Compaq, Microsoft Awarded $170 Million Contract to Supply PCs, Servers, Software to Smith Barney; Exclusive Contract Represents Major Victory for Distributed Enterprise Computing.

HOUSTON--(BUSINESS WIRE)--April 17, 1996--Compaq Computer Corporation (NYSE: CPQ) today announced that it and Microsoft Corporation has been awarded a $170 million contract with Smith Barney Inc. and its parent company, Travelers Group. The new contract makes Compaq the primary provider of all PCs and servers and Microsoft the primary provider of software for both Smith Barney and Travelers over the next three years.

The agreement initially involves the roll-out of approximately 500 Compaq ProLiant servers and 20,000 Compaq Deskpro PCs running on the Microsoft(r) Windows NT(tm) operating system platform and the Microsoft BackOffice(tm)family of applications to be used throughout Smith Barney's 460 retail branch offices. Compaq and Microsoft teamed together through their Frontline Partnership Agreement to jointly provide Smith Barney with a true distributed-enterprise, client-server computing solution.

"The agreement with Smith Barney and Travelers represents a major victory for Compaq and Microsoft, for distributed enterprise computing and for the strategic importance of our Frontline Partnership," said Ross Cooley, Compaq Computer Corporation's senior vice president and general manager, North America Division. "Winning this contract underscores the cost-effectiveness and sheer power of our advanced servers for enterprise-wide applications, as well as the true power of the Compaq-Microsoft combination."

"We are pleased that Travelers and Smith Barney have chosen Microsoft and Compaq as their primary platform providers for both software and hardware," said Deborah Willingham, vice president of Microsoft's Enterprise Customer Unit. "The combined robustness of our products, along with seamless technical support from both organizations, will provide Smith Barney and Travelers with a reliable, mission-critical platform for servicing their customers."

The new Compaq/Microsoft network initially is being implemented as part of Smith Barney's NextGen project. NextGen, a fully integrated system of shared applications data, will provide Smith Barney's financial consultants with unprecedented information in each of the company's retail branches nationwide. Financial consultants will have immediate access to a client's profile of personal, financial or account-related information, as well as maintain more specific data to build a complete history of conversations and correspondence. Using contact management functionality, financial consultants will be prompted to contact their clients on a more regular, disciplined basis, enabling them to better build and maintain client relationships and to better manage their daily activities.

Smith Barney financial consultants will also enjoy an added ability to profile and integrate prospects and leads within a system, enabling each with access to all relevant functionality and applications for targeting and tracking processes which could lead to new business opportunities.

"Compaq and Microsoft have provided a powerful, cost effective platform for this strategically important project," said Smith Barney Vice Chairman and Chief Administrative Officer Robert Druskin. "We are very excited by the opportunities both for our clients and our company with the technologies which lie ahead."

Official roll-out of Smith Barney's new Compaq/Microsoft enterprise-wide computing solution will take place from September 1996 to September 1997.

"The decision to purchase Compaq workstations provides both the technology required and an excellent foundation for our network of Smith Barney Financial Consultants to effectively service a large and diverse client base in an extremely competitive environment," said Smith Barney Senior Executive Vice President Mel Taub. "Compaq's Pentium-based Deskpro PCs, running Microsoft Windows NT, will have a very pronounced and positive affect on the way in which our financial consultants do business."

Compaq Deskpros on the desktop running the Microsoft Windows NT Workstation operating system will provide Smith Barney financial consultants with this information, which is stored on the Compaq ProLiant server, over a Microsoft SQL Server(tm) database, employing Microsoft BackOffice network software. Through the Compaq and Microsoft system, Smith Barney employees will also be able to retrieve, share and store real-time data and graphs, and access third-party market research reports.

Frontline Partnership

Compaq and Microsoft signed the Frontline Partnership in April 1993. Under this comprehensive agreement, the two companies collaborate on making enterprise solutions easier to use, and simpler to install, with the goal of providing customers with the best performance and value in the industry. As an example of the cooperative spirit of this agreement, products such as Windows NT and the Windows(r) 95 operating system are broadly tested on Compaq platforms.

The two companies continue to jointly develop and promote the "Plug and Play" standard; to provide customers ease-of-use features among their respective product offerings; and to work together to support marketing programs with mutual customers, including sharing technical support information, cross-training both sales organizations and sponsoring educational seminars for customers.

Company Backgrounds

Compaq Computer Corporation is the world's largest supplier of personal computers, offering desktop PCs, portable PCs, servers and options. The company reported 1995 worldwide sales of $14.8 billion. Compaq products are sold and supported in more than 100 countries through Compaq marketing partners, and sold directly to customers through Compaq DirectPlus at 1-800-888-5858. Compaq provides 24- hour customer support and can be reached through the Compaq forums on America Online, CompuServe, Internet (http://www.compaq.com) and Prodigy, or by calling 1-800-OK-COMPAQ. Product information and reseller locations can be obtained by calling 1-800-345-1518.

Smith Barney Inc. is a leading worldwide financial services company with headquarters in New York. Smith Barney is a wholly-owned subsidiary of Travelers Group (NYSE:TRV), a diversified financial services company engaged in investment, insurance and consumer finance, with more than $115 billion in assets. -0-

Compaq, Registered U.S. Patent and Trademark Office. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies.

Microsoft Windows NT, BackOffice, and Windows and are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

CONTACT: Compaq Computer Corporation

Yvonne Donaldson, Nora Hahn

713/514-0484

or

Miller/Shandwick Technologies

Donna Ruane, Lisa Gilbert

617/536-0470

or

Waggner/Edstrom

Laura Pierce

216/637-9097