(a)        Applicable Exchange Rate means the currency exchange rate utilizing the closing rate quoted in The Wall Street Journal on December 27, 1996; or, for purposes of issuing Subsequent Grants under the Plan, then “Applicable Exchange Rate” shall mean such exchange rate as from time to time determined by the Chief Executive Officer in his or her sole discretion.

    (b)        Beneficiary means the individual or trust defined by or designated as the Participant’s Beneficiary in accordance with paragraph 15 hereof. If no Beneficiary is designated, then the Beneficiary shall be determined as prescribed by governing law.

    (c)        Code means the U.S. Internal Revenue Code of 1986, as amended from time to time.

    (d)        Committee means the Benefits Oversight Committee of EDS.

    (e)        Compensation means the Employee’s annual base salary as determined to be paid by a Participating Employer as of December 31, 1996, together with commissions, bonus and overtime actually paid by a Participating Employer to the Employee during 1996. Compensation shall not include any extraordinary payments or imputed income. If an Employee’s Compensation is not paid in U.S. dollars, then, for purposes of calculating the amount of an Employee Award pursuant to subparagraph 6(d)(i) hereof, the Employee’s Compensation shall be converted to U.S. dollars using the Applicable Exchange Rate. For purposes of issuing Subsequent Grants under the Plan, then “Compensation” shall be determined by the Chief Executive Officer in his or her sole discretion.

    (f)        Controlling Retirement Plan means the EDS Retirement Plan, a defined benefit retirement plan sponsored by EDS, or, if the Participant does not participate in the EDS Retirement Plan, then such other retirement plan sponsored by a subsidiary in which the Participant is eligible to participate, or such other retirement plan or program acceptable to the Committee.

    (g)        Employee means any employee of a Participating Employer who is classified as a permanent employee and does not include any individual who is not classified by a Participating Employer as a permanent employee.

    (h)        Employee Award means a Participating Employer’s grant to an Employee of the right to purchase a specified number of shares of EDS Stock at a specified price pursuant to such applicable terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of this Plan. All options granted herein are nonqualified stock options.

    (i)        Employee Award Statement means a written notice provided by a Participating Employer to a Participant setting forth the number of shares of EDS Stock subject to the Employee Award.

    (j)        Exchange Act means the U.S. Securities Exchange Act of 1934, as amended from time to time, or such other governing securities law in each local jurisdiction in which an Employee Award is offered under this Plan.

    (k)        Fair Market Value of a share of EDS Stock means, as of a specified date: (i) if shares of EDS Stock are listed on the New York Stock Exchange, the closing price per share of EDS Stock as reported in The Wall Street Journal , or, if there shall have been no such price so reported on that date, on the last preceding date on which a price was so reported; (ii) if shares of EDS Stock are not so listed but are quoted on the NASDAQ National Market System, the closing sales price per share of EDS Stock reported by the NASDAQ National Market System on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported; or, (iii) if the EDS Stock is not so listed or quoted, the mean between the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be available, as reported by the NASDAQ National Market System, or, if not reported by the NASDAQ National Market System, by the National Quotation Bureau Incorporated.

    (l)        Grant Date means the particular date or dates, as established by the Committee, on which an Employee is granted an Employee Award under the terms of this Plan.

    (m)        Grant Price means the Fair Market Value of EDS Stock on the Grant Date.

    (n)        Moratorium Period means the 6 month period immediately following the Grant Date.

    (o)        Participant means an individual to whom an Employee Award has been made, and for whom such Employee Award remains outstanding, unforfeited, and unexercised under this Plan.

    (p)        Participating Country means any country, as determined by the Committee in its sole and absolute discretion, and as set forth in Attachment “A”, attached hereto, and as may be amended from time to time.

    (q)        Participating Employer means EDS, or any subsidiary or affiliate of EDS, as determined by the Committee in its sole and absolute discretion, and as set forth in Attachment “B”, attached hereto, and as may be amended from time to time.

    (r)        Plan means PerformanceShare , as set forth in this document, and as it may be amended from time to time.

    (s)        Retirement means separation from employment on account of normal or early retirement, as described under the Controlling Retirement Plan, or, in the event the Participant does not participate in a Controlling Retirement Plan, then under the local governing law or social security authority, or such other retirement program as deemed acceptable by the Committee.

    (t)        Service Date means the date of record by which a Participating Employer establishes the service date of an Employee.

    (u)        Subsequent Grant means any grant issued under the terms of the Plan after the Grant Date of the Re-Issued Grant.

    (v)        Trading Day means a day on which EDS Stock is available for purchase or sale on the New York Stock Exchange.

    (w)        Year of Service means any 12 month period, beginning on an Employee’s Service Date.

    (a)        Each Employee Award shall be described in an Employee Award Statement, and shall be subject to the vesting schedule, forfeiture provisions, terms, conditions and limitations described herein. An Employee Award shall be subject to limitations on exercisability as are set forth in this Plan. Upon the termination of a Participant’s employment, any unexercised, unvested or otherwise outstanding Employee Awards shall be treated as described herein.

    (b)        Each Employee eligible, as defined in paragraph 4, shall receive a grant of an Employee Award, as described in paragraph 6(c) hereof, and in the amount, and subject to the terms, described in paragraph 6(d) hereof.

    (c)        The price at which shares of EDS Stock may be purchased upon the exercise of an Employee Award shall be the Grant Price. All Employee Awards granted pursuant to this Plan shall be subject to the vesting schedule, forfeiture provisions, terms, conditions and limitations set forth in this Plan. The date or dates upon which an Employee Award awarded pursuant to this Plan may become exercisable shall be determined pursuant to subparagraphs 6(d)(iii) and 7(b) hereof.

    (d)        The following provisions shall apply to any Employee Awards made pursuant to this Plan:

    (i)        Amount of Employee Award . Each Participant shall receive an Employee Award under this Plan such that the number of shares of EDS Stock subject to the Employee Award, with partial or an odd number of shares rounded up to the next even number of full shares, shall be determined by dividing the Participant’s Compensation by $47¾ (the Fair Market Value of EDS Stock on January 16, 1997) or, for purposes of Subsequent Grants, such other number as determined by the Chief Executive Officer in his or her sole discretion (such number shall not be less than the Fair Market Value of EDS Stock on the Grant Date of such Employee Award)., and multiplying the quotient by a percentage determined as follows:

    I.       Ten Percent (10%) for Participants with Years of Service up to and including five (5) Years of Service; and

    II.        An additional one percent (1%) for each additional Year of Service after five (5) Years of Service, up to a maximum of twenty-five percent (25%).

Notwithstanding the foregoing, each eligible Employee shall receive an Employee Award for at least fifty (50) shares of EDS Stock.

    (ii)        Vesting of Employee Award

    A.       Employee Awards shall fifty percent (50%) vest, and the Participant’s interest in that fifty percent (50%) of such Employee Award shall be nonforfeitable (subject to subparagraph 6(d)(v) hereof) and exercisable (subject to subparagraphs 6(d)(iii) and 7(b) hereof) if the Participant remains in the continuous employment of a Participating Employer until the first date after which the Fair Market Value of EDS Stock is, for five (5) consecutive Trading Days, equal to or greater than one hundred fifty percent (150%) of the Fair Market Value of EDS Stock on the Grant Date.

    B.        Employee Awards shall fully vest, and the Participant’s interest in such Employee Award shall be nonforfeitable (subject to subparagraph 6(d)(v) hereof) and exercisable (subject to subparagraphs 6(d)(iii) and 7(b) hereof) if the Participant remains in the continuous employment of a Participating Employer until the earlier of:

    1.        Ten (10) years from Grant Date; or

    2.         the first date after which the Fair Market Value of EDS Stock is, for five (5) consecutive Trading Days, equal to or greater than two hundred percent (200%) of the Fair Market Value of EDS Stock on the Grant Date; or

    3.         Age sixty-five (65).

    C.         If the Participant terminates employment with the Participating Employer by reason of Retirement, death, or permanent disability (whereby such disability entitles the Participant to receive benefits under a long-term disability plan sponsored by the

Participating Employer, or, if the Participant does not participate in such a Participating Employer sponsored long-term disability plan, then permanent disability shall be determined according to Social Security Administration provisions or equivalent governing law), then the Employee Award shall not be forfeited and the Employee Award shall vest pursuant to subparagraphs 6(d)(ii)(A) and 6(d)(ii)(B) hereof, as if the Participant remained in the continuous employment of the Participating Employer.

    (iii)        Exercise of Employee Award . At vesting, Employee Awards are first made eligible for exercise to Participants on a staggered basis. After the Moratorium Period, a Participant may exercise any vested Employee Award on any Trading Day occurring on or after the first day after vesting which corresponds to the same day of the month as the day of the month of such Participant’s Service Date. Notwithstanding the foregoing sentence, if, under applicable income tax laws, the Participant is subject to taxation upon vesting, then a vested Employee Award shall be exercisable on any Trading Day immediately following vesting. An Employee Award shall cease to be exercisable as to any share when the Participant purchases the share, or when the Employee Award lapses as provided in subparagraph 6(d)(v) hereof. The Participant shall have no obligation to exercise an Employee Award granted pursuant to this Plan.

    (iv)         Forfeiture of Employee Award . Any Employee Award that is not vested or subject to continuing vesting pursuant to subparagraph 6(d)(ii) hereof shall be forfeited upon the Participant’s termination of employment with the Participating Employer.

    (v)         Lapse of Employee Award . Employee Awards which became vested for any reason other than being age sixty-five (65) in accordance with Plan paragraph 6(d)(ii)(B)(3) shall lapse on the earlier of the fifth anniversary of the date on which such Employee Award is one hundred percent (100%) vested. All Employee Awards in which a Participant is vested shall lapse on the ninetieth (90th) day after the termination of such Participant’s employment for any reason other than death, permanent disability or retirement. Any Employee Award granted pursuant to this Plan which has not been exercised prior to such lapse date shall be automatically forfeited.

    (e)        Notwithstanding any other provision contained in this Plan, if the Compensation and Benefits Committee of the Board expressly so determines and approves, Employee Awards granted in Subsequent Grants may have terms and conditions that are different from or in addition to the terms and conditions for Employee Awards specified in other provisions of this Plan, including but not limited to terms and conditions which result in different formulae or methods for determining the amount of Employee Awards, different vesting schedules or different forfeiture provisions than those set forth in Section 6(d).

    (a)        Election . A vested Employee Award may be exercised after the Moratorium Period (subject to subparagraphs 6(d)(iii), 6(d)(v), and 7(b) hereof), in whole or in part, by timely delivery to the Committee of such forms as may be designated by the Committee, a notice of exercise, and payment of the purchase price. Notice of exercise shall be effective on the date received by the Committee. The notice must state the Participant’s election to exercise the Employee Award, the number of shares with respect to which the election to exercise has been made, the method of payment elected, the exact name or names in which such shares will be registered and such other information and in such form as may be required by the Committee. If, at the time of a Participant’s death, such Participant is vested in an Employee Award, or if the Employee Award subsequently vests pursuant to subparagraph 6(d)(ii)(C) hereof, than the Employee Award may be exercised by the Beneficiary of the Participant, subject to the provisions hereof.

    (b)        Completion of Necessary Forms . As a condition precedent to becoming eligible to exercise any Employee Award, the Participant shall be required to complete and execute such forms as may be designated by the Committee. Failure to properly complete and execute such forms shall result in the lapse of a vested Employee Award pursuant to the provisions of subparagraph 6(d)(v) hereof.

    (c)        Payment . The full purchase price for the shares of EDS Stock purchased on the exercise of an Employee Award (i.e., the number of shares purchased, multiplied by the price per share) may be paid in cash, or, at the request of the Participant, and to the extent permitted by applicable law, the Committee may approve, in its sole and absolute discretion, cashless exercise through an arrangement with a brokerage firm, under which the brokerage firm, on behalf of the Participant, will pay for all or a portion of the shares of EDS Stock purchased upon the exercise of the Employee Award.

    (a)        This Plan shall be administered by the Committee (or the Committee’s delegate pursuant to paragraph 9 hereof). The Committee shall have the power, in its sole and absolute discretion, to contract with a third-party administrator to administer this Plan.

    (b)        Subject to the provisions hereof, the Committee shall have full and exclusive power and authority to administer this Plan and to take all actions which are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The Committee shall also have full and exclusive power to interpret this Plan, to devise necessary forms and documents, and to adopt such rules, regulations and guidelines for carrying out this Plan as it may deem necessary or proper, all of which powers shall be exercised in the best interests of EDS and in keeping with the objectives of this Plan. The Committee may, in its sole and absolute discretion, amend or modify an Employee Award in any manner that is consistent with the purpose and objectives of this Plan and is either (i) not adverse to the Participant to whom such Employee Award was granted, (ii) required to comply with governing law, or (iii) consented to by such Participant. The Committee may correct any defect or supply any omission or reconcile any error or inconsistency in this Plan or in any Employee Award Statement in the manner and to the extent the Committee deems necessary or desirable to carry it into effect. Any decision of the Committee in the interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned.

    (c)        No member of the Committee, or officer or Employee of EDS to whom the Committee has delegated authority in accordance with the provisions of paragraph 9 hereof, shall be liable for anything done or omitted to be done by such person, by any member of the Committee, or by any officer or Employee of EDS in connection with the performance of any duties under this Plan, except for such person’s own willful misconduct or as expressly provided by statute.