<PAGE>
Filed pursuant to Rule 424(B)(5)
SEC File No. 333-50971
PROSPECTUS SUPPLEMENT
(To Prospectus dated August 6, 1998)
15,000,000 Shares
Electronic Data Systems Corporation
COMMON STOCK
----------------
The General Motors Special Hourly Employees Pension Trust under the General
Motors Hourly-Rate Employees Pension Plan is offering 15,000,000 shares of
common stock. EDS will not receive any of the proceeds from the sale of shares
in the offering.
----------------
EDS' common stock is listed on the New York Stock Exchange under the symbol
"EDS." On May 6, 1999, the last reported sale price of the common stock on the
New York Stock Exchange was $52 1/4 per share.
----------------
PRICE $52 1/4 A SHARE
----------------
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions Selling Stockholder
-------- ------------- -------------------
<S> <C> <C> <C>
Per Share........................ $52.25 $1.44 $50.81
Total............................ $783,750,000 $21,600,000 $762,150,000
</TABLE>
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
supplement and the prospectus are truthful or complete. Any representation to
the contrary is a criminal offense.
----------------
Advisor to United States Trust Company of New York
WASSERSTEIN PERELLA & CO.
----------------
The selling stockholder has granted the underwriters the right to purchase up
to an additional 2,250,000 shares of common stock to cover over-allotments.
Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers
on May 12, 1999.
----------------
MORGAN STANLEY DEAN WITTER
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
May 6, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Prospectus Supplement Page
--------------------- ----
<S> <C>
Recent Developments..... S-3
Underwriters............ S-3
Legal Matters........... S-4
Experts................. S-4
</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>
----------------
You should rely only on the information contained in or incorporated into
this document. We have not authorized anyone to provide you with information
that is different from that contained in this document. This document is not
an offer to sell the common stock and is not soliciting an offer to buy common
stock in any state where the offer or sale is not permitted. The information
contained in this document is accurate only as of the date hereof, regardless
of the time of delivery of this document or of any sale of the common stock.
S-2
<PAGE>
RECENT DEVELOPMENTS
On April 29, 1999, EDS announced that it recorded restructuring and other
pre-tax charges totaling $379.8 million for the first quarter. These charges
resulted primarily from costs associated with approximately 5,200 employee
separations, asset writedowns, the consolidation of certain operations, and
the discontinuation and exit of certain service offerings. On May 3, 1999, EDS
announced the formation of its E-Business Solutions unit, which combines
operations and capabilities from across EDS, including elements of
Systemhouse, which EDS acquired from MCI WORLDCOM, Inc. on April 22, 1999. EDS
also announced that it will reorganize into five geographic management regions
instead of its traditional industry units as its primary channels for
marketing, selling and delivering products and services to clients. The units
include Europe, the Middle East and Africa; Canada; Latin America;
Asia/Pacific and Japan; and the United States. This reorganization marks the
beginning of EDS' efforts to simplify its organizational structure and reduce
costs. As EDS continues to explore opportunities for organizational
improvements and cost reductions, it could decide to take actions that would
result in restructuring or other charges in the future.
UNDERWRITERS
Under the terms and subject to the conditions of the Purchase Agreement with
EDS and the General Motors Hourly-Rate Employees Pension Plan, as 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 of EDS common stock set forth below
opposite their names.
<TABLE>
<CAPTION>
Number of
Name Shares
---- ----------
<S> <C>
Morgan Stanley & Co. Incorporated................................ 5,000,000
Goldman, Sachs & Co.............................................. 5,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................ 5,000,000
----------
Total.......................................................... 15,000,000
==========
</TABLE>
The underwriters are offering the shares of common stock subject to their
acceptance of the shares from the selling stockholder and subject to prior
sale. The Purchase Agreement provides that the obligations of the several
underwriters to pay for and accept delivery of the shares of common stock
offered hereby are subject to the approval of certain legal matters by their
counsel and to other conditions. The underwriters are obligated to take and
pay for all of the shares of common stock offered by this prospectus
supplement, other than those covered by the underwriters' over-allotment
option, if any shares are taken. Under certain circumstances under the
Purchase Agreement, the commitments of non-defaulting underwriters may be
increased.
The underwriters initially propose to offer part of the shares of common
stock directly to the public at the price to public set forth on the cover
page of this prospectus supplement and part to some dealers at that price less
a concession not in excess of $.86 a share. Any underwriter may allow, and the
dealers may reallow, a discount not in excess of $.10 a share on sales to
other underwriters or dealers. After the initial offering of the shares of
common stock, the offering price, concession and discount may be changed.
The selling stockholder has granted the underwriters an option, exercisable
for 30 days from the date of this prospectus supplement, to purchase up to an
additional 2,250,000 shares of common stock at the price to public less the
underwriting discount set forth on the cover page of this prospectus
supplement. The underwriters may exercise this option only for the purpose of
covering over-allotments, if any. If the underwriters exercise this option in
full, each of the underwriters will be obligated, subject to some conditions,
to purchase approximately the same percentage of the additional shares as the
number of shares of common stock it will purchase bears to
S-3
<PAGE>
the total number of shares of common stock that all underwriters will
purchase, as shown in the preceding table. If the underwriters' option is
exercised in full, the total price to the public will be $901,312,500, the
total underwriters' discounts and commissions will be $24,840,000, and total
proceeds to the selling stockholder will be $876,472,500.
EDS has agreed not to sell or otherwise dispose of or transfer any shares of
common stock or any securities convertible into or exchangeable or exercisable
for common stock for 90 days after the date of this prospectus supplement,
without the prior written consent of Morgan Stanley & Co. Incorporated. This
restriction will not apply in some circumstances involving (1) the conversion,
exercise or exchange of options, warrants or other securities pursuant to
their terms, (2) any agreement to issue such securities that is in effect on
the date of this prospectus supplement, as well as issuances in connection
with acquisitions or other business combinations, and (3) dividend
reinvestment plans or employee benefit plans.
The selling stockholder has agreed not to offer, sell or otherwise dispose
of any shares of common stock or any securities convertible into or
exchangeable or exercisable for common stock for 90 days after the date of
this prospectus supplement, without the prior written consent of Morgan
Stanley & Co. Incorporated. This restriction will not apply to transfers to or
for the benefit of employee benefit plans of EDS or its affiliates. This
restriction also will not apply to transfers directly to employee benefit
plans of Delphi Automotive Systems Corporation so long as the transferee
agrees to a similar restriction.
In order to facilitate the offering of the common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the common stock. Specifically, the underwriters may over-allot in
connection with the offering, creating a short position for their own account.
In addition, to cover over-allotments or to stabilize the price of the common
stock, the underwriters may bid for and purchase shares in the open market.
Finally, the underwriting syndicate may reclaim selling concessions and
discounts allowed to an underwriter or a dealer for distributing the common
stock in the offering, if the syndicate repurchases previously distributed
common stock to cover short positions, in stabilization transactions, or
otherwise. These transactions may occur on the New York Stock Exchange or
otherwise. Any of these activities may stabilize or maintain the market price
of the common stock above independent market levels. The underwriters are not
required to engage in these activities and may end any of these activities at
any time.
Some of the underwriters or their affiliates have provided, and are expected
to continue to provide, various investment banking and other advisory services
to EDS and the selling stockholder. They have received, and will continue to
receive, customary compensation for these services.
C. Robert Kidder, a director of EDS, is also a director of Morgan Stanley
Dean Witter & Co., which is the parent company of Morgan Stanley & Co.
Incorporated.
EDS, the selling stockholder to the extent permitted under law, and the
underwriters have agreed to indemnify each other against some liabilities,
including liabilities under the Securities Act of 1933.
LEGAL MATTERS
D. Gilbert Friedlander, General Counsel for EDS, will pass upon the validity
of the shares of common stock offered in this prospectus supplement. Vinson &
Elkins L.L.P., Dallas, Texas, will pass upon some legal matters for the
underwriters in connection with this offering.
EXPERTS
The consolidated financial statements and schedule of EDS as of December 31,
1998 and 1997, and for each of the years in the three-year period ended
December 31, 1998, have been incorporated by reference herein and in the
registration statement in reliance upon the reports of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
S-4
<PAGE>
PROSPECTUS
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
