Compaq To Retire Digital Debt; Compaq Announces Cash Tender Offers and Solicitations of Consents with respect to Outstanding Debt of Digital Equipment Corporation.

HOUSTON--(BUSINESS WIRE)--May 28, 1998--Compaq Computer Corporation (NYSE:CPQ) today announced cash tender offers and solicitations of consents relating to the following debt securities of Digital Equipment Corporation (NYSE:DEC): $250 million 7-1/8% Notes due October 15, 2002, $250 million 8-5/8% Debentures due November 1, 2012, and $250 million 7-3/4% Debentures due April 1, 2023. In connection with the cash tender offers, Compaq is soliciting consents to the adoption of amendments to the indenture under which the securities were issued to eliminate certain covenants.

According to Earl Mason, Compaq's Chief Financial Officer, "Retiring the Digital bonds will result in significant interest savings for Compaq. This allows Compaq to remain debt free and is consistent with our long-term asset management goals."

The purchase price to be paid for each 7-1/8% note and each 8-5/8% debenture tendered will be based upon a spread of 30 and 60 basis points over the yield of U.S. Treasury notes with comparable maturity dates, respectively. The purchase price to be paid for each 7-3/4% debenture tendered will be based upon a spread of 70 basis points over the yield of a U.S. Treasury bond with a comparable maturity date. A portion of the total consideration will consist of a consent payment (in an amount in cash equal to 2% of the principal amount ($20 per $1,000 principal amount) of the securities purchased) that will only be paid for tendered securities for which consents have been validly delivered and not validly revoked at or prior to June 12. The cash tender offers will terminate on June 25.

The offer for each series of securities is subject to certain conditions, including the consummation of the acquisition of Digital by Compaq and the valid consent by holders of at least a majority in aggregate principal amount of such series of securities.

For additional information, please contact Corporate Investor Communications, Inc., the Information Agent for the offerings, at [phone].

Company Backgrounds

Compaq Computer Corporation, a Fortune 100 company, is the fifth largest computer company in the world and the largest global supplier of personal computers, delivering useful innovation through products that connect people with people and people with information. The company is an industry leader in environmentally friendly programs and business practices. Compaq is strategically organized to meet the current and future needs of its customers, offering Internet and enterprise computing solutions, networking products, commercial PC products and consumer PCs. As the leader in distributed enterprise solutions, Compaq has shipped over a million servers. In 1997, the company reported worldwide sales of $24.6 billion. Compaq products are sold and supported in more than 100 countries through a network of authorized Compaq marketing partners. Customers support and information about Compaq and its products can be found at http://www.compaq.com or by calling 1-800-OK-COMPAQ. Product information and reseller locations can be obtained by calling 1-800-345-1518.

Digital Equipment Corporation, recognized for product and service excellence, is a leading supplier of high-performance, Web-based computing solutions, which help enterprises compete in the global marketplace. Digital gives its customers a winning Internet advantage through a comprehensive portfolio of Internet solutions based on award-winning systems, advanced networking infrastructure, innovative software, and industry applications - including those from its business partners. The expertise and experience of Digital employees help customers plan, design, implement, manage and support Internet solutions in countries throughout the world. For the latest company information, visit Digital on the World Wide Web at http://www.digital.com and/or http://www.newsdesk.com. -0-

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

Digital is a registered trademark of Digital Equipment Corporation.

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