News release

Compaq and Raytheon Enter Three-Year Agreement Valued up to $250 Million

Compaq Computer Corporation (NYSE: CPQ) announced today that it has been competitively awarded a three-year partner agreement to provide Raytheon Company (NYSE: RTN) with Intel™-based technology solutions at 196 sites in the United States. The estimated value of this agreement is between $200 million and $250 million in sales.

Under the agreement, Compaq will design and deliver custom configurations for desktops, notebooks, servers, and workstations, as well as enterprise and business-class storage - all based on Intel technology. These solutions will be incorporated into Raytheon's internal IT infrastructure.

"An agreement of this significance demonstrates Compaq's ability to establish deeper partnerships with our customers and deliver the most value. It goes well beyond manufacturing the latest hardware and serving as the technology supplier," said Compaq's Peter Blackmore, executive vice president, Sales and Services. "We appreciate the opportunity to extend Compaq's business partnership with Raytheon over the next three years in the U.S."

This agreement is an extension to the previous U.S. agreement since Compaq has provided standard Intel-based solutions to Raytheon since 1998. Compaq is also a global supplier for Raytheon's operations internationally.

Raytheon is a hybrid account that works with select partners and leverages direct sales from Compaq. It was one of the first companies to participate in Compaq's direct sales program when it launched more than four years ago and is one of Compaq's largest direct customers today. To support its partner program, Compaq will help Raytheon identify and qualify small, minority- and women-owned business enterprises to serve as partners for a select portion of Raytheon's business. Finally, Compaq will enhance Raytheon's Employee Purchase Program offering the company's standard configurations at a discount.

"Raytheon is a global technology leader in its own right, particularly in defense and specialized systems. That is why our partnership with Raytheon helps Compaq maintain the highest levels of product innovation and technology development," said Jim Milton, senior vice president and general manager, Compaq North America.

About Raytheon

With headquarters in Lexington, Mass., Raytheon Company is a global technology leader in defense, government, and commercial electronics, as well as business and special mission aircraft.

About Compaq

Founded in 1982, Compaq Computer Corporation is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, and desktop and portable personal computers that are sold in more than 200 countries. Information on Compaq and its products and services is available at http://www.compaq.com.