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COMPAQ ANNOUNCES RESTRUCTURING OF SGI RELATIONSHIP; COMPANY CITES DEVELOPMENT CYCLE PRIORITIES; DIFFERENCES IN STRATEGIC PRODUCT DIRECTION

COMPAQ ANNOUNCES RESTRUCTURING OF SGI RELATIONSHIP; COMPANY CITES DEVELOPMENT CYCLE PRIORITIES; DIFFERENCES IN STRATEGIC PRODUCT DIRECTION
 HOUSTON, Jan. 21 /PRNewswire/ -- Compaq Computer Corporation (NYSE: CPQ) today announced that the relationship with Silicon Graphics, Inc. (SGI) has been restructured to serve more effectively both companies' divergent markets.
 As a result of the restructuring, Compaq and SGI stopped joint technology development, entered into a cross-license for technology previously exchanged by the two companies, and entered into an agreement under which SGI will acquire Compaq's equity interest in SGI.
 "The joint development work did not coalesce as expected into products that could appropriately serve each of the companies different timing and market requirements," said Gary Stimac, senior vice president and general manager, Systems Division, Compaq Computer Corporation. "Given Compaq's renewed focus on aggressive and timely announcement of new products for our market, we concluded that continued joint development work did not meet our needs." Stimac emphasized that Compaq continues its aggressive development of x86 and MIPS-based products.
 Compaq said that this announcement does not change its membership and activities in ACE (Advanced Computing Environment). "ACE objectives are still valid and we are looking forward to the availability of key components like the Microsoft NT 32-bit operating system," Stimac added.
 The original relationship between Compaq and SGI was announced on April 3, 1991, and provided for a technology exchange and joint technical development. As part of this relationship Compaq was to pay up to $50 million to SGI subject to certain terms and conditions and purchase $135 million of Silicon Graphics preferred stock.
 Under the terms of the restructuring, Compaq has agreed to pay Silicon Graphics $3.75 million this month and Silicon Graphics has agreed to pay Compaq $150 million by July 31, 1992. Upon receipt of these funds, Compaq has agreed to transfer the SGI preferred stock it currently owns to SGI. The company said that the decision to restructure the agreement with Silicon Graphics would have no material financial impact.
 Compaq Computer Corporation is a world leader in the manufacture of PC systems, and desktop, portable, laptop and notebook personal computers. COMPAQ products are sold and serviced in more than 69 countries through a variety of dealers, systems integrators, VARs and distributors.
 -0- 1/21/92
 /CONTACT: Bob Beach or Mike Berman of Compaq Computer Corporation, 713-374-4613; or Tony Sapienza of Miller Communications, 617-536-0470, for Compaq/
 (CPQ) CO: Compaq Computer Corporation; Silicon Graphics Inc. ST: Texas, California IN: CPR SU:


PB-SH -- NE016 -- 2041 01/21/92 16:28 EST
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Publication:PR Newswire
Date:Jan 21, 1992
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