##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2006
 or
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from            to
 Commission File Number 0-22495
 PEROT SYSTEMS CORPORATION
  DELAWARE
(State or other jurisdiction of
incorporation or organization)
    
    75-2230700
(IRS Employer
Identification No.)
 
 
 þ o
  þ o o
 o þ




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##### 



PagePART I:
    
    FINANCIAL INFORMATIONITEM 1:
    
    FINANCIAL STATEMENTS (UNAUDITED)Condensed Consolidated Balance Sheets as of March 31, 2006 and December 31, 2005
    
    
    1Condensed Consolidated Income Statements for the three months ended March 31, 2006 and 2005
    
    
    2Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and 2005
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4ITEM 2:
    
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    14ITEM 3:
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    21ITEM 4:
    
    CONTROLS AND PROCEDURES
    
    
    22PART II:
    
    OTHER INFORMATIONITEM 1:
    
    LEGAL PROCEEDINGS
    
    
    23ITEM 1A:
    
    RISK FACTORS
    
    
    24ITEM 6:
    
    EXHIBITS
    
    
    24SIGNATURES
    
    
    26Rule 13a-14 Certification of CEORule 13a-14 Certification of CFOSection 1350 Certification of CEOSection 1350 Certification of CFO




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March 31, 2006
    
    
    December 31, 2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    238,139
    
    
    $
    259,598Accounts receivable, net
    
    
    307,404
    
    
    
    277,780Prepaid expenses and other
    
    
    67,838
    
    
    
    65,974Total current assets
    
    
    613,381
    
    
    
    603,352Property, equipment and purchased software, net
    
    
    187,386
    
    
    
    180,036Goodwill
    
    
    452,055
    
    
    
    443,439Deferred contract costs, net
    
    
    91,254
    
    
    
    85,313Other non-current assets
    
    
    65,615
    
    
    
    58,480Total assets
    
    $
    1,409,691
    
    
    $
    1,370,620LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    51,724
    
    
    $
    38,680Deferred revenue
    
    
    36,563
    
    
    
    28,035Accrued compensation
    
    
    35,655
    
    
    
    60,024Income taxes payable
    
    
    41,411
    
    
    
    51,064Accrued and other current liabilities
    
    
    89,030
    
    
    
    81,812Total current liabilities
    
    
    254,383
    
    
    
    259,615Long-term debt
    
    
    76,505
    
    
    
    76,505Non-current deferred revenue
    
    
    52,303
    
    
    
    47,143Other non-current liabilities
    
    
    23,909
    
    
    
    26,822Total liabilities
    
    
    407,100
    
    
    
    410,085Commitments and contingenciesStockholders equity:Common stock
    
    
    1,208
    
    
    
    1,205Additional paid-in capital
    
    
    494,548
    
    
    
    502,443Retained earnings
    
    
    517,000
    
    
    
    494,082Treasury stock
    
    
    (19,671
    )
    
    
    (35,332
    )Deferred compensation
    
    
    
    
    
    
    (11,394
    )Accumulated other comprehensive income
    
    
    9,506
    
    
    
    9,531Total stockholders equity
    
    
    1,002,591
    
    
    
    960,535Total liabilities and stockholders equity
    
    $
    1,409,691
    
    
    $
    1,370,620
  1




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PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
 
     Three Months Ended March 31,2006
    
    
    2005Revenue
    
    $
    542,429
    
    
    $
    473,271Direct cost of services
    
    
    443,727
    
    
    
    369,509Gross profit
    
    
    98,702
    
    
    
    103,762Selling, general and administrative expenses
    
    
    64,061
    
    
    
    60,124Operating income
    
    
    34,641
    
    
    
    43,638Interest income
    
    
    2,054
    
    
    
    2,243Interest expense
    
    
    (980
    )
    
    
    (845
    )Other income (expense), net
    
    
    641
    
    
    
    (292
    )Income before taxes
    
    
    36,356
    
    
    
    44,744Provision for income taxes
    
    
    13,438
    
    
    
    18,302Net income
    
    $
    22,918
    
    
    $
    26,442Basic and diluted earnings per common share:Basic earnings per common share
    
    $
    0.19
    
    
    $
    0.22Weighted average common shares outstanding
    
    
    118,642
    
    
    
    117,705Diluted earnings per common share
    
    $
    0.19
    
    
    $
    0.22Weighted average diluted common shares outstanding
    
    
    121,553
    
    
    
    122,017
  2




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Three Months Ended March 31,2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    22,918
    
    
    $
    26,442Adjustments to reconcile net income to net cash provided
by (used in) operating activities:Depreciation and amortization
    
    
    17,858
    
    
    
    13,895Change in deferred taxes
    
    
    7,733
    
    
    
    (174
    )Other non-cash items
    
    
    3,599
    
    
    
    3,510Changes in assets and liabilities (net
of effects from acquisitions of
businesses):Accounts receivable, net
    
    
    (25,642
    )
    
    
    (22,079
    )Prepaid expenses
    
    
    (11,028
    )
    
    
    (22,794
    )Deferred contract costs, net
    
    
    (7,988
    )
    
    
    (10,374
    )Accounts payable and accrued liabilities
    
    
    18,703
    
    
    
    12,182Deferred revenue
    
    
    13,887
    
    
    
    4,644Accrued compensation
    
    
    (25,252
    )
    
    
    (31,894
    )Income taxes
    
    
    (7,595
    )
    
    
    16,792Other current and non-current assets
    
    
    (3,608
    )
    
    
    3,736Other current and non-current liabilities
    
    
    (824
    )
    
    
    (741
    )Net cash provided by (used in) operating activities
    
    
    2,761
    
    
    
    (6,855
    )Cash flows from investing activities:Purchases of property, equipment and purchased software
    
    
    (17,169
    )
    
    
    (14,791
    )Acquisitions of businesses
    
    
    (20,724
    )
    
    
    (23,878
    )Other
    
    
    56
    
    
    
    Net cash used in investing activities
    
    
    (37,837
    )
    
    
    (38,669
    )Cash flows from financing activities:Repayment of long-term debt
    
    
    
    
    
    
    (75,498
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    76,505Proceeds from issuance of common stock
    
    
    3,944
    
    
    
    4,230Proceeds from issuance of treasury stock
    
    
    8,026
    
    
    
    Excess tax benefits from stock-based compensation arrangements
    
    
    1,393
    
    
    
    Other
    
    
    (463
    )
    
    
    (757
    )Net cash provided by financing activities
    
    
    12,900
    
    
    
    4,480Effect of exchange rate changes on cash and cash equivalents
    
    
    717
    
    
    
    (1,561
    )Net decrease in cash and cash equivalents
    
    
    (21,459
    )
    
    
    (42,605
    )Cash and cash equivalents at beginning of period
    
    
    259,598
    
    
    
    304,786Cash and cash equivalents at end of period
    
    $
    238,139
    
    
    $
    262,181
  3




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ConsultingandIndustry
    
    
    Government
    
    
    ApplicationsSolutions
    
    
    Services
    
    
    Solutions
    
    
    TotalBalance as of December 31, 2005
    
    $
    250,208
    
    
    $
    127,552
    
    
    $
    65,679
    
    
    $
    443,439Estimated goodwill from eServ acquisition
    
    
    9,904
    
    
    
    
    
    
    
    
    
    
    
    9,904Reclassification of goodwill due to
change in reporting units
    
    
    (15,471
    )
    
    
    
    
    
    
    15,471
    
    
    
    Other
    
    
    (457
    )
    
    
    (24
    )
    
    
    (807
    )
    
    
    (1,288
    )Balance as of March 31, 2006
    
    $
    244,184
    
    
    $
    127,528
    
    
    $
    80,343
    
    
    $
    452,055
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Deferred contract costs, net
   Identifiable intangible assets
  As of March 31, 2006Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    BookValue
    
    
    Amortization
    
    
    ValueService mark
    
    $
    6,697
    
    
    $
    (4,538
    )
    
    $
    2,159Customer-based intangible assets
    
    
    39,949
    
    
    
    (16,713
    )
    
    
    23,236Other intangible assets
    
    
    7,193
    
    
    
    (4,361
    )
    
    
    2,832Total
    
    $
    53,839
    
    
    $
    (25,612
    )
    
    $
    28,227
  5




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Three MonthsEnded March 31,2006
    
    
    2005Net income
    
    $
    22,918
    
    
    $
    26,442Foreign currency translation adjustments
    
    
    (25
    )
    
    
    1,070Total comprehensive income
    
    $
    22,893
    
    
    $
    27,512
    Stock-based compensation
    6




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Net incomeAs reported
    
    $
    26,442Add: stock-based compensation expense included in
reported net income, net of related tax effects
    
    
    453Less: total stock-based employee compensation
expense determined under fair value based methods
for all awards, net of related tax effects
    
    
    (3,441
    )Pro forma
    
    $
    23,454Basic earnings per common shareAs reported
    
    $
    0.22Pro forma
    
    $
    0.20Diluted earnings per common shareAs reported
    
    $
    0.22Pro forma
    
    $
    0.19
  Three Months Ended March 31,2006
    
    2005Weighted average risk free interest rates
    
    
    4.44
    %
    
    
    3.83
    %Weighted average life (in years)
    
    
    5.5
    
    
    
    4.1Volatility
    
    
    39
    %
    
    
    43
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Weighted average grant-date fair value per
share of options granted
    
    $
    6.55
    
    
    $
    5.47
  7




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Description of stock-based compensation plans
  2001 Long-Term Incentive Plan
  Employee stock purchase plan
  1996 Non-Employee Director Stock Option/Restricted Stock Plan
  1991 Stock Option Plan
  8




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Activity in our stock-based compensation plans
  Weighted-Weighted-
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term (in Years)
    
    ValueOutstanding at January 1, 2006
    
    
    25,342
    
    
    $
    14.81Granted
    
    
    41
    
    
    
    15.14Exercised
    
    
    (1,212
    )
    
    
    8.43Forfeited
    
    
    (4,042
    )
    
    
    21.37Outstanding at March 31, 2006
    
    
    20,129
    
    
    
    13.87
    
    
    
    4.83
    
    
    $
    67,896Exercisable at March 31, 2006
    
    
    10,873
    
    
    
    14.82
    
    
    
    4.53
    
    
    
    38,759
  Options Outstanding
    
    Options ExercisableWeighted
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    Average
    
    
    
    
    
    AverageExercise
    
    Remaining
    
    
    
    
    
    ExerciseRange of Prices
    
    Number
    
    Price
    
    Life
    
    Number
    
    Price$0.25 - $5.00
    
    
    1,599
    
    
    $
    2.19
    
    
    
    1.70
    
    
    
    993
    
    
    $
    2.07$5.01 - $10.00
    
    
    3,078
    
    
    
    9.69
    
    
    
    5.38
    
    
    
    2,391
    
    
    
    9.69$10.01 - $15.00
    
    
    8,932
    
    
    
    12.38
    
    
    
    4.82
    
    
    
    2,865
    
    
    
    11.62$15.01 - $20.00
    
    
    2,522
    
    
    
    16.37
    
    
    
    5.63
    
    
    
    1,003
    
    
    
    16.83$20.01 - $25.00
    
    
    3,998
    
    
    
    23.52
    
    
    
    5.16
    
    
    
    3,621
    
    
    
    23.68Total
    
    
    20,129
    
    
    
    13.87
    
    
    
    4.83
    
    
    
    10,873
    
    
    
    14.82
   9




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Consulting andIndustry
    
    Government
    
    ApplicationsSolutions
    
    Services
    
    Solutions
    
    Other
    
    TotalFor the quarter ended March 31, 2006:Revenue
    
    $
    418,090
    
    
    $
    76,074
    
    
    $
    60,032
    
    
    $
    (11,767
    )
    
    $
    542,429Income before taxes
    
    
    22,524
    
    
    
    4,559
    
    
    
    8,567
    
    
    
    706
    
    
    
    36,356For the quarter ended March 31, 2005:Revenue
    
    $
    364,401
    
    
    $
    62,805
    
    
    $
    55,590
    
    
    $
    (9,525
    )
    
    $
    473,271Income before taxes
    
    
    34,260
    
    
    
    3,621
    
    
    
    7,205
    
    
    
    (342
    )
    
    
    44,744
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For the Three Months EndedMarch 31,2006
    
    
    2005Basic Earnings per Common ShareNet income
    
    $
    22,918
    
    
    $
    26,442Weighted average common shares outstanding
    
    
    118,642
    
    
    
    117,705Basic earnings per common share
    
    $
    0.19
    
    
    $
    0.22Diluted Earnings per Common ShareNet income
    
    $
    22,918
    
    
    $
    26,442Weighted average common shares outstanding
    
    
    118,642
    
    
    
    117,705Incremental shares assuming dilution
    
    
    2,911
    
    
    
    4,312Weighted average diluted common shares outstanding
    
    
    121,553
    
    
    
    122,017Diluted earnings per common share
    
    $
    0.19
    
    
    $
    0.22
   Litigation
   11




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IPO Allocation Securities Litigation
    Litigation Relating to the California Energy Market
  12




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Other
  Contract-related Contingencies
   13




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This quarterly report contains forward-looking statements. These statements relate to future
events or our future financial performance. In some cases, you can identify forward-looking
statements by terminology such as may, will, should, could, forecasts, expects,
plans, anticipates, believes, estimates, predicts, potential, see, target,
projects, position, or continue or the negative of such terms and other comparable
terminology. These statements reflect our current expectations, estimates, and projections. These
statements are not guarantees of future performance and involve risks, uncertainties, and
assumptions that are difficult to predict. Actual events or results may differ materially from what
is expressed or forecasted in these forward-looking statements. In evaluating these statements, you
should specifically consider various factors, including the risks described in our Annual Report on
Form 10-K for the year ended December 31, 2005. These risk factors describe reasons why our actual
results may differ materially from any forward-looking statement. We disclaim any intention or
obligation to update any forward-looking statement.
 
  RESULTS OF OPERATIONS
  Lines of Business
  Overview of Our Financial Results for the First Quarter of 2006
   14




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Revenue Growth
  §
    
    A net increase in revenue from the expansion of base services and
discretionary technology investments by our existing long-term
customers.
 §
    
    Revenue from companies acquired during the twelve-month period
following the first quarter of 2005.
 §
    
    Revenue from new contracts signed during the twelve-month period
following the first quarter of 2005.
 Earnings Growth
  §
    
    In the first quarter of 2006, we incurred a $10.1 million loss on
an infrastructure services contract with a Commercial Solutions
customer, which decreased our gross profit from this contract by
$11.4 million as compared to the first quarter of 2005, or
approximately $0.06 per diluted share.
 §
    
    During the first quarter of 2005, we recorded additional profit of
approximately $0.03 per diluted share associated with the
termination of a contract.
 §
    
    Effective January 1, 2006, we adopted FAS 123R, Share-Based
Payment, which requires employee stock options and rights to
purchase shares under stock participation plans to be accounted
for under the fair value method and eliminates the ability to
account for these instruments under the intrinsic value method
prescribed by Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, which was allowed
under the original provisions of FAS 123, Accounting for
Stock-Based Compensation. As a result, during the first quarter
of 2006, we recorded additional stock compensation expense of $3.6
million ($2.4 million net of tax) as compared to the first quarter
of 2005, which reduced our earnings by approximately $0.02 per
diluted share. Of this additional stock compensation expense, $1.6
million was recorded in direct costs of services and $2.0 million
was recorded in selling, general and administrative expenses.
  Free Cash Flow
  15




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Twelve MonthsEndedMarch 312006
    
    
    2005Net cash provided by operating activities
    
    $
    159.3
    
    
    $
    149.1Purchases of property, equipment and software
    
    
    (72.7
    )
    
    
    (37.5
    )Free cash flow
    
    $
    86.6
    
    
    $
    111.6
  TCV of Contracts Signed
   Additional Measurements
  Comparison of the Three Months Ended March 31, 2006 and 2005
 Revenue
  Three Months Ended March 312006
    
    
    2005
    
    
    $ Change
    
    
    % ChangeIndustry Solutions
    
    $
    418.1
    
    
    $
    364.4
    
    
    $
    53.7
    
    
    
    14.7
    %Government Services
    
    
    76.1
    
    
    
    62.8
    
    
    
    13.3
    
    
    
    21.2
    %Consulting and Applications Solutions
    
    
    60.0
    
    
    
    55.6
    
    
    
    4.4
    
    
    
    7.9
    %Elimination of intersegment revenue
    
    
    (11.8
    )
    
    
    (9.5
    )
    
    
    (2.3
    )
    
    
    24.2
    %Total
    
    $
    542.4
    
    
    $
    473.3
    
    
    $
    69.1
    
    
    
    14.6
    %
 16




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##### Table of Contents



Industry Solutions
  §
    
    $28.1 million net increase from existing accounts and short-term
project work. This net increase resulted from expanding our base
services to existing long-term customers and from providing
additional discretionary services to these customers. The
discretionary services that we provide, which include short-term
project work, can vary from period-to-period depending on many
factors, including specific customer and industry needs and
economic conditions. This increase was primarily related to
contracts in the healthcare industry.
 §
    
    $16.2 million increase from new contracts signed during the
twelve-month period following the first quarter of 2005. This
increase was composed of $11.7 million and $4.5 million from new
contracts signed in the Healthcare and Commercial Solutions
groups, respectively. The services that we are providing to these
new customers are primarily the same services that we provide to
the majority of our other long-term outsourcing customers.
 §
    
    $15.6 million increase from revenue related to acquisitions within
our Commercial Solutions group during the twelve-month period
following the first quarter of 2005, including a leading provider
of policy administration and business process services to the life
insurance and annuity industry.
   §
    
    Our solutions for the healthcare market were developed over
several years and are highly customized to the specific business
needs of the market. We identified certain aspects of the
healthcare market as core to our long-term service offerings
several years ago when the market for technology and business
process services was immature. As a result, we have an established
presence and brand, which we have strengthened through internal
investment in software and solutions and through acquisitions.
 §
    
    The healthcare industry continues to be in a state of change as
health systems look to transform their clinical and administrative
back-office operations, payer organizations work to develop new
consumer-based health models, and as the rate of medical cost
inflation continues to be high. Clinical transformation
revolutionizes the way in which the healthcare community receives
patient-specific data that spans the entire continuum of care,
including centralization of patient data and electronic order
entry and decision support.
 Government Services
  17




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Consulting and Applications Solutions
  UBS
  Three Months EndedMarch 312006
    
    
    2005
    
    
    ChangeUBS revenue in Industry Solutions
    
    $
    64.9
    
    
    $
    62.9
    
    
    
    3.2
    %UBS revenue in Consulting and Applications Solutions
    
    
    8.2
    
    
    
    8.6
    
    
    
    (4.7
    %)Total revenue from UBS
    
    $
    73.1
    
    
    $
    71.5
    
    
    
    2.2
    %
  Gross Margin
  §
    
    An $11.4 million decrease in gross profit from an infrastructure
services contract with a Commercial Solutions customer. This
decrease was due to a $10.1 million loss on this contract that we
incurred in the first quarter of 2006, which reduced our gross
margin for the first quarter of 2006 by 1.9 percentage points.
After signing this contract, we discovered that the size and
complexity of the infrastructure of this customer were
significantly greater than was originally disclosed to us.
Consequently, we have significantly exceeded our cost expectations
on this contract. In addition, our service levels have also not
met expectations, which was partially caused by the unanticipated
complexity. The contract provides for additional resource charges,
but the parties do not agree on the amount of those charges. The
customer paid approximately $2.7 million of these additional
charges during the first quarter of 2006 but reserved its rights
to reclaim this amount. Although we believe the customer owes us
more than it has paid, we have not, because of the uncertainties
involved, recognized any of the additional charges as revenue,
including the approximately $2.7 million paid by the customer.
 §
    
    In the first quarter of 2005, we recorded revenue of $6.2 million
and related direct costs of services of $0.6 million, resulting in
gross profit of $5.6 million, associated with the termination of a
contract.
 §
    
    Lower margins from existing commercial customer contracts, which
are primarily due to our fixed- and unit-priced contracts.
 18




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§
    
    In the first quarter of 2006, we adopted FAS 123R and recorded
$1.6 million of additional stock compensation expense in direct
costs of services as compared to the prior year period.
  Selling, General and Administrative Expenses
  Other Income Statement Items
  Contract-related Contingencies
  19




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Expected Effect of the End of Our Outsourcing Contract with UBS
   Liquidity and Capital Resources
  Operating Activities
  §
    
    Amounts paid for prepaid expenses in the first quarter of 2006
decreased as compared to the amounts paid in the prior year period
due primarily to a decrease in amounts paid for prepaid hardware-
and software-related costs.
 §
    
    Bonuses paid to associates under our bonus plans in the first
quarters of 2006 and 2005 (including payments of annual bonuses
relating to the previous years bonus plan) were $53.4 million and
$60.8 million, respectively. Included in these bonus amounts paid
were approximately $23.2 million in each
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period of bonus payments
that are reimbursable by our customers. The amount of bonuses
that we pay each year is based on several factors, including our
financial performance and managements discretion.
  Investing Activities
  §
    
    During the three months ended March 31, 2006, we paid $20.7
million for the acquisition of eServ LLC, a leading provider of
high-end product engineering outsourcing services.
 §
    
    During the three months ended March 31, 2005, we paid $23.9
million as additional consideration for acquisitions, including
$17.0 million and $6.9 million related to the acquisitions of Soza
& Company, Ltd. and ADI Technology Corporation, respectively.
 §
    
    During the three months ended March 31, 2006, we purchased $17.2
million of property, equipment and purchased software as compared
to $14.8 million during the three months ended March 31, 2005.
This increase was primarily related to our business expansion
needs for data center and office facilities. We plan to
significantly increase our data center capacity in the next 12 to
24 months, which could increase our future capital expenditures
from current levels and reduce the amount of our available cash
balances and borrowing capacity.
 Financing Activities
   
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IPO Allocation Securities Litigation
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Litigation Relating to the California Energy Market
  Other
  
   
   EXHIBITNUMBER
    
    DESCRIPTION OF EXHIBIT3.1
    
    Third Amended and Restated Certificate of Incorporation of Perot
Systems Corporation (the Company) (Incorporated by reference to
Exhibit 3.1 of the Companys Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2002.)3.2
    
    Fourth Amended and Restated Bylaws. (Incorporated by reference to
Exhibit 3.2 of the Companys Current Report on Form 8-K filed
September, 24, 2004.)4.1
    
    Specimen of Class A Common Stock Certificate (Incorporated by
reference to Exhibit 4.1 of the Companys Registration Statement
on Form S-1, Registration No. 333-60755.)4.2
    
    Rights Agreement dated January 28, 1999 between the Company and
The Chase Manhattan Bank (Incorporated by reference to Exhibit
4.2 of the Companys Registration Statement on Form S-1,
Registration No. 333-60755.)4.3
    
    Form of Certificate of Designation, Preferences, and Rights of
Series A Junior Participating Preferred Stock (included as Exhibit
A-1 to the Rights Agreement) (Incorporated by reference to
Exhibit 4.3 of the Companys Registration Statement on Form S-1,
Registration No. 333-60755.)
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EXHIBITNUMBER
    
    DESCRIPTION OF EXHIBIT4.4
    
    Form of Certificate of Designation, Preferences, and Rights of
Series B Junior Participating Preferred Stock (included as Exhibit
A-2 to the Rights Agreement) (Incorporated by reference to
Exhibit 4.4 of the Companys Registration Statement on Form S-1,
Registration No. 333-60755.)10.1
    
    Restricted Stock Plan, as amended through March 22, 2006
(Incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K, filed March 28, 2006.)10.7
    
    Amended and Restated 1991 Stock Option Plan, as amended through
March 22, 2006. (Incorporated by reference to Exhibit 10.7 of the
Companys Current Report on Form 8-K filed March 28,
2006.)10.9
    
    2001 Long Term Incentive Plan, as amended through March 22, 2006
(Incorporated by reference to Exhibit 10.9 of the Companys
Current Report on Form 8-K filed March 28, 2006.)10.40
    
    Form of Change-in-Control Severance Agreement (Incorporated by
reference to Exhibit 10.40 to the Companys Current Report on Form
8-K filed March 28, 2006.)31.1*
    
    Rule 13a-14 Certification dated May 2, 2006, by Peter A. Altabef,
President and Chief Executive Officer.31.2*
    
    Rule 13a-14 Certification dated May 2, 2006, by Russell Freeman,
Vice President and Chief Financial Officer.32.1**
    
    Section 1350 Certification dated May 2, 2006, by Peter A. Altabef,
President and Chief Executive Officer.32.2**
    
    Section 1350 Certification dated May 2, 2006, by Russell Freeman,
Vice President and Chief Financial Officer.
 
 *
    
    Filed herewith.**
    
    Furnished herewith. 25




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PEROT SYSTEMS CORPORATION(Registrant)Date: May 2, 2006
    
    By /s/ ROBERT J. KELLYRobert J. KellyCorporate Controller and PrincipalAccounting Officer
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