SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
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PEROT SYSTEMS CORPORATION
(Name of Registrant as Specified in its Charter)
----------
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
perotsystem(R)
PEROT SYSTEMS CORPORATION
2300 W. Plano Parkway
Plano, Texas 75075
------------------------------
Notice of Annual Meeting of Stockholders
Wednesday, May 7, 2003
3:30 p.m. - Central Daylight Time
------------------------------
Perot Systems Corporation
Plano Campus Cafeteria, West Lobby
2300 West Plano Parkway
Plano, Texas 75075
April 2, 2003
TO OUR STOCKHOLDERS
On behalf of the Board of Directors, you are cordially invited to attend
the 2003 Perot Systems Corporation Annual Meeting of Stockholders. At the
Annual Meeting, we will be electing our directors and conducting any other
business properly brought before the meeting.
Voting is limited to stockholders of record at the close of business on
March 24, 2003.
If you plan to attend the meeting in person, please bring to the Annual
Meeting one of the admission tickets provided with these proxy materials.
Sincerely yours,
/s/ Ross Perot
Ross Perot
Chairman
perotsystems(R)
PEROT SYSTEMS CORPORATION
------------------------------
PROXY STATEMENT
------------------------------
FOR
ANNUAL MEETING OF STOCKHOLDERS
Perot Systems Corporation is furnishing you this Proxy Statement on behalf
of its Board of Directors to solicit proxies for its Annual Meeting of
Stockholders and any adjournments or postponements of the Annual Meeting. We
will hold the Annual Meeting at our Plano Campus Cafeteria, 2300 West Plano
Parkway, Plano, Texas on Wednesday, May 7, 2003, at 3:30 p.m. local time. We
first mailed these proxy materials to our stockholders on or about April 2,
2003.
PURPOSE OF MEETING
We are holding the Annual Meeting for the stockholders to elect our
directors and to conduct any other business that properly comes before the
Annual Meeting.
VOTING AND SOLICITATION
Right to Vote and Record Date
Our Class A Common Stock, par value $.01 per share, is the only type of
security entitled to vote at the Annual Meeting. Each share of Class A Common
Stock that you owned as of the close of business on March 24, 2003 entitles you
to one vote for each of the eight nominees for director and one vote on any
other proposal properly brought before the Annual Meeting. On March 24, 2003,
there were 105,697,110 shares of Class A Common Stock outstanding.
Quorum; Adjournment
The holders of at least a majority of the voting power of our issued and
outstanding shares of Class A Common Stock must be present, in person or by
proxy, to constitute a quorum for the transaction of business at the Annual
Meeting. We count abstentions to determine whether a quorum exists for the
transaction of business. We also count broker non-votes, which we describe in
more detail below, as shares present or represented at the Annual Meeting for
purposes of determining whether a quorum exists.
Voting at the Annual Meeting
If your shares of Class A Common Stock are registered directly with Mellon
Investor Services, you are a "record holder" and may vote in person at the
Annual Meeting. If you hold your shares through a stockbroker, bank or other
nominee, your shares are held in "street name" and you are the "beneficial
holder." If you hold your shares in street name, in order to vote in person at
the Annual Meeting, you must obtain a proxy from your broker or nominee.
1
Voting By Proxy
Whether or not you are able to attend the Annual Meeting, we urge you to
vote by proxy.
Shares Held of Record
If you are a record holder, you can vote your shares using one of the
following methods:
o the Internet website shown on the proxy card,
o by telephone using the toll-free number shown on the proxy card, or
o a completed and returned written proxy card.
We must receive votes submitted through the Internet or by telephone by
11:59 p.m., Eastern Daylight Time, on May 6, 2003. Internet and telephone
voting are available 24 hours a day, and if you use one of those methods, you
do not need to return a proxy card. Submitting your voting instructions by any
of the methods mentioned above will not affect your right to attend the Annual
Meeting and vote.
If you vote by phone or via the Internet, please have your social security
number and proxy or voting instruction card available. The sequence of numbers
appearing on your card and your social security number are necessary to verify
your vote.
Shares Held in Street Name
If you hold your shares in street name, you should follow the directions
provided by your broker regarding how to instruct your broker to vote your
shares. Without instructions from you, your broker has discretion to vote your
shares on "routine matters," such as the election of directors.
How The Proxy Holders Will Vote Your Proxy
The proxy holders will vote as you direct if you properly complete your
proxy. If you submit a proxy but do not provide directions on how to vote, your
proxy will be voted as follows:
o FOR the nominees of the Board of Directors, and
o In the discretion of the proxy holders, with respect to any other
matters that may properly come before the Annual Meeting.
Changing Your Vote
You may revoke or change your proxy at any time before the Annual Meeting.
The procedures for changing your vote differ depending on how you own your
shares. If you are a record holder of your Perot Systems shares, you may change
your vote by:
o submitting another proxy with a later date before the beginning of the
Annual Meeting,
o sending a written notice of revocation to the Secretary of Perot
Systems at 2300 W. Plano Parkway, Plano, Texas 75075 that is received
before the beginning of the Annual Meeting, or
o attending the Annual Meeting and voting in person.
If you hold your shares in street name, you may change your vote by
submitting new voting instructions to your broker or nominee.
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Vote Required
Board of Directors
The eight nominees receiving the highest number of affirmative votes will
be elected directors of Perot Systems and will serve until the next Annual
Meeting and until their successors have been elected and qualified. We do not
have cumulative voting for the election of directors.
Other Matters
Approval of any other matter considered at the Annual Meeting will require
the affirmative vote of a majority of the shares present or represented by
proxy and entitled to vote at the Annual Meeting.
Broker Non-Votes and Abstentions
A broker non-vote occurs when a broker holds shares in street name for a
customer and the customer does not direct the broker's vote with respect to the
approval of non-routine matters.
With respect to the election of directors, a broker will have
discretionary authority to vote the shares if the beneficial owner has not
given instructions.
Solicitation of Proxies
Perot Systems will pay all costs of the solicitation. We will furnish
copies of solicitation material to fiduciaries and custodians holding shares in
street name that others beneficially own. We will conduct the original
solicitation by mail or, in cases where the stockholder has previously
consented to electronic delivery, by electronic means. We may supplement the
original solicitation with a solicitation by telephone, telegram, or other
means by our directors, officers, or employees. We will not pay additional
compensation to these individuals for their services. We do not plan to solicit
proxies by means other than those we have described above.
PROPOSAL
ELECTION OF DIRECTORS
General
Our bylaws provide that the number of our directors will not be less than
one, with the exact number to be fixed by the Board of Directors. The Board of
Directors has fixed the number of directors at eight. We are proposing the
reelection of all eight of our current directors to hold office for a term of
one year, expiring at the close of the 2004 Annual Meeting of Stockholders or
when their successors are elected and qualified. We have listed the nominees
and their positions and offices with Perot Systems below. The proxy holders
will vote all duly executed proxies received for the nominees listed below
unless you instruct them otherwise. If any nominee is unable or declines to
serve as a director at the time of the Annual Meeting, the proxy holders will
vote the proxies for any nominee designated by the current Board to fill the
vacancy, unless the Board reduces the number of directors to be elected at the
Annual Meeting. The Board is not aware of any nominee who is unable or who will
decline to serve as a director.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION OF EACH OF
THE NOMINEES LISTED BELOW.
3
Directors and Their Business Experience
Ross Perot is Chairman of the Board and has served as a director of Perot
Systems since 1997. Mr. Perot is a founder of Perot Systems, served as Perot
Systems' President and Chief Executive Officer from November 1997 through
August 2000 and served as a director from 1988 through 1994. Mr. Perot is
currently a private investor. Mr. Perot is the father of Ross Perot, Jr. Age
72.
Ross Perot, Jr. has served as President and Chief Executive Officer since
September 2000 and as a director since 1988. Mr. Perot previously served as
President of Hillwood Development Corporation, a real estate development
company, from March 1988 until May 1998 and President of Hillwood DBL Partners,
Inc. from August 1996 until April 2000. Mr. Perot remains Chairman of Hillwood
Development. Mr. Perot is the son of Ross Perot. Age 44.
Steve Blasnik has served as a director of Perot Systems since 1994. Mr.
Blasnik is a director and President of Perot Investments, Inc., a private
investment firm affiliated with our Chairman, Ross Perot. Mr. Blasnik also
serves as a director and member of the compensation committee of Zonagen, Inc.
Age 45.
James Champy has served as a Vice President and director of Perot Systems
since 1996. Mr. Champy also serves as a trustee and member of the compensation
committee of the Massachusetts Institute of Technology. Mr. Champy has also
been nominated, and expects to be elected, as a director of Analog Devices,
Inc. Age 60.
John S.T. Gallagher has served as a director of Perot Systems since May
2001. Mr. Gallagher serves as Deputy County Executive of Health and Human
Services for Nassau County, New York and as a Life Trustee of the North
Shore-Long Island Jewish Health System, a customer of Perot Systems. Mr.
Gallagher also serves as a director of Netsmart Technologies, Inc. Mr.
Gallagher served as Chief Executive Officer of North Shore-Long Island Jewish
Health System from October 1997 to December 31, 2001. Age 71.
William K. Gayden has served as a director of Perot Systems since 1998.
Mr. Gayden is the founder, Chairman, and CEO of Merit Energy Company. Mr.
Gayden also serves as a director and member of the audit committee of
Harte-Hanks, Inc., as a director and member of the Compensation Committee of
King Ranch, and as a trustee of Carnegie Institution of Washington. Age 61.
Carl Hahn has served as a director of Perot Systems since 1993. Mr. Hahn
is a private investor. Mr. Hahn previously served as Chairman of Saurer Ltd., a
manufacturer of textile machines, and Chairman of the Board of Management of
Volkswagen AG. Mr. Hahn also serves as a director of Gerling AG, Hawesko, AG,
Sachsenring, AG, and Merloni Electrodomestici Group. Age 76.
Thomas Meurer has served as a director of Perot Systems since May 2001.
Mr. Meurer is currently Senior Vice President of Hunt Consolidated, Inc.,
director and Senior Vice President of Hunt Oil Company, President of AgHoc
Inc., President and director of Hunt Equities Company, and a director of Hunt
Realty Company. Age 61.
Board and Committee Meetings
The Board met five times in 2002. The Board has established the Executive
Committee, Audit Committee, and Compensation Committee to assist in the
discharge of the Board's responsibilities. Members of the committees serve
until their successors are appointed or their earlier resignation or removal.
The Board may establish other committees to facilitate the management of Perot
Systems or for other purposes it deems appropriate. The Board does not have a
nominating committee. Each director attended at least 80% of the Board meetings
during 2002.
4
Executive Committee
The Executive Committee consists of Ross Perot, Ross Perot, Jr., and Steve
Blasnik. The Executive Committee met one time in 2002. Generally, the Executive
Committee has the full power and authority of the Board in the management of
the business and affairs of Perot Systems, except with respect to matters that
cannot be delegated under Delaware law. All members of the Executive Committee
attended 100% of the Executive Committee meetings.
Audit Committee
The Audit Committee consists of William K. Gayden, Carl Hahn, and John
S.T. Gallagher. The Audit Committee met ten times in 2002. All members of the
Audit Committee satisfy the requirements of independence as set forth in the
Audit Committee Policy of the New York Stock Exchange. All members of the Audit
Committee attended at least 90% of the Audit Committee meetings.
The Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing, and
financial reporting practices of Perot Systems. The Audit Committee itself does
not prepare financial statements or perform audits, and its members are not
auditors or certifiers of the Company's financial statements. A charter that
the Board reassesses annually governs the Audit Committee's activities.
The Audit Committee's primary responsibilities and duties are to review
and discuss with our outside independent public accountants our financial
statements and the professional services they provide, including the scope of
their audit coverage, the auditor's reports to management and management's
responses to such reports, and the independence of the accountants from our
management. The Audit Committee also reviews and discusses with management the
scope of our internal audits, summaries of the internal auditors' reports and
activities, the effectiveness of our internal audit staff, possible violations
of our Standards and Ethical Principles, and such other matters with respect to
our accounting, auditing, and financial reporting practices and procedures as
it may find appropriate or as have been brought to its attention. In addition,
the Board has delegated to the Audit Committee the authority to select Perot
Systems' auditors for the 2003 fiscal year.
Compensation Committee
The Board of Directors established the Compensation Committee on March 7,
2002. The Compensation Committee consists of Carl Hahn, John S.T. Gallagher,
and Thomas Meurer. The Compensation Committee met two times in 2002. The
Compensation Committee reviews and makes recommendations on executive officer
compensation, the Company's bonus and retirement plans, the 1999 Employee Stock
Purchase Plan, and executive officer awards under the 2001 Long-Term Incentive
Plan. All members of the Compensation Committee attended 100% of the
Compensation Committee meetings.
Director Compensation
Perot Systems compensates its non-employee directors $2,000 for each
meeting of the Board attended in person. Employee directors receive no
additional compensation for attending Board or committee meetings. We reimburse
our directors for their reasonable travel-related and other out-of-pocket
expenses associated with attending Board and committee meetings.
Perot Systems' 1996 Non-Employee Director Stock Option/Restricted Stock
Incentive Plan provides for the issuance of nonqualified stock options or
restricted stock to our non-employee directors. The Board administers the
Non-Employee Director Plan and has the authority to interpret it. Directors who
are not employees of Perot Systems are eligible to receive awards under the
Non-Employee Director Plan. Perot Systems makes grants to new directors upon
their initial election to the Board and to existing directors at completion of
the original vesting schedule for any existing options or restricted shares
granted to such director under the Non-Employee
5
Director Plan. The Non-Employee Director Plan currently provides for a grant to
each eligible director of (i) an option to purchase 40,000 shares of Class A
Common Stock vesting over five years or (ii) the right to purchase 40,000
restricted shares of Class A Common Stock vesting over five years. The exercise
price of options or the purchase price of restricted shares of Class A Common
Stock must be at least equal to 100% of the fair market value of the Class A
Common Stock on the date of the award.
During 2002, Messrs. Blasnik, Gayden, and Meurer received cash
compensation of $8,000, and Messrs. Gallagher and Hahn each received cash
compensation of $6,000.
STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT
The following table shows the number of shares of Common Stock
beneficially owned as of March 24, 2003 by:
o each person who we know beneficially owns more than 5% of our common
stock;
o each director;
o the Chief Executive Officer and the other executive officers required
to be named in the Summary Compensation Table; and
o all executive officers and directors as a group.
Class B
Class A Common Stock Common Stock
----------------------------------- -----------------
Number of Shares Percent Number of Shares
Beneficially of Beneficially
Owned(1) Ownership(1) Owned
------------------ -------------- -----------------
Executive Officers and Directors
Ross Perot, Jr.(2) ............................ 32,100,000 30.3% --
Peter Altabef(3) .............................. 359,267 * --
James Champy(4) ............................... 975,286 * --
Russell Freeman(5) ............................ 143,510 * --
Brian Maloney(6) .............................. 61,363 * --
Steven Blasnik(7) ............................. 66,000 * --
John S.T. Gallagher(8) ........................ 8,000 * --
William K. Gayden(9) .......................... 47,000 * --
Carl Hahn ..................................... 85,000 * --
Thomas Meurer(10) ............................. 148,800 * --
Ross Perot(11) ................................ 31,759,100 30.0% --
All Executive Officers and Directors as a Group
(13 Persons)(12) ............................. 35,236,312 33.1% --
Additional 5% Beneficial Owners
UBS(13) ...................................... -- -- 5,550,000
Royce & Associates, LLC(14) .................. 5,574,700 5.3% --
FMR Corp.(15) ................................ 8,591,662 8.1% --
- ------------
* Less than 1%
(1) Percentages are based on the total number of shares of Class A Common Stock
outstanding at March 24, 2003, plus the total number of outstanding options
and warrants held by each person that are exercisable within 60 days of
such date. We do not consider shares of Class A Common Stock issuable upon
exercise of outstanding options and warrants to be outstanding for purposes
of computing the
6
percentage ownership of any other person. Except as indicated in the
footnotes to this table, other than shared property rights created under
joint tenancy or marital property laws between our directors and executive
officers and their respective spouses, each stockholder named in the table
has sole voting and investment power with respect to the shares of Class A
Common Stock set forth opposite such stockholder's name. The shares of
Class A Common Stock listed include shares held by our Retirement Savings
Plan and Trust for the benefit of the named individuals. Participants in
the plan have investment and voting power over shares held for their
benefit.
(2) Includes 31,705,000 shares of Class A Common Stock owned by HWGA, Ltd.;
10,000 shares owned by The Perot Foundation; 5,000 shares owned by Mr.
Perot's spouse; and 380,000 shares that Mr. Perot has the right to acquire
upon the exercise of vested options. Mr. Perot disclaims beneficial
ownership of the shares his spouse holds. Ross Perot, Jr. is a general
partner of HWGA. Ross Perot, our Chairman, is the managing general partner
of HWGA. If Ross Perot ceases to be managing general partner, Ross Perot,
Jr. will have authority to manage HWGA. Accordingly, the table also shows
Ross Perot beneficially owning the shares that HWGA owns. Ross Perot, Jr.
is a director of The Perot Foundation. The address for Ross Perot, Jr. is
2300 W. Plano Parkway, Plano, Texas 75075, and the address of HWGA and The
Perot Foundation is P.O. Box 269014, Plano, Texas 75026-9014.
(3) Includes 153,000 shares of Class A Common Stock that Mr. Altabef has the
right to acquire upon the exercise of vested options and 2,000 shares of
Class A Common Stock Mr. Altabef's spouse holds. Mr. Altabef disclaims
beneficial ownership of the shares that his spouse holds.
(4) Includes 200,000 shares of Class A Common Stock the Champy Family
Irrevocable Trust, of which Mr. Champy is a trustee, holds. As trustee, Mr.
Champy shares voting and investment power with respect to the shares of
Class A Common Stock the Champy Trust holds and, therefore, the table shows
him as the beneficial owner of such shares of Class A Common Stock.
(5) Includes 126,000 shares of Class A Common Stock that Mr. Freeman has the
right to acquire upon the exercise of vested options.
(6) Includes 60,000 shares of Class A Common Stock that Mr. Maloney has the
right to acquire upon the exercise of vested options.
(7) Includes 60,000 shares of Class A Common Stock that Mr. Blasnik has the
right to acquire upon the exercise of vested options and 6,000 shares of
Class A Common Stock that Mr. Blasnik's spouse holds. Mr. Blasnik disclaims
beneficial ownership of the shares that his spouse holds.
(8) Includes 8,000 shares of Class A Common Stock that Mr. Gallagher has the
right to acquire upon the exercise of vested options.
(9) Includes 10,000 shares held by partnerships of which Mr. Gayden is a
general partner and 32,000 shares of Class A Common Stock that Mr. Gayden
has the right to acquire upon the exercise of vested options.
(10) Includes 136,800 shares owned by Perot Investment Trusts I - V of which Mr.
Meurer is trustee. As trustee, Mr. Meurer has voting and investment power
with respect to the shares of Class A Common Stock held by the Trusts and,
therefore, the table shows him as the beneficial owner of such shares of
Class A Common Stock. Also includes 8,000 shares of Class A Common Stock
that Mr. Meurer has the right to acquire upon the exercise of vested
options.
(11) Includes 31,705,000 shares owned by HWGA, Ltd.; 10,000 shares owned by The
Perot Foundation; and 100 shares owned by Mr. Perot's spouse with respect
to which Mr. Perot disclaims beneficial ownership. Ross Perot, our
Chairman, is the managing general partner of HWGA. Ross Perot has voting
and investment power over shares owned by HWGA. Ross Perot, Jr., President
and Chief Executive Officer of Perot Systems, is a general partner of HWGA
and has authority to manage HWGA if Ross Perot ceases to be managing
general partner of HWGA. Accordingly, the table also shows Ross Perot, Jr.
beneficially owning the shares that HWGA owns. Mr. Perot is a director and
officer of The Perot Foundation. The address for Ross Perot, HWGA and The
Perot Foundation is P.O. Box 269014, Plano, Texas 75026-9014.
7
(12) Includes 880,000 shares of Class A Common Stock that the Executive Officers
and Directors have the right to acquire upon the exercise of vested
options.
(13) The number of shares of Class A Common Stock owned by UBS is based on
information provided by UBS. The Class B Common Stock shown as beneficially
owned includes 1,983,318 shares that UBS has the right to acquire upon the
exercise of options. The address for UBS AG is Bahnhofstrasse 45, CH 8001,
Zurich, Switzerland.
(14) This data is based on information contained in Schedule 13G filed by Royce
& Associates, LLC with the Securities and Exchange Commission on February
4, 2003. The address for Royce & Associates, LLC is 1414 Avenue of the
Americas, New York, NY 10019.
(15) This data is based on information contained in Schedule 13G filed by FMR
Corp. with the Securities and Exchange Commission on February 14, 2003. The
address for FMR Corp. is 82 Devonshire Street, Boston, Massachusetts 02109.
8
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The Summary Compensation Table below shows compensation for the years
2002, 2001, and 2000 for each person who served as the Chief Executive Officer
during 2002 and the four other most highly compensated executive officers who
were serving as executive officers at the end of 2002 (the "named executive
officers").
Summary Compensation Table
Long Term
Compensation Awards
--------------------------
Annual Compensation Restricted
--------------------------------- Stock Securities All Other
Salary Bonus Other Award(s) Underlying Compensation
Name and Principal Position Year ($) ($)(1) ($)(2) ($)(3) Options ($)(4)
- ----------------------------- ------ --------- ---------- -------- ----------- ------------ -------------
Ross Perot, Jr. ............. 2002 500,000 -- -- -- -- --
President & Chief 2001 500,000 -- -- -- 1,050,000 --
Executive Officer (5) 2000 166,667 -- -- -- 950,000 --
Brian Maloney ............... 2002 405,303 351,000 -- -- 300,000 --
Vice President & Chief 2001 -- -- -- -- -- --
Operating Officer (6) 2000 -- -- -- -- -- --
James Champy ................ 2002 540,956 81,947 11,528 -- 40,000 25,000
Vice President 2001 530,400 132,600 11,810 -- -- 23,800
2000 520,000 -- 12,576 -- -- 23,800
Peter Altabef ............... 2002 335,172 118,349 -- -- 105,000 8,000
Vice President, Secretary 2001 322,400 161,200 -- -- 104,000 6,800
& General Counsel 2000 303,327 -- -- -- -- 6,800
Russell Freeman ............. 2002 343,167 82,800 -- -- 120,000 8,000
Vice President and Chief 2001 280,250 175,000 -- -- -- 6,800
Financial Officer 2000 207,310 5,000 -- -- 182,000 26,800
- ------------
(1) Bonus amounts shown in 2002 include bonuses earned in 2002 and paid in
2003. Bonus amounts shown in 2001 were earned in 2001 and paid in 2002.
(2) Represents the payment of taxes related to the life insurance premiums
referenced in Note 4 to this table.
(3) At December 31, 2002, Mr. Champy owned 400,000 restricted shares of Class A
Common Stock with a value (less the amount paid therefor) of $3,788,000.
Mr. Champy's restricted shares vest in equal installments over ten years
with vesting beginning in 1997. Mr. Champy is entitled to a pro rata
distribution of any dividends paid by Perot Systems on the Class A Common
Stock.
(4) In 2002, represents (i) $17,000 in life insurance premiums paid for the
benefit of Mr. Champy; and (ii) $8,000 in contributions to our 401(k) plan
for the benefit of each of Messrs. Champy, Altabef, and Freeman. In 2001,
represents (i) $17,000 in life insurance premiums paid for the benefit of
Mr. Champy; and (ii) $6,800 in contributions to our 401(k) plan for the
benefit of each of Messrs. Champy, Altabef, and Freeman. In 2000,
represents (i) $17,000 in life insurance premiums paid for the benefit of
Mr. Champy; (ii) $20,000 in commissions paid to Mr. Freeman; and (iii)
$6,800 in contributions to our 401(k) plan for the benefit of each of
Messrs. Champy, Altabef, and Freeman.
9
(5) Mr. Perot has served as our President and Chief Executive Officer since
September 1, 2000 and started receiving compensation on that date.
(6) Mr. Maloney has served as our Chief Operating Officer since March 11, 2002
and started receiving compensation on that date.
Stock Option Grants
The following table provides information relating to option grants in 2002
to the named executive officers. All options are exercisable for Class A Common
Stock pursuant to the Company's existing stock option plans and are
non-qualified stock options.
Option Grants in Last Fiscal Year
Individual Grants
-----------------------------------------------------------
Potential Realized
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation
Underlying Granted to Exercise for Option Term(1)
Options Employees in Price Expiration --------------------------------
Name Granted Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---------------------------- ------------ -------------- ----------- ------------- ------------- -------------
Ross Perot, Jr. ............ -- -- -- -- -- --
Brian Maloney(2) ........... 300,000 6.92% $ 18.30 03/11/2012 $3,452,632 $8,749,646
James Champy(2) ............ 40,000 .92% $ 9.63 10/18/2012 $ 242,250 $ 613,910
Peter Altabef(3) ........... 15,000 .35% $ 20.07 05/07/2012 $ 126,046 $ 379,029
Peter Altabef(4) ........... 90,000 2.08% $ 9.63 10/18/2012 $ 545,063 $1,381,297
Russell Freeman(3) ......... 20,000 .46% $ 20.07 05/07/2012 $ 168,062 $ 505,372
Russell Freeman(4) ......... 100,000 2.31% $ 9.63 10/18/2012 $ 605,626 $1,534,774
- ------------
(1) These amounts represent assumed rates of appreciation in value from the
date of grant until the end of the option term, at the rates set by the
Securities and Exchange Commission and, therefore, are not intended to
forecast possible future appreciation, if any, in the shares of Class A
Common Stock.
(2) Grants vest in five equal annual installments beginning on the first
anniversary of the grant.
(3) Grants vest in five equal annual installments beginning on December 20,
2002.
(4) Grants issued with cliff vesting on October 18, 2006 and October 18, 2007,
50% each year.
Option Exercises and Holdings
The following table provides information regarding exercises of stock
options by named executive officers during 2002.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
Number of Securities Value of Unexercised
Class A Underlying Unexercised in-the-Money Options at
Shares Options at Fiscal Year-End Fiscal Year-End
Acquired on Value ----------------------------------- -----------------------------------
Name Exercise(#) Realized($) Exercisable(#) Unexercisable(#) Exercisable($) Unexercisable($)
- ------------------------ ------------- ------------- ---------------- ------------------ ---------------- -----------------
Ross Perot, Jr. ........ -- -- 380,000 1,620,000 $ 463,600 $695,400
Brian Maloney .......... -- -- -- 300,000 -- --
James Champy ........... -- -- -- 40,000 -- $ 43,600
Peter Altabef .......... -- -- 126,000 237,000 $1,083,320 $588,660
Russell Freeman ........ -- -- 120,000 294,000 $ 264,850 $251,150
10
Employment Contracts and Change in Control Agreements
Brian Maloney
We have entered into an associate agreement with Brian Maloney pursuant to
which he serves as our Chief Operating Officer at a base salary of $500,000 per
year. Mr. Maloney is entitled to an annual cash bonus which has a guaranteed
minimum bonus totaling $700,000 over the first two years of his associate
agreement, payable over three years. To be eligible to receive these bonus
payments, Mr. Maloney must be employed with us on the relevant payment date.
Mr. Maloney's associate agreement also provided for a $210,000 signing bonus,
less amounts specified in his agreement. Of the $210,000 potential signing
bonus, the actual amount we paid Mr. Maloney was $76,000.
Under Mr. Maloney's associate agreement, we may terminate his employment
due to his death or disability, for cause, for any other reason, or for no
reason. Mr. Maloney may terminate his employment with us for good reason or
without good reason. If we terminate Mr. Maloney due to his death or
disability, or for cause, or if he terminates his employment without good
reason, then we will pay any salary that has accrued to the date his employment
ceases. If we terminate Mr. Maloney not for cause, or if Mr. Maloney terminates
his employment for good reason, within six years of his employment date, then
Mr. Maloney will receive an amount equal to 36 times his then-current monthly
base salary, subject to adjustment for subsequent employment.
Pursuant to the terms of Mr. Maloney's associate agreement, we granted him
a non-qualified stock option to purchase 300,000 shares of our stock, vesting
in five equal annual installments beginning in March 2003. In March 2003, we
awarded Mr. Maloney non-qualified stock options to purchase (i) 100,000 shares
of our Class A Common Stock vesting in five equal annual installments beginning
in December 2003, (ii) 60,000 shares of our Class A Common Stock vesting in one
installment in March 2008, and (iii) 20,000 shares vesting in five equal annual
installments beginning in March 2004. Vesting is contingent on Mr. Maloney's
continued employment. All remaining unvested options will become exercisable
upon a change of control (as defined in the associate agreement).
James Champy
James Champy's associate agreement provided for an initial base salary of
$500,000 per year, which is to be reviewed at least annually, and provides for
additional benefits, including:
o a bonus to be determined in accordance with the current bonus plan for
the most senior officers of Perot Systems,
o payment of life insurance premiums, and
o some travel benefits.
Mr. Champy's associate agreement also provides that if we terminate him
other than for cause or substantial misconduct or Mr. Champy is deemed to have
been constructively terminated, Mr. Champy will receive a severance payment
equal to six months of his current base salary. If either party terminates his
employment (other than for cause by Perot Systems) within one year of a change
in control of Perot Systems, Mr. Champy would receive severance equal to six
months of his current base salary. We may terminate Mr. Champy's associate
agreement upon 30 days' notice and payment of severance equal to six months'
base pay plus benefits.
The 1,000,000 restricted shares of Class A Common Stock Mr. Champy
acquired pursuant to his restricted stock agreement vest in equal installments
over ten years beginning on the first anniversary of the commencement of his
employment. Vesting is contingent on continued employment, but Mr. Champy's
11
restricted shares of Class A Common Stock will continue to vest for limited
periods following the termination of his employment if he is terminated by
Perot Systems other than for cause or substantial misconduct (as defined in his
associate agreement) or is deemed to have been constructively terminated (as
defined in his associate agreement). If we terminate Mr. Champy other than for
cause or substantial misconduct, his restricted shares of Class A Common Stock
will continue to vest as scheduled for two years following termination. If
there is a change in control of Perot Systems (as defined in his associate
agreement) and either party terminates Mr. Champy's employment within one year
of such change in control (other than for cause by Perot Systems), all of his
shares of Class A Common Stock scheduled to vest through the next two vesting
dates will vest on schedule. If either party terminates Mr. Champy's employment
for any reason, he has the right to require Perot Systems to purchase his
shares for their original cost plus simple interest at the rate of 8% per
annum.
Certain Relationships and Related Transactions
Licenses for Use of Name
We license the right to use the names "Perot" and "Perot Systems" in our
current and future businesses, products, or services from the Perot Systems
Family Corporation and Ross Perot. The license is a non-exclusive,
royalty-free, non-transferable license without geographic restriction. We may
also sublicense our rights to these names to certain of our affiliates. Under
the license agreement either party may, in their sole discretion, terminate the
license at any time, with or without cause and without penalty, by giving the
other party written notice of such termination. Upon termination by either
party, we must discontinue all use of the names "Perot" and "Perot Systems"
within one year following notice of termination.
Outsourcing Agreement with Hillwood Enterprises L.P.
We are currently providing, under a three-year contract which will end in
2003, information technology services for Hillwood Enterprise L.P., which is
controlled and partially owned by Ross Perot, Jr. This contract includes
provisions under which we may be penalized if our actual performance does not
meet the levels of service specified in the contract, and such provisions are
consistent with those included in other customer contracts. For the years ended
December 31, 2002, 2001, and 2000, we recorded revenue of $1,484,000,
$1,511,000 and $358,000 under this contract and direct cost of services of
$1,018,000, $1,032,000, and $203,000, respectively. Our Audit Committee has
reviewed and approved this contract.
Sublease with Perot Services Company, LLC
During 2002, we entered into a sublease agreement with Perot Services
Company, LLC, which is controlled and owned by Ross Perot, for approximately
23,000 square feet of office space at our Plano, Texas facility. Rent over the
term of the lease is approximately $363,000 per year. The initial lease term is
30 months with one optional 24-month renewal period. Under the terms of the
sublease, we paid a $100,000 allowance for modifications to the leased space.
Perot Services Company, LLC will pay all modification costs in excess of the
allowance. Our Audit Committee has reviewed and approved this contract.
Affiliate Use of AAirPass Program
Perot Systems has a corporate AAirPass program with American Airlines
under which it prepays for mileage that Perot Systems associates use for
business travel. Historically, the use of prepaid miles has resulted in lower
travel costs than refundable tickets for most travel itineraries. Employees of
Hillwood Development Corporation, The Perot Group, and their affiliated
corporations, as well as members of the Perot family also use the Perot Systems
AAirPass program. These parties reimburse Perot Systems for the prepaid miles
that they use. During 2002, these parties used, and reimbursed Perot Systems
for, $84,751 in prepaid
12
miles under the Perot Systems AAirPass program. We benefit from this
arrangement because we have a commitment to American Airlines to purchase a
minimum number of miles under the AAirPass program and the miles used by these
related parties are counted toward fulfilling that commitment. Our Audit
Committee has reviewed and approved this arrangement.
Employment of Law Firm
During 2002, we paid Hughes & Luce, L.L.P. $2,499,749 for legal services.
A partner in that firm is related by marriage to Ross Perot and Ross Perot, Jr.
Independent Public Accountants
No Approval or Ratification of the Selection of Independent Public
Accountants
We anticipate that, as part of the implementation of corporate governance
reforms that have been proposed by the New York Stock Exchange, we will revise
our Audit Committee Charter during the next several months. We expect that
these reforms will require that the Audit Committee have the authority to
select and engage Perot Systems' independent public accountant. We are
discontinuing the submission of a proposal ratifying or approving the
appointment of our independent public accountant in advance of this requirement
in order to provide the Audit Committee with the maximum flexibility in
selecting and engaging our independent public accountant.
PricewaterhouseCoopers LLP has audited our financial statements for the
fiscal year ended December 31, 2002. A representative of PricewaterhouseCoopers
will be at the Annual Meeting and will be given the opportunity to make a
statement if they desire to do so, and will be available to answer questions.
Audit Fees
PricewaterhouseCoopers' fees for our 2002 and 2001 annual audit and review
of interim financial statements and various statutory audits were $760,172 and
$679,688, respectively.
Audit Related Fees
PricewaterhouseCoopers' fees for audit related services in 2002 and 2001
were $425,254 and $136,305, respectively. These services included the employee
benefit plan audit, due diligence, and audits in connection with acquisitions
and accounting consultations on emerging accounting issues.
Tax Fees
PricewaterhouseCoopers' fees for expatriate administration, tax advisory,
and compliance services in 2002 and 2001 were $875,752 and $261,760,
respectively.
All Other Fees
PricewaterhouseCoopers' fees for all other professional services rendered
to us during 2002 and 2001 were $139,591 and $202,316, respectively. These
professional services were primarily for litigation support and foreign
subsidiary pension benefit services.
Our Audit Committee has not yet adopted preapproval policies and
procedures for audit and non-audit services. Therefore, we have not included
preapproval policies and procedures. Perot Systems expects to have preapproval
policies and procedures in place in approximately one month.
The Audit Committee has considered whether PricewaterhouseCoopers'
independence is compatible with rendering all other non-audit services during
2002. See "Report of Audit Committee."
13
REPORT OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
MARCH 6, 2003
Introduction
The Board is providing this report to assist our stockholders in
understanding the Board's objectives and procedures in the establishment and
operation of the compensation policy for our executive officers.
Compensation Committee
During 2002, the Board had responsibility for the executive compensation
policy. In March 2002, the Board of Directors established the Compensation
Committee to review and make recommendations to the Board of Directors on
executive officer compensation, bonus and retirement plans, the 1999 Employee
Stock Purchase Plan and executive officer awards under the 2001 Long-Term
Incentive Plan. In discharging these responsibilities, the Committee was
advised by our Human Resources organization. In addition, the Committee has
engaged Watson Wyatt Worldwide as its advisor.
Compensation Philosophy and Objectives
Perot Systems has a core compensation philosophy that underpins our
approach to compensating our Associates, including our executive officers. Our
policy is to develop an executive compensation program that is competitive with
comparable information technology companies with whom we compete for executive
talent, but with appropriate variations based on individual and corporate
performance. We believe that the compensation of our executive officers should:
o Have stock as a key component;
o Be cost effective and minimize fixed salary, while maximizing variable
pay which tracks to business results;
o Be compared with our industry peers to ensure market competitiveness;
o Attract, retain and motivate high caliber executives on a long-term
basis; and
o Align with the business strategy of our fast paced, growing company.
2002 Executive Compensation Program -- Overview
Our 2002 executive compensation program comprised three key components:
Base Salary, Short-Term Cash Incentive, and Long-Term Incentive programs.
Base Salary
Base salary is a core component of our compensation program. It is
designed to reward Associates for effective performance in their current role
and to be adjusted over time as a consequence of that performance and also
increased responsibility. The setting and adjustment of base salary are
governed by the following principles:
o All Associates -- including executives -- have base salary levels set
within established market-based salary ranges. These are developed
using an analysis of the external market in order to ensure
competitiveness, consistency, and transparency; and
14
o Salary levels within the established ranges vary by individual,
according to their experience, responsibility level and individual
performance towards the attainment of corporate goals and objectives.
In 2002, the executive officers received increases that were commensurate
with their performance and our design criteria.
Short-Term Incentive Program
Perot Systems operates a short-term incentive program through an annual
bonus plan. The design of the annual bonus plan is reviewed annually, but is
always linked to principles of corporate and individual performance. Corporate
financial and strategic goals are set at the beginning of each plan year as the
overall framework. These are then used to determine the basic payments after
the end of the plan year. We also consider factors such as the financial
targets and corporate contribution of business units, which may be recognized
in our plan design.
Individual performance is another key criterion. It is through the
contribution of individual Associates and their attainment of designated goals
that we meet our corporate objectives. All Associates have individual goals and
annual performance ratings and any final payments reflect this rating.
For 2002, the Global Annual Bonus Plan was designed to reflect corporate,
business unit, and individual performance. Individual payments were assessed
against these design criteria. In 2002, our executive officers received
payments commensurate with the attainment of the relevant program components
outlined above.
Long-Term Incentive Program
Perot Systems regards the holding of stock as a key consideration for
executives. This helps fundamentally to align executive behaviors and the
achievement of corporate objectives with our stockholders. Stock rewards
long-term commitment to the successful performance of an organization. It is,
therefore, a major component of our executive compensation program.
We use stock options under an annual grant program. Executives, like all
other Associates, are considered for awards on the basis of their contribution,
the performance of the Company and reference to the external market. Attention
is paid to the need to retain executives over time and consideration is given
to the current holdings of an individual executive (including restricted stock)
and the vesting schedule of their holdings. In 2002, the executive officers
participated in the annual grant program.
The short-term and long-term incentive programs are both operated at the
discretion of the Company.
Compensation of the Chief Executive Officer
Ross Perot, Jr. was elected President and Chief Executive Officer
effective September 1, 2000. Mr. Perot's current base salary is $500,000 per
year. The independent directors of the Company based the annual and incentive
compensation of Ross Perot, Jr. on the Company's historical compensation of its
CEO's. While Mr. Perot is eligible to receive a bonus under our annual bonus
plan, he has declined to be considered for a bonus related to the 2002 fiscal
year.
15
Conclusion
Our compensation policy and resultant payments directly reflect the
performance of Perot Systems and its individual executive officers. It is our
belief that our compensation policy serves both the interests of our
stockholders and Perot Systems.
BOARD OF DIRECTORS
Ross Perot
Ross Perot, Jr.
Steve Blasnik
James Champy
John S.T. Gallagher
William K. Gayden
Carl Hahn
Thomas Meurer
Compensation Committee Interlocks and Insider Participation
As members of the Board, Ross Perot, our Chairman and former President and
Chief Executive Officer, Ross Perot, Jr., our President and Chief Executive
Officer, and James Champy, one of our Vice Presidents, will participate in
future compensation decisions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENT
Our directors, executive officers, and holders of more than 10% of our
Class A Common Stock must file reports with the Securities and Exchange
Commission indicating the number of shares of Perot Systems' Class A Common
Stock they beneficially own and any changes in their beneficial ownership. They
must provide copies of these reports to us. Based on our review of these
reports and written representations from the persons required to file them,
John King filed a late report on Form 5 related to a gift he made in 2001.
Steve Blasnik, a director of Perot Systems, received an automatic award of an
option to purchase 40,000 shares in May 2002 under our 1996 Non-Employee
Director Stock Option/Restricted Stock Plan. Perot Systems did not notify Mr.
Blasnik of the award nor provide him with an option agreement at that time.
Consequently, Mr. Blasnik did not timely file a Form 4 with respect to his
award.
16
PERFORMANCE GRAPH
The graph below compares the performance of our Class A Common Stock since
February 2, 1999, the inception of public trading, to the performance of
publicly traded securities. The starting point for the graph was $43.50 per
share, the closing price on our first day of trading following our initial
public offering. Therefore, the graph does not reflect the 172% increase from
Perot Systems' $16.00 per share initial public offering price that occurred on
the first day of trading.
COMPARE CUMULATIVE TOTAL RETURN
AMONG PEROT SYSTEMS CORPORATION,
NYSE MARKET INDEX AND MG GROUP INDEX(1)
[LINE CHART OMITTED]
ASSUMES $100 INVESTED ON FEB. 2, 1999
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2002
- ------------
(1) The Media General (MG) Group Information Technology Services Index.
- --------------------------------------------------------------------------------
2/02/99 12/31/99 12/31/00 12/31/01 12/31/02
------- -------- -------- -------- --------
PEROT SYSTEMS CORP. 100.00 43.39 21.12 46.94 24.64
MG GROUP INDEX 100.00 117.66 72.05 76.98 41.85
NYSE MARKET INDEX 100.00 109.05 111.65 101.70 83.08
- --------------------------------------------------------------------------------
17
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
March 6, 2003
The Audit Committee reviewed the audited financial statements of Perot
Systems as of and for the fiscal year ended December 31, 2002, with management
and PricewaterhouseCoopers, LLP. The Audit Committee has discussed and reviewed
with PricewaterhouseCoopers all communications required by generally accepted
auditing standards, including those described in Statement on Auditing
Standards No. 61, as amended, "Communication with Audit Committees" and, with
and without management present, discussed and reviewed the results of the
independent auditors' examination of the financial statements.
PricewaterhouseCoopers has provided the Audit Committee with a formal
written statement describing all relationships between the auditors and the
Company that might bear on the auditors' independence (as required by the
Independence Standards Board Standard No. 1). The Audit Committee has discussed
with PricewaterhouseCoopers any relationships that may impact their objectivity
and independence, including fees paid to PricewaterhouseCoopers by us for
services not related to the audit of our year end financial statements and the
review of our quarterly financial statements. The Audit Committee has satisfied
itself as to PricewaterhouseCoopers' independence.
The Audit Committee also discussed with management, the internal auditors
and the independent auditors the quality and adequacy of our internal controls
and the internal audit function's organization, responsibilities, budget, and
staffing. The Audit Committee reviewed with both the independent and the
internal auditors their audit plans, audit scope, and identification of audit
risks.
Based on the review and discussions with management and
PricewaterhouseCoopers, the Audit Committee has recommended to the Board that
Perot Systems' audited financial statements be included in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2002, for filing with the
Securities and Exchange Commission.
AUDIT COMMITTEE
William K. Gayden
John S.T. Gallagher
Carl Hahn
18
Equity Compensation Plan Information
The following table gives information about our Class A Common Stock that
we may issue under our equity compensation plans as of December 31, 2002.
Equity Compensation Plan Information
Number of
Securities
Remaining
Number of Available for
Securities to be Future Issuance
Issued Upon Weighted-Average Under Equity
Exercise of Exercise Price of Compensation
Outstanding Outstanding Plans (Excluding
Options, Warrants, Options, Warrants, Securities Reflected
Plan Category and Rights and Rights in Column (a))
- ------------- ------------------ ------------------ --------------------
(a) (b) (c)
Equity Compensation Plans
Approved by Security Holders ............. 6,749,670 $ 14.12 41,573,910(1)
Equity Compensation Plans
Not Approved by Security Holders ......... 30,084,808 $ 13.46 560,000(2)
---------- ------------
Total ..................................... 36,834,478 $ 13.58 42,133,910
========== ============
- ------------
(1) Includes 23,380,472 shares under the 2001 Long-Term Incentive Plan and
18,193,438 shares under the 1999 Employee Stock Purchase Plan.
(2) Includes 560,000 shares under the 1996 Non-Employee Director Stock
Option/Restricted Stock Plan.
STOCKHOLDER PROPOSALS FOR THE ANNUAL MEETING
AND FOR 2004 ANNUAL MEETING
Under Article II, Section 4 of our current Bylaws, proposals by
stockholders intended to be presented at the Annual Meeting, must be received
by Perot Systems' Secretary at our executive offices no later than the close of
business on April 17, 2003.
If you want to include a stockholder proposal in the proxy statement for
the 2004 annual meeting, it must be delivered to Perot Systems' Secretary at
our executive offices before December 1, 2003.
OTHER MATTERS
At the date of mailing of this Proxy Statement, we are not aware of any
business to be presented at the Annual Meeting other than the proposal
discussed above. If other proposals are properly brought before the Annual
Meeting, any proxies returned to us will be voted as the proxy holders see fit.
19
FOR MORE INFORMATION
We file reports, proxy statements, and other information with the SEC. You
can read and copy these reports, proxy statements, and other information
concerning Perot Systems at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. The SEC maintains an Internet
site at http://www.sec.gov/ that contains reports, proxy, and information
statements and other information regarding issuers that file electronically
with the SEC, including Perot Systems. The Class A Common Stock is quoted on
the NYSE. These reports, proxy statement, and other information are also
available for inspection at the offices of the NYSE, 20 Broad Street, New York
City, New York 10005.
In addition, our annual report on Form 10-K (without exhibits) is
available via the Internet at our website (www.perotsystems.com). If you would
like to request documents from us, please contact our Investor Relations
Department at 877-737-6973 by April 15, 2003 to receive them before the Annual
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Peter Altabef
Peter Altabef
Secretary
20
Directions to Perot Systems' Plano Campus
From DFW International Airport:
Take International Parkway (the one main road running north-south through the
Airport) North to I-635 East.
Continue East on I-635.
Take Exit #27B to I-35E North.
Take Exit #443 to President George Bush Turnpike (TX 190) heading East.
Drive East on President George Bush Turnpike (TX 190) to Plano.
Exit at Custer Parkway.
Turn Left on Custer Parkway to go North.
At Plano Parkway turn Left.
As you head West on Plano Parkway, Perot Systems' Campus is on your left.
Use the first left turn lane entering the Campus parking lot. Once entering the
parking lot, proceed to the west end of the parking lot and enter the Campus
through the West Lobby.
From Downtown Dallas:
Proceed North on North Central Expressway (IH-75).
Take exit #28B to President George Bush Turnpike going West.
Take the first exit -- Custer Parkway. Proceed West on the service road to the
light at Custer Parkway.
Turn Right on Custer Parkway.
Turn Left at the first light (Plano Parkway).
As you head West on Plano Parkway, Perot Systems' Campus is on your left.
Use the first left turn lane entering the Campus parking lot. Once entering the
parking lot, proceed to the west end of the parking lot and enter the Campus
through the West Lobby.
[perotsystems(TM)LOGO]
PEROT SYSTEMS CORPORATION
2300 W. PLANO PARKWAY
PLANO, TEXAS 75075
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions until 11:59 p.m. EDT on
May 6, 2003. Have your proxy card or e-mail notification available when you
access the web site. You will be prompted to enter your 12-digit Control Number
which is located below to obtain your records and create an electronic voting
instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touchtone telephone to transmit your voting instructions until 11:59
p.m. EDT on May 6, 2003. Have your proxy card or e-mail notification available
when you call. You will be prompted to enter your 12-digit Control Number which
is located below and then follow the simple instructions the Vote Voice provides
you.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we have provided or return to Perot Systems Corporation, Attention: Legal
Department, 2300 W. Plano Parkway, Plano, Texas 75075.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PEROTP KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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PEROT SYSTEMS CORPORATION
THE DIRECTORS RECOMMEND A VOTE "FOR"
ITEM 1
For Withhold For All To withhold authority to vote, mark "For
1. To elect as Directors the nominees listed below. All All Except All Except" and write the nominee's
number on the line below.
01) Ross Perot
02) Ross Perot, Jr. [ ] [ ] [ ] -----------------------------------------
03) Steve Blasnik
04) James Champy
05) John S.T. Gallagher
06) William K. Gayden
07) Carl Hahn
08) Thomas Meurer
2. In their discretion, upon such other matters that may properly come before
the meeting or any adjournment or adjournments thereof.
Please sign exactly as your name appears on your stock certificate(s). When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Yes No
HOUSEHOLDING ELECTION - Please indicate if you
consent to receive certain future investor
communications in a single package per household [ ] [ ]
- ------------------------------------------------- ------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
- ------------------------------------------------- ------------------------------------------
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PEROT SYSTEMS CORPORATION
Proxy For Annual Meeting of Stockholders
May 7, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of Perot Systems Corporation hereby
acknowledge(s) receipt of the Proxy Statement dated April 2, 2003, and hereby
appoint(s) Peter A. Altabef and Rex C. Mills, or either of them, proxies, each
with full power of substitution, and hereby authorizes them to represent and to
vote, as designated on the reverse side, all of the shares of Class A Common
Stock of Perot Systems Corporation held of record by the undersigned on March
24, 2003, at the Annual Meeting of Stockholders to be held at the Corporate
Headquarters Cafeteria, 2300 West Plano Parkway, Plano, Texas 75075, at 3:30
p.m. CDT on May 7, 2003 or any adjournment thereof.
The shares represented by this proxy, when properly executed, will be voted in
the manner directed herein by the undersigned stockholder(s). If no direction is
made, this proxy will be voted FOR item 1. If any other matters properly come
before the meeting, the persons named in this proxy will vote in their
discretion.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH YOUR
INSTRUCTIONS AND IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF ALL NOMINEES LISTED ON THE REVERSE SIDE OF THIS CARD. YOU MAY REVOKE
THIS PROXY AT ANY TIME PRIOR TO THE VOTING THEREOF.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
(Continued, and to be signed and dated, on the reverse side.)
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