<PAGE>
PROSPECTUS SUPPLEMENT Filed pursuant to Rule 424(b)(2)
(To Prospectus dated August 6, 1998) SEC File No. 333-50971
LOGO
11,500,000 Shares
Electronic Data Systems Corporation
COMMON STOCK
----------------
All of the shares of Common Stock offered by this Prospectus Supplement and
the accompanying Prospectus are being sold by the General Motors Special
Hourly Employees Pension Trust (together with any sub-trusts thereunder,
the "Hourly Plan Special Trust" or the "Selling Stockholder") under
the General Motors Hourly-Rate Employees Pension Plan (the "Hourly
Plan"). United States Trust Company of New York is the trustee
for the Hourly Plan Special Trust and U.S. Trust Company of
California, N.A., an affiliate of United States Trust Company
of New York, is the trustee for a sub-trust under the
Hourly Plan Special Trust (together, the "Hourly Plan
Trustee"). The Company will not receive any of the
proceeds from the sale of the Shares offered hereby.
See "Selling Stockholder" in the accompanying
Prospectus and "Underwriters" herein. The
Common Stock is listed on the New York Stock
Exchange (the "NYSE") under the symbol
"EDS." The last reported sale price of
the Common Stock on the NYSE on August
10, 1998, was $41 3/8 per share.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
The Shares will be purchased from the Selling Stockholder by the
Underwriters at a price of $41 5/16 per share (resulting in $475,093,750
aggregate net proceeds (before expenses) to the Selling Stockholder). The
Company will pay certain expenses of the offering estimated at $100,000.
The Shares may be offered by the Underwriters from time to time in one or
more transactions (which may involve block transactions) on the NYSE, in the
over-the-counter market, through negotiated transactions or otherwise at
market prices prevailing at the time of the sale or at prices otherwise
negotiated. See "Underwriters."
The Company and, to the extent permitted by applicable law, the Selling
Stockholder have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. The Selling Stockholder has also agreed to reimburse certain expenses
of the Underwriters. See "Underwriters."
----------------
The Shares are offered, subject to prior sale, when, as and if issued to and
accepted by the Underwriters named herein and subject to approval of certain
legal matters by counsel for the Underwriters. It is expected that delivery of
the Shares will be made on or about August 13, 1998, at the office of Morgan
Stanley & Co. Incorporated, New York, N.Y., against payment therefor in
immediately available funds.
----------------
BEAR, STEARNS & CO. INC. MORGAN STANLEY DEAN WITTER
August 10, 1998
<PAGE>
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT, THE PROSPECTUS OR THE DOCUMENTS INCORPORATED BY REFERENCE THEREIN,
AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, BY THE SELLING STOCKHOLDER OR
BY ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE SHARES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREBY SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT PAGE
--------------------- ----
<S> <C>
Underwriters............ S-3
Legal Matters........... S-3
</TABLE>
<TABLE>
<CAPTION>
PROSPECTUS PAGE
---------- ----
<S> <C>
Available Information............................. 2
Incorporation of Certain Documents by Reference... 2
The Company....................................... 3
Use of Proceeds................................... 3
Background of the Offering........................ 4
Selling Stockholder............................... 5
Plan of Distribution.............................. 5
Legal Matters..................................... 6
Experts........................................... 6
</TABLE>
S-2
<PAGE>
UNDERWRITERS
Under the terms and subject to the conditions of the Purchase Agreement with
the Company and the Selling Stockholder and the related Pricing Agreement
between the Underwriters and the Selling Stockholder dated the date of this
Prospectus Supplement (collectively, the "Purchase Agreement"), the
Underwriters named below have severally agreed to purchase, and the Selling
Stockholder has agreed to sell to them, severally, the number of Shares set
forth below opposite their names.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
---- ----------------
<S> <C>
Bear Stearns & Co. Inc...................................... 5,232,500
Morgan Stanley & Co. Incorporated........................... 6,267,500
----------
Total .................................................... 11,500,000
</TABLE>
On August 4, 1998, Standard & Poor's Corporation ("S&P") announced that,
following the close of trading on August 10, 1998, it planned to include the
Common Stock in the Standard & Poor's Corporation 500 Composite Stock Price
Index (the "S&P 500 Index"), which is composed of 500 common stocks that S&P
selects. Shares offered by this Prospectus Supplement will be offered
primarily to funds whose portfolios are primarily based on stocks included in
the S&P 500 Index, which funds may be required to purchase Common Stock as a
result of the inclusion of the Common Stock in the S&P 500 Index.
In the Purchase Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Shares being
sold pursuant to such Agreement if any of the Shares being sold pursuant to
such Purchase Agreement are purchased. Under certain circumstances under such
Purchase Agreement, the commitments of non-defaulting Underwriters may be
increased.
The Shares may be sold by the Underwriters to purchasers in one or more
transactions (which may involve block transactions) on the NYSE or otherwise.
The distribution of the Shares may also be effected from time to time in
special offerings, exchange distributions or secondary distributions pursuant
to and in accordance with the rules of the NYSE, in the over-the-counter
market, in negotiated transactions through the writing of options on the
Shares (whether such options are listed on an options exchange or otherwise),
or in a combination of such methods at prevailing market prices or at
negotiated prices. The Underwriters may effect such transactions by selling
shares to or through dealers, and such dealers may receive compensation in the
form of discounts, concessions or commissions from the Underwriters or the
purchasers of such Shares for whom they may act as agents or to whom they may
sell as principal.
The Company and (to the extent permitted under applicable law) the Selling
Stockholder have agreed to indemnify the Underwriters against certain
liabilities including liabilities under the Securities Act. The Selling
Stockholder has also agreed to reimburse the Underwriters for their expenses
in connection with this offering, including fees and expenses of their
counsel, subject to a limit of $500,000.
Certain of the Underwriters or their affiliates have rendered, and are
expected to continue to render, various investment banking and other advisory
services to the Company, the Selling Stockholder and the Hourly Plan. They
have received, and will continue to receive, customary compensation for such
services. The Selling Stockholder has agreed to pay Bear, Stearns & Co. Inc. a
financial advisory fee of $500,000 after the closing of this offering. C.
Robert Kidder, a director of the Company, is also a director of Morgan Stanley
Dean Witter & Co., the parent company of Morgan Stanley & Co. Incorporated.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by D. Gilbert Friedlander, General Counsel for the Company, and for
the Underwriters by Vinson & Elkins L.L.P., Dallas, Texas.
S-3
<PAGE>
PROSPECTUS
LOGO
40,000,000 SHARES
ELECTRONIC DATA SYSTEMS CORPORATION
COMMON STOCK
The 40,000,000 shares (the "Shares") of Common Stock, par value $0.01 per
share ("Common Stock"), of Electronic Data Systems Corporation, a Delaware
corporation (together with its subsidiaries and predecessors, "EDS"), offered
hereby may be offered for sale from time to time by and for the account of the
General Motors Special Hourly Employees Pension Trust (together with any sub-
trusts thereunder, the "Hourly Plan Special Trust" or the "Selling
Stockholder") under the General Motors Hourly-Rate Employees Pension Plan (the
"Hourly Plan"). See "Selling Stockholder."
EDS will not receive any of the proceeds from the sale of the Shares by the
Selling Stockholder. EDS will bear the costs of registering the Shares under
the Securities Act, including the registration fee under the Securities Act of
1933, as amended (the "Securities Act"), certain legal and accounting fees and
any printing fees. The Selling Stockholder will bear all other expenses in
connection with this offering, including any underwriting discounts and
commissions, brokerage fees and the fees and disbursements of counsel
representing the Selling Stockholder. See "Selling Stockholder" and "Plan of
Distribution."
The Common Stock is listed in the United States on the New York Stock
Exchange (the "NYSE") under the symbol "EDS." The last reported sale price of
the Common Stock on the NYSE on August 5, 1998 was $36.6875 per share.
United States Trust Company of New York is the trustee for the Hourly Plan
Special Trust and U.S. Trust Company of California, N.A., an affiliate of
United States Trust Company of New York, is the trustee for a sub-trust under
the Hourly Plan Special Trust (together, the "Hourly Plan Trustee").
The Selling Stockholder from time to time may offer and sell Shares (i) to
underwriters who will acquire Shares for their own account and resell them in
one or more transactions at fixed prices or at varying prices determined at
time of sale, (ii) in block transactions in which the broker or dealer engaged
will attempt to sell the Shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction, (iii) to a broker or
dealer as principal, which may resell Shares for its own account, and (iv)
through "brokers' transactions" (within the meaning of Section 4(4) of the
Securities Act ). To the extent required, the names of any underwriter, broker
or dealer and applicable commissions or discounts and any other required
information with respect to any particular transaction will be set forth in an
accompanying Prospectus Supplement. See "Plan of Distribution." Any statement
contained in this Prospectus will be deemed to be modified or superseded by
any inconsistent statement contained in any Prospectus Supplement delivered
herewith. The Selling Stockholder reserves the sole right to accept or reject,
in whole or in part, any proposed purchase of the Shares to be made in the
manner set forth above.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST 6, 1998
<PAGE>
AVAILABLE INFORMATION
EDS is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed by EDS with the Commission can be inspected, and
copies may be obtained, at the Public Reference Section of the Commission,
Judiciary Plaza, 450 Fifth Street N.W., Washington D.C. 20549, at prescribed
rates, as well as at the following Regional Offices of the Commission: Seven
World Trade Center, New York, New York 10048; and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Such reports, proxy
statements and other information may also be obtained from the web site that
the Commission maintains at http://www.sec.gov. Reports, proxy statements and
other information concerning EDS can also be inspected at the offices of the
New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New
York 10005, where the Common Stock is listed.
Reports, proxy statements, and other information concerning EDS can also be
obtained electronically through a variety of databases, including, among
others, the Commission's Electronic Data Gathering, Analysis And Retrieval
("EDGAR") System.
EDS has filed with the Commission a Registration Statement on Form S-3 (as
amended and including exhibits, the "Registration Statement") under the
Securities Act covering the resale of the shares of Common Stock offered
hereby. Pursuant to the rules and regulations of the Commission, this
Prospectus omits certain information contained in the Registration Statement.
Such information can be inspected at and obtained from the Commission and the
NYSE in the manner set forth above. For further information pertaining to EDS
and the Common Stock, reference is hereby made to the Registration Statement.
Statements contained herein concerning any document filed as an exhibit to the
Registration Statement are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or, where so stated, portions thereof, which have been
filed by EDS with the Commission, are incorporated herein by reference:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1997;
2. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1998;
3. Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1998; and
4. The section entitled "Description of Registrant's Securities to be
Registered" contained in the Registration Statement on Form 8-A dated
May 29, 1996.
In addition, all documents filed by EDS with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering made hereunder shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
EDS will provide without charge to each person, including any beneficial
owner, to whom this Prospectus is delivered, upon the written or oral request
of such person, a copy of any and all of the documents which have been or may
be incorporated by reference in this Prospectus, other than exhibits to such
documents not specifically described above. Requests for such documents should
be directed to Electronic Data Systems Corporation, Investor Relations, Mail
Stop H1-2D-05, 5400 Legacy Drive, Plano, Texas, 75024-3199 (Telephone Number:
(972) 604-6000).
2
<PAGE>
THE COMPANY
EDS is a professional services firm that applies consulting, information and
technical expertise to enhance clients' business performance. EDS offers its
clients a portfolio of related services worldwide within the broad categories
of systems and technology services, business process management, management
consulting and electronic business. EDS provides clients access to a wide
range of value-added offerings within each of the four categories. Services
include the management of computers, networks, information systems,
information processing facilities, business operations and related personnel.
The following is a description of EDS' principal service offerings:
. SYSTEMS AND TECHNOLOGY SERVICES. EDS' traditional outsourcing business
encompasses systems development, systems integration and systems
management. Also included in this area are desktop services, Year 2000
conversions and enterprise software solutions.
. BUSINESS PROCESS MANAGEMENT. EDS may manage an entire business function
within the client's enterprise, including such activities as remittance
processing, procurement logistics, enterprise customer management,
customer service and training, as well as information technology
operations.
. MANAGEMENT CONSULTING. A.T. Kearney, an EDS subsidiary, provides clients
with high value-added strategy, operations and information technology
capabilities combined with implementation skills that improve overall
business performance and competitive positioning. Services in this area
focus on strategic consulting, including customer equity management, new
market entry and shareholder value creation; operations consulting,
encompassing strategic sourcing, supply chain management and
manufacturing; and technology consulting, including systems planning,
new technology applications and advanced applications.
. ELECTRONIC MARKETS. EDS' offerings in this area include interactive
marketing and payment services, internet and online services and
advertising, electronic commerce, EDI (electronic data interchange),
smart cards, multimedia and home shopping, and the design, development,
implementation and operation of internet websites, corporate intranets
and extranets.
As of December 31, 1997, EDS employed approximately 110,000 persons and
served clients in the United States and 43 other countries.
EDS is incorporated under the laws of the State of Delaware. EDS' principal
executive offices are located at 5400 Legacy Drive, Plano, Texas 75024,
telephone number: (972) 604-6000.
USE OF PROCEEDS
EDS will not receive any of the proceeds of the sale of any of the Shares
offered hereby. All of such proceeds will be for the account of the Selling
Stockholder and for the benefit of participants in the Hourly Plan.
3
<PAGE>
BACKGROUND OF THE OFFERING
On March 13, 1995, General Motors Corporation ("GM") contributed
approximately 173 million shares of Class E Common Stock of GM (the "Class E
Common Stock") to the Hourly Plan. Such shares, together with an approximately
16.9 million additional shares of Class E Common Stock then held by the Hourly
Plan, became subject to the restrictions on transfer in and other terms of the
Registration Rights Agreement dated March 12, 1995 between GM and United
States Trust Company of New York, as Trustee of the Hourly Plan Special Trust
(including the exhibits thereto, the "Registration Rights Agreement").
Pursuant to the split-off of EDS from GM on June 7, 1996 (the "Split-Off"),
each share of Class E Common Stock was converted into one share of Common
Stock. At the time of the Split-Off, EDS succeeded to all of the rights and
obligations of GM under the Registration Rights Agreement (with the exception
of certain indemnification provisions relating to prior offerings under the
Registration Rights Agreement) and all of the provisions of the Registration
Rights Agreement applicable to the Class E Common Stock held by the GM Hourly
Plan Special Trust became applicable to the Common Stock into which such Class
E Common Stock was converted. Since March 1995, the Hourly Plan Special Trust
has sold, in the aggregate, 63,550,000 shares of Common Stock in underwritten
public offerings (including 40,550,000 shares of Class E Common Stock sold in
an underwritten public offering prior to the Split-Off).
Under the Registration Rights Agreement, the Hourly Plan Special Trust may
only transfer such shares of Common Stock in certain types of transactions and
under certain circumstances, including "demand transfers" (which are defined
under the Registration Rights Agreement to include public offerings and
negotiated transactions, whether registered or not) and certain transfers to
employee benefit plans maintained by EDS and its subsidiaries. The
Registration Rights Agreement provides that any underwritten public offering
to be effected thereunder by the Hourly Plan Special Trust must be reasonably
designed to achieve a broad public distribution of the securities being
offered. Subject to certain limitations, EDS may postpone the filing or
effectiveness of any registration statement requested by the Hourly Plan
Special Trust or the making of any demand transfer at any time EDS determines
that such action would interfere with any proposal or plan by EDS to engage in
any material acquisition, merger, tender offer, securities offering or other
material transaction or would require EDS to make a public disclosure of
previously non-public material information. The Registration Rights Agreement
prohibits the Hourly Plan Special Trust from making a negotiated transfer (i)
of more than 2% of the shares of Common Stock then outstanding to any person
and (ii) to any person who is then required to file or has filed a Schedule
13D under the Exchange Act with respect to the Common Stock. The Hourly Plan
Special Trust is permitted two demand transfers in any twelve-month period.
Restrictions on the Hourly Plan Special Trust's transfer of shares of Common
Stock under the Registration Rights Agreement will terminate when the Hourly
Plan Special Trust owns less than 2% of the shares of Common Stock then
outstanding. The Registration Rights Agreement also imposes certain
restrictions on the ability of the Hourly Plan Special Trust to tender its
shares of Common Stock in a third-party tender offer until such Trust owns
7.5% or less of the Common Stock on a fully diluted basis (after which time it
may freely tender into any tender offer for Common Stock).
Pursuant to the Registration Rights Agreement, the Hourly Plan Special Trust
has the right to require that EDS file a registration statement which would
permit sales of shares of Common Stock from time to time pursuant to Rule 415
under the Securities Act on or after March 12, 1999, the fourth anniversary of
the date of the contribution of the Class E Common Stock to the Hourly Plan.
Pursuant to an agreement between EDS and United States Trust Company, as
Trustee of the Hourly Plan Special Trust, EDS and the Hourly Plan Special
Trust agreed to file this Registration Statement pursuant to the terms and
conditions of the Registration Rights Agreement.
4
<PAGE>
SELLING STOCKHOLDER
The Hourly Plan Special Trust is the owner of all of the Shares offered
hereby. The Investment Funds Committee of GM's Board of Directors is the named
fiduciary of the Hourly Plan pursuant to the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and a portion of
the assets of the Hourly Plan (not including the shares of Common Stock owned
by the Hourly Plan Special Trust) is subject to management by or under the
supervision of General Motors Investment Management Corporation, a wholly-
owned subsidiary of GM.
Prior to GM's contribution of approximately 173 million shares of Class E
Common Stock to the Hourly Plan Special Trust as described under "Background
of the Offering," the Hourly Plan Trustee was appointed to have ongoing
responsibility, as a fiduciary within the meaning of ERISA, to manage the
shares of Class E Common Stock owned by the Hourly Plan Special Trust. The
Hourly Plan Trustee retained Wasserstein Perella & Co., Inc. (the "Financial
Advisor") to serve as its investment advisor regarding the management and
disposition of such shares of Class E Common Stock, and as of the date of this
Prospectus, the Financial Advisor continues to serve in such capacity after
the Split-Off with respect to the Common Stock.
The Hourly Plan Trustee has responsibility to manage prudently the shares of
Common Stock held by the Hourly Plan Special Trust in a manner consistent with
maximizing the value of its investment in Common Stock and in accordance with
its determination of the extent to which it may prudently continue to hold
such shares consistent with the diversification and related fiduciary
requirements of ERISA. In accordance with the foregoing and in a manner
consistent with the limitations and terms of the Registration Rights
Agreement, the Hourly Plan Trustee has the authority and discretion to cause
the Hourly Plan Trust to hold such shares or sell all or any portion thereof
from time to time as it may deem appropriate, and to direct the voting of and
the exercise of all other rights relating to such shares. The Hourly Plan
Trustee intends to manage the disposition of such shares in a manner
consistent with maintaining an orderly market for the Common Stock. The
compensation of the Hourly Plan Trustee and the Financial Advisor is not
contingent in any way on the sale or continued holding of shares of Common
Stock by the Hourly Plan Special Trust.
On August 5, 1998, the Hourly Plan Special Trust beneficially owned
approximately 126.5 million shares of Common Stock, representing approximately
25.7% of the Common Stock outstanding.
PLAN OF DISTRIBUTION
The Selling Stockholder may offer Shares from time to time depending on
market conditions and other factors, in one or more transactions on the NYSE
or any other national securities exchange or automated interdealer quotation
system on which shares of Common Stock are then listed, through negotiated
transactions or otherwise. The Shares will be sold at prices and on terms then
prevailing, at prices related to the then current market price or at
negotiated prices. Subject to the terms of the Registration Rights Agreement,
the Shares may be offered in any manner permitted by law, including through
underwriters, brokers, dealers or agents, and directly to one or more
purchasers. Sales of Shares may involve (i) sales to underwriters who will
acquire Shares for their own account and resell them in one or more
transactions at fixed prices or at varying prices determined at time of sale,
(ii) block transactions in which the broker or dealer so engaged will attempt
to sell the Shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction, (iii) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account and
(iv) ordinary brokerage transactions and transactions in which a broker
solicits purchasers. Brokers and dealers may receive compensation in the form
of underwriting discounts, concessions or commissions from the Selling
Stockholder and/or purchasers of Shares for whom they may act as agent (which
compensation may be in excess of customary commissions). The Selling
Stockholder and any broker or dealer that participates in the distribution of
Shares positioned by a broker or dealer may be deemed to be an underwriter
within the meaning of the Securities Act, in which event brokerage commissions
or discounts may be deemed to be underwriting discounts and
5
<PAGE>
commissions under the Securities Act. Upon EDS being notified by the Selling
Stockholder that a material arrangement has been entered into with an
underwriter, broker or dealer for the sale of the Shares, a Prospectus
Supplement will be filed, if required, pursuant to Rule 424 under the Exchange
Act disclosing the number of Shares being offered and the terms of the
offering, including the name of each underwriter, broker or dealer, any
discounts, commissions and other items constituting compensation to
underwriters, brokers or dealers, the public offering price and any discounts,
commissions or concessions allowed or reallowed or paid by underwriters to
dealers, and any other facts material to the transaction. As of the date of
this Prospectus, there are no selling arrangements between the Selling
Stockholder and any underwriter, broker or dealer.
EDS will not receive any of the proceeds from the sale of the Shares by the
Selling Stockholder. EDS will bear the costs of registering the Shares under
the Securities Act, including the registration fee under the Securities Act,
certain legal and accounting fees and any printing fees. The Selling
Stockholder will bear all other expenses in connection with this offering,
including any underwriting discounts and commissions, brokerage fees and the
fees and disbursements of counsel representing the Selling Stockholder.
Pursuant to the terms of the Registration Rights Agreement, EDS and the
Selling Stockholder have agreed to indemnify each other and certain other
related parties for certain liabilities in connection with the registration of
the Shares.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for EDS by D. Gilbert Friedlander, General Counsel of EDS. Mr.
Friedlander is the beneficial owner of shares of Common Stock.
EXPERTS
The consolidated financial statements and financial statement schedule of
EDS as of December 31, 1997 and 1996 and for each of the years in the three-
year period ended December 31, 1997 included in EDS' Annual Report on Form 10-
K for the fiscal year ended December 31, 1997 incorporated herein by reference
have been audited by KPMG Peat Marwick LLP, independent auditors, as stated in
their reports appearing therein, and have been so included in reliance upon
such reports given upon the authority of that firm as experts in accounting
and auditing.
6
