expired had it not been for such termination of
employment. The Participant shall have the right to exercise such Option or
Stock Appreciation Right prior to such expiration to the extent it was
exercisable at the date of such termination of employment and shall not have
been exercised.

          (ii) DEATH, DISABILITY OR RETIREMENT. If the Participant's employment
with the Company or its Affiliates is terminated by death, permanent and total
disability, or retirement, the Participant or his successor (if employment is
terminated by death) shall have the right to exercise any Nonqualified Stock
Option or Stock Appreciation Right to the extent it was exercisable at the date
of such termination of employment and shall not have been exercised, but in no
event shall such option be exercisable later than the date the Option would have
expired had it not been for the termination of such employment. The meaning of
the terms "total and permanent disability" and "retirement" shall be determined
by the Committee.

          (iii) ACCELERATION AND EXTENSION OF EXERCISABILITY. Notwithstanding
the foregoing, the Committee may, in its discretion, provide (A) that an Option
granted to a Participant may terminate at a date earlier than that set forth
above, (B) that an Option granted to a Participant may terminate at a date later
than that set forth above, provided such date shall not be beyond the date the
Option would have expired had it not been for the termination of the
Participant's employment, and (C) that an Option or Stock Appreciation Right may
become immediately exercisable when it finds that such acceleration would be in
the best interests of the Company.

          (iv) DEFINITION OF QUALIFYING TERMINATION. For purposes of
subparagraph (a)(i) above, the term "Qualifying Termination" shall have the
meaning ascribed to such term in the Participant's individual employment or
severance agreement with the Company or its Affiliates. If the Participant is
not a party to an individual employment or severance agreement with the Company
or its Affiliates, the term "Qualifying Termination" shall have the meaning
ascribed to the term "Qualified Termination" in the Compaq Computer Corporation
employee severance plan, as may be amended from time to time, in which such
Participant is eligible to participate.

     (b)  INCENTIVE STOCK OPTIONS. Except as otherwise determined by the
Committee at the time of grant, if the Participant's employment with the Company
is terminated for any reason, the Participant shall have the right to exercise
any Incentive Stock Option and any related Stock Appreciation Right during the
90 days after such termination of employment to the extent it was exercisable at
the date of such termination, but in no event later than the date the option
would have expired had it not been for the termination of such employment. If
the Participant does not exercise such Option or related Stock Appreciation
Right to the full extent permitted by the preceding sentence, the remaining
exercisable portion of such Option automatically will be deemed a Nonqualified
Stock Option, and such Option and any related Stock Appreciation Right will be
exercisable during the period set forth in Section 11(a) of the Plan, provided
that in the event that employment is terminated because of death or the
Participant dies in such 90-day period, the option will continue to be an
Incentive Stock Option to the extent provided by

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Section 421 or Section 422 of the Code, or any successor provision, and any
regulations promulgated thereunder.

     (c)  LEAVE WITHOUT PAY. Any time spent by a Participant in the status of
"leave without pay" shall be disregarded for purposes of determining the extent
to which any Award or portion thereof has vested or otherwise becomes
exercisable or nonforfeitable.

SECTION 9. CHANGE IN CONTROL. Notwithstanding any other provision of the Plan to
the contrary, (a) all Awards granted prior to September 1, 2001 shall vest and
become immediately exercisable or payable, or have all restrictions lifted as
may apply to the type of Award and no outstanding Stock Appreciation Right may
be terminated, amended, or suspended upon or after a Change in Control and (b)
all Awards granted on or after September 1, 2001 shall vest and become
immediately exercisable or payable, or have all restrictions lifted as may apply
to the type of Award, upon a Qualifying Termination (as defined in Section
8(a)(iv) of the Plan) within one year following a Change in Control.

SECTION 10. AMENDMENT AND TERMINATION.

     (a)  AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without stockholder approval if such approval is necessary to
comply with any tax or regulatory requirement, including for these purposes any
approval requirement that is a prerequisite for exemptive relief from Section
16(b) of the Exchange Act, for which or with which the Board deems it necessary
or desirable to qualify or comply. Notwithstanding anything to the contrary
herein, the Committee may amend the Plan in such manner as may be necessary so
as to have the Plan conform with local rules and regulations in any jurisdiction
outside the United States.

     (b)  AMENDMENTS TO AWARDS. The Committee may waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate,
any Award theretofore granted, prospectively or retroactively; provided that any
such waiver, amendment, alteration, suspension, discontinuance, cancellation, or
termination that would adversely affect the rights of any Participant or any
holder or beneficiary of any Award theretofore granted shall not to that extent
be effective without the consent of the affected Participant, holder, or
beneficiary.

     (c)  ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 4(b) hereof) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan; provided that no such adjustment shall be authorized to the
extent that such authority would be inconsistent with the Plan's meeting the
requirements of Section 162(m) of the Code, as from time to time amended.

     (d)  CANCELLATION. Any provision of this Plan or any Award Agreement to the
contrary notwithstanding, the Committee may cause any Award granted hereunder to
be canceled in consideration of a cash payment or alternative Award made to the
holder of such canceled Award equal in value to the Fair Market Value of such
canceled Award.

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     (e)  EMPLOYEE STATUS CHANGE TO PART-TIME. At such time as a full-time
employee becomes a part-time employee of the Company, on the next vesting date
following such status change, all Awards previously granted to such employee
will be automatically amended to reflect the vesting of all such Awards to be
reduced by one-half with respect to any portion of the Awards not yet vested.

SECTION 14. GENERAL PROVISIONS.

     (a)  NONTRANSFERABILITY. No Award 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
Award may be transferable, to the extent set forth in the applicable Award
Agreement and in accordance with procedures adopted by the Committee.

     (b)  NO RIGHTS TO AWARDS. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.

     (c)  SHARE CERTIFICATES. All certificates for Shares or other securities of
the Company or any Affiliate delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which such Shares or other securities are then listed,
and any applicable Federal or state laws, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.

     (d)  DELEGATION. Subject to the terms of the Plan and applicable law, the
Committee may delegate to one or more officers or managers of the Company or any
Affiliate, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to grant
Awards to, or to cancel, modify or waive rights with respect to, or to alter,
discontinue, suspend, or terminate Awards held by, Employees who are not
officers or directors of the Company for purposes of Section 16 of the Exchange
Act, or any successor section thereto, or who are otherwise not subject to such
Section.

     (e)  WITHHOLDING. A participant may be required to pay to the Company or
any Affiliate and the Company or any Affiliate shall have the right and is
hereby authorized to withhold from any Award, from any payment due or transfer
made under any Award or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Shares, other securities, other
Awards or other property) of any applicable withholding taxes in respect of an
Award, its exercise, or any payment or transfer under an Award or under the Plan
and to take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of such taxes. The Committee may
provide for additional cash payments to holders of Awards to defray or offset
any tax arising from the grant, vesting, exercise, or payments of any Award.

     (f)  AWARD NOTICE. Each Award hereunder shall be evidenced by an Award
Notice that shall be delivered to the Participant and shall specify the terms
and conditions of the Award and any rules applicable thereto.

     (g)  NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other compensation arrangements, which may, but need not, provide for the
grant of options, restricted stock, Shares and other

                                       9
<Page>

types of Awards provided for hereunder (subject to stockholder approval if such
approval is required), and such arrangements may be either generally applicable
or applicable only in specific cases.

     (h)  NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Notice.

     (i)  NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the applicable
Award, no Participant or holder or beneficiary of any Award shall have any
rights as a stockholder with respect to any Shares to be distributed under the
Plan until he or she has become the holder of such Shares.

     (j)  GOVERNING LAW. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan and any Award Notice shall be
determined in accordance with the laws of the State of Delaware.

     (k)  SEVERABILITY. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.

     (l)  OTHER LAWS. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole discretion, it
determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder, or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of the U.S.
federal securities laws and any other laws to which such offer, if made, would
be subject.

     (m)  NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.

     (n)  NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.

     (o)  HEADINGS. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

                                       10
<Page>

SECTION 15. TERM OF THE PLAN.

     (a)  EFFECTIVE DATE. The Plan shall be effective as of January 22, 1997,
subject to approval by the stockholders of the Company within one year
thereafter.

     (b)  EXPIRATION DATE. No Incentive Stock Option shall be granted under the
Plan after January 22, 1997. Unless otherwise expressly provided in the Plan or
in an applicable Award Notice, any Award granted hereunder may, and the
authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Award shall, continue after the authority for grant of new Awards
hereunder has been exhausted.

                                       11<Page>

                                                                    EXHIBIT 10.4

                                          Amended and Restated September 4, 2001
              Section 2 definition of Fair Market Value amended December 8, 1999
                                           Amended and Restated January 20, 1998
                               Reflects 5-for-2 stock split dated July 14, 1997,
                                  2-for-1 stock split dated January 20, 1998 and
                                mergers & acquisitions through September 1, 1997

                           COMPAQ COMPUTER CORPORATION
                           1989 EQUITY INCENTIVE PLAN

SECTION 1. PURPOSE. The purposes of the Compaq Computer Corporation 1989 Equity
Incentive Plan (the "Plan") are to encourage eligible employees of Compaq
Computer Corporation (the "Company") and its Affiliates, to acquire a
proprietary and vested interest in the growth and performance of the Company, to
generate an increased incentive to contribute to the Company's future success
and prosperity, thus enhancing the value of the Company for the benefit of its
stockholders, and to enhance the ability of the Company and its Affiliates to
attract and retain talented and highly competent individuals upon whom, in large
measure, the sustained progress, growth, and profitability of the Company
depend.

SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall have the
meanings set forth below:

     (a)  "AFFILIATE" shall mean (i) any Person that directly, or through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Company or (ii) any entity in which the Company has a significant
equity interest, as determined by the Committee.

     (b)  "AWARD" shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, or any other right, interest, or option relating to Shares granted
pursuant to the provisions of the Plan.

     (c)  "AWARD NOTICE" shall mean any written notice, agreement, or other
instrument or document evidencing any Award granted by the Committee hereunder
signed by the Company and delivered to the Participant.

     (d)  "BOARD" shall mean the Board of Directors of the Company.

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

     (f)  "COMMITTEE" shall mean the Human Resources Committee of the Board of
Directors, composed of not less than two directors each of whom is a
Non-Employee Director.

     (g)  "COMMON STOCK" shall mean the common stock, $.01 par value, of the
Company.

     (h)  "COMPANY" shall mean Compaq Computer Corporation.

     (i)  "EMPLOYEE" shall mean any employee of the Company or of any Affiliate.

                                       1
<Page>

     (j)  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 as
amended.

     (k)  "FAIR MARKET VALUE" shall mean the fair market value of the property
or other item being valued, as determined by the Committee in its sole
discretion.

     (l)  "INCENTIVE STOCK OPTION" shall mean an Option granted under Section 6
hereof that is intended to meet the requirements of Section 422A of the Code or
any successor provision thereto.

     (m)  "NON-EMPLOYEE DIRECTOR" shall have the meaning set forth in Rule
13e-3(b)(3)(i) promulgated by the Securities and Exchange Commission under the
Exchange Act.

     (n)  "NONQUALIFIED STOCK OPTION" shall mean an Option granted under Section
6 hereof that is not intended to be an Incentive Stock Option.

     (o)  "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 the Committee shall determine.

     (p)  "PARTICIPANT" shall mean an Employee who is selected by the Committee
to receive an Award under the Plan.

     (q)  "PERSON" shall mean any natural person, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.

     (r)  "RESTRICTED STOCK" shall mean any share of capital stock of the
Company issued with the restriction that the holder may not sell, transfer,
pledge, or assign such share and with such other restrictions as the Committee,
in its sole discretion, may impose (including, without limitation, any
restriction on the right to vote such shares and the right to receive any cash
dividends), which restrictions may lapse separately or in combination at such
time or times, in installments or otherwise, as the Committee may deem
appropriate.

     (s)  "RESTRICTED STOCK AWARD" shall mean an Award of Restricted Stock under
Section 8 hereof.

     (t)  "SHARES" shall mean the Common Stock and such other securities of the
Company as the Committee may from time to time determine.

     (u)  "STOCK APPRECIATION RIGHT" shall mean any right granted to a
Participant pursuant to Section 7 hereof to receive, upon exercise by the
Participant, the excess of (i) the Fair Market Value of one Share on the date of
exercise or, if the Committee shall so determine in the case of any such right
other than one related to any Incentive Stock Option, at any time during a
specified period before the date of exercise over (ii) the grant price of the
right as specified by the Committee, in its sole discretion, on the date of
grant. The grant price of a right granted to an individual subject to Section 16
of the Exchange Act shall not be less than 50% of the Fair Market Value of one
Share on the date of grant. Any payment by the Company in respect of such right
may be made in cash, Shares, other property, or any combination thereof, as the
Committee, in its sole discretion, shall determine.

     (v)  "TANDEM" shall mean Tandem Computers Incorporated.

                                       2
<Page>

     (w)  "TANDEM SUBSTITUTE OPTIONS" shall mean any Options issued under the
Plan pursuant to that certain Agreement and Plan of Merger dated as of June 22,
1997 among Tandem, the Company and Compaq-Project, Inc.

SECTION 3. ADMINISTRATION. The Plan shall be administered by the Committee. The
Committee shall have full power and authority, subject to such orders or
resolutions not inconsistent with the provisions of the Plan as may from time to
time be adopted by the Board, to: (i) select the Employees of the Company and
its Affiliates to whom Awards may from time to time be granted hereunder; (ii)
determine the type or types of Awards to be granted to each Participant
hereunder; (iii) determine the number of Shares to be covered by each Award
granted hereunder; (iv) determine the terms and conditions, not inconsistent
with the provisions of the Plan, of any Award granted hereunder; (v) determine
whether, to what extent, and under what circumstances Awards may be settled in
cash, canceled, or suspended; (vi) determine whether, to what extent, and under
what circumstances Shares and other amounts payable with respect to an Award
under this Plan shall be deferred either automatically or at the election of the
Participant; (vii) interpret and administer the Plan and any instrument or
agreement entered into under the Plan; (viii) establish such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take any
other action that the Committee deems necessary or desirable for administration
of the Plan. Decisions of the Committee shall be final, conclusive, and binding
upon all persons, including the Company, any Participant, any stockholder of the
Company, and any Employee. A majority of the members of the Committee may
determine its actions and fix the time and place of its meetings. The Committee
may delegate its power and authority under this Plan to a Chief Executive
Officer of the Company who is a director of the Company with respect to the
administration of the Plan for grants to persons other than executive officers.
In the case of such delegation, the term "Committee" as used in this Plan shall
be deemed to refer to the Chief Executive Officer of the Company.

SECTION 4. SHARES SUBJECT TO THE PLAN.

     (a)  TOTAL NUMBER. Subject to adjustment as provided in this Section, the
total number of Shares available for grant under the Plan shall be 268,033,504
Shares.

     (b)  REDUCTION OF SHARES AVAILABLE.

          (i)  The grant of an Option or Restricted Stock Award will reduce the
Shares available for grant by the number of Shares subject to such Award.

          (ii) The grant of Stock Appreciation Rights related to an Option will
reduce the number of Shares available for grant only to the extent that the
number of Stock Appreciation Rights granted exceeds the number of Shares subject
to the related Option.

          (iii) The grant of Stock Appreciation Rights not related to an Option
will reduce the number of Shares available for grant by the number of Stock
Appreciation Rights granted.

          (iv) 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.

                                       3
<Page>

          (i)  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; provided that
in the event the cancellation of an Option is due to the exercise of Stock
Appreciation Rights related to such Option, the cancellation of such Option
shall only increase the Shares available by the excess, if any, of the number of
Shares subject to such Option over the number of Stock Appreciation Rights
exercised.

          (ii) The lapse, cancellation, or other termination of Stock
Appreciation Rights that have not been exercised shall increase the available
Shares by the number of Stock Appreciation Rights so lapsed, canceled, or
terminated; provided that in the event the cancellation of Stock Appreciation
Rights is due to the exercise of an Option related to such Stock Appreciation
Rights, the lapse, cancellation, or termination of such Stock Appreciation
Rights shall only increase the Shares available by the excess, if any, of the
number of Stock Appreciation Rights so lapsed, canceled, or terminated over the
number of Shares for which such Option is exercised.

          (iii) Any Restricted Shares forfeited by a Participant shall increase
the available Shares by the number of Shares so forfeited.

     (d)  OTHER ADJUSTMENTS. The total number of shares of Common Stock
available for Awards under the Plan or which may be allocated to any one
Participant, the number of shares of Common Stock subject to outstanding
Options, the exercise price for such Options, the number of outstanding Stock
Appreciation Rights, the base value of such rights, and the number of
outstanding shares of Restricted Stock shall be appropriately adjusted by the
Committee for any increase or decrease in the number of outstanding Shares
resulting from a stock dividend, subdivision, or combination of Shares or
reclassification, as may be necessary to maintain the proportionate interest of
the Award holder. In the event of a merger or consolidation of the Company or a
tender offer for shares of Common Stock, the Committee may make such adjustments
with respect to Awards under the Plan and take such other action as it deems
necessary or appropriate to reflect or in anticipation of such merger,
consolidation, or tender offer including, without limitation, the substitution
of new Awards, the termination or adjustment of outstanding Awards, the
acceleration of Awards, or the removal of restrictions on outstanding Awards.
The payment to the Participant of an amount in cash equal to the excess, if any,
of the Fair Market Value of the number of shares subject to any Award over the
aggregate grant price thereof, in consideration of the cancellation thereof
pursuant to this Section 4(d), shall extinguish any rights of the Participant in
connection with such Award.

SECTION 5. ELIGIBILITY. Any Employee (excluding any member of the Committee)
shall be eligible to be selected as a Participant.

SECTION 6. STOCK OPTIONS. Options may be granted hereunder to Participants
either alone or in addition to other Awards granted under the Plan. The Company
shall deliver an Award Notice to each Participant receiving an Option. Any such
Option shall be subject to the following terms and conditions and to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable:

     (a)  OPTION PRICE. The purchase price per Share purchasable under an Option
shall be determined by the Committee in its sole discretion and set forth in the
applicable Award Notice; provided that such purchase price shall not be less
than (i) 100% of the Fair Market Value of the Share on the date of the grant of
the Option in the case of any Incentive Stock Option, or (ii) 50% of such Fair
Market

                                       4
<Page>

Value in the case of any Nonqualified Stock Option granted to an individual
subject to Section 16 of the Exchange Act.

     (b)  OPTION PERIOD. The term of each Option shall be fixed by the Committee
in its sole discretion and set forth in the applicable Award Notice; provided
that no Option shall be exercisable after the expiration of ten years from the
date the Option is granted.

     (c)  EXERCISABILITY. Options shall be exercisable at such time or times as
determined by the Committee in its sole discretion and set forth in the
applicable Award Notice.

     (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 Committee may
specify. Unless otherwise specified in the applicable grant and Award Notice,
the Participant may make payment in cash or by certified check, bank draft, or
postal or express money order payable to the order of the Company, or, with the
consent of the Board (or the Committee, if established by the Board), in whole
or in part in Common Stock owned by the Optionee, valued at Fair Market Value.

     (e)  INCENTIVE STOCK OPTIONS. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value (determined as of
the time of grant) of the Shares with respect to which Incentive Stock Options
held by any Participant become exercisable for the first time by such
Participant during any calendar year under the Plan (and under any other benefit
plans of the Company or of any parent or subsidiary corporation of the Company)
shall not exceed $100,000 or, if different, the maximum limitation in effect at
the time of grant under Section 422A of the Code, or any successor provision,
and any regulations promulgated thereunder. The terms of any Incentive Stock
Option granted hereunder shall comply in all respects with the provisions of
Section 422A of the Code, or any successor provision, and any regulations
promulgated thereunder.

     (f)  FORM OF SETTLEMENT. In its sole discretion, the Committee may provide,
at the time of grant, that the Shares to be issued upon an Option's exercise
shall be in the form of Restricted Stock or other similar securities.

     (g)  CERTIFICATES. Upon the Company's determination that an Option has been
validly exercised as to any of the Shares, the Secretary of the Company shall
issue certificates in the Participant's name for such Shares. However, the
Company shall not be liable to the Participant 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.

SECTION 7. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be granted
hereunder to Participants either alone or in addition to other Awards granted
under the Plan and may, but need not, relate to a specific Option granted under
Section 6. The provisions of Stock Appreciation Rights need not be the same with
respect to each recipient. Any Stock Appreciation Right related to a
Nonqualified Stock Option may be granted at the same time such Option is granted
or at any time thereafter before exercise or expiration of such Option. Any
Stock Appreciation Right related to an Incentive Stock Option must be granted at
the same time such Option is granted. In the case of any Stock Appreciation
Right related to any Option, the Stock Appreciation Right Award or applicable
portion thereof shall terminate and no longer be exercisable upon the
termination or exercise of the related Option, except that a Stock Appreciation
Right Award granted with respect to fewer than the full number of Shares covered
by a related Option shall not be reduced until the number of Shares issued upon
exercise or canceled upon termination of the related Option exceeds the number
of shares not covered by the Stock Appreciation Right Award. Any Option related
to any Stock Appreciation Right shall no longer be exercisable to the

                                       5
<Page>

extent the related Stock Appreciation Right has been exercised. No Stock
Appreciation Right unrelated to any Option shall be exercisable after the
expiration of ten years from the date such Award is granted. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it shall deem appropriate. The Company shall deliver an Award Notice to
each Participant receiving a Stock Appreciation Right.

SECTION 8. RESTRICTED STOCK.

     (a)  ISSUANCE. Restricted Stock Awards may be issued hereunder to
Participants, for no cash consideration or for such nominal consideration as may
be required by applicable law, either alone or in addition to other Awards
granted under the Plan. The provisions of Restricted Stock Awards need not be
the same with respect to each recipient. The Company shall deliver an Award
Notice to each Participant receiving a Restricted Stock Award.

     (b)  REGISTRATION. Any Restricted Stock issued hereunder may be evidenced
in such manner as the Committee in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of shares of Restricted Stock awarded under the Plan, such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award. Promptly after the lapse of restrictions with respect
to any shares of Restricted Stock, the lapse of such restrictions shall be
evidenced in such manner as the Committee shall deem appropriate.

SECTION 9. TERMINATION OR SUSPENSION OF EMPLOYMENT.

     (a)  NONQUALIFIED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.

          (i)  If the Participant's employment with the Company or its
Affiliates is terminated for any reason other than death, disability, or
retirement, the Participant's right to exercise any Nonqualified Stock Option or
Stock Appreciation Right shall terminate, and such Option or Stock Appreciation
Right shall expire, on the earlier of (A) the first anniversary of such
termination of employment or (B) the date such Option or Stock Appreciation
Right would have expired had it not been for the termination of employment;
provided, however, that if, within one year following a Change in Control, the
Participant's employment is terminated in a Qualifying Termination (as defined
in subparagraph (v) below), the Participant shall have the right to exercise any
outstanding Option or Stock Appreciation Right until the earlier of (A) the
third anniversary of such termination of employment (in the case of Options or
Stock Appreciation Rights granted prior to September 1, 2001) or the first
anniversary of the effective date of such Qualifying Termination (in the case of
Options or Stock Appreciation Rights granted on or after September 1, 2001 and
prior to the Change in Control) or (B) the date such Option or Stock
Appreciation Right would have expired had it not been for such termination of
employment. The Participant shall have the right to exercise such Option or
Stock Appreciation Right prior to such expiration to the extent it was
exercisable at the date of such termination of employment and shall not have
been exercised.

          (ii) If the Participant's employment with the Company or its
Affiliates is terminated by reason of death, disability, or retirement, the
Participant or his successor (if employment is terminated by death) shall have
the right to exercise any Nonqualified Stock Option or Stock Appreciation Right
to the extent it was exercisable at the date of such termination of employment
and shall not have been

                                       6
<Page>

exercised, but in no event shall such option be exercisable later than the date
the Option would have expired had it not been for the termination of such
employment.

          (iii) Notwithstanding the foregoing, the Committee may, in its
discretion, provide (a) that an Option granted to a Participant may terminate at
a date earlier than that set forth above, and (b) that an Option granted to a
Participant may terminate at a date later than that set forth above, provided
such date shall not be beyond the date the Option would have expired had it not
been for the termination of the Participant's employment.

          (iv) Any time spent by a Participant in the status of "leave without
pay" shall be disregarded for purposes of determining the extent to which an
Option or any portion thereof has vested.

          (v)  For purposes of subparagraph (a)(i) above, the term "Qualifying
Termination" shall have the meaning ascribed to such term in the Participant's
individual employment or severance agreement with the Company or its Affiliates.
If the Participant is not a party to an individual employment or severance
agreement with the Company or its Affiliates, the term "Qualifying Termination"
shall have the meaning ascribed to the term "Qualified Termination" in the
Compaq Computer Corporation employee severance plan, as may be amended from time
to time, in which such Participant is eligible to participate.

     (b)  INCENTIVE STOCK OPTIONS. Except as otherwise determined by the
Committee at the time of grant, if the Participant's employment with the Company
is terminated for any reason, the Participant shall have the right to exercise
any Incentive Stock Option and any related Stock Appreciation Right during the
90 days after such termination of employment to the extent it was exercisable at
the date of such termination, but in no event later than the date the Option
would have expired had it not been for the termination of such employment. If
the Participant does not exercise such Option or related Stock Appreciation
Right to the full extent permitted by the preceding sentence, the remaining
exercisable portion of such Option automatically will be deemed a Nonqualified
Stock Option, and such Option and the related Stock Appreciation Right will be
exercisable during the period set forth in Section 9(a) of the Plan, provided
that in the event that employment is terminated because of death or the
Participant dies in such 90-day period the Option will continue to be an
Incentive Stock Option to the extent provided by Section 421 or Section 422A of
the Code, or any successor provision, and any regulations promulgated
thereunder.

     (c)  RESTRICTED STOCK. Except as otherwise determined by the Committee at
the time of grant, upon termination of employment for any reason during the
restriction period, all shares of Restricted Stock still subject to restriction
shall be forfeited by the Participant and reacquired by the Company at the price
(if any) paid by the Participant for such Restricted Stock; provided that in the
event of a Participant's retirement, permanent disability, or death, or in cases
of special circumstances, the Committee may, in its sole discretion, when it
finds that a waiver would be in the best interests of the Company, waive, in
whole or in part, any or all remaining restrictions with respect to such
Participant's shares of Restricted Stock.

     (d)  DISABILITY AND RETIREMENT. The term "disability" means total and
permanent disability. The meaning of the terms "total and permanent disability"
and "retirement" shall be determined by the Committee.

     (e)  ACCELERATION OF EXERCISABILITY. Nothing contained herein shall in any
way limit the authority of the Committee in its sole discretion to cause any
outstanding Option or Stock Appreciation Right to become immediately exercisable
when it finds that such acceleration would be in the best interests of the
Company.

                                       7
<Page>

SECTION 10. CHANGE IN CONTROL.

     (a)  IMMEDIATE VESTING. Notwithstanding any other provision of the Plan to
the contrary, (1) all Awards granted prior to September 1, 2001 shall vest and
become immediately exercisable or payable, or have all restrictions lifted as
may apply to the type of Award upon a Change in Control and (2) all Awards
granted on or after September 1, 2001 shall vest and become immediately
exercisable or payable, or have all restrictions lifted as may apply to the type
of Award, upon a Qualifying Termination (as defined in Section 9(a)(v)) within
one year following a Change in Control.

     (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 the adoption of the Plan), individuals who at the beginning of
such period constitute the Board of Directors, 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 of Directors 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. For purposes
of (A) Awards granted on or after September 1, 2001, (2) applying the provision
of Section 10(a)(1) to Awards (other than Options and Stock Appreciation Rights)
granted prior to September 1, 2001, and (3) applying the provisions of Section
9(a)(i) and the sixth paragraph of Appendix A to all Options and Stock
Appreciation Rights under the Plan, whenever granted, the definition of Change
in Control set forth in this subsection shall be revised by substituting the
phrase "a merger or consolidation of the Company with any other corporation is
consummated" for the phrase "the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation" in clause (iii) of this
subsection.

SECTION 11. AMENDMENTS AND TERMINATION.

     (a)  The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under an Award theretofore granted, without the Participant's
consent, or that without the approval of the stockholders would:

                                       8
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          (i)  except as is provided in Section 4(b) of the Plan, increase the
     total number of Shares reserved for the purpose of the Plan; or

          (ii) change the employees or class of employees eligible to
     participate in the Plan.

     (b)  The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Participant without his consent. The Committee may also substitute new
Awards for previously granted Awards, including without limitation previously
granted Options and Stock Appreciation Rights having higher option prices.

     (c)  EMPLOYEE STATUS CHANGE TO PART-TIME. At such time as a full-time
employee becomes a part-time employee of the Company, on the next vesting date
following such status change, all Awards previously granted to such employee
will be automatically amended to reflect the vesting of all such Awards to be
reduced by one-half with respect to any portion of the Awards not yet vested.

SECTION 12. GENERAL PROVISIONS.

     (a)  NONTRANSFERABILITY. No Award 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
Award may be transferable, to the extent set forth in the applicable Award
Notice and in accordance with procedures adopted by the Committee, (i) if such
Award Notice provisions do not disqualify such Award for exemption under Rule
16b-3 or (ii) if such Award is not intended to qualify for exemption under such
rule.

     (b)  NO CLAIMS. No Employee or Participant shall have any claim to be
granted any Award under the Plan and there is no obligation for uniformity of
treatment of Employees or Participants under the Plan.

     (c)  NOTICES. Any notice necessary under this Plan or any Award hereunder
shall be addressed to the Company in care of its Secretary at the principal
executive office of the Company in Houston, Texas and to the Participant at the
address appearing in the personnel records of the Company for such Participant
or to either party at such other address as either party hereto may hereafter
designate in writing to the other. Any such notice shall be deemed effective
upon receipt thereof by the addressee.

     (d)  UNUSUAL EVENTS. The Committee shall be authorized to make adjustments
in the terms and conditions of Awards in recognition of unusual or nonrecurring
events affecting the Company or its financial statements or changes in
applicable laws, regulations, or accounting principles. The Committee may
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan or any Award in the manner and to the extent it shall deem desirable to
carry it into effect. In the event the Company shall assume outstanding employee
benefit awards or the right or obligation to make such future awards in
connection with the acquisition of another corporation or business entity, the
Committee may, in its discretion, make such adjustments in the terms of Awards
under the Plan as it shall deem appropriate.

     (e)  COMPLIANCE REQUIREMENTS. All certificates for Shares delivered under
the Plan pursuant to any Award shall be subject to such stock-transfer orders
and other restrictions as the Committee 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 Committee 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 (i) to the completion of any registration or qualification
of

                                       9
<Page>

such Shares under any federal or state law, or under any ruling or regulation of
any governmental body or national securities exchange that the Committee in its
sole discretion shall deem to be necessary or appropriate and (ii) to the
Participant's entering into such written representations, warranties, and
agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Plan.

     (f)  DIVIDENDS. Subject to the provisions of this Plan, the recipient of an
Award may, if so determined by the Committee at the time of grant, be entitled
to receive, currently or on a deferred basis, interest or dividends, or interest
or dividend equivalents, with respect to the number of shares covered by the
Award, as determined at the time of the Award by the Committee, in its sole
discretion, and the Committee may provide that such amounts (if any) shall be
deemed to have been reinvested in additional Shares or otherwise reinvested.

     (g)  NO OTHER CONSIDERATION. Except as otherwise required in any applicable
grant and Award Notice or by the terms of the Plan, recipients of Awards under
the Plan shall not be required to make any payment or provide consideration
other than the rendering of services.

     (h)  WITHHOLDING. The Company shall be authorized to withhold from any
Award granted or payment due under the Plan the amount of withholding taxes due
in respect of an Award or payment hereunder and to take such other action as may
be necessary in the opinion of the Company to satisfy any of its obligations
with respect to the payment of such taxes.

     (i)  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.

     (j)  GOVERNING LAW. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan and any Award hereunder shall be
determined in accordance with the laws of the State of Delaware and applicable
federal law.

     (k)  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 Award under any law deemed applicable by the
Committee, 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 Committee, 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. EFFECTIVE DATE OF PLAN. The Plan shall be effective as of January
18, 1989 (the "Effective Date"), subject to approval by the Company's
stockholders within one year thereafter. Awards may be granted at any time after
the Effective Date and prior to termination of the Plan by the Board, except
that no Incentive Stock Option shall be granted pursuant to the Plan after 10
years from the Effective Date, but any Award theretofore granted may extend
beyond that date. The Plan will expire when no Shares are available for
issuance.

SECTION 14. TANDEM SUBSTITUTE OPTIONS. Tandem Substitute Options shall be
governed by the terms of the Plan and the related option conversion notice,
except that, notwithstanding any provision of the Plan or option conversion
notice to the contrary, the terms and conditions set forth on Appendix A hereto
shall govern such options to the extent set forth on such Appendix.

                                       10
<Page>

                    APPENDIX A FOR TANDEM SUBSTITUTE OPTIONS

The term "Options" as used in this Appendix A means Tandem Substitute Options.

EXERCISABILITY: Generally, Options may be exercised beginning six months from
the vesting date or, with respect to certain Options, beginning six months from
the original grant date. Optionees are not entitled to exercise Options if
employment with the Company is terminated prior to six months from the vesting
date or, with respect to certain Options, prior to six months from the original
grant date. The original grant date and the vesting date are set forth on the
related option conversion notice.

VESTING: Vesting stops when the optionee's employment with the Company or any of
its Affiliates terminates. The vesting schedule for each Option is as set forth
on the related Option Conversion Notice.

DEATH: If an optionee dies while an employee of the Company or its Affiliates,
Options become fully vested regardless of length of service and expire one year
after the date of death.

DISABILITY: If an optionee's employment terminates because of permanent
disability, Options (i) become 20% vested, if more than the percentage actually
vested on the termination date and (ii) expire 90 days after the termination
date.

TERMINATION: If employment with the Company or its Affiliates ends for any
reason other than death or permanent disability, Options expire on the 30th day
after the termination date; provided, however, that if, within one year
following a Change in Control, the optionee's employment is terminated in a
Qualifying Termination (as defined in Section 9(a)(v) of the Plan), the optionee
shall have the right to exercise any outstanding Option until the earlier of (A)
the third anniversary of such termination of employment or (B) the date such
Option would have expired had it not been for such termination of employment.

LEAVE OF ABSENCE: Vesting during an approved leave of absence is governed by the
applicable leave of absence policy in effect at the time an optionee goes on
leave.

UNVESTED SHARES: Six months after the original grant date (as set forth on the
related option conversion notice), optionees can purchase unvested option
shares. Unvested option shares may not be sold or otherwise transferred until
they become vested. The Company may buy back unvested shares at the price paid
by the optionee for such shares upon optionee's termination from the Company or
its Affiliates (except death). In such event, the Company must give notice to
the optionee within 60 days after the termination date, provided, however, that
upon termination due to permanent disability, the Company must provide notice
within 60 days after the last date upon which the optionee's option is
exercisable. Optionees must deliver the number of shares requested in such
notice to the Company within 60 days after receipt of such notice, with the
stock certificates fully endorsed or accompanied by a duly executed stock power.
Certificates for unvested shares shall contain a legend referring to the
Company's right to repurchase. As the optionee's vesting percentage increases,
the optionee may request, at reasonable intervals, that the Company exchange
those legended certificates for shares which have vested for certificates for
shares without legends. No certificates shall be issued for partial shares.

FORM OF PAYMENT: A notice of exercise must include payment of the option price
for the shares being purchased. Payment may be made by: (i) cashier's check or a
money order, (ii) irrevocable directions on a Company approved form to a
securities broker approved by the Company to sell the shares and deliver all or
a portion of the sale proceeds to the Company in payment of the option price, or
(iii) certificates for Common Stock, along with any forms needed to transfer the
shares to the Company. The fair market value of the shares, on the effective
date of the Option exercise will be applied to the Option price.

                                       11
<Page>

Transfers: Options cannot be assigned or transferred, except by will or the laws
of descent and distribution.

INDIVIDUAL PROVISIONS: To the extent that an optionee's option agreement with
Tandem provides terms and conditions contrary to those set forth above,
notwithstanding any other provision in the Plan, the option conversion notice or
this Appendix A to the contrary, the terms and conditions of such option
agreement shall govern the related Tandem Substitute Option (except with respect
to the vesting schedule, trading restrictions and notice of exercise, in which
case the terms and conditions contained in the related option conversion notice
shall govern).

                                       12

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