The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between April 19, 2002 and September 24, 2002, thereby artificially inflating the price of EDS securities. The complaint alleges that, throughout the Class Period, defendants issued numerous statements which highlighted the Company's strong financial performance and reassured investors that the Company's "business and financial fundamentals are sound" and the Company's balance sheet is "rock solid." As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (a) that the Company's program to "manage" its future stock issuance under its employee stock option program was essentially an unhedged bet on the price of EDS common stock, which was exposing the Company to substantial liabilities which were not reflected in the Company's financial statements; (b) that the Company was recording and reporting as assets (e.g. accounts receivable) and as revenue, purported receipts from contracts structured as percentage-of-completion payment arrangements where the requirements of Generally Accepted Accounting Principles ("GAAP") for such recording were not met and where sufficient evidential matter did not exist to support the claimed positive impact on EDS's books; (c) that the Company improperly recorded revenue on contracts for software that did not meet GAAP requirements for such revenue recognition; (d) that the Company was experiencing difficulties with certain of its European contracts such that these contracts were not performing according to the Company's expectations; and (e) as a result of the foregoing, defendants' statements concerning the Company, its earnings, accounting practices and prospects were lacking in a reasonable basis at all relevant times.

On September 18, 2002, EDS shocked the market by announcing that it expects "revenues and earnings for its third quarter of 2002 to be lower than company guidance." In response to this negative announcement, the price of EDS common stock dropped sharply, falling from $36.46 per share to $17.20 per share, on extremely heavy trading volume. Then, on September 24, 2002, certain analysts downgraded their rating on EDS stock, citing the Company's obligations on certain put contracts and that in order to close out the position, EDS would have to pay $225 million. In response, EDS issued a press release in which it acknowledged that it had borrowed money in the commercial paper markets to close out the put contracts. In later public comments, an EDS spokesperson confirmed that the Company borrowed $225 million. In response to these announcements, the price of EDS common stock plunged further, falling from the previous day's close of $16.52 per share to close at $11.68 per share.

Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired EDS securities during the Class Period. If you purchased or otherwise acquired EDS securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than November 25, 2002. In order to serve as lead plaintiff, however, you must meet certain legal requirements. You do not need to seek appointment as a lead plaintiff in order to share in any recovery. Under certain circumstances, one or more class members may together serve as "lead plaintiff." You may retain Fruchter & Twersky LLP, or other counsel of your choice, to serve as your counsel in this action.

Plaintiff is represented by the Law Firm of Fruchter & Twersky LLP. Fruchter & Twersky LLP -- has significant experience in prosecuting investor class actions and actions involving financial fraud.

If you have any questions concerning this case or your rights or interests with respect to these matters, please contact: Jack G. Fruchter, Esq. of Fruchter & Twersky LLP, One Pennsylvania Plaza, 19th Floor, New York, New York 10119, by telephone at (212) 279-5050, (800) 440-8986, by facsimile at (212) 279-3655, or by e-mail at Fruchter@FruchterTwersky.com.