Compaq Continues Litigation with Packard Bell

HOUSTON, October 10, 1995 -- Compaq Computer Corporation (NYSE: CPQ) today
confirmed that Packard Bell Electronics has filed counterclaims against
Compaq in Federal Court in Delaware for false advertising and defamation.

In April, Compaq sued Packard Bell in Delaware, claiming that Packard Bell
sells as new, without any suitable disclosure to the consuming public,
computers that may contain used parts. Following the Compaq suit, numerous
class action lawsuits were filed against Packard Bell raising identical
charges. Packard Bell recently settled the class action lawsuits by
agreeing to change its practices and to pay nearly $4 million in fees to
the class action lawyers. Packard Bell and Compaq have not settled their
dispute.

"The Packard Bell claims filed today are without merit," said William D.
Coston, a partner in the Venable law firm in Washington representing
Compaq in the matter. "Compaq's process for handling computer returns is
exemplary and a model for the rest of the industry.

"Only after we filed our lawsuit in April did Packard Bell announce that it
would disclose to consumers that Packard Bell computers contain used
parts," Coston continued. "However, even now disclosure is only placed
inside its boxes, so consumers learn of the Packard Bell practices only
after they've paid for the computer. Consumers have a right to know if
they are buying used goods before the purchase is made."

With respect to a separate claim made against Ross Cooley, a Compaq
executive, Coston indicated that "the allegations made against Mr. Cooley
merely rehash charges that have already been repeated many times by
Packard Bell to the press. They represent an attempt to divert attention
from the real issues in this case."

COMPANY BACKGROUND

Compaq Computer Corporation is the world's largest supplier of personal
computers, offering desktop PCs, portable PCs and servers. Founded in
1982, the Company reported 1994 worldwide sales of $10.9 billion. Compaq
products are sold and supported in more than 100 countries throughout the
world. Compaq also sells directly to customers through Compaq Direct Plus
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 1-800-345-1518.
 
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