In re Electronic Data Systems Corp.  (“EDS”) ERISA Litigation

Settlement Update: Settlement Approved

We are pleased to announce that on August 6, 2008, the Honorable Leonard Davis granted final approval to the Proposed Class Action Settlement of this matter. Once the appeals period has expired and the Settlement becomes final, Class Counsel will direct the Plan’s Trustee to begin calculating each Class Member’s portion of the Settlement and commence distribution of Settlement Funds pursuant to the approved Plan of Allocation. As always, please continue to visit this website for updates about the Settlement and allocation of Settlement Funds.

On August 6, 2008 the following Orders were approved:

Order and Final Judgment Approving Proposed Settlement;

Order Granting Plaintiffs’ Motion for an Award of Attorneys’ Fees, Reimbursement of Litigation Costs and Expenses and for Case Contribution Awards for Named Plaintiffs; and

Order Approving EDS 401(k) Plan of Allocation

Settlement

On May 2, 2008, United States District Judge Leonard Davis granted preliminary approval of the proposed settlement in the In Re Electronic Data Systems Corp. “ERISA” Litigation, a class action case in which plaintiffs allege that the fiduciaries responsible for the EDS 401(k) Plan and all related or predecessor plans (the “Plan”) violated their ERISA-mandated fiduciary duties by investing Plan assets in EDS stock when it was imprudent to do so, resulting in losses to the Plan.  Under the proposed settlement, the Defendants deny liability but agree to pay $12.5 million in cash and to make significant improvements to the Plan.  On August 6, 2008, the Court will hold a fairness hearing, at which time it will determine whether to give the settlement final approval.  Court-approved Class Notice will be mailed to Class Members no later than June 20, 2008.  For further details regarding the proposed settlement, please refer to Case Documents.   
                       
           
Settlement FAQ

Q:  Are there any deadlines I need to be aware of?

A:  Yes.  If you are a class member and want to comment on any aspect of the proposed settlement, including the amount of money to be paid to the class, the changes in the Plan, the amount of money to be paid to the attorneys for the class as fees or reimbursed expenses, the amount of money to be paid to the class representatives, or the proposed Plan of Allocation, you must file your comments no later than July 28, 2008.  Any such comments must be filed with the Clerk of Court and sent to Counsel for Plaintiffs and Counsel for Defendants on or before the due date.  The Class Notice gives specific instructions, which must be followed.  A Final Fairness Hearing will be held on August 6, 2008.  You may attend this hearing if you wish.  The Class Notice gives additional instructions and information concerning the Hearing.

Q:  How do I know if I am part of the settlement? 

A: The proceeds of this Settlement will be allocated only to Class Members, and then only according to a Court-Approved Plan of Allocation.  You are a Class Member if you fall within the following “Settlement Class”:
(A) All participants and former participants in the Plan and their beneficiaries, for whose individual accounts the Plan purchased and/or held interests in EDS stock through the EDS Company Stock Fund (f/k/a the EDS Stock Fund or the GM Class E Stock Fund) at any time during the period September 7, 1999 through and including October 9, 2002, and the beneficiaries of such participants or former participants; and (B) all participants and former participants in the Plan and their beneficiaries, for whose individual accounts the Plan purchased EDS stock through the EDS stock Fund at any time during the period October 20, 2001 through and including November 18, 2002.  Excluded from the Settlement Class are EDS, any other Defendants and the Immediate Family, heirs, successors or assigns of any Defendant. 

Q:  How much will my payment be?

A:  Plaintiffs have submitted a proposed Plan of Allocation to the Court for approval at the Fairness Hearing.  The Plan of Allocation, available in the Case Documents Section, describes the manner by which the Settlement proceeds paid into the Plan (the “Net Proceeds”) will be distributed to Class Members.  In general terms, the Net Proceeds will be allocated to Class Members in proportion to his or her interest in Company stock in the Plan.  Because the Net Proceeds are less than the total losses alleged to be suffered in the Action, each ClassMember’s proportionate recovery will be less than his or her alleged loss.  If your proportionate recovery is de minimis (less than $10), it may be forfeited to the Plan or distributed pro rata to other ClassMembers.  You are not responsible for calculating the amount you may be entitled to receive under the Settlement. This calculation will be done as part of the implementation of the Settlement, and will be based on reasonably available Plan data.

Q.  When would I get my payment?

A:  Payment is conditioned on several matters, including the Court’s approval of the Settlement and such approval becoming final and no longer subject to any appeals to any court.  Upon satisfaction of various conditions, the net Settlement Fund will be paid to the Plan and allocated to the accounts of members of the Settlement Class pursuant to the Plan of Allocation as soon as possible after final approval has been obtained for the Settlement (which includes exhaustion of any appeals).  An appeal of the final approval could take several years.  Any accrued interest on the Settlement Fund will be included in the amount paid to the Plan and allocated to the Plan accounts of members of the Settlement Class.  The Settlement Agreement may be terminated on several grounds, including if the Court does not approve or modifies the Settlement.

For inquiries on the settlement or to update your address, please e-mail:
EDSERISA@SusmanGodfrey.com

Case Information  

The In re Electronic Data Systems Corporation ERISA Litigation Complaint was filed in the United States District Court for the Eastern District of Texas, Tyler Division.  The Third Amended Consolidated Class Action Complaint alleges that during the Class Period, the Defendants breached their fiduciary duties to Plaintiffs and the Class members by:

• failing to prudently and loyally manage the Plan's assets;
• failing to provide participants with complete and accurate information regarding EDS stock sufficient to advise participants of the true risks of investing their retirement savings;
• failing to properly monitor the performance of their fiduciary appointees, and remove and replace those whose performance was inadequate; and,
• breaching the duty to avoid conflict of interest.

In addition, Plaintiffs allege that during a portion of the Class Period, the Company sold unregistered shares of EDS stock to the Plan in violation of Federal Securities laws. 

Not all claims were brought against every Defendant. Please refer to the Third Amended Consolidated Class Action Complaint or contact counsel for the Plaintiffs at:

EDSERISA@SusmanGodfrey.com or 866-540-4948 for more information.