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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 6/06/08  Electronic Data Systems Corp/DE   PREM14A                1:163                                    RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     Preliminary Proxy Statement                         HTML  1,107K 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(A)

of the Securities Exchange Act of 1934

Filed by the Registrant  x            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

ELECTRONIC DATA SYSTEMS CORPORATION

(Name of Registrant as Specified in its Charter)

Payment of Filing Fee (Check the appropriate box):

Common Stock, par value $0.01 per share, of Electronic Data Systems Corporation

The maximum aggregate value was determined based upon the sum of (A) 502,829,356 shares of Common Stock multiplied by $25.00 per share; (B) options to purchase 17,729,381 shares of Common Stock with exercise prices less than $25.00 per share multiplied by $5.70 (which is the difference between $25.00 and the weighted average exercise price of $19.30 per share); (C) restricted stock units and other equity awards with respect to 25,312,276 shares of Common Stock multiplied by $25.00 per share; and (D) warrants to purchase 879,168 shares of Common Stock multiplied by $1.05 (which is the difference between $25.00 and the exercise price of the warrants of $23.95 per share). In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying 0.0000393 by the sum calculated in the preceding sentence.

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PRELIMINARY PROXY STATEMENT, SUBJECT TO COMPLETION, JUNE 5, 2008

Dear Stockholder,

You are cordially invited to attend a special meeting of Electronic Data Systems Corporation (“EDS”) stockholders to be held on             , 2008, starting at             , local time, at our principal executive offices located at 5400 Legacy Drive, Plano, Texas 75024.

At the special meeting, you will be asked to consider and vote upon a proposal to adopt the merger agreement under which EDS would be acquired by Hewlett-Packard Company. We entered into this merger agreement on May 13, 2008. If the merger is completed, you, as a holder of our common stock, will be entitled to receive $25.00 in cash, without interest, less any applicable withholding taxes, for each share of our common stock owned by you at the consummation of the merger, as more fully described in the enclosed proxy statement. The merger consideration of $25.00 per share of our common stock represents an approximately 32.6% premium over the closing price of our shares of common stock on the New York Stock Exchange, Inc., on May 9, 2008, the last trading day before we publicly confirmed market rumors regarding the transaction discussions with Hewlett-Packard Company.

After careful consideration, our board of directors has unanimously declared the merger agreement advisable and determined that the merger is fair to, and in the best interests of, EDS and our stockholders, and unanimously recommends that you vote “FOR” the adoption of the merger agreement.

Your vote is very important, regardless of the number of shares of common stock you own. We cannot consummate the merger unless the merger agreement is approved by the affirmative vote of the holders of a majority of the shares of our common stock outstanding at the close of business on                 , 2008, the record date for the purpose of determining the stockholders who are entitled to receive notice of, and to vote at, the special meeting. Therefore, if you fail to vote your shares, it will have the same effect as a vote against the adoption of the merger agreement.

The attached proxy statement provides you with detailed information about the special meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to the proxy statement. We encourage you to read the proxy statement and the merger agreement carefully and in their entirety. You may also obtain more information about EDS from documents we have filed with the Securities and Exchange Commission.

If you have any questions or need assistance voting your shares, please call Georgeson Inc., our proxy solicitor, toll free at (866) 729-6815.

Thank you in advance for your continued support and your consideration of this matter.

Sincerely,

Ronald A. Rittenmeyer

Chairman of the Board, President and Chief

Executive Officer

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in the attached proxy statement. Any representation to the contrary is a criminal offense.

The attached proxy statement is dated                , 2008, and is first being mailed to stockholders on or about such date.

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ELECTRONIC DATA SYSTEMS CORPORATION

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held on                     , 2008

To the Stockholders of Electronic Data Systems Corporation:

A special meeting of stockholders of Electronic Data Systems Corporation, a Delaware corporation, or EDS, will be held on                     , 2008, starting at         , local time, at our principal executive offices located at 5400 Legacy Drive, Plano, Texas 75024 for the following purposes:

1. To consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of May 13, 2008, among EDS, Hewlett-Packard Company, a Delaware corporation, and Hawk Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Hewlett-Packard Company, as it may be amended from time to time, pursuant to which Hawk Merger Corporation will merge with and into EDS.

2. To consider and vote on a proposal to adjourn or postpone the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment or postponement to adopt the merger agreement.

3. To consider and vote on such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting.

Our board of directors has specified                     , 2008, as the record date for the purpose of determining the stockholders who are entitled to receive notice of, and to vote at (in person or by proxy), the special meeting. Only stockholders of record at the close of business on the record date are entitled to notice of, and to vote at (in person or by proxy), the special meeting and at any adjournment or postponement thereof. Each stockholder is entitled to one vote for each share of our common stock held on the record date. A complete list of our stockholders of record entitled to vote at the special meeting will be available for inspection at our principal executive offices at least 10 days prior to the date of the special meeting and continuing through the special meeting for any purpose germane to the meeting. The list will also be available at the meeting for inspection by any stockholder present at the meeting.

Under Delaware law, EDS stockholders who do not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for such an appraisal prior to the vote on the merger agreement and comply with the other requirements of Delaware law as explained in the accompanying proxy statement.

Regardless of whether you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy card or submit your proxy by telephone or the Internet prior to the special meeting to ensure that your shares will be represented at the special meeting. If you have Internet access, we encourage you to record your vote via the Internet. Properly executed proxy cards with no instructions indicated on the proxy card will be voted “FOR” the adoption of the merger agreement and “FOR” the adjournment or postponement of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment or postponement to adopt the merger agreement. If you attend the special meeting, you may revoke your proxy and vote in person if you wish, even if you have previously returned your proxy card. Your prompt attention is greatly appreciated.

THE EDS BOARD OF DIRECTORS HAS UNANIMOUSLY DECLARED THE MERGER AGREEMENT ADVISABLE AND DETERMINED THAT THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, EDS AND ITS STOCKHOLDERS. THEREFORE, THE EDS BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ADOPTION OF THE MERGER AGREEMENT.

By Order of the Board of Directors,

Storrow M. Gordon

Secretary

                    , 2008

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ADDITIONAL INFORMATION

This document incorporates important business and financial information about EDS from documents that are not included in or delivered with this document. See “Where You Can Find More Information” on page 84. You can obtain documents incorporated by reference in this document by requesting them in writing or by telephone from EDS Investor Relations at 5400 Legacy Drive, Mail Stop H1-2D-05, Plano, Texas 75024, or by calling (888) 610-1122 or (972) 605-6661. You will not be charged for any of these documents that you request. If you wish to request documents, you should do so by                     , 2008 in order to receive them before the special meeting.

If you have additional questions about the merger or require assistance in submitting proxies or voting shares of our common stock, or if you would like to receive additional copies of the proxy statement or the enclosed proxy card, please contact our proxy solicitor:

Georgeson Inc.

199 Water Street, 26th Floor

New York, NY 10038

Banks and Brokers Call: (212) 440-9800

All Others Toll Free: (866) 729-6815

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ANNEXES

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 QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

The following questions and answers address briefly some questions you may have regarding the special meeting and the proposed merger. These questions and answers may not address all questions that may be important to you as a holder of shares of our common stock. For important additional information, please refer to the more detailed discussion contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in, or incorporated by reference into, this proxy statement. We sometimes make reference to Electronic Data Systems Corporation in this proxy statement by using the terms “EDS,” the “company,” “we,” “our” or “us.”

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Georgeson Inc.

199 Water Street, 26th Floor

New York, NY 10038

Banks and Brokers Call: (212) 440-9800

All Others Toll Free: (866) 729-6815

If your brokerage firm, bank, trust or other nominee holds your shares in “street name,” you should also call your brokerage firm, bank, trust or other nominee for additional information.

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 SUMMARY

The following summary highlights selected information in this proxy statement and may not contain all the information that is important to you. Accordingly, we encourage you to read carefully this entire proxy statement, its annexes and the documents referred to in, or incorporated by reference into, this proxy statement. We sometimes make reference to Electronic Data Systems Corporation in this proxy statement by using the terms “EDS,” the “company,” “we,” “our” or “us.” Each item in this summary includes a page reference directing you to a more complete description of the item in this proxy statement.

 The Merger (page 24)

The Agreement and Plan of Merger, dated as of May 13, 2008, which we refer to as the merger agreement, among EDS, Hewlett-Packard Company, which we refer to as HP, and Hawk Merger Corporation, which we refer to as Hawk Merger Co., provides that Hawk Merger Co., a wholly-owned subsidiary of HP, will merge with and into EDS, with EDS continuing after the merger as the surviving corporation. As a result of the merger, we will become a wholly-owned subsidiary of HP. Upon completion of the merger, shares of our common stock will no longer be listed on any stock exchange or quotation system. If the merger is completed, each outstanding share of our common stock will be converted into the right to receive $25.00 in cash, without interest, less any applicable withholding taxes (other than (i) any shares of our common stock that are owned by the company (as treasury stock or otherwise), HP, Hawk Merger Co. or any of their respective direct or indirect wholly-owned subsidiaries and (ii) shares of our common stock held by any holder who has properly exercised appraisal rights with respect to such shares in accordance with Section 262 of Delaware law, as described in this proxy statement). We refer to this amount in this proxy statement as the merger consideration.

 The Special Meeting (page 20)

Date, Time and Place. The special meeting will be held on                     , 2008, starting at                     , local time, at our principal executive offices located at 5400 Legacy Drive, Plano, Texas 75024.

Purpose. You will be asked to consider and vote upon (1) the adoption of the merger agreement, (2) the adjournment or postponement of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment or postponement to adopt the merger agreement and (3) such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

Record Date and Quorum. You are entitled to vote at the special meeting if you owned shares of our common stock at the close of business on                     , 2008, the record date for the special meeting. You will have one vote for each share of our common stock that you owned on the record date. As of the record date, there were              shares of our common stock issued and outstanding and entitled to vote. The presence, in person or by proxy, of stockholders representing a majority of the shares of our common stock entitled to vote at the special meeting will constitute a quorum for the special meeting. In the event that a quorum is not present at the special meeting, the meeting may be adjourned or postponed to a later date or time, if necessary or appropriate, to solicit additional proxies.

Vote Required. The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding at the close of business on the record date, which we refer to as the required stockholder approval. Approval of any proposal to adjourn or postpone the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment or postponement to adopt the merger agreement requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on the matter.

Voting and Proxies. Any stockholder of record entitled to vote at the special meeting may submit a proxy by telephone, via the Internet, by returning the enclosed proxy card by mail, or by voting in person at the special meeting. If you intend to submit your proxy by telephone or the Internet you must do so no later than             , on                     , 2008. If you do not return your proxy card, submit your proxy by phone or the Internet or attend the special meeting, your shares of our common stock will not be voted, which will have the same effect as a vote “AGAINST” the adoption of the merger agreement. Even if you plan to attend the special meeting, after carefully reading and considering the information contained in this proxy statement, if you hold your shares of common stock in your own name as the stockholder of record, please vote

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your shares by completing, signing, dating and returning the enclosed proxy card or by using the telephone number printed on your proxy card or by using the Internet voting instructions printed on your proxy card.

If you return your signed proxy card, but do not mark the boxes showing how you wish to vote, your shares will be voted “FOR” the proposal to adopt the merger agreement and “FOR” the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies, if applicable.

If your shares of our common stock are held in “street name,” you should instruct your brokerage firm, bank, trust or other nominee on how to vote such shares of common stock using the instructions provided by your brokerage firm, bank, trust or other nominee. If your shares of our common stock are held in “street name,” you must obtain a proxy from such nominee in order to vote in person at the special meeting. If you fail to provide your brokerage firm, bank, trust or other nominee with instructions on how to vote your shares of our common stock, it will not be able to vote such shares at the special meeting. Because the adoption of the merger agreement requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding at the close of business on the record date, the failure to provide your brokerage firm, bank, trust or other nominee with voting instructions will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. Because the proposal to adjourn or postpone the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies requires the affirmative vote of a majority of the shares of our common stock present or represented at the special meeting and entitled to vote thereon, and because your brokerage firm, bank, trust or other nominee does not have discretionary authority to vote on the proposal, the failure to provide your brokerage firm, bank, trust or other nominee with voting instructions on how to vote your shares will have no effect on the approval of that proposal.

If you have shares of our common stock registered in your name in the EDS 401(k) Plan or the EDS Puerto Rico Savings Plan, you will have the right to instruct the respective trustees or administrators of the plans how to vote the plan shares allocated to your account. You may exercise these voting rights by submitting a proxy by telephone, via the Internet or by returning the enclosed proxy card by mail. You may attend the special meeting but may not vote in person at the meeting with respect to your plan shares. You must vote by Internet or telephone or complete, date, sign and return the proxy card by             , on                     , 2008 for plan shares to be voted as directed. If you do not give the plans’ trustees or administrators timely voting instructions, your plan shares will be voted in the same manner and proportion as the plan shares for which voting instructions were received from other participants in the plans.

Revocability of Proxy. Any stockholder of record of our common stock may revoke his or her proxy at any time before it is voted at the special meeting by any of the following actions:

Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

Corporate Secretary

Electronic Data Systems Corporation

5400 Legacy Drive, Mail Stop H3-3A-05

Plano, Texas 75024

Fax: (972) 605-5610

If you are a “street name” holder of our common stock, you may change your vote by submitting new voting instructions to your brokerage firm, bank, trust or other nominee. You must contact your brokerage firm, bank, trust or other nominee to obtain instructions as to how to change or revoke your proxy.

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 The Parties to the Merger Agreement (page 23)

Electronic Data Systems Corporation. EDS, a Delaware corporation, is a leading global technology services company delivering business solutions to its clients. We founded the information technology outsourcing industry 46 years ago. Today, we deliver a broad portfolio of information technology and business process outsourcing services to clients in the manufacturing, financial services, healthcare, communications, energy, transportation, and consumer and retail industries and to governments around the world. Our principal executive offices are located at 5400 Legacy Drive, Plano, Texas 75024, and our telephone number is (972) 604-6000.

Hewlett-Packard Company. HP, a Delaware corporation, focuses on simplifying technology experiences for all of its customers—from individual consumers to the largest businesses. With a portfolio that spans printing, personal computing, software, services and information technology (which we refer to as IT) infrastructure, HP is among the world’s largest technology companies, with revenue totaling $110.4 billion for the four fiscal quarters ended April 30, 2008. HP’s principal executive offices are located at 3000 Hanover Street, Palo Alto, California 94304, and its telephone number is (650) 857-1501.

Hawk Merger Corporation. Hawk Merger Co., a Delaware corporation and a wholly-owned subsidiary of HP, was formed for the purpose of facilitating HP’s acquisition of EDS. Hawk Merger Co. has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement. Upon consummation of the proposed merger, Hawk Merger Co. will merge with and into EDS and will cease to exist. Hawk Merger Co.’s principal executive offices are located at 3000 Hanover Street, Palo Alto, California 94304, and its telephone number is (650) 857-1501.

 Recommendation of Our Board of Directors (page 32)

After careful consideration, our board of directors unanimously declared the merger agreement advisable and determined that the merger is fair to, and in the best interests of, EDS and our stockholders, and unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. Our board of directors unanimously recommends that our stockholders vote “FOR” the adoption of the merger agreement and “FOR” the adjournment or postponement of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment or postponement to adopt the merger agreement.

 Reasons for the Merger (page 32)

In reaching its decision to declare the merger agreement advisable and in determining that the merger is fair to, and in the best interests of, EDS and our stockholders, and in approving the merger agreement, the merger and the other transactions contemplated by the merger agreement, our board of directors consulted with our management, as well as our financial and legal advisors, and considered a number of factors that the board believed supported its decision.

 Opinion of Citigroup Global Markets Inc. (page 34 and Annex B)

On May 13, 2008, Citigroup Global Markets Inc., which we refer to as Citi, rendered to our board of directors an oral opinion, which was confirmed by delivery of a written opinion dated May 13, 2008, to the effect that, as of that date and based on and subject to the matters described in its opinion, the merger consideration was fair, from a financial point of view, to the holders of our common stock. The full text of Citi’s written opinion, dated May 13, 2008, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached to this proxy statement as Annex B and is incorporated by reference in its entirety into this proxy statement. We urge you to read the opinion in its entirety. Citi’s opinion was provided to our board of directors in connection with its evaluation of the merger consideration from a financial point of view. Citi’s opinion does not address any other aspects or implications of the merger and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act on any matters relating to the proposed merger.

Pursuant to an engagement letter between us and Citi, dated March 17, 2008, we have agreed to pay Citi for its financial advisory services in connection with the merger an aggregate fee of approximately $30 million, $3 million of which became payable upon the execution of the merger agreement and approximately $27 million of which is contingent upon consummation of the merger. Subject to certain limitations, we also have agreed to reimburse Citi for reasonable travel and

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other expenses incurred by Citi in performing its services, including reasonable fees and expenses of its legal counsel, and to indemnify Citi and related persons against liabilities, including liabilities under the federal securities laws, arising out of its engagement.

 Opinion of Evercore Group L.L.C. (page 40 and Annex C)

On May 13, 2008, Evercore Group L.L.C., which we refer to as Evercore, rendered to our board of directors an oral opinion, which was confirmed by delivery of a written opinion dated May 13, 2008, to the effect that, as of that date and based upon and subject to the factors, limitations and assumptions set forth in its opinion, the merger consideration was fair, from a financial point of view, to the holders of shares of our common stock entitled to receive the merger consideration. The full text of the written opinion of Evercore, dated May 13, 2008, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken in rendering its opinion, is attached as Annex C to this proxy statement and is incorporated by reference in its entirety into this proxy statement. We urge you to read the opinion in its entirety. Evercore’s opinion is directed to our board of directors and addresses only the fairness from a financial point of view of the merger consideration to the holders of our common stock entitled to receive the merger consideration pursuant to the merger agreement. Evercore’s opinion does not constitute a recommendation to our board of directors or to any other person with respect to the merger, including as to how any stockholder should vote or act in respect of the merger.

Pursuant to an engagement letter between us and Evercore, dated May 7, 2008, which superseded an engagement letter between us and Evercore, dated May 11, 2007, a fee of $3,000,000 became payable to Evercore upon delivery of its fairness opinion. In addition, we have agreed to reimburse certain of Evercore’s expenses and to indemnify Evercore for certain liabilities arising out of its engagement.

 Treatment of Stock Options, Restricted Stock Units and the ESPP (page 60)

Stock Options. Except as otherwise provided in a limited number of agreements that we entered into with certain of our executive officers well before the execution of the merger agreement, stock options to purchase shares of our common stock that are outstanding immediately prior to the effective time of the merger, whether or not then vested, will be automatically converted into stock options to acquire, on substantially the same material terms and conditions applicable to such EDS stock options prior to the merger, a number of shares of HP common stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of our common stock subject to the option, and (ii) a fraction (which we refer to as the exchange ratio), the numerator of which is $25.00 and the denominator of which is the average closing price of HP common stock on the NYSE for the five full trading days ending on the date that is two trading days prior to the closing date of the merger. The exercise price for converted options will equal the per share exercise price for the shares of our common stock subject to such options divided by the exchange ratio (rounded up to the nearest whole cent). Any holding periods or other restrictions which applied to the sale of common stock acquired upon the exercise of EDS stock options will no longer apply following the conversion other than any restrictions under applicable securities laws.

Restricted Stock Units. Except as otherwise provided in a limited number of agreements that we entered into with certain of our executive officers well before the execution of the merger agreement, restricted stock units denominated in shares of our common stock that are outstanding immediately prior to the completion of the merger, whether or not then vested or earned, will automatically be converted into the right to receive restricted stock units with respect to the number of shares of HP common stock (rounded down to the nearest whole share) calculated by multiplying the number of shares of our common stock subject to the EDS restricted stock unit by the exchange ratio. Any performance-based vesting requirements that are applicable to any EDS restricted stock units that are converted into HP restricted stock units will, upon completion of the merger, be deemed satisfied and will no longer apply, and the HP restricted stock units received by holders of EDS restricted stock units will be subject to the same time-based vesting schedule to which such EDS restricted stock units are subject prior to the completion of the merger, and such restricted stock units will otherwise have material terms and conditions that are substantially the same as those of the related EDS restricted stock unit. Any holding periods or other restrictions which applied to the sale of common stock acquired upon the vesting of EDS restricted stock units will no longer apply following the conversion other than any restrictions under applicable securities laws.

Employee Stock Purchase Plan. We will establish an exercise date under the EDS 1996 Employee Stock Purchase Plan, which we refer to as the ESPP, no later than the last day of the payroll period ending immediately prior to the completion of the merger (but at least ten business days prior to the completion of the merger) with respect to any offering to

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purchase shares of our common stock otherwise then in effect. In addition, we will terminate the ESPP as of the newly established exercise date, or an earlier date that we determine to be administratively reasonable. Each ESPP participant’s accumulated payroll contributions as of the newly established exercise date that are not withdrawn as of such date will be applied toward the purchase of shares of our common stock in accordance with the terms of the ESPP, which shares will be cancelled upon the completion of the merger in exchange for the right to receive $25.00 per share, without interest, less any applicable withholding taxes. Under the merger agreement, we have agreed not to permit any new offering to commence under the ESPP or any current participant in the ESPP to increase the percentage rate of his or her payroll deductions into his or her account under the ESPP.

 Interests of Our Directors and Executive Officers in the Merger (page 51)

In considering the recommendation of our board of directors that you vote to adopt the merger agreement, you should be aware that some of our executive officers and directors may have economic interests in the merger that are different from, or in addition to, those of our stockholders generally. Our board of directors was aware of and considered these interests, among other matters, in reaching its decision to declare the merger agreement advisable and in determining that the merger is fair to, and in the best interests of, EDS and our stockholders, and in approving the merger agreement, the merger and the other transactions contemplated by the merger agreement. Some of our executive officers are parties to employment agreements with us, which provide for severance and other benefits in the case of qualifying terminations of employment in connection with a change in control of EDS, including consummation of the merger (See “The Merger—Interests of Our Directors and Executive Officers in the Merger”).

As of the date hereof, no member of our management team has entered into any employment, retention or other similar agreements with HP or any of its affiliates with respect to the terms and conditions of his or her employment upon closing of the transaction and, although certain members of our management team may enter into new arrangements with HP or its affiliates regarding employment, there can be no assurance that any such arrangement will be agreed upon.

Our executive officers and directors also have rights to indemnification and are covered under directors’ and officers’ liability insurance that will survive the consummation of the merger.

 Common Stock Ownership of Our Directors and Executive Officers (page 82)

As of                     , 2008, the record date for the special meeting, our directors and executive officers beneficially owned in the aggregate approximately              shares of our common stock entitled to vote at the special meeting or approximately         % of our outstanding common stock as of                     , 2008. We currently expect that each of these individuals will vote all of his or her shares of our common stock in favor of each of the proposals.

 Appraisal Rights (page 76)

Under Delaware law, our stockholders who do not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for such an appraisal prior to the vote on the merger agreement and comply with the other Delaware law procedures explained in this proxy statement. Annex D to this proxy statement contains the full text of Section 262 of Delaware law, which relates to your right of appraisal. We encourage you to read these provisions carefully and in their entirety.

 Conditions to the Merger (page 71)

Conditions to Each Party’s Obligations. Each party’s obligation to consummate the merger is subject to the satisfaction or waiver of the following mutual conditions:

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Conditions to EDS’ Obligations. Our obligation to consummate the merger is subject to the satisfaction or waiver of further conditions, including:

Conditions to HP’s and Hawk Merger Co.’s Obligations. The obligation of HP and Hawk Merger Co. to consummate the merger is subject to the satisfaction or waiver of further conditions, including:

 Termination of the Merger Agreement (page 72)

We and HP may terminate the merger agreement by mutual written consent at any time before the consummation of the merger. In addition, either we or HP may terminate the merger agreement at any time before the consummation of the merger if:

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HP may also terminate the merger agreement if:

We may also terminate the merger agreement if:

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 Termination Fee (page 74)

We have agreed to pay HP a termination fee of $375 million, which we refer to as the termination fee, in the event that (i) the merger agreement is terminated by HP pursuant to any of the provisions described in the first six bullet points in the second paragraph under “Summary—Termination of the Merger Agreement” above, or (ii) the merger agreement is terminated by us pursuant to the provision described in the first bullet point in the third paragraph under “Summary—Termination of the Merger Agreement” above.

In addition, if:

and in each case:

then we have agreed to pay to HP, immediately prior to and as a condition to consummating such transaction, the termination fee (however, all references in the definition of takeover proposal to 15% or 85% will be deemed to be references to “a majority” instead for purposes of payment of the termination fee in the instances described in this paragraph).

 No Solicitations (page 66)

We have agreed that we will not, and will cause our subsidiaries not to, and will use our reasonable best efforts to cause our and our subsidiaries’ directors, officers, employees, advisors and investment bankers not to, directly or indirectly:

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Notwithstanding these restrictions, at any time prior to receipt of the required stockholder approval, if we have not breached the non-solicitation covenant (other than any breach that is unintentional and immaterial in effect) and our board of directors receives an unsolicited bona fide written takeover proposal from a third party that our board of directors determines in good faith, after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation, constitutes or may reasonably be expected to constitute a superior proposal, then we may (i) furnish to any such third party information with respect to us or any of our subsidiaries, subject to compliance with certain terms contained in the merger agreement, and (ii) participate in discussions and negotiations with such third party regarding, and otherwise facilitate and encourage, such takeover proposal.

 Consummation of the Merger (page 71)

We currently anticipate that the merger will be completed in the second half of 2008. However, we cannot predict the exact timing of the consummation of the merger and whether the merger will be consummated. In order to consummate the merger, we must obtain the required stockholder approval and the other closing conditions under the merger agreement, including receipt of certain regulatory approvals, must be satisfied or, to the extent legally permitted, waived.

 Current Market Price of Common Stock (page 79)

The closing per share sale price of our common stock on the NYSE on May 9, 2008, the last full trading day before we publicly confirmed market rumors regarding the transaction discussions with HP, was $18.86. The closing per share sale price of our common stock on the NYSE on         , 2008, the last full trading day before the printing of this proxy statement, was $        .

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 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents to which we refer you in this proxy statement, include forward-looking statements based on estimates and assumptions. There are forward-looking statements throughout this proxy statement, including, without limitation, under the headings “Summary,” “The Special Meeting,” “The Merger,” “Opinion of Citigroup Global Markets Inc.,” “Opinion of Evercore Group L.L.C.,” “Financial Projections,” “Regulatory Approvals,” and “Litigation Related to the Merger,” and in statements containing words such as “believes,” “estimates,” “anticipates,” “continues,” “predict,” “potential,” “contemplates,” “expects,” “may,” “will,” “likely,” “could,” “should” or “would” or other similar words or phrases. These statements are subject to risks, uncertainties, and other factors, including, among others:

In addition, we are subject to risks and uncertainties and other factors detailed in our annual report on Form 10-K for the fiscal year ended December 31, 2007, filed with the Securities and Exchange Commission, which we refer to as the SEC, on February 27, 2008, which should be read in conjunction with this proxy statement. See “Where You Can Find More Information” on page 84. Many of the factors that will impact the completion of the proposed transaction are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained in this proxy statement, readers should not place undue reliance on forward-looking statements. We cannot guarantee any future results, levels of activity, performance or achievements. The statements made in this proxy statement represent our views as of the date of this proxy statement, and it should not be assumed that the statements made in this proxy statement remain accurate as of any future date. Moreover, we assume no obligation to update forward-looking statements, except as required by law.

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 THE SPECIAL MEETING

 Date, Time and Place

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by our board of directors for use at the special meeting to be held on                 , 2008, starting at                 , local time, at our principal executive offices located at 5400 Legacy Drive, Plano, Texas 75024, or at any postponement or adjournment thereof. The purpose of the special meeting is for our stockholders to consider and vote on (1) the adoption of the merger agreement, (2) the adjournment or postponement of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment or postponement to adopt the merger agreement, and (3) such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting. The holders of a majority of the shares of our common stock outstanding must vote to adopt the merger agreement in order for the merger to occur. If our stockholders fail to adopt the merger agreement, the merger will not occur. A copy of the merger agreement is attached to this proxy statement as Annex A. You are urged to read the merger agreement in its entirety.

 Record Date and Quorum

We have fixed the close of business on                 , 2008 as the record date for the special meeting, and only holders of record of our common stock on the record date are entitled to notice of, and to vote at (in person or by proxy), the special meeting. As of                  , 2008, there were                 shares of our common stock outstanding and entitled to vote. Each share of our common stock entitles its holder to one vote on all matters properly coming before the special meeting.

The presence, in person or by proxy, of stockholders representing a majority of the shares of our common stock entitled to vote at the special meeting will constitute a quorum for the special meeting. Shares of our common stock represented at the special meeting but not voted, including shares of our common stock for which proxies have been received but for which stockholders have abstained, will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business. In the event that a quorum is not present at the special meeting, the special meeting may be adjourned or postponed to solicit additional proxies, provided that the proposal to adjourn or postpone the special meeting has been adopted by the affirmative vote of a majority of the shares of our common stock represented in person or by proxy at the special meeting and entitled to vote thereon.

 Vote Required for Approval

You may vote FOR or AGAINST, or you may ABSTAIN from voting on, the proposal to adopt the merger agreement. Consummation of the merger requires the adoption of the merger agreement by the affirmative vote of the holders of a majority of the shares of our common stock outstanding at the close of business on the record date. Therefore, if you abstain or fail to vote, it will have the same effect as a vote “AGAINST” the adoption of the merger agreement.

The adoption of the proposal to adjourn or postpone the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies requires the affirmative vote of a majority of the shares of our common stock represented in person or by proxy at the special meeting and entitled to vote thereon. Therefore, if you abstain, it will have the same effect as a vote “AGAINST” the adoption of the proposal to adjourn or postpone the special meeting and if you fail to vote, it will have no effect on the outcome of the proposal.

As of                 , 2008, the record date for the special meeting, our directors and executive officers held and are entitled to vote, in the aggregate, approximately                  shares of our common stock, representing approximately         % of our outstanding common stock. We currently expect that each of our directors and executive officers will vote their shares of our common stock in favor of the proposals to be presented at the special meeting.

 Proxies and Revocation

If you are a stockholder of record of your shares of our common stock and you submit a proxy by telephone or the Internet or by returning a signed and dated proxy card by mail that is received by us at any time prior to                , on the date of the special meeting, your shares will be voted at the special meeting as you indicate. If you sign your proxy card without indicating your vote, your shares will be voted “FOR” the adoption of the merger agreement and “FOR” the adjournment or postponement of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment or postponement to adopt the merger

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agreement, and in accordance with the recommendations of our board of directors on any other matters properly brought before the special meeting, or at any adjournment or postponement thereof, for a vote.

If your shares of our common stock are held in “street name,” you will receive instructions from your brokerage firm, bank, trust or other nominee that you must follow in order to have your shares voted. If you have not received such voting instructions or require further information regarding such voting instructions, contact your brokerage firm, bank, trust or other nominee. Nominees who hold shares of our common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, nominees are typically not allowed to exercise their voting discretion with respect to the approval of matters that are “non-routine,” such as adoption of the merger agreement, without specific instructions from the beneficial owner. Broker non-votes are shares held by a broker or other nominee that are represented at the meeting, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal and the broker or other nominee does not have discretionary voting power on such proposal. If your brokerage firm, bank, trust or other nominee holds your shares of our common stock in “street name,” your brokerage firm, bank, trust or other nominee will vote your shares only if you provide instructions on how to vote by filling out the voter instruction form sent to you by brokerage firm, bank, trust or other nominee with this proxy statement. Because it is expected that brokers and other nominees will not have discretionary authority to vote on either proposal, we anticipate that there will not be any broker non-votes in connection with either proposal.

If you have shares of our common stock registered in your name in the EDS 401(k) Plan or the EDS Puerto Rico Savings Plan, you will have the right to instruct the respective trustees or administrators of the plans how to vote the plan shares allocated to your account. You may exercise these voting rights by submitting a proxy by telephone, via the Internet or by returning the enclosed proxy card by mail. You may attend the special meeting but may not vote in person at the meeting with respect to your plan shares. If you do not give the plans’ trustees or administrators timely voting instructions, your plan shares will be voted in the same manner and proportion as the plan shares for which voting instructions were received from other participants in the plans.

Proxies received by us at any time prior to                 , on the date of the special meeting, which have not been revoked or superseded before being voted, will be voted at the special meeting.

If you are a stockholder of record of your shares of our common stock, you have the right to change or revoke your proxy at any time before the vote taken at the special meeting by:

Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

Corporate Secretary

Electronic Data Systems Corporation

5400 Legacy Drive, Mail Stop H3-3A-05

Plano, Texas 75024

Fax: (972) 605-5610

If you are a “street name” holder of our common stock, you may change your vote by submitting new voting instructions to your brokerage firm, bank, trust or other nominee. You must contact your brokerage firm, bank, trust or other nominee to obtain instructions as to how to change or revoke your proxy.

 Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment

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or postponement to adopt the merger agreement. Our amended and restated bylaws provide that any adjournment may be made without notice if announced at the meeting at which the adjournment is taken and if the adjournment is to a date that is not greater than 30 days after the original date fixed for the special meeting and no new record date is fixed for the adjourned meeting. Any signed proxies received by us prior to             , on the date of the special meeting in which no voting instructions are provided on such matter will be voted “FOR” an adjournment or postponement of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event there are insufficient votes at the time of such adjournment or postponement to adopt the merger agreement. Whether or not a quorum exists, holders of a majority of our shares of common stock present in person or represented by proxy and entitled to vote at the special meeting may adjourn the special meeting. Because a majority of the votes represented at the meeting, whether or not a quorum exists, is required to approve the proposal to adjourn the meeting, abstentions will have the same effect on such proposal as a vote “AGAINST” the proposal. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow our stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.

 Solicitation of Proxies

We have retained Georgeson Inc. to assist in the solicitation of proxies for the special meeting for a fee of approximately $10,000, plus reimbursement of reasonable out-of-pocket expenses. Our directors, officers and employees may also solicit proxies by personal interview, mail, e-mail, telephone, facsimile or other means of communication. These persons will not be paid additional remuneration for their efforts. We will also request brokers and other fiduciaries to forward proxy solicitation material to the beneficial owners of shares of our common stock that the brokers and fiduciaries hold of record. Upon request, we will reimburse them for their reasonable out-of-pocket expenses.

 Questions and Additional Information

If you have questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please call our proxy solicitor, Georgeson Inc. toll-free at (866) 729-6815 (banks and brokers may call (212) 440-9800).

 Availability of Documents

Documents incorporated by reference (excluding exhibits to those documents unless the exhibit is specifically incorporated by reference into those documents) will be provided by first class mail without charge to each person to whom this proxy statement is delivered upon written or oral request of such person. In addition, our list of stockholders entitled to vote at the special meeting will be available for inspection at our principal executive offices at least 10 days prior to the date of the special meeting and continuing through the special meeting for any purpose germane to the meeting; the list will also be available at the meeting for inspection by any stockholder present in person at the meeting.

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 THE PARTIES TO THE MERGER AGREEMENT

 EDS

EDS, a Delaware corporation, is a leading global technology services company delivering business solutions to its clients. We founded the information technology outsourcing industry 46 years ago. Today, we deliver a broad portfolio of information technology and business process outsourcing services to clients in the manufacturing, financial services, healthcare, communications, energy, transportation, and consumer and retail industries and to governments around the world. Our principal executive offices are located at 5400 Legacy Drive, Plano, Texas 75024, and our telephone number is (972) 604-6000. For more information about us, please visit our corporate website at www.eds.com. Our website address is provided as an inactive textual reference only. The information provided on our website is not part of this proxy statement, and is not incorporated herein by reference. See also “Where You Can Find More Information” on page 84 of this proxy statement. Our common stock is publicly traded on the NYSE under the symbol “EDS.”

 HP

HP, a Delaware corporation, focuses on simplifying technology experiences for all of its customers—from individual consumers to the largest businesses. With a portfolio that spans printing, personal computing, software, services and IT infrastructure, HP is among the world’s largest technology companies, with revenue totaling $110.4 billion for the four fiscal quarters ended April 30, 2008. HP’s principal executive offices are located at 3000 Hanover Street, Palo Alto, California 94304, and its telephone number is (650) 857-1501. Additional information regarding HP is contained in HP’s filings with the SEC.

 Hawk Merger Co.

Hawk Merger Co., a Delaware corporation and a wholly-owned subsidiary of HP, was formed for the purpose of facilitating HP’s acquisition of EDS. Hawk Merger Co. has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement. Upon consummation of the merger, Hawk Merger Co. will merge with and into EDS and will cease to exist. Hawk Merger Co.’s principal executive offices are located at 3000 Hanover Street, Palo Alto, California 94304, and its telephone number is (650) 857-1501.

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 THE MERGER

 Background of the Merger

As part of the ongoing evaluation of our business, our board of directors and members of our senior management regularly review and assess opportunities to achieve long-term strategic goals. As part of this ongoing review process, members of our senior management, in conjunction with our board of directors, have considered potential opportunities for business combinations, acquisitions, dispositions, internal restructurings and other strategic alternatives.

During the regularly scheduled meeting of our board of directors held in April 2007, members of our senior management reviewed with our board of directors, among other things, our business, investor views of the IT services industry and merger and acquisition activity in the IT sector. This discussion included a review of our merger and acquisition strategy, including a review of potential acquisitions by us in different sectors. In addition, at this meeting, Evercore made a presentation to our board of directors regarding merger and acquisition activity in the leveraged buyout and private equity markets, as well as certain strategic alternatives that companies consider to create stockholder value. Following this presentation and extensive discussion, our board of directors determined that further analysis of all potential strategic alternatives should be undertaken and requested that our senior management prepare a strategic analysis to be presented at a special meeting of our board in June 2007. Our board of directors also established an advisory committee of the board, which we refer to as the advisory committee, to provide advice to management with respect to the preparation of this strategic analysis.

In May 2007, we formally engaged Evercore to provide financial advisory services in connection with our review of a range of strategic and financial alternatives. In addition, later in May 2007, the advisory committee engaged outside legal counsel and another financial advisor, which we refer to as the committee financial advisor, to assist in the evaluation of all potential strategic alternatives under consideration. From late May 2007 through July 2007, several meetings of the advisory committee and separate meetings of our board of directors were held. At a meeting of our board of directors held in June 2007, senior management presented its strategic analysis to the board. At this meeting, our board requested that senior management prepare a comprehensive three-year financial plan, which was subsequently presented to the board in July 2007. In addition, at these meetings, several presentations were made to the advisory committee and/or our board of directors by members of our senior management, Evercore and the committee financial advisor regarding potential strategic alternatives, including a possible business combination transaction with a strategic or financial buyer, the acquisition by the company of a large industry participant, a strategy involving a series of smaller acquisitions by the company, dispositions of certain business lines and a stand-alone plan that would involve a significant restructuring of our existing businesses and operations.

In July 2007, due in part to, among other things, concerns regarding the deterioration in the credit markets and related concerns regarding the ability to consummate a transaction with a financial buyer, our board of directors determined not to pursue any potential strategic alternative transaction with a financial buyer at that time, but remained open to consideration of all other potential strategic alternatives. At this time, our board of directors also determined that the work of the advisory committee was complete.

In October 2007, a regularly scheduled meeting of our board of directors was held to discuss a variety of matters, including our third quarter results, a general business update and the continued consideration of options to enhance stockholder value. At this meeting, members of our senior management made presentations to our board of directors regarding value enhancing transactions that may be available to us, including tactical options such as incremental operational improvements, share repurchases, targeted acquisitions and more transformational alternatives, including partnering with a product company or acquiring or merging with an IT services company. Ronald A. Rittenmeyer, our chief executive officer and president (and our chairman as of December 2007), also discussed with the board and determined with the board that it was appropriate for him to seek the counsel and advice of the chairpersons of each of the three standing committees of the board in connection with the ongoing consideration of options to enhance stockholder value.

On November 5, 2007, Mr. Rittenmeyer and another member of our senior management met with Mark Hurd, the chairman, chief executive officer and president of HP, and other members of HP management to discuss, among other things, our purchase and use of HP’s hardware and software products. At this meeting, in addition to discussing these matters, Messrs. Rittenmeyer and Hurd discussed consolidation in the IT services industry. Specifically, Mr. Rittenmeyer expressed an interest in possibly pursuing a transaction in which we would acquire the IT services business of HP. Based on this preliminary discussion, Messrs. Rittenmeyer and Hurd agreed that further consideration of such a transaction was warranted. On November 13, 2007, Mr. Rittenmeyer communicated with the chairpersons of each of the three standing committees of our board of directors regarding his meeting with Mr. Hurd.

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To facilitate further discussions regarding a possible acquisition of the IT services business of HP, on November 21, 2007, we entered into a mutual non-disclosure agreement with HP, which we refer to as the non-disclosure agreement.

On November 27, 2007, members of our management met with members of HP’s management to further develop the preliminary discussions that were held by Messrs. Rittenmeyer and Hurd on November 5, 2007.

On December 4, 2007, at a regularly scheduled meeting of our board of directors, Mr. Rittenmeyer and Joe Eazor, our executive vice president, corporate strategy and business development, provided an update to the board regarding the status of the discussions with HP, the objectives of the parties and the potential options identified in such discussions. At the meeting, Mr. Rittenmeyer confirmed with the board his intention to continue to seek the counsel and advice of the chairpersons of each of the three standing committees of the board as management continued to evaluate our strategic alternatives.

On December 6, 2007, Mr. Rittenmeyer met with Mr. Hurd to discuss their continued mutual interest in possibly pursuing our acquisition of the IT services business of HP. In light of their respective travel schedules and existing business commitments, Messrs. Rittenmeyer and Hurd agreed to defer further discussions until the end of the year. On December 30, 2007, Mr. Rittenmeyer met with Mr. Hurd. At this meeting, Mr. Hurd informed Mr. Rittenmeyer that, at the present time, HP was not interested in pursuing a transaction involving the sale of its IT services business. However, during this conversation, Mr. Hurd indicated that HP was interested in having preliminary discussions regarding a possible acquisition of the company by HP. Following this conversation, Mr. Rittenmeyer consulted with the chairpersons of each of the three standing committees of our board to determine whether to pursue, on a preliminary basis, discussions with HP. During this discussion, it was determined that preliminary discussions with HP should be pursued to evaluate its level of interest in a possible strategic transaction.

On January 17, 2008, representatives from Willkie Farr & Gallagher LLP, which we refer to as Willkie Farr, our outside legal counsel, met with members of our management to discuss the preliminary discussions that had been held with HP, as well as the other strategic alternatives that were under consideration by our board of directors.

Starting in late January 2008, we provided HP with access to certain limited non-public due diligence information to enable its senior management to evaluate the potential for the acquisition of the company by HP.

On February 5, 2008, at a regularly scheduled meeting of our board of directors, Mr. Rittenmeyer provided an update to the board regarding the various strategic alternatives under consideration by the company, including the status of the preliminary discussions with HP, the merger and acquisition strategy of the company and the internal restructuring plans that were discussed at previous meetings of the board. This discussion focused primarily on the background, status, financial implications and next steps with respect to the evaluation of these alternatives. Our board of directors also discussed the possible retention of external financial advisors in connection with its consideration of these alternatives, including the possible retention of Citi in light of the fact that Citi had been informally working with the company in respect of its strategic review since the fourth quarter of 2007. At the conclusion of this discussion, Mr. Rittenmeyer indicated to the board that he intended to continue to pursue each of the strategic alternatives that were discussed at the meeting.

On February 26, 2008, a meeting was held between Mr. Rittenmeyer, Mr. Hurd and other representatives from the company and HP. At this meeting, Mr. Hurd reiterated HP’s interest in possibly pursuing a business combination transaction with us, and explained that a regularly scheduled meeting of the board of directors of HP, which we refer to as the HP Board, was to be held on March 20, 2008. In addition, at this meeting, Mr. Hurd requested that HP representatives be provided with access to additional non-public due diligence information regarding our business, which would enable HP management to present a preliminary financial model and recommendation in respect of a possible transaction to the HP Board at the March 20 meeting. Mr. Hurd indicated that if the HP Board authorized HP’s management to proceed with further discussions concerning a potential strategic transaction, it was HP’s intention to deliver to us a preliminary, non-binding indication of interest in respect of a possible business combination, including an indicative price range. Following this discussion, Mr. Rittenmeyer updated and consulted with the chairpersons of each of the three standing committees of our board regarding the meeting with Mr. Hurd and the other HP representatives.

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From the end of February through March 2008, we provided certain additional non-public due diligence information to HP and its representatives. On March 4, 2008, Mr. Rittenmeyer convened a meeting of certain members of our senior management, as well as representatives of Willkie Farr and Citi. At this meeting, Mr. Rittenmeyer updated the various parties as to the status of the discussions with HP, and the participants discussed, among other things, the process and timeline for pursuing a possible transaction with HP.

In addition, at this meeting and in light of the evolution of the discussions between us and HP, the fact that non-public due diligence information was being provided to HP and the amount of time that had elapsed since the execution of the non-disclosure agreement, members of our senior management and representatives from Citi and Willkie Farr discussed the need to amend the non-disclosure agreement to provide for a standstill provision and an extension of the duration of the confidentiality and non-solicitation obligations of HP. On the evening of March 4, 2008, we distributed a draft of an amendment to the non-disclosure agreement, which we refer to as the non-disclosure amendment, to HP.

On March 5 and 6, 2008, certain HP representatives attended management presentations at our principal executive offices.

On March 10, 2008, HP distributed to us a mark-up of the non-disclosure amendment and a separate standstill and exclusivity agreement. In exchange for its agreement to a standstill provision and the extension of the duration of its confidentiality and non-solicitation obligations, HP requested a limited exclusive negotiation period with the company. Following consultation with our outside advisors and the chairpersons of each of the three standing committees of our board, and after negotiating the terms of these agreements, on March 11, 2008, we entered into the non-disclosure amendment and the standstill and exclusivity agreement, which provided for a limited exclusive negotiation period (subject to a “fiduciary out”), a standstill provision and the extension of the duration of the confidentiality and non-solicitation obligations of HP.

On March 12, 2008, members of our management and Citi met with members of HP’s management and other representatives of HP, including its financial advisor, to discuss, among other things, the due diligence process.

On March 17, 2008, we entered into a formal engagement letter with Citi.

On March 23, 2008, HP delivered a preliminary, non-binding indication of interest to us, which provided that, subject to satisfactory completion of due diligence, HP would be prepared to propose an acquisition of all of our outstanding common stock for a price in the range of $22.00 to $25.00 per share in cash. The preliminary, non-binding indication of interest also noted HP’s intention, if a transaction was pursued, to integrate its IT services delivery capability into our operations, and HP’s expectation that our senior management team would be central in driving the long-term success of the combined business. On the same day, Mr. Rittenmeyer and Mr. Hurd had a telephone conversation to discuss the indication of interest, including the valuation range, the principal financial assumptions on which the valuation range was based and certain due diligence items that affected the valuation range.

Mr. Rittenmeyer sent a copy of the preliminary, non-binding indication of interest to each of the members of our board of directors promptly after receiving it from HP. Mr. Rittenmeyer also convened a conference call with members of our senior management and representatives of Citi and Willkie Farr to discuss the indication of interest received from HP. Also discussed during that conference call was the upcoming special meeting of our board of directors which had been scheduled for April 1 to consider and evaluate HP’s preliminary proposal and the other strategic alternatives that were under consideration at that time.

On March 31, 2008, a meeting was held between the chairpersons of each of the three standing committees of our board, Mr. Rittenmeyer, other members of our senior management and representatives from Citi and Willkie Farr. At this meeting, the participants discussed the preliminary, non-binding indication of interest received from HP, and our outside advisors provided an overview of their views concerning HP’s non-binding indication of interest.

On April 1, 2008, a special meeting of our board of directors was held to consider and evaluate the preliminary, non-binding indication of interest received from HP, as well as the other strategic alternatives that were under consideration at that time. The attendees at this meeting included Mr. Rittenmeyer, other members of our senior management and representatives from Citi and Willkie Farr. Two members of our board did not attend the meeting, but were updated on the meeting by our senior management, including Mr. Rittenmeyer, and representatives from Citi and Willkie Farr during a conference call held on April 11, 2008.

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Mr. Rittenmeyer began the meeting by updating our board of directors regarding the various discussions with, and limited due diligence performed by, HP prior to the date of the meeting. Following this discussion, representatives of Willkie Farr reviewed with the directors their fiduciary duties, including their duties in the context of a change of control transaction. In connection with this discussion, our board discussed and considered the potential significant adverse effect that a leak or other public disclosure regarding our consideration of a business combination transaction may have on our business and operations, including the potential significant adverse effect on our relationships with existing customers and vendors, customer pursuits and our ability to retain our key employees. Based on these concerns, as well as the risk that HP would discontinue transaction discussions with us if we terminated the limited exclusive negotiation period in accordance with the terms of the standstill and exclusivity agreement, our board of directors determined that, if it decided to pursue additional discussions with HP, it would be in the best interests of the company and our stockholders to pursue such discussions, as well as the other strategic alternatives under review at that time, without soliciting other prospective purchasers. In making this determination, our board of directors also considered, among other things, the size and investment community coverage of the company, and discussed with our outside advisors the inclusion of a “go-shop” provision in the definitive agreement if a transaction was pursued, and HP’s likely resistance to the inclusion of such a provision. Our board of directors also discussed with our outside advisors the likely terms of the non-solicitation provision that would be included in the definitive agreement if a transaction was pursued, the likely range of the amount of the termination fee that would be payable in connection with pursuing an alternative offer, and the related effects of these provisions on our ability to consider and respond to an alternative offer following the execution of a definitive agreement.

Following this discussion, members of our senior management reviewed the final terms of Citi’s engagement, and led a discussion regarding the possible retention of Evercore as an additional financial advisor to the company. Representatives from Citi then entered the meeting and led a discussion among our board of directors regarding the indication of interest received from HP, including, but not limited to, the principal terms of HP’s preliminary proposal, a comparison of our business and the IT services business of HP, a review of historical premiums paid in transactions generally and in the technology industry in particular, as well as in past HP transactions, various implied valuation metrics based on the price range included in HP’s preliminary proposal, and the current and historical trading prices, analyst estimates and price to earnings multiples for our stock and the stock of other publicly traded companies in our industry.

Following this discussion, representatives from Citi reviewed with our board of directors Citi’s preliminary valuation analyses. Certain of the preliminary valuation analyses performed by Citi utilized, among other things, the company’s then current three-year financial plan, which was based on the three-year financial plan that was reviewed with the board in July 2007 and incorporated certain adjustments, including but not limited to, our reported results for fiscal 2007. The Citi representatives and members of our senior management also led a discussion among our board of directors regarding certain other strategic alternatives, including a stand-alone plan involving a significant restructuring of our existing businesses and operations, and an acquisition by the company of a large industry participant. This discussion focused, in part, on the range of values that might be generated if we were successful in completing such a restructuring or acquisition, and the viability of, and risks associated with, such alternatives.

Thereafter, representatives from Willkie Farr reviewed with our board of directors, among other things, the likely process and timing of a possible transaction with HP, possible transaction structures and certain proposed contractual terms. Our board of directors, together with our outside legal and financial advisors, then discussed the benefits of formally creating a transaction committee of our board in the event that the board determined to proceed with the preliminary transaction discussions with HP.

At the conclusion of the meeting, our board of directors instructed our senior management to, among other things, continue the preliminary transaction discussions with HP, and authorized the delivery of additional due diligence information to HP to enable it to narrow, and perhaps increase, the valuation range included in its preliminary indication of interest, and to work with Willkie Farr to prepare a draft merger agreement on terms consistent with those discussed at the board meeting for distribution to HP and its representatives. In addition, based on the discussions at the meeting regarding the then current macro economic and IT services business environments, including recent stock market performance and the increasing possibility of a recession in the U.S. economy, as well as management’s current views with respect to the company’s financial performance, our board of directors requested that management review and update the then current three-year financial plan to reflect its most current view on the company’s business and prospects. Our board of directors also determined that it would be beneficial to formally create a transaction committee to provide oversight and advice to our senior management in the discussions and negotiations with HP, although our board of directors did not empower the transaction committee to approve or make any definitive determinations in respect of a transaction with HP, with all such power and authority being expressly reserved to the full board. Our board of directors appointed Ray Groves, Edward Kangas and Ellen Hancock, the chairpersons of the three standing committees of the board, as the members of the transaction committee.

Following the conclusion of the meeting, a meeting of the compensation and benefits committee of our board of directors, which we refer to as the CBC, was convened. At this meeting, Mr. Rittenmeyer and other members of our management made a recommendation to the CBC regarding the approval of a limited number of retention agreements for certain key employees of the company, none of whom were executive officers. These matters were discussed at a prior meeting of the CBC, and in advance of the current meeting, the CBC received detailed information regarding, among other things, the number of key employees that would receive such agreements, the proposed terms of such agreements, the possible costs associated with such agreements, and similar arrangements that were adopted by other publicly traded

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companies in connection with a potential change of control transaction. At this meeting, Mr. Rittenmeyer also explained to the CBC his belief that the retention of the subject employees was critical not only to the continued successful operation of our business, but also to the company’s exploration of strategic alternatives. Following a lengthy discussion, the CBC unanimously approved the execution of severance protection agreements on terms consistent with those presented at the meeting, including with respect to the number of eligible key employees.

On April 8, 2008, Mr. Rittenmeyer met with Mr. Hurd. At this meeting, Messrs. Rittenmeyer and Hurd discussed a variety of matters relating to a potential business combination transaction, including the operating models of the company and the IT services business of HP, possible operating models that would apply if our business and the IT services business of HP were combined, and the ongoing due diligence that was being conducted by HP and its representatives.

Following the April 1 meeting of our board of directors, members of our senior management and representatives from Willkie Farr prepared and finalized a draft merger agreement. On April 13, 2008, a conference call was held between members of our senior management, representatives of Willkie Farr and two of the three members of the transaction committee to discuss, among other things, some of the material terms and conditions contained in the draft merger agreement that was prepared by Willkie Farr in consultation with our senior management. Following the conference call, our executive vice president and general counsel updated the third member of the transaction committee regarding the matters that were discussed on the conference call. On April 14, Willkie Farr distributed the draft merger agreement to Cleary Gottlieb Steen & Hamilton LLP, which we refer to as Cleary Gottlieb, outside legal counsel to HP.

On April 15, 2008, the company held its annual stockholders meeting. Prior to the annual stockholders meeting, a regularly scheduled meeting of our board of directors was convened. The attendees at this meeting included Mr. Rittenmeyer, other members of our senior management and representatives from Citi and Willkie Farr. All members of our board of directors also attended the meeting. At this meeting, Mr. Rittenmeyer provided an update regarding the status of the discussions with HP, including a summary of Mr. Rittenmeyer’s recent discussions with Mr. Hurd, the principal areas of due diligence that HP had not yet completed, and the work that had been performed to date with respect to, and the timing for the distribution of, the updated version of the three-year financial plan that was previously requested by our board.

On April 26, 2008, Mr. Rittenmeyer and Mr. Eazor met with Mr. Hurd and other HP representatives. At this meeting, the participants discussed, among other things, our operating model, possible transaction synergies and employee retention and valuation issues.

On April 26, 2008, Cleary Gottlieb distributed a revised draft of the merger agreement to Willkie Farr.

On April 27, 2008, Mr. Rittenmeyer convened a conference call with members of our senior management and representatives of Citi and Willkie Farr to provide an update on the status of the discussions with HP.

On April 28, 2008, a meeting of the transaction committee was held. Representatives from Willkie Farr and Citi participated in this meeting, along with Mr. Rittenmeyer and other members of our senior management. At this meeting, Mr. Rittenmeyer provided an update on the status of the discussions with HP.

On April 30, 2008, Mr. Rittenmeyer convened a conference call with members of our senior management and representatives of Willkie Farr to discuss the significant issues raised by the revised draft of the merger agreement that was distributed by Cleary Gottlieb on April 26, including the rejection of our request for a “go-shop” provision, the terms of the non-solicitation provision, the scope of the representations and warranties and the interim operating covenants, certain employee benefit matters, certain regulatory matters, certain conditions to closing and HP’s termination rights and associated remedies that were included in the draft.

On May 1, 2008, Mr. Rittenmeyer and other members of our management met with Mr. Hurd and other members of HP’s management to discuss, among other things, the current status of the transaction discussions, possible communications plans if the parties determined to pursue a transaction and employee retention issues.

On May 2, 2008, Mr. Rittenmeyer met with representatives of Evercore to propose that Evercore be retained as an additional financial advisor to the company. At Mr. Rittenmeyer’s request, Evercore thereafter contacted members of our senior management and representatives from Citi, and was provided with, among other things, an update on our reported results and management’s current views on our business and prospects. On May 7, 2008, we entered into an engagement letter with Evercore, which superseded the engagement letter that we entered into with Evercore in May 2007.

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On May 2, 2008, our internal legal counsel and representatives from Willkie Farr participated in a conference call with HP’s internal legal counsel and representatives from Cleary Gottlieb regarding the revised draft of the merger agreement that was distributed by Cleary Gottlieb on April 26.

On May 3, 2008, representatives from Willkie Farr updated members of our senior management on the significant open issues in the merger agreement.

On May 4, 2008, a meeting of the transaction committee was held. At this meeting, Mr. Rittenmeyer provided an update to the transaction committee regarding his meeting with HP on May 1, and representatives from Willkie Farr reviewed the open significant issues concerning the merger agreement.

On May 6, 2008, Willkie Farr distributed a revised draft of the merger agreement to HP and its representatives. On May 7, 2008, our internal legal counsel and representatives from Willkie Farr participated in several conference calls with HP’s internal legal counsel and representatives from Cleary Gottlieb regarding the draft merger agreement. The significant issues discussed included our request for a “go-shop” provision, the terms of the non-solicitation provision, the scope of the representations and warranties and interim operating covenants, certain employee benefit matters, the parties’ respective undertakings concerning regulatory matters, certain of the conditions to closing and HP’s termination rights and associated remedies.

Late in the evening on May 7, 2008, HP delivered a non-binding letter to us indicating that HP would be prepared to propose an acquisition of all of our outstanding common stock for a purchase price of $24.65 per share in cash, subject to, among other things, the completion of, and HP’s satisfaction with, the terms and conditions of the definitive merger agreement and the related disclosure schedules. In addition, on May 8, 2008, Cleary Gottlieb distributed a revised draft of the merger agreement, and Willkie Farr distributed draft disclosure schedules to the merger agreement.

On May 8, 2008, a meeting of our board of directors was held. The attendees at this meeting included eleven of the twelve members of the board, Mr. Rittenmeyer, other members of our senior management and representatives from Citi and Willkie Farr. Following the meeting, our executive vice president and general counsel updated the member of the board who did not attend the meeting regarding the matters that were discussed at the meeting.

At the outset of this meeting, Mr. Rittenmeyer described for the board the recent discussions with HP and the background regarding the letter received from HP the prior day. Mr. Rittenmeyer then led a discussion among our board of directors and outside advisors regarding the proposed purchase price contained in the HP letter, the appropriate response to the HP letter and the due diligence and other discussions that had occurred since our receipt of HP’s preliminary, non-binding indication of interest in March 2008. At the conclusion of this discussion, our board of directors instructed Mr. Rittenmeyer to request that HP consider increasing the proposed purchase price and to deliver a revised offer to the company no later than the close of business on Friday, May 9, in advance of a meeting of the board which was scheduled for May 10.

Following this discussion, members of our senior management and our outside advisors provided an additional update to the board regarding the recent transaction discussions, including an update regarding the status of the negotiations with respect to the merger agreement, the recent meetings of the transaction committee and the public communications plan in the event that the board ultimately determined to proceed with a transaction with HP.

In accordance with the instructions of the board, following the conclusion of the meeting, Mr. Rittenmeyer and Mr. Hurd had a telephone conversation in which Mr. Rittenmeyer conveyed our request that HP consider increasing its proposed purchase price and that it deliver a revised offer no later than the close of business on Friday, May 9.

Throughout the day on May 9, 2008, there were a series of discussions between members of our senior management and our outside advisors, and HP and its outside advisors, including several conference calls between our respective outside and internal legal counsel regarding the terms of the draft merger agreement. The negotiations with respect to the merger agreement focused primarily on closing certainty, our ability to solicit and respond to competing offers following the execution of a definitive agreement, regulatory undertakings, employee benefit matters, HP’s termination rights, the circumstances in which HP would be entitled to be paid the termination fee and the amount of the termination fee.

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In addition, on May 9, 2008, HP delivered a non-binding letter to us indicating that HP would be prepared to propose an acquisition of all of our outstanding common stock for a purchase price of $25.00 per share in cash, subject to, among other things, the completion of, and HP’s satisfaction with, the terms and conditions of the definitive merger agreement and the related disclosure schedules, including, among other things, the non-solicitation provisions and the amount and triggers for the payment of the termination fee.

On May 10, 2008, a meeting of our board of directors was held. The attendees at this meeting included Mr. Rittenmeyer, other members of our management and representatives from Citi, Evercore and Willkie Farr. Eleven of the twelve members of our board were present during the entire meeting, with one member of our board only participating during a portion of the meeting. The member of our board that did not attend the entire meeting was updated on the meeting by our senior management, including Mr. Rittenmeyer, and representatives from Citi, Evercore and Willkie Farr during a conference call held on May 11, 2008.

At the outset of this meeting, Mr. Rittenmeyer led a discussion regarding the recent conversations with HP regarding the revisions to its original preliminary, non-binding indication of interest, including HP’s statements that the price set forth in the May 9 letter represented its final and best offer. Representatives of Citi also described for the board their recent discussions with HP’s financial advisor regarding the May 9 letter, noting that HP’s financial advisor had indicated that the current offer represented HP’s best and final offer.

Following this discussion, representatives from Willkie Farr provided an update to our board of directors regarding the status of the merger agreement negotiations and reviewed with the directors their fiduciary duties, including their duties in the context of a change of control transaction. In connection with this discussion, the Board was informed of, among other things, HP’s refusal to include a “go-shop” provision in the merger agreement, and the participants at the meeting discussed the implications of this provision on the amount of the termination fee, and the otherwise limited benefits of this provision in light of, among other things, the size and investor community coverage of the company. In light of this discussion and HP’s refusal to include such a provision in the merger agreement, our board of directors authorized Willkie Farr and senior management to agree to the removal of the “go-shop” provision in exchange for a significant reduction to the amount of the termination fee that had been proposed by HP.

Following this discussion, Mr. Rittenmeyer, Ronald Vargo, our executive vice president and chief financial officer, and other members of our management reviewed with our board of directors the updated version of the three-year financial plan, a copy of which was provided to the directors prior to the meeting. Messrs. Rittenmeyer and Vargo led a discussion among the board regarding the process undertaken and key assumptions utilized in preparing the updated three-year financial plan. Mr. Vargo reviewed with the board the differences in key financial metrics, including revenue, operating income, operating margins and free cash flow, between the updated three-year financial plan, the company’s three-year financial plan that was reviewed in July 2007 and the financial information that was reviewed with the board in late 2007 and early 2008. Mr. Vargo also detailed for the board the aspects of the company’s business and prospects that were primarily responsible for the differences between the updated three-year financial plan, the financial plan reviewed in July 2007 and the financial information reviewed with the board in late 2007 and early 2008, including revenue growth, the impact of contract run-off projections, re-timed capital investments, working capital, workforce management, SG&A expense forecasts and incremental pension and U.S. healthcare expense, as well as certain positive offsetting business developments, including positive currency fluctuations and the impact of certain recent acquisitions.

The members of our board of directors, senior management and our financial advisors also discussed the stand-alone prospects of the company, including possible revenue growth prospects and margin expansion. In connection with this discussion, Mr. Eazor reviewed possible cost reduction initiatives that had been considered at prior meetings of the board, including additional headcount reductions and the continuation of the company’s “best shore” initiatives, and the related issues associated with such an approach, including the reaction of the investment community and the related effect on the company’s near-term and long-term stock price. Our board of directors and senior management also discussed the relative risk associated with the updated three-year financial plan, comparing management’s views regarding possible upside of the updated plan to the possible downside, in light of, among other things, the impact of the economic environment and liabilities that were difficult to quantify, including pension expense and other contingent liabilities.

Following this discussion, representatives from Citi led a discussion among our board of directors regarding the recent changes in the broader market and in company’s business and investor community sentiment with respect to the IT services industry in general, including negative valuation trends of publicly traded IT services companies. The Citi representatives then reviewed with our board of directors the financial aspects of the proposed merger, including a review of

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the historical premiums paid in transactions generally and in the technology industry in particular, and various implied valuation metrics based on a $25.00 per share offer price. Following this discussion, the Citi representatives reviewed with our board the additional valuation analyses that they performed. At the conclusion of this discussion, representatives from Evercore reviewed with our board of directors, among other things, the implied premium that the offer price represented over different periods of time, a summary of the financial information that Evercore relied upon in performing its valuation analyses, the current and historical trading prices of our common stock in relation to the performance of the broader market, certain IT specific indexes and one of our publicly traded competitors, and the other valuation analyses that it performed. In connection with this discussion, Evercore described to our board the principal differences between the valuation analyses performed by Evercore and those performed by Citi.

The Citi and Evercore representatives then led a discussion among our board of directors and senior management comparing the HP offer to some of the strategic alternatives that the company considered in the spring and summer of 2007, noting negative changes in the valuations of IT services companies in general, as well as changes in the company’s business and prospects, and market conditions over this time period.

Following these discussions, representatives from Willkie Farr reviewed with our board of directors the material terms and conditions contained in the latest draft of the merger agreement, and detailed for our board the significant remaining issues, including certain closing conditions, provisions in respect of the parties’ respective regulatory undertakings, HP’s termination rights and the circumstances in which HP would be entitled to be paid the termination fee.

After further discussion among members of our board of directors, the board asked all of the members of our management to leave the meeting and the board met in executive session. During the executive session, our board of directors discussed possible conflicts of interest on the part of management, including the intentions expressed by HP in its initial indication of interest regarding the prominent role it expected our existing senior management team to play in the combined company, as well as the payments that members of management would receive upon the closing of the proposed transaction. In addition, our board of directors discussed the fact that Mr. Rittenmeyer confirmed that, consistent with statements at past board meetings, he had not engaged in, and would not engage in, any discussions with HP regarding his retention or compensation package until after a definitive merger agreement was executed.

Following the executive session, members of our management rejoined the meeting. Our board of directors, members of our senior management and representatives of Willkie Farr then continued the discussion regarding the significant remaining merger agreement issues. Following this discussion and additional deliberations, our board of directors determined to continue the discussions with HP, subject to favorable resolution on the significant remaining merger agreement issues.

Throughout the day on May 11 and 12, 2008, there were a series of discussions between HP’s internal legal counsel, our internal legal counsel, Willkie Farr and Cleary Gottlieb regarding the merger agreement and the related disclosure schedules. In the afternoon on May 12, several media outlets ran reports of a possible transaction between us and HP, and as a result, the trading volume in our common stock and our stock price increased substantially. Following the release of these media reports, the company and HP issued separate press releases confirming the media reports regarding the advanced transaction discussions. Following the issuance of these press releases, discussions continued regarding the merger agreement and the related disclosure schedules.

A meeting of our board of directors was held prior to the opening of the stock market on May 13, 2008. At this meeting, representatives from Willkie Farr reviewed with our board of directors the resolutions reached with respect to the significant remaining merger agreement issues that were discussed at the last board meeting, noting favorable resolution on the issues regarding closing certainty, the regulatory undertaking provisions and the amount of the termination fee. After further discussion between our board of directors, our senior management and the representatives from Willkie Farr, Citi and Evercore, our board of directors requested that each of Citi and Evercore render to the board an opinion as to whether the financial consideration to be received by our stockholders in the proposed merger was fair, from a financial point of view, to our stockholders. Citi and Evercore each delivered to our board of directors, an oral opinion, which was subsequently confirmed by delivery of written opinions each dated May 13, 2008, that, as of such date and based upon and subject to the factors and assumptions set forth in their respective written opinions, the $25.00 per share merger consideration to be received by the holders of our common stock in the proposed merger was fair, from a financial point of view, to such holders. The full text of the written opinions of Citi and Evercore, which set forth the assumptions made, procedures followed, matters

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considered and limitations on the review undertaken with such opinions, are attached as Annex B and Annex C to this proxy statement, respectively.

Following the receipt of the opinions from Citi and Evercore, our board of directors engaged in additional deliberations and after considering these deliberations, the proposed terms of the merger agreement and the various presentations of its legal and financial advisors, and taking into consideration the factors described under “—Reasons for the Merger; Recommendation of Our Board of Directors,” our board of directors unanimously adopted resolutions declaring the merger agreement advisable and determining that the merger is fair to, and in the best interests of, EDS and our stockholders. These resolutions also unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and authorized the company to enter into the merger agreement and recommended that our stockholders vote to adopt the merger agreement.

The merger agreement was executed by the company, HP and a wholly-owned subsidiary of HP prior to the opening of the stock market on May 13, 2008. Thereafter, the company and HP issued a joint press release announcing the execution of the merger agreement.

 Reasons for the Merger; Recommendation of Our Board of Directors

After careful consideration, our board of directors unanimously declared the merger agreement advisable and determined that the merger is fair to, and in the best interests of, EDS and our stockholders, and unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. In reaching this decision, our board of directors consulted with our management, as well as our financial and legal advisors, and considered a number of positive factors that the board believed supported its decision, including the following factors:

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Our board of directors also considered a variety of risks and other potentially negative factors concerning the merger agreement, the merger and the other transactions contemplated by the merger agreement, including the following factors:

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The foregoing discussion of the factors considered by our board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by our board of directors. In reaching its decision to declare the merger agreement advisable and determining that the merger is fair to, and in the best interests of, EDS and our stockholders, and, in approving the merger agreement, the merger and the other transactions contemplated by the merger agreement, our board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. Our board of directors considered all these factors as a whole, including discussions with, and questioning of, our management and financial and legal advisors, and overall considered the factors to be favorable to, and to support, its decision.

For the reasons set forth above, our board of directors unanimously declared the merger agreement advisable and determined that the merger is fair to, and in the best interests of, EDS and our stockholders, and unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement.

Our board of directors unanimously recommends that our stockholders vote “FOR” the adoption of the merger agreement.

 Opinion of Citigroup Global Markets Inc.

We retained Citi as one of our financial advisors in connection with the merger. In connection with this engagement, we requested that Citi evaluate the fairness, from a financial point of view, of the consideration to be received in the merger by holders of our common stock. On May 13, 2008, at a meeting of our board of directors, Citi rendered to our board of directors an oral opinion, which was confirmed by delivery of a written opinion dated May 13, 2008, to the effect that, as of that date and based on and subject to the matters described in its opinion, the merger consideration was fair, from a financial point of view, to the holders of our common stock.

The full text of Citi’s written opinion, dated May 13, 2008, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached to this proxy statement as Annex B and is incorporated by reference in its entirety into this proxy statement. We urge you to read the opinion in its entirety. Citi’s opinion was provided to our board of directors in connection with its evaluation of the merger consideration from a financial point of view. Citi’s opinion does not address any other aspects or implications of the merger and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act on any matters relating to the proposed merger. Citi’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to the company or the underlying business decision of the company to engage in the merger. The following is a summary of Citi’s opinion and the methodology that Citi used to render its opinion.

In arriving at its opinion, Citi, among other things:

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In rendering its opinion, Citi assumed and relied, without assuming any responsibility for independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with Citi and upon the assurances of the company’s management that it was not aware of any relevant information that was omitted or remained undisclosed to Citi. With respect to financial forecasts and other information and data relating to the company provided to or otherwise reviewed by or discussed with Citi, Citi was advised by the company’s management, and Citi assumed, with the company’s consent, that the forecasts and other information and data were reasonably prepared on bases reflecting the best currently available estimates and judgments of the company’s management as to the company’s future financial performance. Citi assumed, with the company’s consent, that the merger would be consummated in accordance with the terms of the merger agreement, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary regulatory or third party approvals, consents, releases and waivers for the merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on the company or the merger.

Citi did not make, and it was not provided with, an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the company, and Citi did not make any physical inspection of the properties or assets of the company. Citi’s opinion does not address the company’s underlying business decision to effect the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for the company or the effect of any other transaction in which the company might engage. Citi expressed no view as to, and its opinion does not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation to any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the merger consideration. Citi’s opinion was necessarily based on information available to Citi, and financial, stock market and other conditions and circumstances existing, as of the date of its opinion.

In preparing its opinion, Citi performed a variety of financial and comparative analyses, including those described below. The summary of these analyses is not a complete description of the analyses underlying Citi’s opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. Citi arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion. Accordingly, Citi believes that its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying its analyses and opinion.

In its analyses, Citi considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of the company. No company, business or transaction used in those analyses as a comparison is identical or directly comparable to the company or the merger, and an evaluation of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed.

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The estimates contained in Citi’s analyses and the valuation ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by its analyses. In addition, analyses relating to the value of businesses or securities do not necessarily purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, Citi’s analyses are inherently subject to substantial uncertainty.

The type and amount of consideration payable in the merger was determined through negotiations between the company and HP and the decision to enter into the merger was solely that of the company’s board of directors. Citi’s opinion was only one of many factors considered by the company’s board of directors in its evaluation of the merger and should not be viewed as determinative of the views of the company’s board of directors or management with respect to the merger or the merger consideration.

The following is a summary of the material financial analyses presented to the company’s board of directors in connection with the delivery of Citi’s opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand Citi’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Citi’s financial analyses.

Historical Trading Range

Citi reviewed the performance of the company’s common stock, including the trading volume of the company’s common stock, during the three-year period ended May 9, 2008. Citi noted, among other matters, the percentage of time during this period that the price of the company’s common stock was above $22.00, $23.00, $24.00, and $25.00 per share, respectively. Citi also noted that since the date of its earnings announcement for the second fiscal quarter of 2007, the company’s common stock had not traded above $25.00 per share. Citi further noted that during the 52-week period ended May 9, 2008, the company’s common stock traded in a range of $15.71 to $29.13 per share and that the average per share price of the company’s common stock was $21.92. Citi noted that the per share merger consideration of $25.00 was within this range.

Stock Trading History and Implied Premiums

Citi considered the merger consideration of $25.00 per share offered to holders of the company’s common stock in the merger and calculated the implied premiums represented relative to the closing price of the company’s common stock on May 9, 2008, the highest and lowest closing stock price for the company’s common stock for the 52-week period ended May 9, 2008, and the average closing stock prices of the company’s common stock for the ten-day, thirty-day, ninety-day and one-year periods ended May 9, 2008. The results of this analysis are set forth below:

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Selected Precedent Transactions Analysis

Citi reviewed and compared premiums paid in selected precedent transactions, not including those deemed to be hostile. In analyzing 92 selected global technology transactions with deal values over $1 billion occurring between 2002 and 2008, Citi found the median one-day transaction premiums paid in each year to be, 29.7%, 16.2%, 27.3%, 18.5%, 18.0%, 26.4% and 33.5%, respectively, and, the median one-week transaction premiums paid by year to be, 23.3%, 26.0%, 29.1%, 25.8%, 21.6%, 26.7% and 30.3%, respectively. The median one-day and one-week transaction premiums for all 92 transactions were 21.7% and 25.8%, respectively. In analyzing 263 selected cash acquisitions of U.S. companies with deal values over $1 billion (excluding financial services and REIT transactions) occurring between 2002 and 2008, Citi found the median one-day transaction premiums paid in each year to be, 33.0%, 27.2%, 26.6%, 26.1%, 23.3%, 27.5% and 41.8%, respectively and, the median one-week transaction premiums paid by year to be, 30.8%, 28.4%, 27.8%, 30.7%, 26.2%, 26.7% and 35.3%, respectively. The median one-day and one-week transaction premiums for all 263 transactions were 26.4% and 27.7%, respectively. Based on this analysis, Citi applied a premium range of 20% to 35% to the price per share of the company’s common stock on May 9, 2008. The application of the 20% to 35% premium range resulted in an implied per share reference range for the per share value of the company’s common stock of $22.63 to $25.46. Citi noted that the per share merger consideration of $25.00 was within this range.

Selected Publicly Traded Companies Analysis

Citi reviewed financial and stock market information and public market trading multiples of the company and the following seven selected publicly held IT services companies:

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As part of its selected comparable company analysis, Citi calculated and analyzed each company’s ratio of its current stock price to its estimated earnings per share (P/E) for calendar years 2008 and 2009. In addition, Citi calculated and analyzed each company’s ratio of its equity value (calculated as fully diluted shares at the stock price less any option proceeds) to its levered free cash flow (calculated as operating cash flow less capital expenditures including acquired software and outsourcing contracts) for the latest twelve months and estimated levered free cash flow for calendar year 2008. Citi also calculated and analyzed each company’s ratio of its firm value (calculated as equity value plus straight debt, minority interest, straight preferred stock, and out-of-the-money convertibles, less cash and long term investments) to its unlevered free cash flow (calculated as levered free cash flow excluding the impact of after-tax interest expense and income), to its EBITDA (calculated as earnings before interest, taxes, depreciation and amortization) and to its EBIT (calculated as earnings before interest and taxes), for the latest twelve months and as estimated for calendar year 2008. The results of this selected publicly traded comparable companies analysis are summarized below:

Estimated financial data of the selected companies were based on research analysts’ estimates, public filings and other publicly available information. Estimated financial data of the company was based on internal estimates of the company’s management. Based on the comparable company metrics analyzed by Citi, Citi selected a multiple range of 11x to 15x for the company’s estimated P/E ratio for calendar year 2008, a multiple range of 10x to 13x for the company’s estimated P/E ratio for calendar year 2009 and a multiple range of 10x to 14x for the ratio of the company’s equity value to its levered free cash flow for the latest twelve months. This analysis indicated the following selected per share equity reference range for the company’s common stock, as compared to the per share merger consideration:

Research Analyst Price Targets

Citi reviewed the reports of sixteen research analysts found in publicly available equity research. Of the sixteen analyst reports, ten had published price targets. The analysis indicated the following per share reference range for the value of the company’s common stock:

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Discounted Cash Flow Analysis

Citi performed two discounted cash flow analyses to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that the company could generate for calendar year 2008 through calendar year 2012. One analysis was based on the company’s public filings and internal estimates provided by the company’s management, and the second analysis was based on a publicly available research model that in Citi’s view, represented consensus estimates. Estimated terminal values for the company were calculated by applying a range of unlevered free cash flow terminal value multiples of 11x to 15x to the company’s calendar year 2012 estimated unlevered free cash flow. The cash flows and terminal values were then discounted to present value using discount rates ranging from 8% to 10%. This analysis indicated the following implied per share equity reference ranges for the company’s common stock, as compared to the per share merger consideration of $25.00 per share:

Present Value of the Company’s Future Share Price and Dividends

Citi performed an analysis of the implied present value of the company’s common stock and dividends. For purposes of the analysis, Citi assumed:

Citi calculated the implied present values per share of the company’s common stock plus dividends by applying future P/E multiples of 12.2x (representing, as of May 9, 2008, the year to date average of the next twelve month P/E multiples of Accenture Ltd., Affiliated Computer Services, Inc., Atos Origin, Capgemini, CGI Group Inc., Computer Sciences Corp. and Perot Systems Corp.) and 15.5x (representing the average of the next twelve month P/E multiples of the peer group for calendar years 2005 to 2007) to estimated earnings per share of the company for calendar year 2012, and then discounted the value as of January 1, 2012 back to May 9, 2008, using equity discount rates ranging from 9% to 11%, based on a capital asset pricing model. Citi’s analysis resulted in a range of implied present values per share of the company’s common stock at a 10% equity discount rate of $21.35 to $26.93 as of May 9, 2008. Citi noted that the per share consideration in the merger of $25.00 was within this range.

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Miscellaneous

Under the terms of Citi’s engagement, the company has agreed to pay Citi for its financial advisory services in connection with the merger an aggregate fee of approximately $30 million, $3 million of which became payable upon the execution of the merger agreement and approximately $27 million of which is contingent upon consummation of the merger. Subject to certain limitations, the company also has agreed to reimburse Citi for reasonable travel and other expenses incurred by Citi in performing its services, including reasonable fees and expenses of its legal counsel, and to indemnify Citi and related persons against liabilities, including liabilities under the federal securities laws, arising out of its engagement.

Citi and its affiliates in the past have provided, currently are providing and in the future may provide services to the company and certain of its affiliates unrelated to the proposed merger, for which services Citi and its affiliates have received, and expect to receive, compensation, including, without limitation, having acted or acting (i) as financial advisor to the company in connection with the acquisition of a majority stake in MphasiS BFL Limited in 2006 and in connection with the acquisition of Saber Corp. in 2007, (ii) acting as manager to the offer in connection with an open offer by an affiliate of the company to the shareholders of MphasiS BFL Limited in 2006 and (iii) acting as joint lead arranger and lender under a $1 billion credit facility for the company extended in 2006. In connection with these services, during the last two years, we paid Citi or its affiliates fees of approximately $8.8 million in the aggregate. In addition, Citi and its affiliates in the past have provided, currently provide and in the future may provide, services to HP unrelated to the proposed merger, for which services we and such affiliates have received and expect to receive compensation, including, without limitation, (i) having acted as underwriter in connection with certain debt financings of HP in 2007 having an aggregate value of $4 billion and (ii) acting as joint lead arranger and/or lender under certain credit facilities of HP, including its existing $3 billion 364-day revolving credit facility and $3 billion revolving credit facility. In the ordinary course of our business, Citi and its affiliates may actively trade or hold the securities of the company and HP for their own account or for the account of their customers and, accordingly, may at any time hold a long or short position in such securities. In addition, Citi and its affiliates (including Citigroup Inc. and its affiliates) may maintain relationships with the company, HP and their respective affiliates.

The company selected Citi to provide certain financial advisory services in connection with the merger based on Citi’s reputation and experience. Citi is an internationally recognized investment banking firm which regularly engages in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes.

 Opinion of Evercore Group L.L.C.

Evercore was retained by the company as a financial advisor for the purpose of providing to the company’s board of directors an opinion with respect to the fairness, from a financial point of view, of the consideration to be received by the company’s stockholders in the merger. Evercore is a nationally recognized investment banking firm that is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions and similar transactions. The company retained Evercore based on these qualifications.

On May 13, 2008, Evercore rendered to the company’s board of directors an oral opinion, which was confirmed by delivery of a written opinion dated May 13, 2008, to the effect that, as of such date and based upon and subject to the factors, limitations and assumptions set forth in its opinion, the merger consideration is fair, from a financial point of view, to the holders of shares of the company’s common stock entitled to receive the merger consideration.

The full text of the written opinion of Evercore, dated May 13, 2008, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken in rendering its opinion, is attached as Annex C to this proxy statement and is incorporated by reference in its entirety into this proxy statement. We urge you to read the opinion in its entirety. Evercore’s opinion is directed to the company’s board of

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directors, addresses only the fairness from a financial point of view of the merger consideration to the holders of our common stock entitled to receive the merger consideration pursuant to the merger agreement. Evercore’s opinion does not constitute a recommendation to the company’s board of directors or to any other person with respect to the merger, including as to how any stockholder should vote or act in respect of the merger. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to the company or the underlying business decision of the company to engage in the Merger. The following is a summary of Evercore’s opinion and the methodology that Evercore used to render its opinion.

In connection with rendering its opinion, Evercore, among other things:

For purposes of its analysis and opinion, Evercore assumed and relied upon, without undertaking any independent verification of, the accuracy and completeness of all of the information publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by Evercore, and Evercore assumes no liability therefor. With respect to the Management Projections, Evercore assumed that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of the company as to the future matters covered by the Management Projections.

For purposes of rendering its opinion, Evercore assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the merger agreement were true and correct, that each party will perform all of the covenants and agreements required to be performed by it under the merger agreement and that all conditions to the consummation of the merger will be satisfied without material waiver or modification thereof. Evercore further assumed that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the merger will be obtained without any material delay, limitation, restriction or condition that would have an adverse effect on the company or the consummation of the merger.

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Evercore did not make or assume any responsibility for making any independent valuation or appraisal of the assets or liabilities of the company, it was not furnished with any such appraisals, and it did not evaluate the solvency or fair value of the company under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to Evercore as of, the date of its opinion. Evercore’s opinion notes that subsequent developments may affect the opinion and that Evercore does not have any obligation to update, revise or reaffirm its opinion.

Evercore was not asked to pass upon, and expressed no opinion with respect to, any matter other than the fairness to the holders of our common stock, from a financial point of view, of the merger consideration. Evercore did not express any view on, and its opinion does not address, the fairness of the proposed transaction to, or any consideration received in connection therewith by, the holders of any other securities, creditors or other constituencies of the company, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the company, or any class of such persons, whether relative to the merger consideration or otherwise. Evercore assumed that any modification to the structure of the merger will not vary in any respect material to its analysis. Evercore’s opinion noted that Evercore is not a legal, regulatory, accounting or tax expert and that Evercore assumed the accuracy and completeness of assessments by the company and its advisors with respect to legal, regulatory, accounting and tax matters.

Set forth below is a summary of the material financial analyses presented by Evercore to the company’s board of directors in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by Evercore. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by Evercore. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before May 10, 2008, and is not necessarily indicative of current market conditions.

The following summary of financial analyses includes information presented in tabular format. You should read these tables together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses.

Analysis of Historical Trading Prices and Implied Transaction Premiums. Evercore reviewed the historical closing prices of our common stock over a two-year period beginning May 10, 2006 and ending May 9, 2008 (the last trading day before we publicly confirmed market rumors regarding the transaction discussions with HP), calculated the average daily closing prices of our common stock over various time periods, and noted the closing stock price on selected dates including and prior to May 9, 2008. Evercore then calculated and compared the premium that the merger consideration represented relative to the average daily closing prices of our common stock for the selected periods and dates. The results of these calculations are summarized below:

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Peer Group Trading Analysis. Evercore calculated and compared enterprise value as a multiple of EBITDA for the company and for selected publicly-traded companies. Evercore calculated multiples for the selected companies by dividing the total enterprise value (based on the closing share prices as of May 9, 2008) by calendarized estimates for 2008 and 2009 EBITDA for each respective company (for EBITDA, Evercore primarily relied on Computer Sciences Corp. multiples given similarities with EDS in the capital intensity of the business). Evercore also calculated and compared the share price as a multiple of each of 2008 and 2009 estimated earnings per share and equity value as a multiple of each of 2008 and 2009 estimated free cash flow (“FCF”). All of these calculations were based on publicly available filings and financial data provided by Wall Street Research and FactSet. The range of implied multiples that Evercore calculated is summarized below:

Evercore then applied the multiples to the company’s 2008 and 2009 estimated EBITDA (which excludes employee stock options expense), earnings per share and FCF. Evercore also applied the selected FCF multiple range to the company’s 2008 and 2009 adjusted FCF estimates (with FCF being adjusted to account for certain capital lease adjustments to capital expenditures and to exclude non-recurring after-tax proceeds from asset sales). The range of per share equity values for our common stock implied by this analysis is summarized below:

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Present Value of Future Stock Price Analysis. Evercore performed an analysis of the present value of the company’s future share price using four methodologies.

First, Evercore calculated a range of implied per share values for our common stock determined by (i) calculating the implied enterprise value by multiplying our EBITDA estimates for 2010 by a range of forward total enterprise value to EBITDA multiples of 4.0x to 5.0x, (ii) calculating the present value of the total enterprise value by discounting the amount resulting from the calculation described in clause (i) above using an assumed weighted average cost of capital (weighted average cost of capital is a measure of the average expected return on all of a company’s securities or loans based on the proportions of those securities or loans in such company’s capital structure) of between 9.5% and 10.5%, (iii) calculating the equity value by adjusting the amount calculated in clause (ii) above by cash, debt, and convertible debt, and the present value of after tax employee stock option expenses, and (iv) dividing the equity values calculated in clause (iii) above by the fully diluted share count.

Second, Evercore calculated a range of implied per share values for our common stock determined by (i) calculating the implied value per share by multiplying our earnings per share estimates for 2010 by a range of price to earnings multiples of 13.0x to 16.0x, (ii) calculating the present value of the implied share price by discounting the amount resulting from the calculation described in clause (i) above using an assumed equity cost of capital of between 11.0% and 13.0%, and (iii) adding the result from the calculation described in clause (ii) above to the present value of the dividends per share received in 2008 and 2009 using an assumed equity cost of capital of between 11.0% and 13.0%.

Third, Evercore calculated a range of implied per share values for our common stock determined by (i) calculating the implied equity value at December 31, 2009 by multiplying our FCF estimates for 2010 by a range of FCF multiples of 12.0x to 15.0x, (ii) calculating the price per share at December 31, 2009 by dividing the equity value calculated in clause (i) above by the estimated number of outstanding shares of our common stock, (iii) calculating the present value of the implied share price by discounting the amount resulting from the calculation described in clause (ii) above using an assumed equity cost of capital of between 11.0% and 13.0%, and (iv) adding the result from the calculation described in clause (ii) above to the present value of the dividends per share received in 2008 and 2009 using an assumed equity cost of capital of between 11.0% and 13.0%.

Fourth, Evercore calculated a range of implied per share values for our common stock determined by (i) calculating the implied equity value at December 31, 2009 by multiplying our adjusted FCF estimates for 2010 by a range of adjusted FCF multiples of 12.0x to 15.0x, (ii) calculating the price per share at December 31, 2009 by dividing the equity value calculated in clause (i) above by the estimated number of outstanding shares of our common stock, (iii) calculating the present value of the implied share price by discounting the amount resulting from the calculation described in clause (ii) above using an assumed equity cost of capital of between 11.0% and 13.0%, and (iv) adding the result from the calculation described in clause (ii) above to the present value of the dividends per share received in 2008 and 2009 using an assumed equity cost of capital of between 11.0% and 13.0%.

The analysis yielded implied per share present values of our common stock as shown below:

Discounted Cash Flow Analysis. Evercore performed a discounted cash flow (“DCF”) analysis, which calculates the present value of a company’s future cash flow based upon assumptions with respect to such cash flow and assumed discount rates.

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Evercore calculated a range of implied per share values for our common stock determined by:

(a) adding (1) the implied present value of our forecasted unlevered free cash flows (operating income less income taxes, plus depreciation and amortization, plus other non-cash adjustments, less gross capital expenditures, plus after tax proceeds from asset sales and adjusted to reflect changes in working capital) during the projection period, determined using a weighted average cost of capital range of between 9.5% and 10.5%, (2) the implied present value of the terminal value of our future cash flows (the value of future cash flows at a particular point in time), calculated either by multiplying our estimated terminal EBITDA by a range of multiples of 4.0x to 5.0x or our estimated terminal unlevered FCF by a range of multiples of 12.0x to 15.0x, and discounting the result using a weighted average cost of capital range of between 9.5% and 10.5%, and (3) deducting our projected debt, net of estimated cash, and certain minority interests as of March 31, 2008; and

(b) dividing the amount resulting from the calculation described in clause (a) by the number of shares of our common stock outstanding, adjusted for certain restricted stock, warrants and stock options outstanding using the treasury stock method, as of the date of the merger agreement.

This analysis yielded implied per share present values of our common stock as shown below:

Premiums Paid Analysis. Evercore identified and analyzed 46 all cash acquisition transactions across all industries with transaction values from $5.0 billion to $20.0 billion that were announced in the period from January 1, 2002 to May 9, 2008. Using information from Securities Data Corp, a data source that monitors and publishes information on merger and acquisition transactions, Evercore calculated the premiums paid in those transactions based on the value of the per share consideration received in the transaction relative to the closing stock price of the target company one day, one week and four weeks prior to the respective dates of announcement of the transactions. Evercore then compared the results of the analysis to the premiums implied by the merger consideration relative to our common stock trading levels at and prior to May 9, 2008. The results of this analysis are summarized below:

Evercore then applied premiums ranging from 20% to 30% to the closing price of our common stock one day, one week and four weeks prior to the date of announcement. The range of per share equity values for our common stock implied by this analysis is summarized below:

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Precedent Transactions Analysis. Evercore performed an analysis of selected transactions to compare multiples paid in other transactions to the multiples implied in this transaction. Evercore identified and analyzed a group of twenty-one acquisition transactions classified under “IT Services” and four acquisition transactions classified under “Indian IT Services” that were announced between 2002 and 2008. Evercore noted that in its view, none of these transactions were by themselves directly comparable to the merger, although each could be considered similar to the merger (although not necessarily to each other) in certain limited respects. Because of the unique circumstances of each of these transactions and the merger, Evercore cautioned against placing undue reliance on this analysis. Evercore calculated the premiums paid in those transactions based on the value of the per share consideration received in the transaction relative to the closing stock price of the target company one day and one week prior to the respective dates of announcement of the transactions. Evercore also calculated enterprise value as a multiple of revenue and EBITDA during the last twelve months as well as equity value as a multiple of last twelve months FCF and price as a multiple of last twelve months earnings per share implied by these transactions.

IT Services

Indian IT Services

Based on these transactions, Evercore selected a range of implied multiples and premiums which is summarized below:

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Evercore then applied the multiples to the company’s estimated earnings per share, FCF, and adjusted FCF and applied the premiums to the company’s historical share prices. The range of per share equity values for our common stock implied by this analysis is summarized below:

Research Analyst Stock Price Targets. Evercore analyzed Bloomberg and Wall Street Research analyst estimates of potential future value for the company’s common stock (commonly referred to as price targets) based on publicly available equity research published on the Company. As of April 25, 2008, analyst price targets for the company’s common stock ranged from $16.00 to $26.00 and produced a median price target of $22.50.

General. In connection with the review of the merger by our board of directors, Evercore performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Evercore’s opinion. In arriving at its fairness determination, Evercore considered the results of all the analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Evercore made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all the analyses. In addition, Evercore may have deemed various assumptions more or less probable than other assumptions, so that the range of valuations resulting from any particular analysis described above should therefore not be taken to be Evercore’s view of the value of the company. No company used in the above analyses as a comparison is directly comparable to the company, and no transaction used is directly comparable to the transactions contemplated by the merger agreement. Further, in evaluating comparable transactions, Evercore made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the company and Evercore, such as the impact of competition on the company and the industry generally, industry growth and the absence of any adverse material change in the financial condition of the company or in the markets generally.

Evercore prepared these analyses for the purpose of providing an opinion to our board of directors as to the fairness from a financial point of view of the merger consideration to be received by the holders of our common stock entitled to receive the merger consolidation. These analyses do not purport to be appraisals or to necessarily reflect the prices at which the business or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty and are based upon numerous factors, assumptions with respect to industry performance, general business and economic conditions and other matters or events beyond the control of the company and Evercore, neither the company nor Evercore assumes responsibility if future results are materially different from those forecast. The merger consideration to be received by the holders of our common stock pursuant to the merger agreement was determined through arm’s length negotiations between our board of directors and HP and was approved by our board of directors. Evercore did not recommend any specific merger consideration to the company or that any given merger consideration constituted the only appropriate merger consideration for the merger.

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Pursuant to its engagement letter, a fee of $3,000,000 became payable to Evercore upon delivery of its fairness opinion. In addition, the company agreed to reimburse certain of Evercore’s expenses and to indemnify Evercore for certain liabilities arising out of its engagement. During the two years prior to the date of its opinion, Evercore had provided other financial advisory services to the company, and earned aggregate fees for rendering these services of approximately $300,000. During that same two year period, no material relationship existed between Evercore and HP pursuant to which compensation was received by Evercore.

In the ordinary course of business, affiliates of Evercore may at any time hold long or short positions, and may trade or otherwise effect transactions, for its own account or for the account of customers in the equity and other securities of the company, or any other parties, commodities or currencies involved in the merger.

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 Financial Projections

We do not as a matter of course publicly disclose detailed long-term forecasts or internal projections as to our future revenues, earnings or financial condition. However, we have set forth below a summary of the three-year financial plan that was reviewed with our board of directors in May 2008, or the management projections, and the three-year financial plan that was utilized by Citi in making a presentation to our board on April 1, 2008, or the historical projections, which was based on the three-year financial plan that was reviewed with our board in July 2007 and incorporated certain adjustments, including but not limited to, our reported results for fiscal 2007, as this information was made available to our board of directors, Citi, Evercore and/or HP prior to the execution and delivery of the merger agreement. The management projections and historical projections consisted of projected operating and financial information for the company for 2008, 2009 and 2010. In connection with performing its financial analyses presented to our board at the April 1, 2008 meeting of the board, Citi also utilized additional projected operating and financial information for the company for 2011 and 2012 that was provided to Citi by members of our management and was prepared by extrapolating certain operating and financial information for the company for these years using assumptions that were generally consistent with the assumptions used in connection with the preparation of the historical projections. In addition, in connection with performing their financial analyses presented to our board at the May 10, 2008 meeting of the board, Citi and Evercore also utilized additional projected operating and financial information for the company for 2011 and 2012 that was provided to Citi and Evercore by members of our management and was prepared by extrapolating certain operating and financial information for the company for these years using assumptions that were generally consistent with the assumptions used in connection with the preparation of the management projections.

Neither the management projections, the historical projections nor any other information described in this section was prepared with a view towards public disclosure, but rather for purposes of the board’s consideration of various strategic alternatives and as a means of facilitating Citi’s and Evercore’s analyses and HP’s due diligence investigation. We have included below the material financial projections to provide our stockholders access to certain information that was provided to these parties in connection with the merger. The inclusion of this information should not be regarded as an indication that any recipient of this information considered, or now considers, these projections to be a reliable prediction of our future results. We did not prepare the projections with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or generally accepted accounting principles, and some of the projections present financial metrics that were not prepared in accordance with generally accepted accounting principles. Our independent registered public accounting firm has neither examined nor compiled the projections and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

The projections included below are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those shown below and should be read with caution. See “Cautionary Statement Concerning Forward-Looking Information” beginning on page 19 of this proxy statement. These projections are subjective in many respects and thus susceptible to interpretations and periodic revisions based on actual experience and developments occurring since the date the projections were prepared. Although presented with numerical specificity, the projections are based upon a variety of estimates and hypothetical assumptions made by our management. Some or all of the assumptions may not be realized, and they are inherently subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond our control, and such uncertainties and contingencies can generally be expected to increase with the passage of time from the dates of the projections. Accordingly, the assumptions made in preparing the projections might not prove accurate, and actual results might differ materially. In addition, the projections do not take into account any of the transactions contemplated by the merger agreement, including the merger, which might also cause actual results to differ materially.

For these reasons, as well as the bases and assumptions on which the projections were compiled, the inclusion of the projections in this proxy statement should not be regarded as an indication that the projections will be an accurate prediction of future events, and they should not be relied on as such. No one has made, or makes, any representation regarding the information contained in the projections and we do not intend to update or otherwise revise the projections to reflect circumstances existing after the date when made or to reflect the occurrences of future events even if any or all of the assumptions are shown to be in error.

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The management projections included the following estimates of our future financial performance:

The historical projections included the following estimates of our future financial performance:

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 Interests of Our Directors and Executive Officers in the Merger

In considering the recommendation of our board of directors that you vote to adopt the merger agreement, you should be aware that some of our executive officers and directors may have economic interests in the merger that are different from, or in addition to, those of our stockholders generally. Our board of directors was aware of and considered these interests, among other matters, in reaching its decision to declare the merger agreement advisable and in determining that the merger is fair to, and in the best interests of, EDS and our stockholders, and in approving the merger agreement, the merger and the other transactions contemplated by the merger agreement.

Equity Compensation Awards.

Stock Options. Stock options to purchase shares of our common stock that are outstanding immediately prior to the effective time of the merger, whether or not then vested, will be automatically converted into stock options to acquire, on substantially the same material terms and conditions applicable to such EDS stock options prior to the merger, a number of shares of HP common stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of our common stock subject to the option, and (ii) a fraction (which we refer to as the exchange ratio), the numerator of which is $25.00 and the denominator of which is the average closing price of HP common stock on the NYSE for the five full trading days ending on the date that is two trading days prior to the closing date of the merger. The exercise price for converted options will equal the per share exercise price for the shares of our common stock subject to such options divided by the exchange ratio (rounded up to the nearest whole cent). Any holding periods or other restrictions which applied to the sale of our common stock acquired upon the exercise of EDS stock options will no longer apply following the conversion other than any restrictions under applicable securities laws. The foregoing treatment does not apply to stock options held by Ronald Rittenmeyer, Jeffrey Heller, and Michael Jordan who, by virtue of contractual rights set forth in their respective Change of Control Employment Agreements with the company, are entitled to receive, in exchange for their stock options, the same consideration that is paid to our stockholders in connection with the merger. Accordingly, such individuals will receive, in respect of each of their stock options, a cash payment equal to the excess of $25.00 over the applicable per share exercise price multiplied by the number of shares subject to such option.

Restricted Stock Units. Restricted stock units denominated in shares of our common stock that are outstanding immediately prior to the completion of the merger, whether or not then vested or earned, will automatically be converted into the right to receive restricted stock units with respect to the number of shares of HP common stock (rounded down to the nearest whole share) calculated by multiplying the number of shares of our common stock subject to the EDS restricted stock unit by the exchange ratio. Any performance-based vesting requirements that are applicable to any EDS restricted stock units that are converted into HP restricted stock units will, upon completion of the merger, be deemed satisfied and will no longer apply, and the HP restricted stock units received by holders of EDS restricted stock units will be subject to the same time-based vesting schedule to which such EDS restricted stock units are subject prior to the completion of the merger, and such restricted stock units will otherwise have material terms and conditions that are substantially the same as those of the related EDS restricted stock unit. Any holding periods or other restrictions which applied to the sale of common stock acquired upon the vesting of EDS restricted stock units will no longer apply following the conversion other

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than any restrictions under applicable securities laws. The foregoing treatment does not apply to restricted stock units held by Ronald Rittenmeyer, Jeffrey Heller, and Michael Jordan who, by virtue of contractual rights set forth in their respective Change of Control Employment Agreements with the company, are entitled to receive, in exchange for their restricted stock units, the same consideration that is paid to our stockholders in connection with the merger. Accordingly, such individuals will receive, in respect of each share of our common stock represented by their restricted stock units, a cash payment equal to $25.00.

Employee Stock Purchase Plan. We will establish an exercise date under the EDS 1996 Employee Stock Purchase Plan, which we refer to as the ESPP, no later than the last day of the payroll period ending immediately prior to the completion of the merger (but at least ten business days prior to the completion of the merger) with respect to any offering to purchase shares of our common stock otherwise then in effect. In addition, we will terminate the ESPP as of the newly established exercise date, or an earlier date that we determine to be administratively reasonable. Each ESPP participant’s accumulated payroll contributions as of the newly established exercise date that are not withdrawn as of such date will be applied toward the purchase of shares of our common stock in accordance with the terms of the ESPP, which shares will be cancelled upon the completion of the merger in exchange for the right to receive $25.00 per share, without interest, less any applicable withholding taxes. Under the merger agreement, we have agreed not to permit any new offering to commence under the ESPP or any current participant in the ESPP to increase the percentage rate of his or her payroll deductions into his or her account under the ESPP.

Change of Control Employment Agreements. We are party to change of control employment agreements with each of Ronald Rittenmeyer, Jeffrey Heller, Charles Feld, Storrow Gordon, Jeffrey Kelly, Michael Koehler, William Thomas, and Ronald Vargo. These agreements provide that in the event of a change of control of EDS, we will employ the aforementioned employees until the second anniversary of the change of control, during which period they will be entitled to the same salary and benefits to which they were entitled prior to the change of control. The consummation of the merger will constitute a change of control for purposes of these agreements.

The agreements also provide for additional payments and benefits to the executives, which are triggered upon the occurrence of one of the following events: (i) termination without “cause” (as defined in the agreements) during the two-year period following a change of control; (ii) resignation for “good reason” (as defined in the agreements) during the two-year period following a change of control; (iii) termination without cause “in anticipation of” a change of control (as defined in the agreements); and (iv) resignation for good reason “in anticipation of” a change of control (as defined in the agreements), which we refer to as a qualifying termination of employment. The payments and benefits which are triggered upon a qualifying termination of employment are as follows: (A) 2.99 times base salary and 2.99 times the executive’s target bonus amount for the year in which termination occurs; (B) immediate vesting of stock options, restricted stock units, and deferred stock units (except for Messrs. Rittenmeyer and Heller, whose stock options, restricted stock units, and deferred stock units vest immediately upon a change of control, regardless of whether a qualifying termination of employment has occurred); (C) immediate vesting of performance restricted stock units and performance deferred stock units, in each case at their “target” amount (except for Messrs. Rittenmeyer and Heller, whose performance restricted stock units and performance deferred stock units vest immediately upon a change of control, regardless of whether a qualifying termination of employment has occurred); and (D) vested stock options will remain exercisable until the earliest of (x) the first anniversary of the date of termination, (y) the latest expiration date originally set forth in the relevant grant agreement; and (z) the 10th anniversary of the date of grant (or, with respect to stock options awarded to Messrs. Feld and Koehler in connection with EDS’ acquisition of The Feld Group, Inc., the tenth anniversary of the date of grant). The agreements for Messrs. Rittenmeyer and Heller also provide that such individuals are entitled to receive the same consideration that stockholders of EDS receive in connection with a change of control in exchange for their equity awards.

In the event that these benefits trigger any excise or penalty taxes under either Sections 280G and 4999 of the Internal Revenue Code, or Section 409A of the Internal Revenue Code, these agreements also provide that “gross-up” payments will be made to the executives in order to cover such tax liability. If the benefits to which an executive is entitled under his or her agreement constitute a “parachute payment” under Section 280G of the Internal Revenue Code, and such benefits equal an amount less than 110% of 2.99 times such executive’s “base amount” (as such term is defined in the Internal Revenue Code), the benefits will be reduced to an amount equal to 2.99 times such executive’s base amount.

We are also party to a change of control employment agreement with Tina Sivinski. This agreement provides that we will employ Ms. Sivinski from the date of a change of control until the third anniversary of the change of control, during which time she will generally be entitled to the same salary and benefits to which she was entitled prior to the change of control, including (i) an annual cash bonus equal to the greater of the highest annual bonus paid to her during any of the

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preceding three fiscal years or an amount comparable to the annual bonuses awarded to similarly-situated executives at EDS, and (ii) grants of stock options, restricted stock units, and performance awards, which must be granted no less frequently than such awards were granted to her in the past and generally be subject to the same terms as past grants. The consummation of the merger will constitute a change of control for purposes of this agreement.

The agreement provides that if Ms. Sivinski’s employment is terminated by us during the three-year employment period without “cause” or by Ms. Sivinski for “good reason,” or she terminates her employment for any reason during the six-month period beginning six months after a change of control, she will be entitled to the following payments and benefits: