<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12.
</TABLE>
Perot Systems Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
PEROT SYSTEMS CORPORATION
April 7, 1998
TO THE SHAREHOLDERS OF PEROT SYSTEMS CORPORATION:
You are invited to attend the Annual Meeting of Shareholders (the
"Annual Meeting") of Perot Systems Corporation which will be held at the
Sheraton Park Central Hotel, 12720 Merit Drive, Dallas, Texas on Friday, May 8,
1998, at 2:00 p.m. local time.
Details of the business to be conducted at the Annual Meeting are
given in the attached Notice of Annual Meeting and Proxy Statement.
Whether or not you plan to attend the Annual Meeting, please
complete, sign, date and return the enclosed proxy promptly in the accompanying
reply envelope. If you decide to attend the Annual Meeting and wish to change
your proxy vote, you may do so automatically by voting in person at the Annual
Meeting.
We look forward to seeing you at the Annual Meeting.
/s/ ROSS PEROT
Ross Perot
Chairman, President and CEO
- -------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
In order to assure your representation at the Annual Meeting, you are
requested to complete, sign, and date the enclosed proxy as promptly as
possible and return it in the enclosed envelope (to which no postage need be
affixed if mailed in the United States).
- -------------------------------------------------------------------------------
<PAGE> 3
PEROT SYSTEMS CORPORATION
12377 MERIT DRIVE
SUITE 1100
DALLAS, TEXAS 75251
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 8, 1998
The Annual Meeting of Shareholders (the "Annual Meeting") of Perot
Systems Corporation (the "Company") will be held at the Sheraton Park Central
Hotel, 12720 Merit Drive, Dallas, Texas on Friday, May 8, 1998, at 2:00 p.m.
local time for the following purposes:
1. To elect six nominees to serve as Directors of the
Company until the next Annual Meeting and until their successors have
been elected and qualified;
2. To ratify the selection of Coopers & Lybrand L.L.P. as
the Company's independent accountants for the fiscal year ending 1998;
and
3. To act upon such other matters as may properly come
before the Annual Meeting or any adjournments or postponements
thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The record date for determining those
shareholders who will be entitled to notice of, and to vote at, the Annual
Meeting and at any adjournment or postponement thereof is March 30, 1998 (the
"Record Date"). The stock transfer books of the Company will not be closed
between the Record Date and the date of the Annual Meeting. A list of
shareholders entitled to vote at the Annual Meeting will be available for
inspection at the offices of the Company.
Whether or not you plan to attend the Annual Meeting, please
complete, date, sign, and return the enclosed proxy promptly in the accompanying
reply. Your proxy may be revoked at any time prior to the Annual Meeting. If you
decide to attend the Annual Meeting and wish to change your proxy vote, you may
do so automatically by voting in person at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ PETER ALTABEF
Peter Altabef
Secretary
Dallas, Texas
April 7, 1998
<PAGE> 4
PEROT SYSTEMS CORPORATION
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement (the "Proxy Statement") and related proxy
materials are furnished in connection with the solicitation of proxies by the
Board of Directors (the "Board of Directors") of Perot Systems Corporation, a
Delaware corporation (the "Company"), for the Annual Meeting (the "Annual
Meeting") of the Shareholders of the Company (the "Shareholders") to be held at
the Sheraton Park Central Hotel, 12720 Merit Drive, Dallas, Texas on Friday,
May 8, 1998, at 2:00 p.m. local time, and at any adjournments or postponements
of the Annual Meeting. These proxy materials were first mailed to Shareholders
on or about April 7, 1998.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual Meeting of
Shareholders. Each proposal is described in more detail in this Proxy
Statement.
VOTING RIGHTS AND SOLICITATION
VOTING
The Company's Class A Common Stock, par value $.01 per share ("Class A
Common Stock"), is the only type of security entitled to vote at the Annual
Meeting. On March 30, 1998, the record date (the "Record Date") for
determination of Shareholders entitled to vote at the Annual Meeting, there
were 38,251,492 shares of Common Stock ("Class A Shares") outstanding. Each
Shareholder of record on the Record Date is entitled to one vote for each Class
A Share held by such Shareholder on the Record Date. Abstentions will be
counted for purposes of determining whether a quorum is present and for the
purposes of determining the affirmative vote necessary to approve a proposal.
An abstention from voting on a proposal will have the same legal effect as a
vote cast against such proposal. None of the Company's Class A Shares are held
by brokers.
PROXIES
Whether or not you are able to attend the Annual Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Board of Directors and which will be voted as you direct on your proxy when
properly completed. In the event no directions are specified, such proxies
will be voted FOR the nominees of the Board of
<PAGE> 5
Directors (Proposal 1), FOR the ratification of the selection of Coopers &
Lybrand L.L.P. ("Coopers & Lybrand") as the independent accountants for the
Company for the fiscal year ended December 31, 1998 (Proposal 2), and in the
discretion of the proxy holders as to other matters that may properly come
before the Annual Meeting. You may revoke or change your proxy at any time
before the Annual Meeting. To do this, send a written notice of revocation or
another signed proxy with a later date to the Secretary of the Company at the
Company's principal executive offices before the beginning of the Annual
Meeting. You may also revoke your proxy by attending the Annual Meeting and
voting in person.
SOLICITATION OF PROXIES
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the
proxy, and any additional soliciting material furnished to Shareholders.
Copies of solicitation material will be furnished to fiduciaries and custodians
holding shares in their names that are beneficially owned by others. The
original solicitation of proxies by mail may be supplemented by a solicitation
by telephone, telegram, or other means by directors, officers, or employees of
the Company. No additional compensation will be paid to these individuals for
any such services. Except as described above, the Company does not presently
intend to solicit proxies other than by mail.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The names of persons who are nominees for director and their positions
and offices with the Company are set forth in the table below. The proxy
holders intend to vote all proxies received by them in the accompanying form
for the nominees listed below unless otherwise instructed. In the event any
nominee is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who may be designated by the
present Board of Directors to fill the vacancy. As of the date of this Proxy
Statement, the Board of Directors is not aware of any nominee who is unable or
who will decline to serve as a director. The six nominees receiving the
highest number of affirmative votes of the shares entitled to vote at the
Annual Meeting will be elected directors of the Company to serve until the next
Annual Meeting and until their successors have been elected and qualified.
2
<PAGE> 6
<TABLE>
<CAPTION>
Positions and Offices Held
Nominee With the Company
- --------------------------------------------- -----------------------------------------------
<S> <C>
Ross Perot . . . . . . . . . . . . . . . . . Chairman of the Board, President and Chief
Executive Officer
James Champy . . . . . . . . . . . . . . . . Vice President and Director
Steve Blasnik . . . . . . . . . . . . . . . . Director
Carl Hahn . . . . . . . . . . . . . . . . . . Director
George Heilmeier . . . . . . . . . . . . . . Director
Ross Perot, Jr. . . . . . . . . . . . . . . . Director
</TABLE>
BUSINESS EXPERIENCE OF DIRECTORS
Ross Perot, 67, one of the Company's founders, has served as a
director, President and Chief Executive Officer of the Company since November
1997, and Chairman of the Board since February 1998. In addition, from April
1988 to June 1992 Mr. Perot held the position of Chairman of the Company.
Following his resignation as Chairman, Mr. Perot remained a director until
August 1994. Mr. Perot was a private investor from June 1992 to November 1997.
James Champy, 55, joined the Company in August 1996 as Vice President
and a director. Mr. Champy oversees the Company's consulting practice. From
1993 until 1996, Mr. Champy was Corporate Vice President and Chairman -
Consulting Group of Computer Sciences Corporation. Mr. Champy was one of the
founders of, and from 1969 to 1996 served in a variety of capacities for, Index
(a management consulting firm) and CSC Index (the management consulting arm of
Computer Sciences Corporation formed upon the acquisition of Index by Computer
Sciences Corporation in 1988). Most recently, Mr. Champy was Chairman and
Chief Executive Officer of CSC Index.
Steve Blasnik, 40, was elected a director of the Company in September 1994.
Since 1987, Mr. Blasnik has served as President of Perot Investments, Inc., a
private investment firm and an affiliate of Ross Perot ("PII"). Mr. Blasnik
also serves as a director of Zonagen, Inc.
Carl Hahn, 71, was elected a director of the Company in April 1993.
Since June 1996, Mr. Hahn has been a private investor. From June 1993 until
June 1996, Mr. Hahn served as Chairman of the Board of Directors of Saurer
Ltd., a manufacturer of textile machines. Prior to that time, Mr. Hahn served
as Chairman of the Board of Management of Volkswagen AG until December 1992.
Mr. Hahn also serves as a director of PACCAR, Inc., TRW Inc. ("TRW"), Thyssen
AG, AGIV, Gerling AG, Volkswagen AG and a number of other European companies.
3
<PAGE> 7
George Heilmeier, 61, was elected a director of the Company in September
1997 and also serves as a consultant to the Company. Dr. Heilmeier served as
the Chairman and CEO of Bell Communications Research, Inc. ("Bellcore") from
January 1997 to November 1997. He is now Chairman Emeritus of Bellcore. In
addition, from March 1991 to November 1997, Dr. Heilmeier was the President and
Chief Executive Officer of Bellcore. Dr. Heilmeier is a member of the Defense
Science Board and the General Motors Science Advisory Committee. Dr. Heilmeier
also serves as a director of TRW, Compaq Computer Corporation, and The ADP
Companies.
Ross Perot, Jr., 39, was elected a director of the Company in 1988.
Since March 1988, Mr. Perot has served as Chairman of Hillwood Development
Corporation, a real estate development company. Mr. Perot is the son of Ross
Perot.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has established two committees to assist in the
discharge of its responsibilities: the Executive Committee and the Audit
Committee. The Executive Committee consists of Ross Perot, Ross Perot, Jr. and
Steve Blasnik. The Audit Committee consists of Steve Blasnik, George Heilmeier
and Carl Hahn. In addition, prior to February 25, 1998, the Board also
maintained a Compensation Committee and a Nominating Committee. The Company
does not currently have standing Compensation or Nominating Committees.
The Executive Committee was formed on February 25, 1998. Generally, the
Executive Committee has been delegated the full powers and authority of the
Board of Directors in the management of the business and affairs of the Company
(except with respect to matters that cannot be delegated under Delaware law).
The Audit Committee reviews the annual financial statements of the
Company and the professional services provided by the Company's independent
public accountants, including the scope of their audit coverage, the auditor's
reports to management and management's responses thereto, and the independence
of such accountants from the management of the Company. The Audit Committee
also reviews the scope of the Company's internal audits, the internal auditors'
reports to management and management's responses thereto, the effectiveness of
the Company's internal audit staff, possible violations of the Company's
Standards and Ethical Principles, and such other matters with respect to the
accounting, auditing and financial reporting practices and procedures of the
Company as it may find appropriate or as have been brought to its attention.
The Audit Committee met three times during 1997.
The Board of Directors may, from time to time, establish other
committees to facilitate the management of the Company or for other purposes it
may deem appropriate.
The Board of Directors met six times in 1997.
4
<PAGE> 8
DIRECTOR COMPENSATION
In October 1997, the Company began compensating its non-employee
directors with a $2,000 stipend for each meeting of the Board of Directors
attended in person. Directors receive no cash compensation for attending
committee meetings. Directors are also reimbursed for their reasonable
out-of-pocket expenses associated with attending Board of Directors and
committee meetings. Prior to October 1997, directors received no cash
compensation for their service on the Board of Directors or any committee of
the Board of Directors.
Except for Mr. Hahn, prior to December 1996, upon their election to
the Board of Directors, non-employee directors (other than affiliates of Ross
Perot) were offered either (i) the opportunity to purchase 60,000 restricted
Class A Shares or (ii) the grant of an option to acquire 60,000 Class A Shares
at a purchase or exercise price equal to the fair value of such Class A Shares
at the date of purchase or grant, with such restricted Class A Shares or
options to acquire Class A Shares vesting ratably over a five-year period. In
April 1993, Mr. Hahn received 200,000 restricted Class A Shares at a price
equal to the fair value of such shares at the date of purchase, which shares
vest ratably over a five-year period.
In December 1996, the Company adopted the 1996 Non-Employee Director
Stock Option/Restricted Stock Plan (the "Non-Employee Director Plan"). The
Non-Employee Director Plan provides for the issuance of nonqualified stock
options or restricted stock to non-employee directors of the Company and any of
its majority-owned subsidiaries. The Non-Employee Director Plan is administered
by the Board of Directors, which has the authority to interpret the Non-Employee
Director Plan. Directors eligible to receive awards under the Non-Employee
Director Plan are those (other than Ross Perot, Jr.) who are not employees of
the Company. Each eligible existing director will receive comparable grants at
completion of the original vesting schedule for such director's current options
or restricted shares. Grants are made upon election to the Board of Directors
for new directors and, for existing directors, at completion of the original
vesting schedule for the director's existing options or restricted shares. The
Non-Employee Director Plan provides for a grant to each eligible director of (i)
an option to purchase 20,000 Class A Shares or (ii) the right to purchase 20,000
restricted Class A Shares. (The number of Class A Shares or options issuable to
each director were reduced from 30,000 to 20,000 on September 30, 1997.) The
exercise price of options or the purchase price of restricted Class A Shares
awarded under the Non-Employee Director Plan must be at least equal to 100% of
the fair value of a Class A Share on the date of the award.
Dr. Heilmeier also serves as a consultant of the Company. In
connection with his consulting services, Dr. Heilmeier received an option to
purchase 20,000 Class A Shares in addition to options to purchase 30,000 Class A
Shares awarded to him under the Non-Employee Director Plan. In addition, Mr.
Heilmeier receives $12,500 per month as a consultant to the Company.
5
<PAGE> 9
Mr. Hahn will become eligible for a grant under the Non-Employee
Director Plan in April 1998.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the Shareholders vote FOR the
election of each of the nominees listed herein.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the Shareholders to ratify the selection of
Coopers & Lybrand L.L.P. ("Coopers & Lybrand") as the Company's independent
accountants for the fiscal year ending December 31, 1998. The affirmative vote
of a majority of the outstanding voting shares of the Company present or
represented and entitled to vote at the 1998 Annual Meeting is required to
ratify the selection of Coopers & Lybrand.
Coopers & Lybrand has audited the Company's financial statements
annually since fiscal 1988. Its representatives will be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
OWNERSHIP OF SECURITIES
The following table sets forth certain information known to the Company
with respect to beneficial ownership of Class A Shares as of March 16, 1998 for
(i) all persons who are beneficial owners of five percent or more of the
Company's common stock, (ii) each director and nominee for director, (iii) the
Company's CEO and the other executive officers named in the Summary Compensation
Table below, and (iv) all executive officers and directors as a group:
6
<PAGE> 10
<TABLE>
<CAPTION>
Executive Officers Number of Class A Percent
and Directors (1) Shares Beneficially Owned (2) of Class (2)
- ----------------- ----------------------------- ------------
<S> <C> <C>
Ross Perot (3) 16,000,000 42.0%
James Champy (4) 500,067 1.3%
John E. King (5) 803,148 2.1%
Terry Ashwill (6) 40,047 *
Ross Reeves (7) 963,475 2.5%
Guillermo G. Marmol (8) 320,254 *
Steve Blasnik 6,000 *
Carl Hahn 200,000 *
George Heilmeier -0- *
Ross Perot, Jr. (9) 16,000,000 42.0%
Additional 5% Beneficial Owner
- ------------------------------
Morton H. Meyerson (10) 4,000,390 10.5%
All Executive Officers and
Directors as a Group (13 persons) 19,828,429 51.8%
</TABLE>
*Less than 1%
(1) The address for Ross Perot, Ross Perot, Jr., and HWGA, Ltd. ("HWGA") is
12377 Merit Drive, Suite 1700, Dallas, Texas 75251. The address for Mr.
Meyerson is 4514 Cole Ave., Suite 400, Dallas, Texas 75205.
(2) Percentages are based on the total number of Class A Shares outstanding at
March 16, 1998, plus the total number of outstanding options and warrants
held by each person that are exercisable within 60 days of such date.
Class A Shares issuable upon exercise of outstanding options and warrants,
however, are not deemed outstanding for purposes of computing the
percentage ownership of any other person. Except as indicated in the
footnotes to this table, other than shared property rights created under
joint tenancy or marital property laws as between the Company's directors
and executive officers and their respective spouses, each stockholder named
in the table has sole voting and investment power with respect to the Class
A Shares set forth opposite such stockholder's name. The Class A Shares
listed include Class A Shares held by the Company's Retirement Savings Plan
and Trust for the benefit of the named individuals. Voting and investment
power over such Class A Shares is held by the trustee of such trust subject
to the direction of the Company's 401(k) Plan Committee.
(3) Shares are owned by HWGA. Ross Perot, Chairman, President and Chief
Executive Officer of the Company, is the managing general partner of HWGA.
Mr. Perot has voting and investment power over such shares. Shares owned
by HWGA
7
<PAGE> 11
are also shown in this table as being beneficially owned by Ross Perot, Jr.
(4) Includes 100,000 Class A Shares held by the Champy Family Irrevocable Trust
(the "Champy Trust") of which Mr. Champy is a trustee. As trustee, Mr.
Champy shares voting and investment power with respect to the Class A
Shares held by the Champy Trust and, therefore, is deemed the beneficial
owner of such Class A Shares.
(5) Includes 2,000 Class A Shares held by Mr. King's spouse with respect to
which Mr. King shares voting and investment power.
(6) Includes 40,000 Class A Shares that Mr. Ashwill has the right to acquire
upon the exercise of vested options.
(7) Includes 2,000 Class A Shares held by Mr. Reeves' spouse with respect to
which Mr. Reeves shares voting and investment power and 20,000 Class A
Shares that Mr. Reeves has the right to acquire upon the exercise of vested
options.
(8) Includes 10,000 Class A Shares that Mr. Marmol has the right to acquire
upon the exercise of vested options.
(9) All Class A Shares are held by HWGA. Ross Perot, Jr. is a general partner
of HWGA. Shares owned by HWGA are also shown in this table as being
beneficially owned by Ross Perot.
(10) Includes 3,971,200 shares held by the Meyerson Family Limited Partnership
(the "Meyerson Partnership"), and 27,200 shares held by four trusts of
which Mr. Meyerson is the Trustee.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report is provided by the Board of Directors to assist
stockholders in understanding the Board's objectives and procedures in
establishing the compensation of the Company's Chief Executive Officer and the
Company's other executive officers.
The Board is responsible for establishing and administering the
Company's executive compensation program. Prior to February 25, 1998, the
Board had a Compensation Committee that was responsible for establishing and
administering the Company's executive compensation program. The Compensation
Committee consisted of three non-employee directors, Ross Perot, Jr., John
Segall and Craig Fields. Messrs. Segall and Fields have resigned from the
Board of Directors. The Board met six times during 1997. The Compensation
Committee met three times during 1997.
8
<PAGE> 12
In structuring the Company's compensation programs, the Board and,
previously the Compensation Committee, were advised on plan design by external
compensation consultants, as well as the Company's compensation staff.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The Board believes that compensation of the Company's key executives
should:
o consider equity as a key component
o be cost effective - designed to minimize fixed salary and
maximize variable pay which tracks to business results
o benchmark with industry peers to ensure competitiveness
o attract and retain high caliber Associates on a long term
basis
o align with the business strategy of our fast paced, growing
company
The Company's policy is to position compensation to be competitive
with peer information technology ("IT") companies with which the Company
competes for talent, with appropriate variation for individual and company
performance.
EXECUTIVE COMPENSATION COMPONENTS
The Company's executive compensation program consists of two pay
elements: Base Salary and Short-Term Cash Incentives. The Company believes
short-term incentive pay should be linked to the Company's financial
performance and strategic goals and should represent a significant portion of
each senior executive's total cash compensation. The Company believes that the
combination of these two cash compensation elements in conjunction with the
equity compensation elements provides both effective retention and motivational
value. In addition, the Company has sometimes paid bonuses to specific
individuals based on the satisfaction of particular individual goals.
Base Salary
o Base salary ranges for all Perot Systems' employees - including the
Company's top executives - are based on comparisons to the competitive
marketplace to assure equitable salary ranges.
o Salaries within these salary ranges vary by individual based on
sustained performance toward the achievement of Perot Systems' goals
and objectives.
o Increases to base salary are determined by anticipated increases to
external market comparison groups. From these comparisons, the
Company derives a target annual
9
<PAGE> 13
increase percentage. Final increases actually made to base pay are
determined by individual performance.
Short-Term Incentive
The 1997 Global Variable Pay Plan (GVP) was an annual cash incentive
program which linked to corporate financial and strategic results. Individual
target awards varied by position and were based on competitive practices in the
IT industry.
o Performance objectives were based on corporate financial and strategic
goals and were set at the beginning of the plan year. The financial
corporate target is set as the corporate pre-tax profit.
o Individuals will have individual performance assessments and,
therefore, final payment percentages will be different based on
individual performance.
The Company did not make GVP incentive payments to its senior executives for
1997.
Other Bonuses
The Company paid certain executive officers bonuses in 1997 in
connection with their individual efforts on a particular transaction.
CEO COMPENSATION
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Since November 7, 1997 the position of Chief Executive Officer has
been held by Ross Perot. Mr. Perot has not accepted cash or non-cash
compensation for his role in the Company.
COMPENSATION OF THE FORMER CHIEF EXECUTIVE OFFICERS
Morton H. Meyerson served as interim Chief Executive Officer and
President from July 25, 1997 until November 7, 1997. James Cannavino served as
Chief Executive Officer and President of Perot Systems through July 25, 1997.
Messrs. Cannavino and Meyerson's target compensation, base salary and bonuses,
were determined in the manner described above.
CONCLUSION
Financial success which equates to shareholder value was the driver
for reward under the 1997 bonus program. Although the company's financial
performance was healthy, the executive team did not achieve the significant
targets set at the beginning of
10
<PAGE> 14
the year. As a result, the executive team did not receive a bonus under the
short-term cash bonus program for 1997. Certain executives were rewarded a
bonus for significant individual contributions. CEO performance for 1997 was
based in equal parts on financial targets and on the development of structural
capabilities required to sustain Perot Systems Corporation for the long term.
No person who served as CEO received a GVP bonus for the fiscal year 1997.
Messrs. Meyerson and Cannavino received bonuses in 1997 relating to
significant efforts with respect to a particular transaction.
BOARD OF DIRECTORS
Ross Perot
Steve Blasnik
James Champy
Carl Hahn
George Heilmeier
Ross Perot, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
As members of the Board of Directors, Messrs. Perot and Champy will
participate in future compensation decisions.
In January 1996, the Company entered into an agreement with PII
pursuant to which the Company licensed certain software from PII. The Company
sublicensed such software to The Witan Company L.P. ("Witan"). In connection
with this project, Witan paid a license fee of $1,000,000 directly to PII in
connection with the license. The Company had a separate contract with Witan to
perform development work on the licensed software, which was terminated in May
1997. PII is an affiliate of Ross Perot. Mr. Blasnik is the President of PII.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The Summary Compensation Table below shows compensation for the 1997
fiscal year of each person who served in the capacity of CEO during the year,
the four most highly compensated executive officers other than the CEO who were
serving as executive officers at the end of the 1997 fiscal year, and one
person who served as an executive officer for a portion of 1997.
11
<PAGE> 15
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
---------------------------------- Awards
Other -----------------------
Annual Restricted Securities
Compen- Stock Under- All Other
Bonus sation Award(s) lying Compen-
Name and Principal Salary (1) (2) (3) Options sation (4)
Position Year ($) ($) ($) ($) (#) ($)
- ------------------- ------ ------- -------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ross Perot
President & CEO (5) 1997 -- -- -- -- -- --
Morton H. Meyerson
Chairman & CEO (6) 1997 600,000 180,000 10,286 -- -- 34,173
1996 583,333 180,000 10,507 -- -- 40,216
James A. Cannavino
President & CEO (7) 1997 475,000 180,000 -- 1,531,353
1996 538,542 180,000 6,725 -- -- 200,086
James Champy
Vice President (8) 1997 500,000 -- 5,738 -- -- 23,307
1996 195,192 117,115 -- (9) -- 3,744
John E. King
Vice President 1997 308,000 50,000 5,293 22,862
1996 300,000 85,000 8,543 -- -- 17,232
Terry Ashwill
Vice President & CFO
(10) 1997 324,876 -- 96,276 (11) 350,000 --
Ross Reeves
Vice President 1997 319,849 -- 205,255 -- -- 17,569
1996 356,249 110,000 263,207 17,232
Guillermo G. Marmol
Vice President (12) 1997 400,000 50,000 -- -- -- 7,740
1996 400,000 110,000 -- (13) 200,000 6,639
</TABLE>
(1) Bonus amounts shown for 1997 were earned and paid in 1997. Bonus
amounts shown for 1996 were earned in 1996 and paid in 1997.
(2) With respect to Mr. Ashwill, represents $92,668 paid in connection
with his relocation and $3,608 for home office equipment. With
respect to Mr. Reeves, represents $125,479 in taxes paid for Mr.
Reeves and $79,776 in perquisites during 1997 and $263,27 in
perquisites during 1996, which were, in all cases, primarily related
to an overseas assignment (including relocation expenses). With
respect to all other named executive officers, represents the payment
of taxes related to the life insurance policies referenced in Note 4
to this table.
(3) The number of restricted Class A Shares held by the named executive
officers and the value of such Class A Shares (less the amount paid
therefor) at December 31, 1997 were as follows: Mr. Meyerson - 28,800
Class A Shares, $144,000; Mr. Champy - 450,000 Class A Shares,
$1,912,500; Mr. Cannavino - 200,000 Class A Shares, $1,150,000; and
Mr. Marmol - 240,000 Class A Shares, $1,140,000.
12
<PAGE> 16
There is no market for the Class A Stock. Therefore, the values in
the preceding sentence are based on periodic appraisals of the Class A
Shares made for the Company by independent appraisers.
(4) In 1997, represents (i) with respect to Mr. Cannavino, in addition to
other amounts provided in items (ii) and (iii) below, $1,440,000 in
accrued severance obligations and $74,121 paid in connection with the
maintenance of living quarters and payment of certain other living
expenses pending his permanent relocation; (ii) $27,836, $11,232,
$16,970, $16,525 and $11,232 in life insurance premiums paid for the
benefit of Messrs. Meyerson, Cannavino, Champy, King and Reeves
respectively; (iii) $6,337 in Company contributions to the Company's
401(k) plan for the benefit of each of Messrs. Meyerson, Champy, King,
Marmol and Reeves, and $6,000 for the benefit of Mr. Cannavino. In
1996, represents (i) $17,550, $11,232, $693, $11,232, $3,744 and
$11,232 in life insurance premiums paid for the benefit of Messrs.
Meyerson, Cannavino, Marmol, King, Champy and Reeves; (ii) $16,666 for
the retroactive application of a salary increase for Mr. Meyerson,
which amount relates to compensation for services rendered in 1995;
and (iii) $6,000 in Company contributions to the Company's 401(k) plan
for the benefit of each of Messrs. Meyerson, Cannavino, Marmol, King
and Reeves.
(5) Mr. Perot has served as President and CEO since November 7, 1997. Mr.
Perot serves the Company without compensation.
(6) Mr. Meyerson served as interim President and CEO of the Company from
July 25, 1997 until November 7, 1997.
(7) Mr. Cannavino held the post of CEO until July 25, 1997.
(8) Mr. Champy joined the Company as an executive officer on July 8, 1996.
(9) Mr. Champy purchased 500,000 restricted Class A Shares for $2.50 per
share (the fair value of such shares on the date of purchase). The
shares vest ratably over a ten-year period. The first vesting date
was August 12, 1997.
(10) Mr. Ashwill joined the Company and was elected Vice President and
Chief Financial Officer as of January 28, 1997.
(11) Mr. Ashwill purchased 100,000 restricted Class A Shares on January 28,
1997, and an additional 20,000 restricted Class A Shares on February
14, 1997. In each case, the purchase price was $3.75 per share (the
fair value of such shares on the respective dates of the purchase).
The restricted Class A Shares were scheduled to vest ratably over a
ten-year period. On December 23, 1997, Mr. Ashwill sold all of such
shares to the Company for an amount equal to the cost of purchase plus
8% interest accrued from the respective purchase dates. The sale was
in
13
<PAGE> 17
connection with the issuance of options described in the table "Option
Grants in the Last Fiscal Year".
(12) Mr. Marmol ceased to be an executive officer in November 1997. Since
that time, he has been active in the Company's consulting group.
(13) On January 2, 1996, Mr. Marmol purchased 200,000 restricted Class A
Shares for $1.75 per share (the fair value of such shares on the date
of purchase) and was granted options with an exercise price of $1.75
per share to purchase an additional 200,000 Class A Shares. The
shares and options vest ratably over a ten-year period. The first
vesting date was January 2, 1997. On June 17, 1996, Mr. Marmol
purchased an additional 100,000 restricted Class A Shares for $2.50
per share (the fair value of such shares on the date of purchase). In
connection with the June 17 purchase, Mr. Marmol surrendered options
to purchase 100,000 shares of Class A Stock that had been granted on
January 2. All of Mr. Marmol's restricted stock and options will vest
ratably over ten years. The first vesting date remained January 2,
1997.
STOCK OPTIONS
The following table provides information relating to option grants in
1997 to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
- ------------------------------------------------------------------------
Percent of
Total
Options Potential Realized Value at
Number of Granted Assumed Annual Rates of Stock
Securities to Price Appreciation For Option
underlying Employees Exercise Term (1)
Options in Fiscal Price Expiration -----------------------------
Name Granted Year ($/Sh) Date 5% ($) 10% ($)
- ------------------- ----------- ------------ --------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ross Perot ............. -0- -- -- -- -- --
Morton H. Meyerson ..... -0- -- -- -- -- --
James A. Cannavino ..... -0- -- -- -- -- --
James Champy ........... -0- -- -- -- -- --
John E. King ........... -0- -- -- -- -- --
Terry Ashwill .......... 230,000 3.29% $3.75 01/28/08 $612,668 $1,598,313
120,000 (2) 1.71% $6.75 01/28/08 $575,375 $1,501,025
Ross Reeves ............ -0- -- -- -- -- --
Guillermo G. Marmol .... -0- -- -- -- -- --
</TABLE>
(1) These amounts represent assumed rates of appreciation in value
from the date of grant until the end of the option term, at the rates set by
the Securities and Exchange Commission and, therefore, are not intended to
forecast possible future appreciation, if any, in the Class A Shares.
14
<PAGE> 18
(2) Grant was made in connection with the repurchase of restricted
stock from Mr. Ashwill by the Company on December 23, 1997.
OPTION EXERCISES AND HOLDINGS
The following table provides information regarding exercises of stock
options by named executive officers during 1997:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value (1) of
Underlying Unexercised
Unexercised in-the-Money
Options Options
Class at Fiscal Year-End at Fiscal Year-
A Shares Value (1) (#) End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
- ------------------- ------------- ----------- --------------------- ----------------
<S> <C> <C> <C> <C>
Ross Perot ............... -0- -0- -0-/-0- -0-/-0-
Morton H. Meyerson ....... -0- -0- -0-/-0- -0-/-0-
James A. Cannavino ....... -0- -0- -0-/-0- -0-/-0-
James Champy ............. -0- -0- -0-/-0- -0-/-0-
John E. King ............. -0- -0- -0-/-0- -0-/-0-
Terry Ashwill ............ -0- -0- -0-/350,000 -0-/690,000
Ross Reeves .............. -0- -0- 20,000/20,000 125,000/125,000
Guillermo G. Marmol ...... 10,000 $20,000 -0-/90,000 -0-/450,000
</TABLE>
(1) There is no market for the Class A Shares. Therefore, the values set forth
in these columns are based on periodic appraisals of the Class A Shares made
for the Company by independent appraisers.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL AGREEMENTS
Morton H. Meyerson. Mr. Meyerson's assignee, the Meyerson
Partnership, purchased 4,000,000 Class A Shares from the Company pursuant to
the terms of a stock purchase agreement between Mr. Meyerson and the Company
(the "MFLP Agreement"). Under the MFLP Agreement, prior to June 1997, the
Company had the right to repurchase a portion of the Class A Shares held by the
Meyerson Partnership if Mr. Meyerson voluntarily resigned as Chairman unless
the parties agreed to an arrangement for Mr. Meyerson to remain with the
Company. In June 1997, the Company's right to repurchase Class A Shares held
by the Meyerson Partnership terminated.
15
<PAGE> 19
In December 1995, Mr. Meyerson purchased 200,000 restricted Class A
Shares pursuant to the terms of a Restricted Stock Agreement between Mr.
Meyerson and the Company (the "Meyerson Agreement"). Under the Meyerson
Agreement, the Company had the right to purchase unvested Class A Shares if Mr.
Meyerson voluntarily resigned. There were 28,800 unvested Class A Shares at
Mr. Meyerson's resignation in January 1998. The Company exercised its right to
repurchase for a price equal to Mr. Meyerson's cost plus 8% interest per annum.
James A. Cannavino. Mr. Cannavino's employment agreement (the
"Cannavino Agreement") with the Company provided for a base salary of $500,000
per year, subject to adjustment from time to time by the Board of Directors.
Mr. Cannavino's base salary was increased by the Board to $600,000 for 1997.
On July 25, 1997, Mr. Cannavino resigned his positions with the Company. Under
the terms of the Cannavino Agreement, Mr. Cannavino will receive a severance
payment equal to two years of his highest base salary. The second year's
salary will be reduced by amounts earned by Mr. Cannavino from other sources
during that year.
The 2,000,000 restricted Class A Shares acquired by Mr. Cannavino
pursuant to his stock option grant were scheduled to vest in equal installments
over ten years beginning on the first anniversary of the commencement of Mr.
Cannavino's employment by the Company. Mr. Cannavino's restricted Class A
Shares are scheduled to continue to vest through October 1998. The Company has
repurchased 1,400,000 of the Class A Shares formerly owned by Mr. Cannavino
that will not vest under the terms of his stock option grant for a price equal
to his after-tax cost of purchase for those shares plus eight percent per
annum. Mr. Cannavino continues to hold 550,000 Class A Shares. Mr. Cannavino
has transferred 50,000 Class A Shares to his former spouse. If the Class A
Shares are not publicly traded prior to the year 2010, Mr. Cannavino has the
right to require the Company to repurchase his Class A Shares at their then
fair value.
James Champy. Mr. Champy's associate agreement provides for a base
salary of $500,000 per year, which is to be reviewed at least annually. Mr.
Champy's associate agreement provides for additional benefits, including: (i) a
bonus to be determined in accordance with the then current bonus plan
applicable to the most senior officers of the Company, (ii) payment of life
insurance premiums and (iii) certain travel benefits. Mr. Champy's associate
agreement also provides that, in the event that Mr. Champy is terminated by the
Company other than for cause or substantial misconduct (as defined in his
associate agreement) or Mr. Champy is deemed to have been constructively
terminated (as defined in his associate agreement), Mr. Champy will receive a
severance payment equal to six months of Mr. Champy's then current base salary.
If Mr. Champy's employment is terminated by either party (other than for cause
by the Company) within one year of a change in control of the Company (as
defined in his associate agreement), Mr. Champy would be entitled to receive a
severance payment equal to six months of Mr. Champy's then current base salary.
16
<PAGE> 20
The 500,000 restricted Class A Shares acquired by Mr. Champy pursuant
to his restricted stock agreement vest in equal installments over ten years
beginning on the first anniversary of the commencement of Mr. Champy's
employment by the Company. Vesting is contingent on continued employment;
provided, however, that Mr. Champy's restricted Class A Shares will continue to
vest for limited periods following the termination of his employment if his
employment is terminated by the Company other than for cause or substantial
misconduct (as defined in his associate agreement) or Mr. Champy is deemed to
have been constructively terminated (as defined in his associate agreement).
If Mr. Champy's employment is terminated by the Company other than for cause or
substantial misconduct effective on or before August 12, 1998 or Mr. Champy is
deemed to have been constructively terminated on or before August 12, 1998, Mr.
Champy's restricted Class A Shares will continue to vest to and including the
vesting date in 2000, as scheduled. If Mr. Champy's employment is terminated
by the Company other than for cause or substantial misconduct or Mr. Champy is
deemed to have been constructively terminated after August 12, 1998, Mr.
Champy's restricted Class A Shares will continue to vest as scheduled for two
years following termination of employment. If there is a change in control of
the Company (as defined in his associate agreement) and Mr. Champy's employment
is terminated within one year of such change in control by either party (other
than for cause by the Company), Mr. Champy's Class A Shares will continue to
vest as follows: (i) if the change in control occurs on or before August 12,
1998, all Class A Shares scheduled to vest to and including his vesting date in
the year 2000 will vest on schedule or (ii) if the change in control occurs
after August 12, 1998, all Class A Shares scheduled to vest through the next
two vesting dates will vest on schedule. In the event that Mr. Champy is
terminated for any reason by either party, Mr. Champy has the right to require
the Company to purchase his shares for their original cost plus simple interest
at the rate of eight percent per annum.
Terry Ashwill. Pursuant to the letter agreement pursuant to which Mr.
Ashwill accepted employment with the Company, he is assured that at least
50,000 options and/or shares of the Company's stock will vest if his employment
is terminated (i) by Mr. Ashwill and he does not work for a competitor of the
Company for 12 months or, within six months of the date of termination, work
for a company with which he discussed employment prior to the termination of
his employment or (ii) by the Company without cause. This special vesting
provision is only applicable to the extent necessary to cause the value of
vested shares and options to be equal to $1,500,000 on the third anniversary of
his employment by the Company. In addition, the Company agreed to pay certain
expenses related to Mr. Ashwill's relocation to Dallas.
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
The following is a description of the business experience of executive
officers other than those serving on the Company's Board of Directors.
17
<PAGE> 21
Peter Altabef, 38, joined the Company in June 1993 and was elected
Vice President in June 1995 and Secretary in March 1996. Mr. Altabef became
General Counsel in April 1994. From January 1991 until May 1993, Mr. Altabef
was a partner in the Dallas law firm of Hughes & Luce, L.L.P.
Terry Ashwill, 53, joined the Company in January 1997 as a Vice
President and Chief Financial Officer. From August 1991 to January 1997, Mr.
Ashwill served as Executive Vice President, Chief Financial Officer of True
North Communications, Inc.
Joseph Boyd, 38, joined the Company in January 1990 and was elected
Vice President in March 1996. Mr. Boyd currently serves as the General Manager
of North American Operations (other than Global Financial Services) for the
Company. In the past, Mr. Boyd has served as the General Manager of the
Company's Healthcare Group and as an account manager.
Donald D. Drobny, 55, is one of the Company's founders. Mr. Drobny
joined the Company in June 1988, and was elected a Vice President in April
1989. Mr. Drobny currently has oversight responsibility for the Company's
training and recruiting activities. Previously, Mr. Drobny had oversight
responsibility for the Company's project offices.
John E. King, 51, is one of the Company's founders. Mr. King joined the
Company in June 1988, and was elected a Vice President in April 1989. Mr. King
currently has oversight responsibility for the Company's Global Financial
Services group.
Ron Nash, 48, joined the Company in March 1993 and was elected Vice
President in May 1995. From November 1985 until March 1993, Mr. Nash held a
variety of positions with Advanced Telemarketing Corporation and, following its
acquisition by ATC Communications Group, with its parent corporation. From
September 1992 to March 1993, Mr. Nash served as Vice President, International
and a director of ATC Communications Group. Immediately prior to that time,
Mr. Nash served as President, Chief Operating Officer and a director of
Advanced Telemarketing Corporation. Mr. Nash currently has oversight
responsibility for Major Account Sales and European Operations (other than
Global Financial Services). Previously, Mr. Nash had oversight responsibility
for the Company's industry groups (other than Global Financial Services).
Ross Reeves, 53, is one of the Company's founders. Mr. Reeves joined
the Company in June 1988, and was elected Vice President in April 1989. Mr.
Reeves currently has oversight responsibility for the Company's technology
infrastructure and procurement. Previously, Mr. Reeves had oversight
responsibility for the Swiss Bank account.
18
<PAGE> 22
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has loaned funds to each of Ron Nash, Guillermo G. Marmol,
Joseph Boyd and Susan Fairty (a former executive) in connection with the
purchase by such persons of Class A Common Stock from the Company. Each of
such loans accrues interest at the rate of 8% per annum and is secured by the
purchased stock. As of February 28, 1998, the total amount outstanding for
each such loan (including accrued interest) was $265,639, $132,945, $74,510 and
$0 for Messrs. Nash, Marmol and Boyd and Ms. Fairty, respectively. Such
amounts were the highest amounts outstanding with respect to such loans since
the beginning of the 1997 fiscal year, except with respect to Ms. Fairty and
Mr. Boyd. The highest amounts outstanding during such period were $554,250 and
$75,600 for Ms. Fairty and Mr. Boyd, respectively.
The Company also loaned funds to Terry Ashwill in connection with his
purchase of Class A Shares from the Company. Mr. Ashwill's loans accrued
interest at the rate of 8% per annum and were secured by the purchased stock.
On December 23, 1997, the aggregate amount outstanding for Mr. Ashwill's loans
(including accrued interest) was $474,859, the highest amount outstanding with
respect to such loans since their inception. On December 23, 1997, the Company
repurchased the 120,000 Class A Shares held by Mr. Ashwill for $3.75 per share
plus 8% per year for the time that he held the stock (an aggregate of
$481,364). The Company paid the purchase price of the stock by offsetting the
amounts due Mr. Ashwill against the principal and accrued interest on his loans
and paying the remaining $6,875 in cash (which is equal to amounts previously
paid by Mr. Ashwill for interest that had accrued on his loans). In connection
with the repurchase, the Company granted Mr. Ashwill options to purchase
120,000 Class A Shares with an exercise price of $6.75 per share.
On August 27, 1997, the Company loaned $250,000 to John King secured
by his Class A Shares. Mr. King's loan accrues interest at 8% per annum. The
total amount outstanding for Mr. King's loan (including accrued interest) on
February 28, 1998 was $260,137, the highest amount outstanding since the
inception of the loan.
The Company has made loans to James Cannavino secured by his Class A
Shares. As of February 28, 1998, Mr. Cannavino had the outstanding principal
amounts of $420,000 and $1,169,624 accruing interest at the rates of 8% per
annum and 7.25% per annum, respectively. As of February 28, 1998, the
aggregate amount outstanding (including accrued interest) relating to these
loans was $1,735,297. The highest amount outstanding with respect to such
loans (including accrued interest) since January 1, 1997 was $3,695,375. The
Company also loaned Mr. Cannavino $1,000,000 in connection with his purchase of
a permanent residence in Dallas. This loan is secured by a mortgage on such
residence and bears interest at 7.25% per year. As of February 28, 1998, the
total amount outstanding (including accrued interest) relating to this loan was
$1,011,521. Since its inception, the highest amount outstanding for this loan
was $1,052,041 on December 30, 1997.
19
<PAGE> 23
Messrs. Nash, Drobny, Marmol and Altabef have outstanding loans with
NationsBank of Texas, N.A. ("NationsBank") in the respective principal amounts
of $207,868, $350,000, $125,000 and $126,400. Interest accrues on all such
loans at the rate of 9.50%. The Company has agreed that it will, at the
request of NationsBank, purchase such loans from NationsBank for an amount
equal to principal plus accrued and unpaid interest if, by the later of June
30, 1998 or the maturity of the relevant note, the Company has not had an
initial public offering that results in the Class A Shares being publicly
traded. The maturity dates are February 26, 2000, July 1, 1998, July 1, 1998
and July 5, 1998 for amounts borrowed by Messrs. Drobny, Marmol, Nash and
Altabef, respectively. Each loan is secured by a pledge of Class A Shares held
by the borrower.
In 1997, the Company paid $91,425 to the law firm of Locke Purnell
Rain Harrell for services rendered to the Company. The spouse of Mr. Altabef
is a shareholder of that firm.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Mr. Reeves inadvertently did not timely file his Form 3 because he was
not notified that a filing was required prior to the due date.
PERFORMANCE GRAPH
The Company is not publicly traded and there is no market for its
securities. Therefore, the performance of the Company's securities cannot be
compared to the performance of publicly-traded securities based on trading
prices
SHAREHOLDER PROPOSALS FOR 1998 PROXY STATEMENT
Shareholder proposals that are intended to be presented at the Annual
Meeting to be held in 1999 must be received by the Company no later than
December 7, 1998 in order to be included in the Proxy Statement and related
proxy materials.
20
<PAGE> 24
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
Shareholder action at the Annual Meeting. However, if other matters do
properly come before the Annual Meeting or any adjournments or postponements
thereof, the Board of Directors intends that the persons named in the proxies
will vote upon such matters in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ PETER ALTABEF
Peter Altabef
Secretary
21
<PAGE> 25
PROXY PEROT SYSTEMS CORPORATION
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 8, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter A. Altabef and Rex C. Mills, or either
of them as proxies, each with full power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all of the shares
of Class A Common Stock of Perot Systems Corporation held of record by the
undersigned on March 30, 1998, at the Annual Meeting of Shareholders to be held
on May 8, 1998 or any adjournment thereof.
1. Election of Directors
[ ] FOR all nominees listed below (except as marked to the contrary below).
[ ] WITHHOLD authority to vote for all nominees listed below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
<TABLE>
<S> <C> <C>
Ross Perot James Champy George Heilmeier
Steve Blasnik Carl Hahn Ross Perot, Jr.
</TABLE>
2. The ratification of the appointment of Coopers & Lybrand L.L.P. as
independent public accountants of the Company and its subsidiaries.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE> 26
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES LISTED ABOVE, AND FOR THE RATIFICATION OF
THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS OF
THE COMPANY. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO THE VOTING THEREOF.
The undersigned hereby acknowledges receipt of the Proxy Statement and hereby
expressly revokes any and all proxies heretofore given or executed by him with
respect to the shares represented by the proxy.
Dated this day of , 1998
---- ------
--------------------------------
Signature
--------------------------------
Signature
Please sign exactly as name
appears on stock certificate.
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by President or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
If necessary, please correct
your address in the space
provided below.
--------------------------------
--------------------------------
--------------------------------
--------------------------------
(PLEASE SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.)
