November 29, 2005
By Facsimile and U.S. Mail
John W. Martin, Esq.
Baker Botts LLP
2001 Ross Avenue, Suite 800
Dallas Texas 75201
Re: Perot Systems Corporation
Schedule TO-I
Filed November 15, 2005
Dear Mr. Martin:
We have the following comments on the above-referenced
filing:
Summary of Terms, page 8
1. In Q&A Nos. 35 and 36 you recommend that option holders consult
a
tax professional to determine the tax consequences of the offer.
Option holders may rely on the disclosure that appears in your
filing, including disclosure relating to tax consequences. Please
revise or eliminate the referenced disclaimers. If you wish to
alert
option holders that their tax consequences may differ based on
their
particular situation, then please revise the disclosure to clarify
this fact. Also revise the similar language on page 27 that
recommends to option holders that they seek the advice of their
"own
legal, investment and/or tax advisors if [they] have questions
about
[their] legal, financial and/or tax situation."
Conditions of the Offer, page 30
2. The introductory paragraph addresses the company`s ability to
determine whether the triggering of a condition "makes it
inadvisable" to proceed with the offer. Please note that, when a
condition is triggered and the company decides to proceed with the
offer anyway, we believe that this constitutes a waiver of the
triggered condition(s). You may not rely on this language to
tacitly
waive a condition of the offer by failing to assert it. Please
confirm your understanding on a supplemental basis.
3.
Paragraphs (a) and (b)(3) condition the offer on whether the
"contemplated future conduct" or the "prospects" of the company or
its subsidiaries is materially impaired. Please revise to specify
or
generally describe the "contemplated future conduct" and
"prospects"
so that option holders will have the ability to objectively
determine
whether these conditions have been triggered. Also revise
paragraphs
(d)(5) and (f)accordingly.
4. Please revise the conditions to eliminate repetition. It
appears
that the conditions in paragraphs (a) and (b) address many of the
same situations.
5. In condition (d)(7) you state that the condition is triggered
by a
decline in the named benchmarks in "any time period after the
close
of business on November 15, 2005." Please revise to clarify how
the
decline is determined
Effect of a Merger or Acquisition Before We Grant Replacement
Options, page 34
6. Here and elsewhere in the document you discuss what may happen
to
tendered options "if [you] merge into or are acquired by another
company after [you] accept eligible options for exchange in the
Offer
but before we grant the replacement options." As there are
currently
only five calendar days between the scheduled expiration of this
offer and the date you intend to issue replacement options, revise
this language here and throughout the document to clarify the risk
to
option holders.
General Terms of Replacement Options . . . , page 34
7. Confirm, if true, that you have summarized all material terms
of
the replacement options and the eligible options, and that you
have
summarized all material difference between the two options.
Revise
the offer to eliminate the disclaimer on page 39.
Material U.S. Federal Income Tax Consequences, page 45
8. Please eliminate the qualifier that this disclosure is "a
general
summary." Also, eliminate qualifiers such as "we believe" and
"generally" and the disclaimer in the penultimate sentence of the
first paragraph. The current disclosure suggests that security
holders may not rely on the description of material tax
consequences
included in the document.
9. Revise this section to affirmatively state the tax consequences
of
the exercise of the amended options. It appears you should revise
the summary term sheet to highlight this tax effect.
10. Revise to eliminate the IRS Circular 230 Disclosure disclaimer
or
tell us why you believe it is applicable.
Additional Information, page 47
11. Schedule TO does not specifically allow you to forward
incorporate disclosure in subsequently filed documents. In fact,
doing so is inconsistent with the technical requirements of
General
Instruction F of Schedule TO and your obligation under Rules 13e-
4(c)(3) and 13e-4(e)(3) to amend the Schedule to reflect a
material
change in the information previously disclosed. Please revise the
second and third paragraphs of this section, and the similar
disclaimer in the section entitled "Forward-Looking Statements"
accordingly.
Closing Comments
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
* * *
Please respond to these comments by promptly amending the
filing and submitting a response letter filed via EDGAR under the
label "CORRESP." If the information you provide in response to
our
comments materially changes the information that you have already
provided to option holders, disseminate the revised materials in a
manner reasonably calculated to inform them of the new
information.
If you do not agree with a comment, please tell us why in your
response. Direct any questions to me at (202) 551-3262. You may
also contact me by facsimile at (202) 772-9203.
Sincerely,
Abby Adams
Special Counsel
Office of Mergers and Acquisitions
??
??
??
??
John W. Martin, Esq.
November 29, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0303
DIVISION OF
CORPORATION FINANCE