Compaq Settles Packard Bell Lawsuit

HOUSTON, February 23, 1996 -- Compaq Computer Corporation (NYSE:CPQ)
announced today that it has settled its unfair advertising lawsuit against
Packard Bell. The case, filed in April of last year, concerned Packard
Bell's practice of putting used components in its products and selling
them as new without disclosing that fact to consumers. The case was
scheduled to go to trial in the Federal District Court in Wilmington,
Delaware, on February 26.

Subsequent class action lawsuits filed by consumers around the country
against Packard Bell were settled by Packard Bell agreeing to change some
of its practices and to inform consumers -- after opening the box -- that
its computers contained used parts. The class action lawsuit settlements
did not require Packard Bell to provide pre-sale disclosure to consumers
of the presence of used parts in its computers, which was the principle
basis of Compaq's suit.

According to William D. Coston, outside counsel for Compaq and a partner in
the Washington, D.C., law firm of Venable, Baetjer, Howard and Civiletti,
the federal court hearing this case urged the two parties during a recent
hearing to settle since it was unlikely to issue an opinion before the
Fall of 1996. Coston also indicated that state and federal authorities
investigating this issue will very likely require pre-sale disclosure
before that time.

"As a result," said Coston, "we have chosen to settle this litigation
because we fully expect in the near future that Packard Bell will be
required to disclose prior to sale that its products contain used parts.

"Before Compaq filed this suit, the public was unaware of Packard Bell's
practices," Coston continued. "Today, thanks to Compaq bringing this
practice to light, the American public is much better informed regarding
Packard Bell's practices. Compaq remains proud of its policy of using only
new parts in products it sells as new."

As part of the settlement, Packard Bell's counterclaims against Compaq were
also dismissed with prejudice.

COMPANY BACKGROUND

Compaq Computer Corporation is the world's largest supplier of personal
computers, offering desktop PCs, portable PCs, servers and options.
Founded in 1982, 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 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-OK-COMPAQ. Product information and reseller locations can be
obtained by calling 1-800-345-1518.
 
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