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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): August 10, 1998
ELECTRONIC DATA SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 01-11779 75-2548221
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
5400 Legacy Drive
Plano, Texas 75024-3105
(Address of Principal Executive Offices,
Including Zip Code)
Registrant's telephone number, including area code: (972) 604-6000
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ITEM 5. OTHER EVENTS.
On August 10, 1998, the Registrant entered into the Purchase Agreement
attached as Exhibit 99(a) hereto with the General Motors Hourly Rate Employees
Pension Plan and the Underwriters identified therein in connection with the
offering by the General Motors Hourly-Rate Employees Pension Plan of 11,500,000
shares of the Registrant's Common Stock. Also on August 10, 1998, that Pension
Plan and the Underwriters entered into the Pricing Agreement attached as Exhibit
A to the Purchase Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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99(a) Purchase Agreement dated August 10, 1998 among the
Registrant, the General Motors Hourly Rate Employees Pension
Plan, Bear, Stearns & Co. Inc. and Morgan Stanley & Co.
Incorporated (the "Underwriters"), together with the Pricing
Agreement dated August 10, 1998, between the General Motors
Hourly Rate Employees Pension Plan and the Underwriters.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ELECTRONIC DATA SYSTEMS
CORPORATION
By: /S/ D. GILBERT FRIEDLANDER
--------------------------------
Name: D. Gilbert Friedlander
Title: Senior Vice President
August 10, 1998
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EXHIBIT 99(a)
11,500,000 SHARES
ELECTRONIC DATA SYSTEMS CORPORATION
(A DELAWARE CORPORATION)
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
PURCHASE AGREEMENT
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August 10, 1998
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO. INCORPORATED
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Electronic Data Systems Corporation, a Delaware corporation (the
"Company"), and United States Trust Company of New York (the "Trustee"), as
trustee of the General Motors Special Hourly Employees Pension Trust established
under the General Motors Hourly-Rate Employees Pension Plan (the "Hourly Plan"),
for the account and on behalf of the Hourly Plan (the "Selling Stockholder"),
confirm their respective agreements with Bear, Stearns & Co. Inc. and Morgan
Stanley & Co Incorporated ("Morgan Stanley") (collectively, the "Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Article VIII), with respect to the sale by the Selling Stockholder
of the aggregate number of shares of Common Stock, par value $0.01 per share, of
the Company ("Common Stock"), and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of shares of Common Stock
set forth opposite their names in Schedule A to the Pricing Agreement (as
hereinafter defined) (the "Securities").
This Agreement shall apply with respect to one or more offerings of
Securities, each of which shall be governed by a separate Pricing Agreement.
Prior to each purchase and public offering of Securities by the several
Underwriters, the Selling Stockholder and the several Underwriters shall enter
into an agreement substantially in the form of Exhibit A hereto (each, a
"Pricing Agreement"). The Pricing Agreement may take the form of an exchange of
any standard form of written communication among the Selling Stockholder and the
Underwriters and shall specify such applicable information as is indicated in
Exhibit A hereto, including Schedule A thereto. Each offering of Securities
will be governed by this Agreement, as supplemented by the Pricing Agreement
applicable to such offering. From and after the date of the execution and
delivery of a Pricing Agreement, this Agreement shall be deemed to incorporate
that Pricing Agreement with
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respect to such offering. The date of the applicable Pricing Agreement is
referred to as the "Representation Date." The Company agrees that Morgan Stanley
will be the sole book-running manager with respect to any offering pursuant to
this Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-50971), including a
prospectus, for the registration of securities (including the Securities) under
the Securities Act of 1933, as amended (the "1933 Act"), which has been declared
effective by the Commission, and shall promptly hereafter file with or transmit
for filing to the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Securities pursuant to Rule 424 under
the Securities Act. Such registration statement (as amended, if applicable) and
the prospectus constituting part of the Registration Statement which relates to
the Securities (including the information contained in a prospectus supplement
filed pursuant to Rule 424(b)(2) and (5) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and all documents, if
any, incorporated by reference thereafter), as from time to time amended or
supplemented pursuant to the 1933 Act, are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively, except that if any
revised base prospectus shall be provided to the Underwriters by the Company for
use in connection with the offering of Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
became effective or if any revised supplemental prospectus shall be provided to
the Underwriters by the Company for use in connection with the offering of the
Securities which differs from the supplemental prospectus on file at the
Commission (whether or not such revised base or supplemental prospectus is
required to be or is filed by the Company pursuant to Rule 424(b) of the 1933
Act Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to the Underwriters for such use.
For purposes of this Agreement, all references to the Registration Statement,
any preliminary prospectus, the Prospectus or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system.
I.
On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Selling
Stockholder agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter, severally and not jointly, agrees to purchase from the Selling
Stockholder, at the price per share set forth in the Pricing Agreement, the
number of Securities set forth in Schedule A to the Pricing Agreement opposite
the name of such Underwriter, plus any additional number of Securities which
such Underwriter may become obligated to purchase pursuant to the provisions of
Article VIII hereof.
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II.
The Company and the Selling Stockholder understand that the
Underwriters propose to make a public offering of the Securities upon the terms
set forth in the Prospectus as soon as the Underwriters deem advisable after the
Pricing Agreement has been executed and delivered.
In accordance with the Selling Stockholder's obligations to the
Company under Section 3(g) of that certain Registration Rights Agreement, dated
March 12, 1995, between General Motors Corporation ("GM") and the Selling
Stockholder, as succeeded to by the Company pursuant to that certain Succession
Agreement, dated June 7, 1996, between GM and the Company, each Underwriter
severally covenants that it will, collectively with the other Underwriters, use
its reasonable best efforts (i) to effect a broad public distribution of the
Securities and (ii) not to sell to any one Person (or group of related Persons
acting pursuant to a plan or arrangement) (whether such Person (or group of
related Persons acting pursuant to a plan or arrangement) is buying for its own
account or as a fiduciary on behalf of one or more accounts) if (A) such sale is
of Securities constituting more than 2% of the Common Stock outstanding as of
the date hereof or (B) such Person (or group of related Persons acting pursuant
to a plan or arrangement) is a 5% Person, or, at any time prior to the time of
such sale, has been designated in a written list provided by GM to the
Underwriters as, to the reasonable belief of GM, beneficially owning (as defined
in Rule 13d-3 ("Rule 13d-3") of the Securities Exchange Act of 1934, as amended
(the "1934 Act")) 2% or more of the total voting power or total value of the
Common Stock then outstanding. As used herein, the term "5% Person" shall mean
any Person (or group of related Persons acting pursuant to a plan or
arrangement) that, directly or indirectly, beneficially owns (as defined in Rule
13d-3) shares of Common Stock that constitute 5% or more of the total voting
power or total value of the Common Stock then outstanding. As used herein, the
term "Person" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
III.
Payment of the purchase price for, and delivery of certificates for,
or evidence of book-entry transfer of, the Securities shall be made at the
offices of Vinson & Elkins L.L.P., 3700 Trammell Crow Center, 2001 Ross Avenue,
Dallas, Texas, or at such other place as shall be agreed upon by the
Underwriters, the Company and the Selling Stockholder, at 9:00 a.m. (Central
time) on a date no later than the fourth business day (unless postponed in
accordance with Article VIII herein) following the Representation Date, or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriters, the Company and the Selling Stockholder (each such
time and date of payment and delivery being herein called a "Closing Time").
The Selling Stockholder shall not be obligated to deliver any of the Securities
to be delivered at Closing Time except upon payment for all the Securities to be
purchased at such time or on such date as provided herein.
Payment shall be made to the Selling Stockholder by wire transfer of
immediately available funds to a bank account designated by the Selling
Stockholder, against delivery to the Underwriters of certificates for the
Securities to be purchased by them. Certificates for the Securities
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shall be in such denominations and registered in such names as the Underwriters
may request in writing at least one full business day before Closing Time. The
Underwriters, individually, may (but shall not be obligated to) make payment of
the purchase price for the Securities to be purchased by any Underwriter whose
funds have not been received by Closing Time, but such payment shall not relieve
such Underwriter from its obligations hereunder. The certificates for the
Securities will be made available for examination and packaging by the
Underwriters not later than 10:00 a.m. (Eastern time) on the last business day
prior to Closing Time.
IV.
The several obligations of the Underwriters hereunder are subject to
the following conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for such
purpose shall be pending before or threatened by the Commission, and there
shall have been no material adverse change, or development involving in the
current reasonable view of the Company's management a prospective material
adverse change, in the condition of the Company and its subsidiaries, taken
as a whole, from that set forth in the Registration Statement; and you
shall have received, at Closing Time, a certificate of an officer of the
Company (acting on behalf of the Company and without personal liability),
dated the Closing Time, to the foregoing effect. Such certificate will also
provide that the representations and warranties of the Company contained
herein are true and correct as of the Closing Time. The officer may rely
upon the best of his knowledge in making such certification. You shall
also have received, at Closing Time, a certificate of an authorized agent
of the Selling Stockholder (acting on behalf of the Selling Stockholder and
without personal liability), dated the Closing Time, providing that the
representations and warranties of the Selling Stockholder contained herein
are true and correct as of the Closing Time; such authorized agent may rely
upon the best of his knowledge in making such certification.
(b) You shall have received the favorable opinion, dated as of
the Closing Time, of D. Gilbert Friedlander, General Counsel of the
Company, to the effect that:
(i) the Company is a corporation validly existing and in
good standing under the laws of the State of Delaware, is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification and has all requisite
corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, except where the
failure to be so qualified or in good standing would not have a
materially adverse effect on the financial position of the Company and
its subsidiaries taken as a whole;
(ii) the authorized, issued and outstanding capital stock
of the Company conforms as to legal matters to the description thereof
incorporated by reference in the Prospectus;
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(iii) the outstanding shares of Common Stock, including
without limitation the Securities sold by the Selling Stockholder
hereunder, have been duly authorized and validly issued and are fully
paid and nonassessable;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the execution, delivery and performance of this
Agreement will not contravene any provision of applicable law or the
Restated Certificate of Incorporation or the Amended and Restated
Bylaws of the Company or any agreement or other instrument known to
such counsel and binding upon the Company, and no consent, approval or
authorization of any governmental body or agency is required for the
performance of this Agreement other than the registration of the
Securities under the 1933 Act and compliance with the securities or
Blue Sky Laws of various foreign and state jurisdictions (as to which
no opinion is expressed);
(vi) the statements under the heading "Services for General
Motors" incorporated by reference in the Prospectus, the description
of the capital stock of the Company incorporated by reference in the
Prospectus, and the statements in the Prospectus under the headings
"Underwriting," and "Plan of Distribution," insofar as such statements
constitute a summary of the legal matters or documents referred to
therein, fairly summarize the information called for with respect to
such legal matters and documents; and
(vii) after due inquiry, such counsel does not know of any
legal or governmental proceeding or investigation pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company is subject which is
required to be described in the Registration Statement or the
Prospectus and is not so described or of any contract or other
document which is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required.
(c) You shall have received the favorable opinion, dated as of
the Closing Time, of Vinson & Elkins L.L.P., counsel for the Underwriters,
covering the matters referred to in (ii) (as to the number and class of
authorized capital stock only), (iv) and (vi) (as to the description of
capital stock and "Underwriting" only) in (b) above.
(d) You shall have received the favorable opinion, dated as of
the Closing Time, of Jones, Day, Reavis & Pogue, counsel for the Trustee,
to the effect that:
(i) the Trustee has been appointed by the named fiduciary of
the Selling Stockholder (the "Named Fiduciary") (as determined in
accordance with Section 402(a) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), to manage the Securities
held by the Selling Stockholder and
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to exercise all rights, powers and privileges appurtenant to such
Securities (subject to the authority of the Named Fiduciary to
terminate such appointment and appoint one or more other investment
managers for any such Securities);
(ii) the Trustee has full power and authority to execute
and deliver this Agreement for the account and on behalf of the
Selling Stockholder and to so bind the Selling Stockholder; and
(iii) upon the delivery of and payment for the Securities as
herein contemplated, each of the Underwriters who has acquired
Securities from the Selling Stockholder in good faith and without
notice of any adverse claim within the meaning of the New York Uniform
Commercial Code will acquire such Securities free of any adverse
claim.
(e) Each counsel referred to in (b) and (c) above shall
additionally state that, based upon the participation of such counsel in
the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto (but not including, with respect to
counsel referred to in (c) above, documents incorporated therein by
reference) and review and discussion of the contents thereof (including
documents incorporated therein by reference), nothing has come to the
attention of such counsel that would lead such counsel to believe that the
Registration Statement, at the time it became effective or at the
Representation Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus, at
the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company for
use in connection with the offering of the Securities which differs from
the Prospectus on file at the Commission at the Representation Date, in
which case at the time it is first provided to the Underwriters for such
use) or at the Closing Time, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that such counsel need not make
such statement with respect to the financial statements and supporting
schedules and other financial information contained or incorporated by
reference into or omitted from the Registration Statement and the
Prospectus.
(f) You shall have received on the date of this Agreement a
letter dated such date and also at the Closing Time a letter dated as of
the Closing Time, in each case in form and substance satisfactory to you,
from KPMG Peat Marwick LLP, independent auditors, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the historical financial
statements and certain historical financial information contained in or
incorporated by reference into the Registration Statement and the
Prospectus.
(g) At Closing Time counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the sale of the Securities as
contemplated herein and related
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proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
Stockholder in connection with the sale of the Securities as herein
contemplated shall be reasonably satisfactory in form and substance to you
and your counsel.
(h) The inclusion of the Company in the Standard & Poor's
Corporation 500 Composite Price Index shall not have been withdrawn, nor
shall the inclusion date have been delayed from that heretofore announced.
If any condition specified in this Article shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by you by notice to the Company and the Selling Stockholder at any time at or
prior to Closing Time and such termination shall be without liability of any
party to any other party except as provided in Article VIII.
V.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) To furnish you, without charge, three copies of the
Registration Statement as filed with the Commission (including exhibits
thereto and documents incorporated therein by reference) and to each other
Underwriter and the Selling Stockholder a copy of the Registration
Statement (without exhibits thereto but including documents incorporated
therein by reference) and, during the period mentioned in paragraph (c),
any supplements and amendments thereto as you may reasonably request. The
terms "supplement" and "amendment" or "amend" as used in this Agreement
shall include all documents subsequently filed by the Company with the
Commission pursuant to the 1934 Act, which are deemed to be incorporated by
reference in the Prospectus.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish you and the Selling Stockholder (or their
respective counsel) a copy of each such proposed amendment or supplement,
unless otherwise directed by you or the Selling Stockholder.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of your counsel the Prospectus
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if it is necessary to amend
or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at its own expense, to the Underwriters and to the dealers (whose
names and addresses you will furnish to the Company) to which Securities
may have been sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so
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amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to pay all expenses (including reasonable fees and
disbursements of counsel) in connection therewith.
(e) To make generally available to the Company's security
holders as soon as practicable an earnings statement covering the twelve
month period ending December 31, 1998, which shall satisfy the provisions
of Section 11(a) of the 1933 Act and the 1933 Act Regulations.
In further consideration of the agreements of the Underwriters herein
contained, the Selling Stockholder covenants not to offer or sell, or solicit
offers to purchase, or transfer or otherwise dispose of (including any pledge
and any disposition upon the foreclosure of any pledge or any agreement to do
any of the foregoing), any shares of Common Stock (or securities convertible
into or exchangeable for such shares) (other than transfers to or for the
benefit of employee benefit plans of the Company or any of its affiliates) on
the date of this Agreement and on the date of any Pricing Agreement, without the
prior written consent of the Underwriters; provided, that nothing contained in
this Article V shall prevent the sale of Securities hereunder.
VI.
The Company represents and warrants to each Underwriter and the
Selling Stockholder that (i) this Agreement has been duly authorized, executed
and delivered by the Company, (ii) each document filed or to be filed pursuant
to the 1934 Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the 1934 Act and the rules
and regulations of the Commission thereunder, (iii) each Preliminary Prospectus
filed as part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act and the 1933
Act Regulations, and (iv) the Registration Statement and Prospectus complied on
the date the Registration Statement became effective, and will comply on each
Representation Date, in all material respects with the 1933 Act and the 1933 Act
Regulations and, as of such dates did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading;
except that these representations and warranties do not apply to statements or
omissions in the Registration Statement or the Prospectus or any preliminary
Prospectus based upon information furnished to the Company in writing by the
Selling Stockholder or by any Underwriter through you expressly for use therein.
The Selling Stockholder represents and warrants to the Company and
each Underwriter that (i) this Agreement and the Pricing Agreement have been
duly authorized, executed and delivered by the Selling Stockholder, (ii) the
Selling Stockholder has good and marketable title to the Securities to be sold
by the Selling Stockholder hereunder and full power, right and authority
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to sell the Securities, and upon the delivery of and payment for the Securities
as herein contemplated, each of the Underwriters will receive good and
marketable title to the Securities purchased by it from the Selling Stockholder,
free and clear of any mortgage, pledge, lien, security interest, encumbrance,
claim or equity, (iii) any written information furnished to the Company by the
Selling Stockholder for use in the Registration Statement, the Prospectus, any
amendments or supplements thereto, or any preliminary Prospectus does not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading, (iv) the Selling
Stockholder has not taken and will not take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock, and (v) since
August 4, 1998, the Selling Stockholder has not sold Common Stock except
pursuant to this Agreement.
The Trustee represents and warrants to the Company and each
Underwriter that (i) the Trustee has been appointed by the Named Fiduciary (as
determined in accordance with Section 402(a) of ERISA) to manage the Securities
held by the Selling Stockholder as described herein and to exercise all rights,
powers and privileges appurtenant to such Securities (subject to the authority
of the Named Fiduciary to terminate such appointment and appoint one or more
other investment managers for any such Securities); and (ii) the Trustee has
full power and authority to execute and deliver this Agreement for the account
and on behalf of the Selling Stockholder and to so bind the Selling Stockholder.
The Company agrees to indemnify and hold harmless each Underwriter,
the directors, partners and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act from and against (i) any and all losses, claims, damages, liabilities
and reasonable expenses arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary Prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any and all losses, claims, damages, liabilities and reasonable expenses
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, provided that any such settlement is effected with the
written consent of the Company, and (iii) any and all expenses whatsoever, as
incurred (including the fees and disbursements of counsel chosen by Morgan
Stanley), reasonably incurred in investigating, preparing and defending against
any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under the preceding clauses (i)
or (ii), promptly after receipt of adequate documentation relating thereto;
provided, however, that this indemnity shall not apply to any such losses,
claims, damages, liabilities or expenses arising out of any such untrue
statement or omission or alleged untrue statement or omission that is based upon
information furnished to the Company in writing by any Underwriter expressly for
use therein; and provided that the foregoing indemnity agreement with respect to
any preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages, liabilities or
expenses purchased Securities, or any
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person controlling such Underwriter, if it shall be established that a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to such person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability, and if
the Company had previously furnished copies thereof to such Underwriter in the
quantities reasonably requested by such Underwriter. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
The Selling Stockholder agrees, to the extent permitted under
applicable law, to indemnify and hold harmless the Underwriters, their
directors, partners and each person, if any, who controls the Underwriters
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information furnished to the Company in
writing by the Selling Stockholder expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus. This indemnity agreement will be in addition to any
liability which the Selling Stockholder may otherwise have. No claim against
the assets of the Selling Stockholder shall be created by this paragraph, except
as and to the extent permitted by applicable law.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, each of its officers who sign the
Registration Statement, the Selling Stockholder, its trustees (including the
Trustee) and directors and each person, if any, who controls the Company or the
Selling Stockholder within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the same extent as the foregoing indemnity from
the Company to each Underwriter, but only with reference to information
furnished to the Company in writing by such Underwriter expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to any of the three preceding paragraphs, such person
(hereinafter called the indemnified party) shall promptly notify the person
against whom such indemnity may be sought (hereinafter called the indemnifying
party) in writing; provided, however, that the omission so to notify the
indemnifying party shall not relieve the indemnifying party of any liability
which it may have to such indemnified party except to the extent that the
indemnifying party was materially prejudiced by such failure to notify and in
any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. The indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party shall have agreed in
writing to pay such fees and expenses, (ii) the indemnifying party shall have
failed to take reasonable steps necessary to defend diligently any claim within
ten calendar days after receiving written notice
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<PAGE>
from the indemnified party that the indemnified party believes the indemnifying
party has failed to take such steps or (iii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified parties, and that all such fees and
expenses shall be reimbursed as they are incurred after receipt of adequate
documentation thereof. In the case of any such separate firm for the
Underwriters and such control persons of Underwriters, such firm shall be
designated in writing by Morgan Stanley. In the case of any such separate firm
for the Selling Stockholder and such control persons of the Selling Stockholder,
such firm shall be designated in writing by the Named Fiduciary. In the case of
any such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution could be sought
under this Article VI (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement.
If the indemnification provided for in the fourth, fifth or sixth
paragraph of this Article VI is unavailable to an indemnified party in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriters on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
of the Selling Stockholder on the one hand and of the Underwriters on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportions as the net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover of the Prospectus. The
relative fault of the Company, the Selling Stockholder and the Underwriters
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company, by the
Selling Stockholder or by the Underwriters and the
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<PAGE>
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Article VI
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Article VI, the
aggregate contribution of the Selling Stockholder under this Article VI, will
not exceed the proceeds received by the Selling Stockholder from the Securities
sold by it and the Selling Stockholder shall not be required to contribute under
this Article VI in respect of any costs, expenses, losses, damages or other
liabilities unless the same arise with reference to any information furnished to
the Company in writing by the Trustee acting on behalf of the Selling
Stockholder expressly for use in the Registration Statement. Notwithstanding the
provisions of this Article VI, no Underwriter shall be required to contribute
any amount in excess of the underwriting discount or commission applicable to
the Securities purchased by such Underwriter hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Article VI are several in proportion to the respective number
of Securities purchased by each Underwriter, and not joint. No party
contributing pursuant to this Article VI shall be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent such contributing party agrees to contribute to that amount paid or
payable by the indemnified party as a result of any loss or liability by reason
of such settlement.
As between the Company and the Selling Stockholder on the one hand and
the Underwriters on the other, the Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters (but excluding any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters), (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under U.S. state securities or blue sky laws and
foreign securities laws in accordance with the provisions hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Memorandum and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus and of the
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Memorandum
and any supplement thereto, (viii) the fees and expenses of any transfer agent
or registrar for the Securities, and (ix) the filing fees
-12-
<PAGE>
incident to the review by the National Association of Securities Dealers, Inc.
of the terms of the sale of the Securities. This paragraph does not supersede
any agreement between the Company and the Selling Stockholder with respect to
the allocation between them of any such expenses. The Selling Stockholder will
pay all stock or other transfer taxes and any stamp or other duties payable upon
the sale, issuance or delivery of the Securities to the Underwriters.
If any purchase and sale of Securities hereunder occurs, the Selling
Stockholder agrees, at the Closing Time and from time to time upon request, to
reimburse the Underwriters for all travel expenses and other out-of pocket
expenses incurred by any Underwriter in connection with this Agreement, a
Pricing Agreement, and the Underwriters' engagement hereunder, including,
without limitation, fees and disbursements of the Underwriters' counsel;
provided, however, that the aggregate amount for which the Selling Stockholder
is obligated to reimburse the Underwriters shall not exceed $500,000.
The representations, warranties and agreements in this Article VI
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by on behalf of the
Company, its officers and directors or any other person controlling the Company
and (iii) acceptance of any payment for any of the Securities.
VII.
This Agreement shall be subject to termination in your absolute
discretion, by notice given to the Company and the Selling Stockholder, if prior
to the Closing Time (i) there has been, since the Representation Time or since
the respective dates as of which information is given in the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in the condition of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus, the effect
of which is such as to make it, in the judgment of the Underwriters,
impracticable to market the Securities or to enforce contracts for the sale of
Securities, (ii) trading in securities generally or trading in the Common Stock
on the New York Stock Exchange or the London Stock Exchange shall have been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by any of such
exchanges or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority, (iii) a general moratorium on
commercial banking activities in New York or London shall have been declared by
either Federal, New York State or British authorities, as applicable, (iv) there
shall have occurred any material outbreak or escalation of hostilities or other
calamity the effect of which on the financial markets of the United States or
London is such as to make it, in your reasonable judgment, impracticable to
market the Securities or enforce contracts for the sale of the Securities, or
(v) there shall have occurred on the date of this Agreement or any Pricing
Agreement a market disruption, trade imbalance or any other event that results
in a failure by the New York Stock Exchange to execute some or all transactions
pursuant to its official Market-on-Close ("MOC") mechanism with respect to the
Common Stock.
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<PAGE>
VIII.
This Agreement shall become effective with respect to an offering when
you and the Selling Stockholder shall have agreed upon the purchase price of the
Securities and shall have executed and delivered a Pricing Agreement. If the
purchase price of the Securities shall not have been agreed upon or a Pricing
Agreement shall not have been executed and delivered by all parties thereto
prior to 5:00 p.m., New York Time, on the seventh full business day after the
date hereof, this Agreement shall thereupon terminate without liability on the
part of the Underwriters, the Company or the Selling Stockholder, except as set
forth herein.
If as of the Closing Time, any one or more of the Underwriters shall
fail or refuse to purchase the Securities which it or they have agreed to
purchase hereunder on such date, and the aggregate number of the Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of the Securities
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions which the number of Securities set forth opposite
their names in Schedule A to the Pricing Agreement bear to the aggregate number
of Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the number
of Securities which any Underwriter has agreed to purchase pursuant to Schedule
A to the Pricing Agreement be increased pursuant to this Article VIII by an
amount in excess of one-ninth of such number without the written consent of such
Underwriter. If, at the Closing Time, any Underwriter or Underwriters shall
fail or refuse to purchase the Securities and the aggregate number of the
Securities with respect to which such default occurs is more than one-tenth of
the aggregate number of the Securities to be purchased on such date, and
arrangements satisfactory to you and the Company and the Selling Stockholder for
the purchase of such Securities are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any non-
defaulting Underwriter, the Company or the Selling Stockholder. In any such
case you or the Company and the Selling Stockholder shall have the right to
postpone the Closing Time, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or the
Selling Stockholder to comply with the terms or to fulfill any of the conditions
of this Agreement to be complied with or fulfilled by the Company or the Selling
Stockholder, or if for any reason the Company or the Selling Stockholder shall
be unable to perform its obligations under this Agreement, the party who failed
or refused to comply or fulfill any such condition will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder; provided, that the provisions of Article VI shall survive such
termination.
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<PAGE>
This Agreement may be signed in two or more counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. Each of the Underwriters, the
Company, and the Selling Stockholder agree to accept delivery of facsimile,
counterpart signature pages of this Agreement and the Pricing Agreement to
establish the respective execution and delivery of this Agreement and the
Pricing Agreement. When facsimile signature pages are used, the person
executing and delivering this Agreement or the Pricing Agreement by facsimile
signature pages agrees to provide a manually-signed signature page to this
Agreement or the Pricing Agreement, as appropriate, to the other persons party
to such agreement as soon as is reasonably practicable following use of
facsimile signature pages, but failure to do so shall not impair the
enforceability of this Agreement or the Pricing Agreement against that person.
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<PAGE>
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Very truly yours,
ELECTRONIC DATA SYSTEMS CORPORATION
By: /s/ D. GILBERT FRIEDLANDER
------------------------------------
Name: D. Gilbert Friedlander
----------------------------------
Title: Senior Vice President
---------------------------------
GENERAL MOTORS HOURLY-RATE
EMPLOYEES PENSION PLAN
By: United States Trust Company of New York,
as Trustee
By: /s/ NORMAN P. GOLDBERG
------------------------------------
Name: Norman P. Goldberg
----------------------------------
Title: Authorized Agent
---------------------------------
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<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO. INCORPORATED
By: Morgan Stanley & Co. Incorporated
By: /s/ K. J. Dorton
--------------------------------------
Authorized Signatory
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<PAGE>
EXHIBIT A
11,500,000 SHARES
ELECTRONIC DATA SYSTEMS CORPORATION
(A DELAWARE CORPORATION)
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
PRICING AGREEMENT
-----------------
August 10, 1998
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO. INCORPORATED
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Reference is made to the Purchase Agreement, dated August 10, 1998
(the "Purchase Agreement"), relating to the purchase by the several Underwriters
named in Schedule A hereto (the "Underwriters") of shares of Common Stock of
Electronic Data Systems Corporation (the "Company"). This Pricing Agreement is
entered into pursuant to the Purchase Agreement and relates to the purchase and
public offering by the Underwriters of the number of Securities set forth above
(the "Securities").
Pursuant to Article I of the Purchase Agreement, the Selling
Stockholder agrees with each Underwriter that the purchase price per share for
the Securities to be paid by the several Underwriters shall be the last reported
sale price at the close of market on the date hereof of a share of Common Stock
as reported, regular way, on the consolidated reporting system of the New York
Stock Exchange, minus $0.0625.
A-1
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Selling Stockholder a counterpart
hereof (with a copy to the Company), whereupon this instrument, along with all
counterparts, will become a binding agreement among the Underwriters and the
Selling Stockholder in accordance with its terms.
GENERAL MOTORS HOURLY-RATE
EMPLOYEES PENSION PLAN
By: United States Trust Company of New York,
as Trustee
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
A-2
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO. INCORPORATED
By: Morgan Stanley & Co. Incorporated
By:
--------------------------------------
Authorized Signatory
A-3
<PAGE>
SCHEDULE A
Name of Number of
Underwriter Securities
- ----------------------------------- ----------
Bear, Stearns & Co. Inc. 5,232,500
Morgan Stanley & Co. Incorporated 6,267,500
----------
11,500,000
==========
A-4
