News release

Houston Independent School District, 7th Biggest in US, Selects Compaq for Technology Initiative

Teachers Gain Access to Personal Laptops; HISD Implements End-to-End Compaq Solution including Desktops, Servers, and Services

Compaq Computer Corporation (NYSE: CPQ) today announced a three-year comprehensive technology agreement with the Houston Independent School District (HISD). A key element of the agreement will enable teachers in the largest school district in Texas to purchase state-of-the-art Compaq Evo N115 laptops for their personal use at significantly discounted prices.

"Getting a laptop for every HISD teacher at rates they can afford is nothing short of exciting," said Dr. Kaye Stripling, HISD Superintendent. "I thank Compaq for its continued commitment and dedication to the teachers and students of HISD. Their partnership and dedication to the district is a worthy investment that benefits everyone."

"Working with a technology leader like Compaq is a key step in helping the district control overall IT costs," said Dr. Stripling, noting that Compaq was selected in an open, competitive process.

"Being selected by HISD to support a technology initiative that will bring significant benefits to the greater Houston community is very exciting for Compaq. We're confident the initiative will help lower the total cost of ownership of the district's IT infrastructure in a multi-year agreement that could be worth over $120 million," said Jim Weynand, Compaq vice president for government and education. "We're working with HISD to put the latest technology into the hands of some of Houston's most influential citizens—its teachers. That's important to us since we're part of the Houston community and children of the people who design and manufacture many of the systems will benefit directly."

HISD has been a Compaq customer for seven years. According to Weynand, the new multi-year agreement with HISD demonstrates that Compaq's public sector strategy is working. "We're experiencing tremendous momentum in the education marketplace. Nearly every school district we've signed recently has committed to a multi-year contract, which I believe reflects their belief in Compaq's commitment to education and ability to deliver innovative products and service solutions now and into the future."

Under the terms of the agreement, HISD—the nation's seventh largest school district—will exclusively purchase Compaq hardware for the next three years, with two one-year renewal options.

Over the next six months, HISD will purchase up to 15,000 specially priced Evo N115 laptops with Accidental CarePaq coverage to ensure the laptop includes three years of maintenance and support. These units will be available to teachers at special pricing and through a small weekly payroll deduction.

Last year, HISD purchased some $22 million worth of equipment from Compaq. Under the new contract, the industry's broadest range of innovative technologies will be available: iPAQ PocketPC handheld and Blackberry wireless devices, Evo laptops and desktops, and industry-standard ProLiant servers. Compaq Global Services will be available to provide everything from architecture design to system set up and help desk support.

"Upgrading our technology infrastructure with Compaq systems and services will support the district's commitment to become the K-12 school system of choice in Houston," said Dr. Stripling. "We're constantly improving and refining instruction and management to make schools as effective, productive, and economical as possible, and this is part of that larger effort."

A leader in restructuring public education, including the establishment of unprecedented new standards all students must meet to earn promotion, HISD is bringing school facilities up to high standards. The district is building 10 new schools through Rebuild 2002, a $678 million capital improvement program.

Company Background

Founded in 1982, Compaq Computer Corporation is a leading global provider of information technology products, services and solutions for enterprise customers. Compaq designs, develops, manufactures and markets information technology equipment, software, services and solutions, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, personal desktop and notebook computers, and personal entertainment and Internet access devices that are sold in more than 200 countries directly and through a network of authorized Compaq marketing partners. Information on Compaq and its products and services is available at http://www.compaq.com.