Document:

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                                                                   EXHIBIT 10.46

                           SECOND AMENDED AND RESTATED
                                  AGREEMENT FOR
                       EPI OPERATIONAL MANAGEMENT SERVICES

THIS SECOND AMENDED AND RESTATED AGREEMENT FOR EPI OPERATIONAL MANAGEMENT
SERVICES (as amended, modified and supplemented from time to time, this "EPI
Agreement"), dated as of June 28, 1998, to be effective as of the Merger Date
(as defined below), is between Swiss Bank Corporation, a banking corporation
organized under the laws of Switzerland ("SBC"), and Perot Systems Corporation,
a corporation organized under the laws of the State of Delaware ("PSC").

                                   WITNESSETH

WHEREAS, SBC and PSC entered into the Agreement for Operational Management
Services (the "Original EPI Agreement") dated as of January 1, 1996 (the
"Original Agreement Date");

WHEREAS, SBC and PSC entered into the Amended and Restated Agreement for EPI
Operational Management Services (the "Amended and Restated EPI Agreement") dated
as of January 1, 1997 (the "Adjustment Date");

WHEREAS, SBC and PSC now desire to amend and restate the Amended and Restated
EPI Agreement to read in its entirety as set forth herein;

WHEREAS, contemporaneously with the execution of this EPI Agreement, PSC and SBC
are entering into the Second Amended and Restated Master Agreement, dated as of
the date hereof (the "Master Agreement"); and

WHEREAS, SBC, on behalf of the SBC Warburg Division, desires to obtain from PSC,
and PSC is willing to provide to SBC, the SBC Warburg Division's requirements
for the services described in this EPI Agreement, on the terms and conditions
set forth in the Master Operating Agreement and this EPI Agreement;

NOW, THEREFORE, SBC and PSC hereby agree as follows:

1.       Master Operating Agreement. Other than Sections 2.1, 3.1, 3.2, 3.3 and
         11.4 of the Master Operating Agreement and except as otherwise
         expressly set forth in this EPI Agreement, all the terms and conditions
         of the Master Operating Agreement will apply to this EPI Agreement as
         if fully set forth herein. In the event of any conflict or
         inconsistency between the terms and conditions of this EPI Agreement
         and the terms and conditions of the Master Operating Agreement, the
         terms and conditions of this EPI Agreement will apply.

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2.       EPI Agreement. During the term of this EPI Agreement and except as
         otherwise provided in Schedule F hereto, PSC will provide to the SBC
         Warburg Division, and SBC will obtain from PSC, the SBC Warburg
         Division's requirements for the Services, all upon and subject to the
         terms and conditions specified in this EPI Agreement.

3.       Definitions.  As used in this EPI Agreement:

         (a)      "Budget Period" means (i) the period commencing on the
                  Adjustment Date and ending on December 31, 1997, and (ii) each
                  twelve (12) month period thereafter.

         (b)      "Merger Date" means June 29, 1998, the date of the merger of
                  SBC and Union Bank of Switzerland through UBS AG.

         (c)      "Moves and Restacks" means the process of relocating the staff
                  of the SBC Warburg Division and its contractors within and
                  among the offices of the SBC Warburg Division, including
                  without limitation moving network voice connections and
                  Equipment.

         (d)      "Performance Metric" means, with respect to each Budget
                  Period, each qualitative or quantitative standard of
                  performance applicable to the Services for that Budget Period
                  which the parties may mutually establish from time to time in
                  accordance with the terms of this EPI Agreement. The
                  Performance Metrics for the Budget Period commencing on the
                  Merger Date are as designated on Schedule G hereto.

         (e)      "SBC Warburg Infrastructure" means the Equipment, Licensed SBC
                  Systems, SBC Facilities and non-personnel services provided
                  pursuant to Third Party Service Contracts that SBC makes
                  available to PSC for PSC's use in connection with this EPI
                  Agreement.

         (f)      "SBC Warburg Division Member" means any entity included within
                  the SBC Warburg Division.

         (g)      "Scope of Services" means, collectively, the services PSC is
                  generally performing at the locations at which PSC is
                  performing services as of the Merger Date on behalf of the SBC
                  Warburg Division, except with respect to the SBC Private
                  Banking Division, in which case Scope of Services shall refer
                  only to locations outside of Switzerland at which PSC is
                  performing services as of the Merger Date and the SBC Brinson
                  Division, in which case Scope of Services shall refer only to
                  locations outside of Chicago, Illinois at which PSC is
                  performing services, as of the Merger Date. The Scope of
                  Services shall include those services required to support the
                  normal technological evolution of the SBC Warburg
                  Infrastructure and the ordinary growth of the business of the
                  SBC Warburg Division (at the locations at which PSC is
                  performing such services as of the Merger Date) being
                  supported by

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                  PSC as defined in Schedule A hereto. The Scope of Services is
                  more specifically defined to include and exclude the services
                  described on Schedule A hereto as being either included or
                  excluded.

         (h)      "Service Level" means each qualitative or quantitative
                  standard of performance applicable to the Services, which the
                  parties may mutually establish from time to time in connection
                  with unit pricing in accordance with the terms of this EPI
                  Agreement and which are called "Service Levels".

         (i)      "Services" mean, collectively, the services required for the
                  Operational Management of the EPI of each SBC Warburg Division
                  Member, including the services described in Schedule A hereto.

4.       Term. The term of this EPI Agreement will commence on the Adjustment
         Date and, unless earlier terminated in accordance with the terms of the
         Master Operating Agreement, will continue until the tenth (10th)
         anniversary of the Adjustment Date or such later date as the parties
         may mutually agree.

5.       PSC Obligations and Performance Metrics. During the term of this EPI
         Agreement:

         (a)      PSC will make available to the SBC Warburg Division, for the
                  SBC Warburg Division's use in accordance with Article IV of
                  the Master Operating Agreement, any PSC Systems used by PSC in
                  the Operational Management of the EPI of the SBC Warburg
                  Division.

         (b)      PSC will provide the Services (including making available in a
                  timely fashion qualified people to perform, and to respond to
                  SBC's reasonable requests for, Services) (i) contemplated by
                  the PSC Costs Budget or Equipment and Facilities Budget (as
                  each such term is defined in Schedule F hereto) and, where
                  applicable, will use reasonable efforts to meet any Service
                  Levels mutually established for those Services or (ii) for
                  which SBC agrees to otherwise pay PSC in accordance with
                  Schedule F hereto. Additionally, and notwithstanding anything
                  else in this EPI Agreement to the contrary, SBC will pay PSC
                  in accordance with Schedule F, including the quarterly
                  adjustment provisions thereof, for any Services required to be
                  provided and which are provided by PSC to the SBC Warburg
                  Division whether the amounts for those Services are or are not
                  included in a PSC Costs Budget. Subject to the foregoing, PSC
                  agrees that it will abide by any cost approval processes of
                  which PSC may receive notice from SBC from time to time,
                  including the SBC Warburg Central Approval and Order Process,
                  within a reasonable period of time after receipt thereof.

         (c)      The Performance Metrics contained in Schedule G hereto shall
                  continue in effect until changed by the parties by mutual
                  agreement:

                  (1)      [Intentionally omitted]

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                  (2)      [Intentionally omitted]

                  (3)      Subject to the SBC Operational Manager's rights and
                           obligations under Section 2 of Schedule G hereto, if
                           PSC's actual level of performance meets the
                           anticipated typical or median (neither superior nor
                           inferior) performance expected by the parties, it is
                           expected that PSC will be paid an amount equal to the
                           Annual Profit Amount (as defined in Schedule F
                           hereto).

                  (4)      [Intentionally omitted]

                  (5)      On or before December 15 of each Budget Period, PSC
                           will deliver to the SBC Operational Manager in
                           writing its estimate of the total PSC Costs for the
                           current Budget Period. Within seven (7) days
                           thereafter, the SBC Operational Manager and the PSC
                           Relationship Manager will meet at a mutually agreed
                           time to discuss SBC's good faith estimate of the
                           Annual Profit Amount for such Budget Period.
                           Thereafter, PSC will deliver to SBC its final invoice
                           for the Budget Period and within seven (7) days of
                           receipt thereof SBC will deliver its final
                           determination of the Annual Profit Amount, as
                           adjusted in accordance with Schedule G.

                  (6)      [Intentionally omitted]

                  (7)      Upon the request of the PSC CEO no more frequently
                           than once per calendar quarter, the SBC Operational
                           Manager will provide the PSC CEO with a good faith
                           outlook with respect to PSC performance on the
                           Performance Metrics for the remainder of the
                           then-current Budget Period.

         (d)      [Intentionally omitted]

         (e)      [Intentionally omitted]

         (f)      PSC will timely provide SBC with a quarterly performance
                  report, in a form and with content mutually established by the
                  parties, documenting PSC's performance with respect to the
                  Performance Metrics.

         (g)      It is PSC's intention to use the SBC Warburg Infrastructure
                  and the Transitioned Employees in order to provide services to
                  other PSC customers, subject to the security and
                  confidentiality provisions of the Master Operating Agreement
                  and this EPI Agreement. Prior to any use of the SBC Warburg
                  Infrastructure in connection with the provision of services to
                  a third party by PSC, PSC must comply with the provisions of
                  Section 6 of Appendix 1 to Schedule F hereto. Nothing in this
                  EPI Agreement will limit PSC's rights to use the Licensed SBC
                  Systems in accordance with the Master Operating Agreement.

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         (h)      With respect to those PSC employees that have a significant,
                  direct working relationship with the SBC Warburg Division
                  business units, SBC will provide to PSC specific criteria for
                  the comprehensive incentive based compensation program
                  established for those PSC employees that will be designed to
                  reward those employees for performance that, while not
                  disadvantaging PSC, directly benefits those areas of SBC's
                  business deemed important to SBC. During PSC's annual review
                  of those PSC employees, SBC will provide PSC with SBC's
                  assessment of those PSC employees based upon the specific
                  criteria provided by SBC. Notwithstanding the foregoing, PSC
                  employees shall remain employees of PSC.

         (i)      PSC will also have responsibility for the functions and
                  obligations set forth on Schedule D hereto.

         (j)      PSC will use all reasonable efforts to maintain an errors and
                  omissions insurance policy with one hundred million dollars
                  ($100,000,000) of coverage and the cost of the policy will be
                  a direct PSC Cost. Other policies of insurance maintained by
                  PSC with coverage above the coverage maintained by PSC prior
                  to the Original Agreement Date, up to an aggregate of
                  seventy-five million dollars ($75,000,000) in coverage, will
                  be a direct PSC Cost until the time that those other policies
                  of insurance can be used by PSC to insure against risks
                  incurred by PSC as a result of its relationships with other
                  customers of PSC, at which time the costs of that insurance
                  will be allocated among all PSC accounts for which such
                  insurance can be used in accordance with the amount of
                  insurance coverage that can be used with respect to such
                  customer. SBC and PSC will periodically determine whether
                  these limits should be adjusted to take into account the
                  effects of inflation.

6.       SBC Obligations. Commencing on the Original Agreement Date:

         (a)      SBC has and will continue to make available to PSC, for PSC's
                  use in accordance with Article IV of the Master Operating
                  Agreement, the SBC Warburg Infrastructure. Other than as sold
                  or terminated in the ordinary course of business with the
                  consent of both parties prior to the date of delivery of this
                  Agreement, SBC represents to PSC that the SBC Warburg
                  Infrastructure made available to PSC hereunder includes all of
                  the Equipment, SBC Systems, SBC Facilities and services from
                  Third Party Service Contracts used by or on behalf of the SBC
                  Warburg Division as of the Original Agreement Date to provide
                  the Services to the SBC Warburg Division that PSC is obligated
                  to provide under this EPI Agreement.

         (b)      Except as expressly permitted by this EPI Agreement, the
                  Master Agreement (herein so called), executed by SBC and PSC
                  as of the Adjustment Date, or the Master Operating Agreement,
                  neither SBC nor the SBC Warburg Division Members will enter
                  into any agreements with third parties relating to any
                  products or services for which PSC has

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                  responsibility hereunder. SBC agrees that it will not enter
                  into any Third Party Service Contracts for services relating
                  to the Operational Management of the EPI of the SBC Warburg
                  Division during the term of this EPI Agreement, except as
                  otherwise approved by PSC or authorized by the terms of this
                  EPI Agreement.

         (c)      SBC will retain responsibility for the functions and
                  obligations set forth on Schedule C hereto.

         (d)      SBC will use all commercially reasonable efforts to cause the
                  SBC Warburg Division to standardize the products and services
                  for which PSC has responsibility hereunder within the SBC
                  Warburg Division as soon as reasonably practicable.

7.       PSC's Charges. SBC will pay PSC for the Services in accordance with
         Schedule F hereto.

8.       Operational Manager of SBC. SBC agrees that the Operational Manager of
         SBC (as defined in the Master Operating Agreement) for SBC will be
         David Solo, Peter Wuffli, or another individual satisfactory to the
         Operational Manager of PSC; provided that should PSC not consent to the
         designation of any Operational Manager designated pursuant to the
         Master Operating Agreement other than David Solo or Peter Wuffli, then
         the following shall apply: The matter of who shall serve as the
         Operational Manager for SBC under this EPI Agreement will be referred
         to the CEO's of PSC and SBC who will discuss the issue and negotiate in
         good faith to resolve the dispute or controversy. The specific format
         for such discussions and negotiations will be left to the CEO's. In the
         event that the CEO's do not agree on the individual who shall serve as
         the Operational Manager for SBC, then for the first twelve (12) months
         during which such disagreement as to the Operational Manager for SBC
         continues, PSC shall be deemed to have performed under the terms of
         this EPI Agreement each of the Performance Metrics to the extent
         necessary so that PSC will be entitled to receive the Annual Profit
         Amount on a pro rata basis for each of such twelve (12) months without
         adjustment pursuant to Schedule G of this EPI Agreement. Thereafter, so
         long as such disagreement continues, and notwithstanding Schedule G
         hereto, the Reward Pool will be an amount equal to seven and one half
         percent (7.5%) of the Annual Profit Amount and the Penalty Pool will be
         an amount equal to seven and one half percent (7.5%) of the Annual
         Profit Amount.

9.       Notices. Wherever under this EPI Agreement one party is required or
         permitted to give notice to the other, such notice shall be deemed
         given when delivered by hand or when mailed by registered or certified
         mail, return receipt requested, postage prepaid, and addressed as
         follows:

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         In the case of PSC:

            Perot Systems Corporation
            1801 Robert Fulton Drive, Suite 200
            Reston, Virginia  22091
            Attention: Division President - Global Financial Services Division

            with a copy to:

            Perot Systems Corporation
            12377 Merit Drive, Suite 1100
            Dallas, Texas 75251
            Attention:  General Counsel

         In the case of SBC:

            Swiss Bank Corporation
            1 Finsbury Avenue
            London, EC2M 2P
            Attention:  Operational Manager - SBC Warburg

            with a copy to:

            Swiss Bank Corporation
            Legal Services SBC Group
            Malzgasse 30-32
            CH-4002 Basel, Switzerland
            Attention:  General Counsel

         Either party hereto may from time to time change its address for
         notification purposes by giving the other prior written notice of the
         new address and the date upon which it will become effective.

10.      Entire Agreement. Except as set forth in the Principal Agreements (as
         defined in the Master Agreement), this EPI Agreement, including any
         Schedules referred to herein and attached hereto, and the terms and
         conditions of the Master Operating Agreement, each of which is
         incorporated herein for all purposes, constitutes, together with any
         other written agreement or letter between SBC and PSC dated the
         Adjustment Date or as of the Adjustment Date, or the Original Agreement
         Date or as of the Original Agreement Date (not including agreements or
         letters amended, or restated or superseded as of the Adjustment Date)
         that relates to this EPI Agreement, the entire agreement between the
         parties hereto with respect to the subject matter hereof and thereof
         and there are no representations, understandings or agreements relative
         hereto and thereto, written or oral, which are not fully expressed
         herein or therein. No change, waiver, or discharge hereof shall be
         valid unless in writing and signed by an authorized representative of
         the party against which such change, waiver, or discharge is sought to
         be enforced.

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IN WITNESS WHEREOF, PSC and SBC have each caused this EPI Agreement to be signed
and delivered by its duly authorized officer(s), all as of the Adjustment Date.

PEROT SYSTEMS CORPORATION                       SWISS BANK CORPORATION

By:                                             By:
   ----------------------------                    ----------------------------

Title:                                          Title:
      -------------------------                       -------------------------

                                                By:
                                                   ----------------------------

                                                Title:
                                                      -------------------------

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                                   SCHEDULE A

                                  PSC SERVICES

The Services included within the Scope of Services collectively make up data
processing services and specifically center on the support of: the entire wide
and local area communication network software and hardware; all data centers and
network, file and data servers; all desktop computer support, office automation
tools (specifically global email design, operation and support), the work to
ensure global connectivity and relatively free-seating capability; customer help
desk for non application specific problems; design, staging, installation and
restacking of an appropriate range of workstation offerings (fixed and
portable); design and support expertise for the inevitably evolving standards of
institutional process automation infrastructure (such as Internet standards and
Web technology).

The Scope of Services does not include services required for the design or
implementation of software packages ("Excluded Software Packages") for
transaction processing, custody, settlement/payments services, pricing tools,
risk control, customer MIS, financial reporting, general ledgers, payment
systems or other applications or business systems. However, the Scope of
Services does include the Services necessary for operating the systems that run
the Excluded Software Packages, to include appropriate monitoring of task
completion, etc. PSC will, within the Scope of Services, facilitate the normal
restack and periodic site relocation (to include the Stamford and Stardust work
contemplated as of the Adjustment Date), though a major relocation project
(excluding the currently configured Stamford and Stardust moves) or the support
of a new geographic office would be outside the Scope of Services and require
additional compensation as described in Schedule F to this EPI Agreement.
Likewise, if there is a substantial increase in the services necessary to
support services in the Scope of Services beyond the level of services as of the
Merger Date, as requested by SBC (for example, such as an increase of more than
7% during any Budget Period or 35% in the aggregate in the number of
workstations (not bandwidth) currently supported by PSC), or if the services are
required to support the SBC Private Banking Division in Switzerland or the SBC
Brinson Division in Chicago then these additional services would be outside the
Scope of Services and require additional compensation as described in Schedule F
to this EPI Agreement. Additionally, any offices of the SBC Private Banking
Division and the SBC Brinson Division not serviced on the Merger Date are also
outside the Scope of Services and require additional compensation as described
in Schedule F to the EPI Agreement.

                                       A-1

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                                   SCHEDULE B

                           EXCLUSIONS TO REQUIREMENTS

[Intentionally omitted]

                                       B-1
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                                   SCHEDULE C

                              SBC RESPONSIBILITIES

1.       Establish appropriate requirements and priorities for the SBC Warburg
         Division's requirements for the Services, including business
         projections relating to such requirements, and communicate the same to
         PSC.

2.       Subject to the terms and conditions of this EPI Agreement and the
         Master Operating Agreement, make available to PSC, as reasonably
         requested by PSC, management decisions, personnel, information,
         approvals, acceptances, and access to the SBC Facilities in order that
         the Services may be properly performed.

3.       Cooperate with PSC in establishing mutually acceptable procedures and
         timing for the processing of non-scheduled, special request, or other
         user-initiated services and change control activities, and modifying
         those procedures as reasonably requested from time to time.

4.       Supply to PSC for processing required data with applicable control
         totals as such data is currently used by the SBC Warburg Division and
         as may be required by PSC to provide the Services.

5.       Identify a mutually acceptable number of delivery points for report
         distribution within each location at which PSC is required to deliver
         reports and timely notify PSC of any report distribution schedule
         changes or problems which may arise from time to time.

6.       Inspect and review all reports prepared by PSC as soon as reasonably
         practicable after receipt and promptly notify PSC as to any required
         corrections.

7.       Periodically provide to PSC an updated list of SBC personnel authorized
         to access data and system functions designated as restricted by SBC.

8.       Provide access control and physical security at locations provided or
         controlled by the SBC Warburg Division, including such security as may
         be required in connection with the installation, operation, maintenance
         and removal of communication and computer equipment to, at or from any
         such location.

9.       Cooperate and assist PSC in instructing SBC personnel to adhere to
         applicable PSC security policies and standards as necessary to protect
         the information and assets of PSC and its customers.

10.      Provide to PSC and the end-users the consumables, such as toner and
         paper, required for all desk-top devices maintained by PSC in
         connection with the Services provided hereunder.

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                                   SCHEDULE D

                         ADDITIONAL PSC RESPONSIBILITIES

1.       Use its commercially reasonable efforts to meet or exceed each of the
         applicable Service Levels, subject to the terms and conditions of this
         EPI Agreement.

2.       Cooperate and consult with and assist SBC in establishing the PSC Costs
         Budget and the Equipment and Facilities Budget as described in Appendix
         1 to Schedule F to this EPI Agreement.

3.       Provide SBC or its representatives with reasonable access to PSC's
         books and records as required for SBC to exercise its audit rights as
         described in this EPI Agreement and the Master Operating Agreement.

4.       Use reasonable efforts to meet or exceed applicable budget targets,
         subject to the terms and conditions of this EPI Agreement.

                                       D-1
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                                   SCHEDULE E

                              LICENSED SBC SYSTEMS

[Intentionally omitted]

                                       E-1
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                                   SCHEDULE F

                                   PSC CHARGES

1.       Definitions.  For purposes of this Schedule:

         (a)      "Annual Profit Amount" means, with respect to the first Budget
                  Period, an amount equal to Forty Million Five Hundred Thousand
                  Dollars ($40,500,000) and for each subsequent Budget Period,
                  an amount equal to Forty Six Million Dollars ($46,000,000)
                  which will be adjusted in accordance with Appendix 2 to this
                  Schedule F.

         (b)      "Cost Plus Service" means all Services provided by PSC
                  pursuant to this EPI Agreement, excluding any Services for
                  which PSC is being paid by SBC on other than a cost
                  reimbursement basis as described in Section 4 of this Schedule
                  F.

         (c)      "Equipment and Facilities Budget" means, with respect to each
                  Budget Period, each budget relating to SBC Warburg Division
                  capital expenses developed for that Budget Period in the form
                  finally approved by SBC in accordance with Section 2 of
                  Appendix 1 to this Schedule F.

         (d)      "PSC Costs" mean all costs, excluding Corporate Overhead,
                  incurred by PSC in the performance and provision of the
                  Services pursuant to this EPI Agreement. To be chargeable to
                  SBC, costs shall, unless otherwise mutually agreed, be
                  accounted for using (i) generally accepted accounting
                  principles, and (ii) using reasonable cost accounting
                  practices. "Corporate Overhead" means the costs of the Office
                  of PSC Chairman, Office of the PSC CEO and President, Office
                  of the Global Financial Services Industry, and the corporate
                  (as contrasted with SBC Account) costs of the Marketing,
                  Finance, HR, Legal, Internal Audit, Travel, Sales Procurement,
                  Real Estate, Internal Systems and Recruiting Departments, all
                  to the extent such costs are for the general support of PSC on
                  a corporate-wide basis, and not for the direct support of
                  providing the Services pursuant to this EPI Agreement where
                  such direct support costs are allocated on a use, consumption
                  or incurrence of cost basis.

                  SBC will notify PSC within nine (9) months of receipt by SBC
                  of any invoice containing a cost item that SBC reasonably
                  believes to be of a class or character (but not an amount)
                  that SBC or a third Person similarly situated with PSC could
                  not reasonably be expected to incur in performing the
                  Services. Such written notice will set forth the basis for
                  SBC's belief in reasonable detail. SBC and PSC will discuss
                  the issues raised in such notice for a period of up to thirty
                  (30) days following its delivery to PSC, and if not resolved
                  during the first twenty (20) days of such period, there will
                  be a meeting between the CEO of Perot Systems and the
                  Operational Manager of SBC prior to the end of such thirty
                  (30) day period. Any dispute between PSC and SBC with respect
                  to the

                                       F-1

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                  foregoing that is not mutually resolved by PSC and SBC within
                  such thirty (30) day period will be resolved in accordance
                  with Section 7.4 of the Master Operating Agreement with the
                  "arbitration panel" referred to in that Section being one of
                  the six (6) largest internationally recognized firms of public
                  accountants.

                  PSC Costs will include:

                           (1)      With respect to taxes, all Taxes
                                    attributable to the Services and the
                                    resources utilized therefor but only to the
                                    extent that those Taxes, or the withholding
                                    or collection thereof, are the legal
                                    obligation of PSC, such as employee
                                    withholding taxes and sales taxes for
                                    products or services purchased by PSC on its
                                    own behalf to provide the Services. All
                                    other Taxes will be paid or reimbursed by
                                    SBC to PSC but will not be included in PSC
                                    Costs.

                           (2)      To the extent that PSC presents invoices for
                                    Services in local currency, the costs of
                                    hedging against and otherwise prudently
                                    managing the risk of currency fluctuations,
                                    but excluding currency profits and/or losses
                                    from such hedging or other management
                                    activities.

                           (3)      To the extent that PSC presents invoices for
                                    Services in U.S. Dollars, the costs of
                                    hedging against and otherwise prudently
                                    managing the risk of currency fluctuations
                                    and any profits and/or losses from such
                                    hedging or other management activities and
                                    profits and/or losses from currency
                                    fluctuations measured against the U.S.
                                    Dollar.

         (e)      "PSC Costs Budget" means, with respect to each Budget Period,
                  each budget developed for that Budget Period in the form
                  finally approved by SBC in accordance with Section 1 of
                  Appendix 1 to this Schedule F.

         (f)      "PSC Interest Payment" means, with respect to any amount owed
                  by SBC to PSC under this EPI Agreement and for which this EPI
                  Agreement expressly provides for an interest payment equal to
                  the PSC Interest Payment:

                  (1)      An amount equal to the fees and expenses incurred by
                           PSC in connection with PSC's financing of the amount
                           owed by SBC; or

                  (2)      If PSC does not finance the amount owed by SBC, an
                           amount equal to the PSC Interest Rate on the amount
                           owed by SBC calculated from the date the amount owed
                           by SBC was due and payable until the date it is paid
                           to PSC.

         (g)      "PSC Interest Rate" means the London Interbank Offered Rate as
                  published in the Wall Street Journal (national edition) for
                  three (3) month U.S. Dollar deposits, plus two percent (2%),
                  or if no such rate is

                                       F-2
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                  quoted, the rate for certificates of deposit of major New York
                  banks as quoted in the Wall Street Journal (national edition)
                  for three (3) month certificates of deposit plus two percent
                  (2%). PSC and SBC will adjust the PSC Interest Rate for each
                  Budget Period as necessary to reflect changed circumstances.

         (h)      "SBC Interest Payment" means, with respect to any amount
                  overpaid by SBC and reimbursable by PSC to SBC under this EPI
                  Agreement and for which this EPI Agreement expressly provides
                  for an interest payment equal to the SBC Interest Payment, an
                  amount equal to the SBC Interest Rate on the amount
                  reimbursable by PSC calculated from the date the amount
                  reimbursable by PSC was overpaid by SBC until the date it is
                  reimbursed to SBC.

         (i)      "SBC Interest Rate" means the London Interbank Offered Rate as
                  published in the Wall Street Journal (national edition) for
                  three (3) month U.S. Dollar deposits, plus two percent (2%) or
                  if no such rate is quoted, the rate for certificates of
                  deposit of major New York banks as quoted in the Wall Street
                  Journal (national edition) for three (3) month certificates of
                  deposit plus two percent (2%). PSC and SBC will adjust the SBC
                  Interest Rate for each Budget Period as necessary to reflect
                  changed circumstances.

         (j)      "Special Profit Fee" means a one time payment of Three Million
                  Dollars ($3,000,000) payable from SBC to PSC.

         (k)      "Taxes" means all foreign, federal, state, county, local and
                  other taxes of every kind and however measured, including,
                  without limitation, income, capital, gross receipts, excise,
                  stamp, franchise, business privilege, property, value added,
                  import duties, employment, withholding, payroll, sales, ad
                  valorem, use, leasing, profits, excess profits, occupational,
                  telephony, transfer, levies, imposts, duties, charges, fees,
                  assessments, or withholdings of any nature whatsoever, general
                  or special, ordinary or extraordinary, and any transaction
                  privilege or similar taxes together with any and all
                  penalties, fines, surcharges, additions to tax and interest
                  thereon; but excluding any taxes based on the net income (or
                  gross income, profits or franchise taxes in lieu of or in
                  conjunction with net income) of PSC imposed by any federal,
                  state, provincial, cantonal, local or any similar
                  jurisdiction, and any withholding tax associated with the
                  distribution of that net income (or gross income, profits or
                  franchise taxes in lieu of or in conjunction with net income).

2.       Budget and Capacity Planning. The PSC Costs Budget and the Equipment
         and Facilities Budget will be established in accordance with Appendix 1
         to this Schedule F.

3.       Cost Plus Services. During each Budget Period:

         (a)      PSC's estimated and budgeted charges to SBC for the Cost Plus
                  Services will be an amount equal to (i) the PSC Costs
                  reflected in the PSC Costs

                                       F-3

<PAGE>

                  Budget for that Budget Period that it is estimated PSC will
                  incur during that Budget Period relating to the Cost Plus
                  Services, plus (ii) the then current Annual Profit Amount.

         (b)      Subject to receipt of an invoice pursuant to Section 6 hereof,
                  on the tenth day (or, if not a business day, the first
                  business day thereafter) of each month during that Budget
                  Period, SBC will pay to PSC, by wire transfer to a bank
                  account designated by PSC, an amount equal to the Monthly Run
                  Rate (as defined in Section 1(b)(3) of Appendix 1 to this
                  Schedule F) applicable to the Cost Plus Services for that
                  month.

         (c)      At the end of each calendar quarter during that Budget Period
                  (or, at the request of either party, more often than quarterly
                  to take into account significant differences between actual
                  PSC Costs and the Monthly Run Rate), PSC will determine the
                  actual PSC Costs and the pro rata portion of the Annual Profit
                  Amount relating to the Cost Plus Services for all prior
                  periods. To the extent the actual PSC Costs for the Cost Plus
                  Services for prior periods varied from the estimated amounts
                  paid under Section 3(b) with respect to those prior periods
                  and such variance has not been taken into account in
                  connection with prior adjustments under this Section 3(c), PSC
                  will either issue to SBC (i) an invoice for additional amounts
                  owed by SBC, plus the PSC Interest Payment, or (ii) a credit
                  against the next month's invoice for amounts overpaid by SBC
                  as a result of such variances, plus the SBC Interest Payment.

         (d)      In a given budget year, PSC has the right to limit the growth
                  in the PSC Costs Budget by not providing expanded services or
                  by ceasing to provide services in specific functional or
                  geographic areas. In such case, SBC has the right to perform
                  such services itself, and PSC and SBC shall mutually agree on
                  which services or functional areas shall no longer be
                  supported by PSC, and to the extent that PSC is no longer
                  providing such services in such functional or geographic area,
                  PSC shall accommodate SBC by permitting SBC to hire the
                  permanent, full-time PSC employees who were providing such
                  services.

4.       Services Not Within the Scope of Services. PSC shall not be required to
         provide any services outside of the Scope of Services defined in
         Section 3(f) and Schedule A hereto unless SBC and PSC mutually agree on
         the compensation for such additional services; provided, however, that
         PSC shall not be entitled to withhold or withdraw any services
         previously provided except to the extent that PSC may determines to
         stop performing services which it deems to be outside the Scope of
         Services and for which compensation has not been established, in which
         case SBC shall be free to hire the permanent, full-time PSC employees
         who are performing such services for SBC. Anything to the contrary
         notwithstanding, SBC shall have the right in its sole discretion to
         perform for itself services outside the Scope of Services except to the
         extent that such services are specifically contracted for with PSC for
         additional compensation. Upon the occurrence of any event or events
         that would provide PSC with the opportunity to provide services outside
         the Scope of Services or development,

                                       F-4

<PAGE>

         maintenance or enhancement services related to the Restricted
         Application Systems, PSC will so notify SBC and unless SBC, in its sole
         discretion, determines to perform such services itself, SBC will pay
         PSC for the resources required to provide those services as set out
         below.

         If PSC and SBC are unable to agree on an amount to be paid for the
         required resources, PSC will be relieved of any responsibility for the
         services with respect to the required resources and SBC may, in its
         sole discretion, perform the services itself; provided, however, that
         if SBC desires to have the right to have another third party provide
         the services that are not within the Scope of Services, subject to
         PSC's final right of refusal in the case that SBC elects to use a third
         party, PSC will have a final right of refusal as follows:

         (a)      SBC will give PSC notice of the services and related resources
                  that it is proposing be provided by a third party. The notice
                  will include the amounts that the third party proposes to
                  charge for those services and related resources.

         (b)      PSC will be given thirty (30) days to respond to the notice by
                  notifying SBC whether it desires to provide those services and
                  related resources and the price it offers to charge for those
                  services.

         (c)      Within thirty (30) days of receiving PSC's response, SBC will
                  grant PSC the right to provide those services and related
                  resources, unless either the price for such services offered
                  by PSC is meaningfully worse or SBC in good faith believes
                  that PSC has not demonstrated proficiency in the area of the
                  applicable services.

         (d)      SBC may use a PSC Competitor to provide the applicable
                  services only if SBC and the PSC Competitor act in good faith
                  and not with the intent to have the PSC Competitor "buy" the
                  business and the PSC Competitor charges SBC no less than its
                  typical retail rates for similar services.

5.       [Intentionally omitted]

6.       Invoices and Time of Payment. The amounts payable to PSC hereunder will
         be invoiced and paid as set out below.

         (a)      PSC will submit invoices to SBC for each month during the term
                  of this EPI Agreement. Invoices will be submitted in the name
                  of any SBC Warburg Division Member and for any location that
                  is requested by SBC to cover Services delivered in that
                  location to that SBC Warburg Division Member, in a form that
                  is acceptable to the taxing authorities in the applicable
                  location. Each invoice will contain information in a format
                  and with such detail as is reasonably necessary for SBC to
                  verify PSC's charges and to allocate PSC's charges among the
                  appropriate SBC Warburg Division Members. PSC will also
                  provide an analysis of the charges in a manner consistent with
                  SBC's reasonable requests from time to time.

                                       F-5
<PAGE>

         (b)      Invoices for the amounts due pursuant to Sections 3(b), 4(b),
                  5(b) and 6(b) of this Schedule F will be submitted on or
                  before the first day of each calendar month and will be
                  payable by the tenth day of that calendar month. Any amount
                  due PSC hereunder for which a time for payment is not
                  otherwise specified will be due and payable within thirty (30)
                  days after receipt by SBC of a PSC invoice therefor. PSC will
                  submit such invoices on a timely basis promptly after
                  performing the Services or incurring the expenses that are
                  being invoiced.

         (c)      If SBC reasonably disputes any invoice in good faith, as SBC's
                  sole means of obtaining relief related to the invoice, SBC
                  must provide to PSC within nine (9) months of receipt of the
                  invoice concerning such dispute a detailed written reason for
                  its dispute and will pay to PSC all amounts due on the
                  invoice, except SBC may withhold a portion of the Annual
                  Profit Amount having the same ratio to the Annual Profit
                  Amount invoiced for the month as to which a dispute exists as
                  the ratio of the amount in dispute to all amounts due to PSC
                  for the month associated with the PSC Costs being disputed by
                  SBC. SBC will pay to PSC the PSC Interest Payment for any late
                  payments and withheld Annual Profit Amounts that are
                  ultimately determined to be due. PSC will pay to SBC the SBC
                  Interest Payment for any amounts required to be reimbursed by
                  PSC to SBC as a result of SBC's payment to PSC of amounts that
                  are ultimately determined not to have been due.

         (d)      PSC's monthly invoices will include a pro-rata portion of the
                  Annual Profit Amount. Adjustment to the Annual Profit Amount
                  pursuant to Schedule G will be determined by SBC and notified
                  to PSC in writing in accordance with Section 5(c)(5) of the
                  EPI Agreement. Payment of any reward amount by SBC will be
                  made simultaneously with delivery of such notice to PSC.
                  Credit for any penalty amount will by applied by PSC to the
                  Monthly Run Rate for the subsequent Budget Period.

         (e)      SBC will pay PSC the Special Profit Fee on or before May 31,
                  1997.

7.       Currency of Payment. All charges to SBC will be invoiced in the
         currency of the country or countries, as the case may be, in which the
         PSC Costs related to the charges were incurred, and SBC will pay those
         PSC charges in the currency so denominated. Upon the agreement of SBC
         and PSC at the beginning of any Budget Period, charges to SBC may be
         invoiced in U.S. Dollars. The Annual Profit Amount will be invoiced in
         U.S. Dollars.

8.       Tax Credit. As a reduction to any amounts billed to SBC under this
         Schedule F, PSC will apply a credit equal to the reduction in "Income
         Tax" resulting from the use of an "Existing Tax Asset" to the extent
         that "SBC Taxable Income" in any jurisdiction enables PSC to "Utilize"
         such Existing Tax Asset. For purposes of this Section 8:

                                       F-6
<PAGE>

         (a)      "Income Tax" means the tax liability required to be calculated
                  under the relevant jurisdiction's income, profits or franchise
                  tax laws for any tax year.

         (b)      "Existing Tax Asset" means a net operating loss carryover, as
                  defined in the relevant jurisdiction's income, profits or
                  franchise tax laws, that exists at December 31, 1995.

         (c)      "SBC Taxable Income" means the portion of PSC Group taxable
                  income before net operating loss carryover as presented on any
                  PSC Group final tax return for any tax year in any
                  jurisdiction that PSC allocates to this Agreement, using any
                  reasonable, good faith method.

         (d)      "Utilize" means to use the Existing Tax Asset on any PSC Group
                  final income tax return for any tax year in any jurisdiction,
                  but only to the extent that the Existing Tax Asset would not
                  otherwise be offset by non-SBC Taxable Income in the current
                  tax year or in any subsequent tax years. For these purposes,
                  an Existing Tax Asset shall not be considered Utilized until a
                  final determination can be made that the Existing Tax Asset
                  would have expired unused but for availability of SBC Taxable
                  Income. In making this determination, non-SBC Taxable Income
                  shall be applied to the oldest net operating loss carryovers
                  first. Non-SBC Taxable Income shall mean any PSC Group taxable
                  income that is not SBC Taxable Income.

9.       Audit of Charges. Upon the reasonable request of SBC, PSC will permit
         SBC or its designated representatives (who will not be PSC Competitors
         or Affiliates of PSC Competitors, other than the reporting auditors of
         any SBC Warburg Division Member) access to PSC's books and records to
         perform an audit up to four (4) times per Budget Period to the extent
         necessary to verify PSC's charges to SBC under this EPI Agreement. SBC
         will provide to PSC a copy of the audit report resulting from each such
         audit upon its completion. As promptly as practicable thereafter, but
         within nine (9) months of the receipt by SBC of the invoice concerning
         the disputed cost, SBC must provide notice to PSC of a dispute and the
         parties will then review the audit report and work in good faith to
         agree upon any reimbursement of charges due to SBC and any appropriate
         future adjustments to PSC's charges and practices under this EPI
         Agreement. Subject to the delivery of the notice referred to above, if
         such audit demonstrates that PSC's invoiced charges for that period
         differ from the correct charges for that period, PSC will either (i)
         issue a credit to SBC against the next succeeding monthly invoice for
         the amount of any overpayments, or (ii) issue an invoice to SBC for any
         underpayments, plus in the event of (i) above, interest on the credited
         amounts equal to the SBC Interest Rate calculated from the date such
         amounts were overpaid, and in the event of (ii) above, interest on the
         invoiced amounts equal to the PSC Interest Rate calculated from the
         date such amounts should have been paid. If PSC's invoiced charges for
         the applicable period exceed the correct charges for that period by
         more than ten percent (10%), PSC will pay or reimburse SBC for the
         reasonable costs of such audit. In the event PSC reasonably desires to
         limit the scope of SBC's audit rights in order to

                                       F-7

<PAGE>

         protect confidential or proprietary information, the audit will be
         conducted by an independent third party auditor mutually acceptable to
         PSC and SBC who will verify PSC's charges to SBC for the relevant
         period without disclosing any Confidential Information of any member of
         the PSC Group to any member of the SBC Group or any other party.

                                       F-8
<PAGE>

                                   APPENDIX 1
                                       TO
                                   SCHEDULE F

                          BUDGET AND CAPACITY PLANNING

1.       PSC Costs Budget. The PSC Costs Budget will be established for each
         Budget Period as follows:

         (a)      SBC, in consultation with PSC, will determine the estimated
                  requirements of the SBC Warburg Division during that Budget
                  Period for the Cost Plus Services (the "Estimated Services").

         (b)      Following determination of the Estimated Services, PSC, in
                  consultation with SBC, will establish a proposed budget for
                  that Budget Period and PSC will submit the proposed budget to
                  SBC for SBC's written approval. The budget submitted by PSC
                  will:

                  (1)      Reference the aggregate amount of PSC Costs that PSC
                           estimates it will incur in connection with providing
                           the Estimated Services.

                  (2)      Itemize the aggregate PSC Costs by a number and type
                           of expense categories to be mutually established from
                           time to time.

                  (3)      Allocate the budget over the total number of months
                           in that Budget Period (the "Monthly Run Rate") by
                           considering the month in which the various PSC Costs
                           will be incurred by PSC and allocate the Annual
                           Profit Amount on a pro-rata basis.

                  (4)      Take into account providing the Estimated Services in
                           accordance with any Performance Metrics that may have
                           been established.

           (c)    Upon receipt of PSC's proposed budget, SBC will either approve
                  the budget as submitted or disapprove the budget as submitted
                  and provide to PSC the aggregate amount of PSC Costs that SBC
                  will approve for the budget. If SBC does not approve PSC's
                  proposed budget, PSC and SBC will work together to adjust the
                  Services and, where applicable, the Performance Metrics, and
                  to make any other appropriate adjustments, all as necessary to
                  cause the budget to meet the total PSC Costs that SBC will
                  approve for the budget.

           (d)    The final budget (the "PSC Costs Budget"), along with the
                  Monthly Run Rate, for each Budget Period will be subject to
                  SBC's final approval and will become the basis for PSC's
                  determination of its estimated monthly charges to SBC for the
                  Cost Plus Services.

2.       Equipment and Facilities Budget. An Equipment and Facilities Budget
         will be established for each Budget Period as follows:

                                      1-F-1

<PAGE>

         (a)      PSC, in consultation with SBC, will establish a proposed
                  budget for that Budget Period covering the aggregate amount of
                  equipment and facilities expenditures that PSC estimates SBC
                  must directly incur in connection with the Services
                  contemplated by the PSC Costs Budget for that Budget Period
                  and PSC will submit the proposed budget to SBC for SBC's
                  written approval. The budget submitted by PSC will:

                  (1)      itemize the aggregate equipment and facilities
                           expenditures by expense category to be mutually
                           established from time to time; and

                  (2)      allocate the budget over the total number of months
                           in that Budget Period (the "Monthly Capital Rate") by
                           considering the month in which the various equipment
                           and facilities expenditures will be incurred.

         (b)      Upon receipt of PSC's proposed budget, SBC will either approve
                  the budget as submitted or disapprove the budget as submitted
                  and provide to PSC the aggregate amount of equipment and
                  facilities expenditures that SBC will approve for the budget.
                  If SBC does not approve PSC's proposed budget, PSC and SBC
                  will work together to adjust the PSC Costs Budget, the
                  Services and, where applicable, the Performance Metrics
                  reflected in the applicable PSC Costs Budget, and to make any
                  other appropriate adjustments, all as necessary to cause the
                  Equipment and Facilities Budget to meet the total equipment
                  and facilities expenditures that SBC will approve for the
                  budget.

         (c)      The final budget (the "Equipment and Facilities Budget") for
                  each Budget Period will be subject to SBC's final approval.

3.       Quarterly Budget Review. At the end of each calendar quarter during a
         Budget Period, PSC and SBC will jointly review (i) the Equipment and
         Facilities Budget and (ii) the PSC Costs Budget, by comparing the
         budgeted Monthly Run Rate and Monthly Capital Rate for that Budget
         Period to the actual monthly costs incurred during that Budget Period
         for each expense category reflected in the PSC Costs Budget or the
         Equipment and Facilities Budget, as applicable. Based upon that review,
         SBC may make adjustments to the Monthly Run Rate, the PSC Costs Budget
         and the Equipment and Facilities Budget for the remainder of the Budget
         Period. Additionally, based upon these quarterly reviews, PSC's charges
         to SBC will be adjusted as provided in Section 3 to Schedule F. Either
         party may request that adjustments occur more often than quarterly to
         take into account significant differences between actual PSC Costs and
         the Monthly Run Rate.

4.       Changes to Budgets. PSC acknowledges and agrees that SBC may make
         changes to the PSC Costs Budget and the Equipment and Facilities Budget
         by providing prior notice to PSC. SBC acknowledges and agrees that
         changes to either the PSC Costs Budget or the Equipment and Facilities
         Budget may result

                                      1-F-2

<PAGE>

         in changes to the Services and, where applicable, the Performance
         Metrics that SBC anticipates PSC will provide during the applicable
         Budget Period. Subject to Section 8 of this Appendix, if PSC desires to
         make any changes to either the PSC Costs Budget or the Equipment and
         Facilities Budget, PSC will first obtain the prior approval of SBC.

5.       Additional Equipment. If at any time during the term of this EPI
         Agreement, PSC elects to add any Equipment (excluding any personal
         computers, modems, printers or other related personal Equipment for use
         by PSC personnel) to the SBC Warburg Infrastructure, and the cost of
         the Equipment has been included in the Equipment and Facilities Budget
         covering the Budget Period in which the Equipment is to be purchased,
         PSC may purchase the Equipment, and the cost thereof will be chargeable
         to SBC. If the cost of the Equipment has not been included in the
         Equipment and Facilities Budget covering the Budget Period in which the
         Equipment is to be purchased, PSC will notify SBC of its desire to add
         the Equipment to the SBC Warburg Infrastructure and the date by which
         PSC desires to order the Equipment, and if SBC consents to the purchase
         of the Equipment prior to the desired order date, PSC will purchase the
         Equipment on behalf of SBC and SBC will pay PSC therefor in accordance
         with this Schedule F. Subject to the foregoing, PSC agrees that it will
         abide by any cost approval process of which PSC may receive notice from
         SBC from time to time, including the SBC Warburg Central Approval and
         Order Process, within a reasonable period of time after receipt
         thereof.

6.       Use of SBC Warburg Infrastructure. Prior to the use by PSC of the SBC
         Warburg Infrastructure for any customer of PSC (other than an SBC
         Warburg Division Member), PSC will obtain the consent of SBC based upon
         a business case prepared by PSC for SBC's review and approval
         specifying (i) any capital investment that will be required from SBC to
         obtain any additional resources to provide services to the PSC customer
         and, if so, any payments that will be made to SBC in connection with or
         attributable to the use of the SBC Warburg Infrastructure, (ii) any
         impact on the overall operating expenses of the SBC Warburg
         Infrastructure, (iii) any impact the introduction of the third party
         customer would have on existing Performance Metrics and (iv) any impact
         on PSC's charges to SBC for the Services. PSC shall also satisfy SBC,
         in SBC's sole discretion, that adequate security procedures have been
         instituted to prevent disclosure of any Confidential Information of SBC
         to the third party customer.

7.       Operational Plan. PSC, on an annual basis, will update and provide to
         SBC a twelve (12) month operational plan for the Services to be
         provided by PSC under this Agreement, which will include plans for
         reducing PSC Costs and will establish suggested Performance Metrics for
         the Services.

8.       Assignment of Costs. Notwithstanding anything to the contrary in this
         Appendix or elsewhere in the EPI Agreement, SBC acknowledges and agrees
         that PSC may assign to SBC, and SBC will assume from PSC,
         responsibility for paying directly to the applicable third party vendor
         any costs that are then included in the PSC Costs. In such event, the
         PSC Costs, the PSC Costs Budget, and the Monthly Run Rate will be
         decreased to reflect any such

                                      1-F-3

<PAGE>

         assignment. Notwithstanding any assignment by PSC to SBC of any
         third-party costs pursuant to this Section 8, PSC will remain
         responsible for continuing to manage the Services to which the assigned
         costs are applicable.

                                      1-F-4
<PAGE>

                                   APPENDIX 2
                                       TO
                                   SCHEDULE F

                              INFLATION ADJUSTMENT

1.       Index. As used in this Appendix, (i) the "Index" means the Implicit
         Price Deflator for the Gross Domestic Product, published by the Bureau
         of Economic Analysis, an agency of the U.S. Department of Commerce,
         (ii) the "Base Index" is the Index applicable to the Original Agreement
         Date and (iii) the "Base Profit Amount" means $46,000,000.

2.       Adjustment.

         (a)      Effective as of the third anniversary of the Original
                  Agreement Date,the Annual Profit Amount will be increased by
                  the percentage increase in the Index as of such date over the
                  Base Index.

         (b)      If, on any anniversary of the Original Agreement Date during
                  the term of this EPI Agreement after the third anniversary
                  referred to in clause (a) above (each, an "Inflation
                  Adjustment Date") the Index (the "Applicable Index") is higher
                  than the Base Index, then, effective as of such Inflation
                  Adjustment Date the Annual Profit Amount will be an amount
                  equal to (i) the Base Profit Amount plus (ii) the percentage
                  by which the Applicable Index exceeds the Base Index as of
                  such Inflation Adjustment Date multiplied by the Base Profit
                  Amount.

         (c)      Notwithstanding any other provision of this Appendix 2 to
                  Schedule F, the Annual Profit Amount will never be less than
                  $46,000,000 (other than for the first Budget Period, for which
                  it will be $40,500,000.

3.       Change of Index. In the event that the Bureau of Economic Analysis
         should stop publishing the Index or should substantially change the
         content or format thereof, PSC and SBC will substitute therefor another
         comparable measure published by a mutually acceptable source.

                                      2-F-1
<PAGE>

                                   SCHEDULE G

                               PERFORMANCE METRICS

1.       Definitions. For purposes of this Schedule G, the following definitions
         will apply:

         a.       [Intentionally omitted]

         b.       "Penalty Pool" is, with respect to any Budget Period during
                  the term of this EPI Agreement, an amount equal to fifteen
                  percent (15%) of the Annual Profit Amount.

         c.       [Intentionally omitted]

         d.       "Reward Pool" is, with respect to any Budget Period during the
                  term of this EPI Agreement, an amount equal to fifteen percent
                  (15%) of the Annual Profit Amount.

2.       Performance Metrics Mechanics. The Performance Metrics listed below are
         in effect at the Merger Date:

         o        Service Quality/Product Delivery

         o        Business User Satisfaction

         o        Cost Effectiveness

         o        Corporate Level Support

         Each of the four metrics above is a subjective criteria, and the SBC
         Operational Manager will make a good faith assessment of PSC's
         performance under the foregoing metrics taking into consideration all
         information and factors he deems appropriate. The SBC Operational
         Manager will also provide the PSC CEO or his designee with his good
         faith outlook in accordance with any request made pursuant to Section
         5(c)(7) of this EPI Agreement.

3.       Penalty Amount. With respect to each Budget Period in which PSC's
         performance of the Services fails to meet or fails to exceed the
         standards which have been mutually established for a Performance
         Metric, PSC will provide to SBC a credit in an amount, as determined
         hereunder by the SBC Operational Manager, not to exceed the Penalty
         Pool for that Budget Period; provided, however, that the maximum amount
         of credit that PSC is obligated to provide to SBC pursuant to this
         Section 3 in any one Budget Period with respect to all Performance
         Metrics shall not exceed, in the aggregate, the Penalty Pool for that
         Budget Period.

                                       G-1

<PAGE>

4.       Reward Amount. With respect to each Budget Period in which PSC's
         performance of the Services meets or exceeds the standards which have
         been mutually established for a Performance Metric, SBC will pay to PSC
         an amount, as determined hereunder by the SBC Operational Manager, not
         to exceed the Reward Pool for that Budget Period; provided, however,
         that the maximum additional amount that SBC is obligated to pay to PSC
         pursuant to this Section 4 in any one Budget Period with respect to all
         Performance Metrics shall not exceed, in the aggregate, the Reward Pool
         for that Budget Period.

                                       G-2<PAGE>
                                                                   EXHIBIT 10.47

                            PEROT SYSTEMS CORPORATION
                          2001 LONG-TERM INCENTIVE PLAN

1.       PURPOSES OF THE PLAN.

                  The purposes of this Plan are to provide an incentive to
         eligible employees, officers, independent consultants, directors who
         are also employees or consultants, and advisors of the Company whose
         present and potential contributions are important to the continued
         success of the Company; to encourage ownership in the Company by key
         personnel whose long-term employment is considered essential to the
         Company's continued progress; and to enable the Company to continue to
         enlist and retain the best available personnel to contribute to the
         success of the Company's business and, thereby, to encourage
         Participants to act in the stockholders' interest and share in the
         Company's success.

2.       DEFINITIONS.

         As used herein, the following definitions shall apply:

         (a)      "Administrator" means the Board or any of its Committees
                  administering the Plan in accordance with Section 4 of the
                  Plan.

         (b)      "Affiliate" means any entity that is directly or indirectly
                  controlled by the Company or any entity in which the Company
                  has a significant ownership interest as determined by the
                  Administrator, including but not limited to any entity (i) in
                  which the Company, directly or indirectly, owns a 40% or
                  greater voting, equity or other economic interest and (ii) the
                  financial statements of which are consolidated with the
                  financial statements of the Company.

         (c)      "Applicable Laws" means the legal requirements relating to the
                  administration of stock plans under U.S. federal, state and
                  local corporate, securities and tax laws and regulations, the
                  New York Stock Exchange or any other stock exchange or
                  quotation system on which the Common Stock is listed or quoted
                  and the analogous applicable laws of any country or
                  jurisdiction where Awards are granted under the Plan.

         (d)      "Award" means a Cash Award, Stock Award, Stock Appreciation
                  Right or Option granted to a Participant in accordance with
                  the terms of the Plan.

         (e)      "Award Agreement" means an instrument or agreement, in written
                  or electronic form, between the Company and an Awardee
                  evidencing the terms and conditions of an individual Award
                  which instrument or agreement may, but need not, be executed
                  or acknowledged by the Awardee. The Award Agreement is subject
                  to the terms and conditions of the Plan.

<PAGE>

         (f)      "Awardee" means the holder of an outstanding Award.

         (g)      "Board" means the Board of Directors of the Company.

         (h)      "Cash Awards" means cash awards granted pursuant to Section 13
                  of the Plan.

         (i)      "Code" means the United States Internal Revenue Code of 1986,
                  as amended.

         (j)      "Committee" means a committee of Directors appointed by the
                  Board in accordance with Section 4 of the Plan.

         (k)      "Common Stock" means the Class A common stock of the Company.

         (l)      "Company" means Perot Systems Corporation, a Delaware
                  corporation, or any successor entity.

         (m)      "Consultant" means any person, including an advisor, engaged
                  by the Company or a Subsidiary to render bona fide services
                  (provided that such services are not provided in connection
                  with the offer and sale of securities in capital-raising
                  transactions) to such entity or any person who is an advisor,
                  director or consultant of an Affiliate.

         (n)      "Director" means a member of the Board who is also an Employee
                  or Consultant.

         (o)      "Employee" means a regular employee of the Company, any
                  Subsidiary or any Affiliate, including Officers and Directors,
                  who is treated as an employee in the personnel records of the
                  Company, any Subsidiary or any Affiliate for the relevant
                  period, but shall exclude individuals who are classified by
                  the Company, any Subsidiary or any Affiliate as (A) leased
                  from or otherwise employed by a third party; (B) independent
                  contractors; or (C) contingent, intermittent or temporary,
                  even if any such classification is changed retroactively as a
                  result of an audit, litigation or otherwise. A Participant
                  shall not cease to be an Employee solely as the result of (i)
                  any leave of absence approved by the Participant's Employer,
                  subject to the provisions of Section 6(b), or (ii) transfers
                  between locations of the Participant's Employer or transfers
                  of the Participant's employment among the Company, any
                  Subsidiary or any Affiliate. Neither service as a Director nor
                  payment of a director's fee by the Company shall be sufficient
                  to constitute "employment" by the Company.

         (p)      "Employer" means, with respect to an Awardee on the relevant
                  date, the Company or any Subsidiary or Affiliate of which
                  Awardee is an Employee or to which Awardee is a Consultant.

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         (q)      "Exchange Act" means the Securities Exchange Act of 1934, as
                  amended.

         (r)      "Fair Market Value" means, as of any date, the last reported
                  sale price for one Share on such date (or the most recent
                  prior date for which the last reported sale price is
                  available) on the principal national securities exchange on
                  which the Common Stock is listed or admitted to trading or, if
                  no such reported sale price is available, the average of the
                  closing bid and asked prices for one Share on such exchange on
                  such date (or the most recent prior date for which such prices
                  are available), in either case as reported in The Wall Street
                  Journal or such other source as the Administrator shall
                  determine.

         (s)      "Grant Date" means the date selected by the Administrator,
                  from time to time, upon which an Award is granted to a
                  Participant pursuant to this Plan.

         (t)      "Incentive Stock Option" means an Option intended to qualify
                  as an incentive stock option within the meaning of Section 422
                  of the Code and the regulations promulgated thereunder.

         (u)      "Nonstatutory Stock Option" means an Option not intended to
                  qualify as an Incentive Stock Option.

         (v)      "Officer" means a person who is an officer of the Company
                  within the meaning of Section 16 of the Exchange Act and the
                  rules and regulations promulgated thereunder.

         (w)      "Option" means an option of any type permitted by Applicable
                  Laws to purchase Shares granted pursuant to this Plan.

         (x)      "Participant" means an Employee, Director or Consultant.

         (y)      "Plan" means this 2001 Long-Term Incentive Plan, as amended
                  from time to time.

         (z)      "Predecessor Plans" means the Company's (i) 1988 Restricted
                  Stock Plan, (ii) 1989 Pioneer Stock Option Plan, (iii) 1991
                  Stock Option Plan, (iv) 1992 Advisor Stock Option/Restricted
                  Stock Incentive Plan, and (v) 1996 Advisor and Consultant
                  Stock Option/Restricted Stock Incentive Plan.

         (aa)     "Restricted Stock" means shares of Common Stock acquired
                  pursuant to a grant of a Stock Award under Section 11 of the
                  Plan.

         (bb)     "Severance Date" means the date shown in the Company's, its
                  Subsidiaries' and Affiliates' personnel or other records as
                  the last day an Awardee was a Participant or, with respect to
                  an Awardee who has a Total Disability, the day such Total

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                  Disability ceases to exist unless such Awardee becomes an
                  Employee within a reasonable period determined by the
                  Administrator in its sole discretion.

         (cc)     "Share" means a share of the Common Stock, as adjusted in
                  accordance with Section 15 of the Plan.

         (dd)     "Stock Appreciation Right" means a right to receive cash equal
                  to the difference between the Fair Market Value of Common
                  Stock on the Grant Date and the Fair Market Value of Common
                  Stock on the date such right is exercised by the Awardee
                  granted pursuant to Section 12 of the Plan.

         (ee)     "Stock Awards" means the right to purchase or receive Common
                  Stock pursuant to Section 11 of the Plan.

         (ff)     "Subsidiary" means a "subsidiary corporation," whether now or
                  hereafter existing, as defined in Section 424(f) of the Code.

         (gg)     "10% Shareholder" means the owner of stock (as determined
                  under Code Section 424(d)) possessing more than 10% of the
                  total combined voting power of all classes of stock of the
                  Company (or any parent or Subsidiary of the Company).

         (hh)     "Total Disability" means a mental or physical condition that
                  results in an Employee's continued entitlement to long term
                  disability benefits under a long term disability plan
                  sponsored by the Employee's Employer or the U.S. Social
                  Security Act or any equivalent law governing non-U.S.
                  Employees, provided that such mental or physical condition is
                  not the result of any condition or circumstance that the
                  Administrator, in its sole discretion, determines to have
                  resulted from the Awardee's illegal or reckless use of
                  alcohol, drugs or other chemical substances, or from actions
                  taken by the Awardee with the intention of causing self-injury
                  or with reckless disregard for personal health and safety.

3.       STOCK SUBJECT TO THE PLAN.

         (a)      Subject to the provisions of Section 15 and Section 6(d) of
                  the Plan, the maximum aggregate number of Shares that may be
                  issued in connection with any combination of Awards under the
                  Plan is (i) the aggregate number of Shares remaining available
                  for grants under the Predecessor Plans on the date this Plan
                  is approved by the Company's stockholders, plus (ii) the
                  additional Shares described in paragraph (b) below. The Shares
                  may be authorized, but unissued, or reacquired Common Stock.

         (b)      If an Award or any award or grant under any Predecessor Plan
                  expires or becomes unexercisable without having been exercised
                  in full, the unpurchased Shares which were subject thereto, if
                  any, shall become available for future grant or sale

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                  under the Plan (unless the Plan has terminated). Shares of
                  Restricted Stock that are either forfeited or repurchased by
                  the Company shall become available for future grant or sale
                  under the Plan. Shares that are tendered, whether by physical
                  delivery or by attestation, to the Company by the Participant
                  as full or partial payment of the exercise price of any Award
                  or in payment of any applicable withholding for federal,
                  state, city, local or other taxes incurred in connection with
                  the exercise of any Award shall become available for future
                  grant or sale under the Plan.

4.       ADMINISTRATION OF THE PLAN.

         (a)      Procedure.

                  (i)      Multiple Administrative Bodies. The Plan may be
                           administered by different Committees with respect to
                           different groups of Participants.

                  (ii)     Section 162(m). To the extent that the Administrator
                           determines it to be desirable to qualify Awards
                           granted hereunder as "performance-based compensation"
                           within the meaning of Section 162(m) of the Code, the
                           Plan shall be administered by a Committee of two or
                           more "outside directors" within the meaning of
                           Section 162(m) of the Code.

                  (iii)    Rule 16b-3. To the extent desirable to qualify
                           transactions hereunder as exempt under Rule 16b-3
                           promulgated under the Exchange Act, the transactions
                           contemplated hereunder shall be structured to satisfy
                           the requirements for exemption under Rule 16b-3.

                  (iv)     Other Administration. The Board may delegate to the
                           Executive Committee of the Board or the chief
                           executive officer of the Company the power to approve
                           Awards to Participants who are not (A) subject to
                           Section 16 of the Exchange Act or (B) at the time of
                           such approval, "covered employees" under Section
                           162(m) of the Code.

         (b)      Powers of the Administrator. Subject to the provisions of the
                  Plan, and in the case of a Committee or the chief executive
                  officer of the Company, subject to the specific duties
                  delegated by the Board to such Committee or officer, the
                  Administrator shall have the authority, in its discretion:

                  (i)      to select the Participants to whom Awards may be
                           granted hereunder;

                  (ii)     to determine the number of shares of Common Stock to
                           be covered by each Award granted hereunder;

                  (iii)    to approve forms of agreement for use under the Plan;

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                  (iv)     to determine the terms and conditions, not
                           inconsistent with the terms of the Plan, of any Award
                           granted hereunder. Such terms and conditions include,
                           but are not limited to, the exercise price, the time
                           or times when an Award may be exercised (which may or
                           may not be based on performance criteria), any
                           vesting acceleration or waiver of forfeiture
                           restrictions, and any restriction or limitation
                           regarding any Award or the Shares relating thereto,
                           based in each case on such factors as the
                           Administrator, in its sole discretion, shall
                           determine;

                  (v)      to construe and interpret the terms of the Plan and
                           Awards granted pursuant to the Plan;

                  (vi)     to adopt rules and procedures relating to the
                           operation and administration of the Plan to
                           accommodate the specific requirements of local laws
                           and procedures. Without limiting the generality of
                           the foregoing, the Administrator is specifically
                           authorized (A) to adopt the rules and procedures
                           regarding the conversion of local currency,
                           withholding procedures and handling of stock
                           certificates which vary with local requirements, and
                           (B) to adopt sub-plans and Plan addenda as the
                           Administrator deems desirable, to accommodate non-US
                           laws, regulations and practice, including but not
                           limited to non-US tax laws and regulations;

                  (vii)    to prescribe, amend and rescind rules and regulations
                           relating to the Plan, including rules and regulations
                           relating to sub-plans and Plan addenda;

                  (viii)   to modify or amend each Award, including the
                           discretionary authority to extend the
                           post-termination exercisability period of Options
                           longer than is otherwise provided for in the Plan,
                           provided, however, that any such amendment is subject
                           to Section 16(c) of the Plan and may not impair any
                           outstanding Award unless agreed to in writing by the
                           Participant;

                  (ix)     to allow Participants to satisfy withholding tax
                           obligations by electing to have the Company withhold
                           from the Shares to be issued upon exercise of an
                           Award that number of Shares having a Fair Market
                           Value equal to the amount required to be withheld.
                           The Fair Market Value of the Shares to be withheld
                           shall be determined on the date that the amount of
                           tax to be withheld is to be determined. All elections
                           by an Awardee to have Shares withheld for this
                           purpose shall be made in such form and under such
                           conditions as the Administrator may deem necessary or
                           advisable;

                  (x)      to authorize conversion or substitution under the
                           Plan of any or all outstanding stock options or
                           outstanding stock appreciation rights held by
                           employees, directors, officers, consultants, advisors
                           or other service

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                           providers of an entity acquired by the Company (the
                           "Conversion Options"). Any conversion or substitution
                           shall be effective as of the close of the merger or
                           acquisition. The Conversion Options may be
                           Nonstatutory Stock Options or Incentive Stock
                           Options, as determined by the Administrator;
                           provided, however, that with respect to the
                           conversion of stock appreciation rights in the
                           acquired entity, the Conversion Options shall be
                           Nonstatutory Stock Options. Unless otherwise
                           determined by the Administrator at the time of
                           conversion or substitution, all Conversion Options
                           shall have the same terms and conditions as Options
                           generally granted by the Company under the Plan;

                  (xi)     to provide, upon direction by the Board in its sole
                           discretion in the event there is a change of control
                           of the Company or any Subsidiary, as determined by
                           the Board, for the (A) assumption or substitution of,
                           or adjustment to, each outstanding Award; (B)
                           acceleration of the vesting of Options and the
                           termination of any restrictions on Cash Awards or
                           Stock Awards; and/or (C) the cancellation of Awards
                           for a cash payment to the Awardee;

                  (xii)    to delegate to any officer of the Company any of its
                           powers hereunder, to the extent permitted by
                           Applicable Laws, and to authorize any person to
                           execute on behalf of the Company any instrument
                           required to effect the grant of an Award previously
                           granted under this Plan; and

                  (xiii)   to make all other determinations deemed necessary or
                           advisable for administering the Plan and any Award
                           granted hereunder.

         (c)      Effect of Administrator's Decision. The Administrator's
                  decisions, determinations and interpretations shall be final
                  and binding on all Participants.

5.       ELIGIBILITY.

         One or more Awards may be granted to Participants, provided, however,
         that Incentive Stock Options may be granted only to Employees of the
         Company or any Subsidiary.

6.       AWARD LIMITATIONS.

         (a)      Each Option shall be designated in the Award Agreement as
                  either an Incentive Stock Option or a Nonstatutory Stock
                  Option. However, notwithstanding such designation, to the
                  extent that the aggregate Fair Market Value of the Shares with
                  respect to which Incentive Stock Options are exercisable for
                  the first time by the Participant during any calendar year
                  (under all plans of the Company and any Subsidiary) exceeds
                  $100,000, such Options shall be treated as Nonstatutory Stock
                  Options. For purposes of this Section 6(a), Incentive Stock
                  Options shall be

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                  taken into account in the order in which they were granted.
                  The Fair Market Value of the Shares shall be determined as of
                  the time the Option with respect to such Shares is granted.

         (b)      For purposes of Incentive Stock Options, no leave of absence
                  may exceed 90 days, unless reemployment upon expiration of
                  such leave is guaranteed by statute or contract. If
                  reemployment upon expiration of a leave of absence approved by
                  the applicable Employer is not so guaranteed, on the 91st day
                  of such leave an Awardee's employment with the Company shall
                  be deemed terminated for Incentive Stock Option purposes and
                  any Incentive Stock Option held by the Awardee shall cease to
                  be treated as an Incentive Stock Option and shall be treated
                  for tax purposes as a Nonstatutory Stock Option three months
                  thereafter.

         (c)      No Participant shall have any claim or right to be granted an
                  Award and the grant of any Award shall not be construed as
                  giving an Awardee the right to continue in the employ or hire
                  of the Company, its Subsidiaries or Affiliates. Further, the
                  Company, its Subsidiaries and Affiliates expressly reserve the
                  right, at any time, to dismiss a Participant at any time
                  without liability or any claim under the Plan, except as
                  provided herein or in any Award Agreement entered into
                  hereunder.

         (d)      The following limitations shall apply to grants of Awards:

                  (i)      No Participant shall be granted, in any fiscal year
                           of the Company, Options to purchase more than
                           2,000,000 Shares.

                  (ii)     If an Option is cancelled, forfeited, or lapses in
                           the same fiscal year of the Company in which it was
                           granted (other than in connection with a transaction
                           described in Section 15), the cancelled, forfeited or
                           lapsed Option will be counted against the limits set
                           forth in subsection (i).

                  (iii)    The foregoing limitations shall be adjusted
                           proportionately in connection with any change in the
                           Company's capitalization as described in Section 15.

         (e)      The following limitations shall apply to grants of Awards to
                  an Employee who is not exempt from the overtime pay provisions
                  of the Fair Labor Standards Act of 1938, as amended (a
                  "Non-Exempt Employee"):

                  (i)      Options or Stock Appreciation Rights (but not
                           Restricted Stock) may be granted under this Plan to
                           Non-Exempt Employees.

                  (ii)     Options or Stock Appreciation Rights granted to
                           Non-Exempt Employees must comply with the exercise
                           price and exercise period restrictions set forth
                           below, and other provisions of the "Worker Economic
                           Opportunity

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                           Act" of 2000, P.L. 106-202, or other provisions of
                           law, sufficiently to insure that such Options, and
                           any profits, gains or income resulting from such
                           Options, are excluded from such Non-Exempt Employee's
                           overtime pay calculations.

                  (iii)    No Option granted to a Non-Exempt Employee may be
                           exercisable less than six months after the effective
                           date of the grant of such Option, except in the case
                           of death, Total Disability, retirement or change in
                           control.

7.       TERM OF PLAN.

         Subject to Section 21 of the Plan, the Plan shall become effective upon
         its adoption by the Board and its approval by the Company's
         shareholders. It shall continue in effect for a term of 10 years from
         the later of the date the Plan or any amendment to add shares to the
         Plan is adopted by the Board and approved by the stockholders unless
         terminated earlier under Section 16 of the Plan.

8.       TERM OF AWARD.

         The term of each Award shall be determined by the Administrator and
         stated in the Award Agreement. In the case of an Incentive Stock
         Option, the term shall be 10 years (five years if the Awardee is a 10%
         Shareholder) from the Grant Date or such shorter period as may be
         provided in the Award Agreement. In the case of an Option other than an
         Incentive Stock Option, the term shall be 10 years from the Grant Date
         or such shorter term as may be provided in the Award Agreement;
         provided that the term may be up to 11 years in other circumstances
         deemed appropriate in the discretion of the Administrator.

9.       OPTION EXERCISE PRICE AND CONSIDERATION.

         (a)      Exercise Price. The per share exercise price for the Shares to
                  be issued pursuant to exercise of an Option shall be
                  determined by the Administrator, subject to the following:

                  (i)      In the case of an Incentive Stock Option the per
                           Share exercise price shall be no less than 100% of
                           the Fair Market Value on the Grant Date; provided
                           that if any Participant to whom an Incentive Stock
                           Option is granted is a 10% Shareholder, then the per
                           Share exercise price shall be no less than 110% of
                           the Fair Market Value on the Grant Date.

                  (ii)     In the case of a Nonstatutory Stock Option, the per
                           Share exercise price shall be no less than 85% of the
                           Fair Market Value on the Grant Date. In the case of a
                           Nonstatutory Stock Option intended to qualify as
                           "performance-based compensation" within the meaning
                           of Section 162(m)

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                           of the Code, the per Share exercise price shall be no
                           less than 100% of the Fair Market Value on the Grant
                           Date.

                  (iii)    The exercise price per Share for a Nonstatutory Stock
                           Option granted to a Non-Exempt Employee must be not
                           less than 85% of the Fair Market Value per Share on
                           the effective date of grant of the Option.

                  (iv)     Notwithstanding the foregoing, at the Administrator's
                           discretion, Conversion Options (as defined in Section
                           4(b)(x)) may be granted with a per Share exercise
                           price of less than 100% of the Fair Market Value on
                           the Grant Date.

         (b)      Vesting Period and Exercise Dates. At the time an Option is
                  granted, the Administrator shall fix the period within which
                  the Option may vest and be exercised and shall determine any
                  conditions that must be satisfied before the Option may be
                  exercised.

         (c)      Form of Consideration. The Administrator shall determine the
                  acceptable form of consideration for exercising an Option,
                  including the method of payment. In the case of an Incentive
                  Stock Option, the Administrator shall determine the acceptable
                  form of consideration at the Grant Date. Acceptable forms of
                  consideration may, but except for cash, check and wire
                  transfers are not required to, include:

                  (i)      cash;

                  (ii)     check or wire transfer (denominated in U.S. Dollars
                           or other currency the Administrator determines is
                           acceptable);

                  (iii)    other Shares which (A) in the case of Shares acquired
                           upon exercise of an Option, have been owned by the
                           Participant for more than six months on the date of
                           surrender, and (B) have a Fair Market Value on the
                           date of surrender equal to the aggregate exercise
                           price of the Shares as to which said Option shall be
                           exercised;

                  (iv)     consideration received by the Company under a
                           cashless exercise program implemented by the Company
                           in connection with the Plan;

                  (v)      any combination of the foregoing methods of payment;
                           or

                  (vi)     such other consideration and method of payment for
                           the issuance of Shares to the extent permitted by
                           Applicable Laws.

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10.      EXERCISE OF OPTION.

         (a)      Procedure for Exercise; Rights as a Stockholder.

                  (i)      Any Option granted hereunder shall be exercisable
                           according to the terms of the Plan and at such times
                           and under such conditions as determined by the
                           Administrator and set forth in the respective Award
                           Agreement.

                  (ii)     An Option granted hereunder shall continue to vest
                           during any authorized leave of absence and such
                           Option may be exercised to the extent vested during
                           such leave of absence.

                  (iii)    No Option may be exercised for a fraction of a Share.

                  (iv)     An Option shall be deemed exercised when the Company
                           receives:

                           (A)      written or electronic notice of exercise (in
                                    accordance with the Award Agreement or the
                                    procedures established by the Administrator
                                    from time to time) from a person entitled to
                                    exercise the Option;

                           (B)      full payment for the Shares with respect to
                                    which the related Option is exercised; and

                           (C)      full payment of all applicable taxes
                                    required to be withheld by the Company or
                                    the Awardee's employer in connection with
                                    such exercise.

                  Shares issued upon exercise of an Option shall be issued in
                  the name of the Awardee or, if requested by the Awardee, in
                  the name of the Awardee and his or her spouse, or in the name
                  of any permitted transferee. Until the Shares are issued (as
                  evidenced by the appropriate entry on the books of the Company
                  or of a duly authorized transfer agent of the Company), no
                  right to vote or receive dividends or any other rights as a
                  stockholder shall exist with respect to the Shares subject to
                  an Option, notwithstanding the exercise of the Option. The
                  Company shall issue (or cause to be issued) such Shares
                  promptly after the Option is exercised. No adjustment will be
                  made for a dividend or other right for which the record date
                  is prior to the date the Shares are issued, except as provided
                  in Section 15 of the Plan. Exercising an Option in any manner
                  shall decrease the number of Shares thereafter available, both
                  for purposes of the Plan and for sale under the Option, by the
                  number of Shares as to which the Option is exercised.

         (b)      Termination of Employment. Unless otherwise provided in the
                  Award Agreement, if an Awardee ceases to be an Employee, other
                  than as a result of circumstances

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                  described in Sections 10(c), (d), or (e) below, the Awardee's
                  Options shall (i) cease to vest immediately upon the Awardee's
                  Severance Date and (ii) terminate on the earlier of 90 days
                  after the Awardee's Severance Date or the expiration of the
                  term of such Option. If the Awardee does not exercise any
                  Shares covered by the vested portion of his or her Option, the
                  unexercised Shares covered by the vested portion of such
                  Option shall revert to the Plan on the earlier of 90 days
                  after the Awardee's Severance Date or the expiration of the
                  term of such Option.

         (c)      Total Disability. Unless otherwise provided in the Award
                  Agreement, if an Awardee ceases to be an Employee as a result
                  of the Awardee's Total Disability, the Awardee's Options shall
                  (i) continue to vest while the Total Disability continues to
                  exist and (ii) terminate on the earlier of 90 days after the
                  Awardee's Severance Date unless prior to such date the Awardee
                  becomes an Employee or the expiration of the term of such
                  Option. On the Awardee's Severance Date, the Shares covered by
                  the unvested portion of his or her Option shall revert to the
                  Plan. If the Awardee does not exercise any Shares covered by
                  the vested portion of his or her Option, the unexercised
                  Shares covered by the vested portion of such Option shall
                  revert to the Plan on the earlier of 90 days after the
                  Awardee's Severance Date or the expiration of the term of such
                  Option. The Option may be exercised by the guardian of
                  Awardee's property if one has been appointed.

         (d)      Retirement. Unless otherwise provided in the Award Agreement,
                  if an Awardee ceases to be an Employee as a result of the
                  Awardee's retirement on or after attaining the age of 65
                  years, or otherwise in accordance with his or her Employer's
                  retirement policy, the Awardee's Options shall (i) cease to
                  vest immediately upon the Awardee's Severance Date and (ii)
                  terminate on the earlier of one year after the Awardee's
                  Severance Date or the expiration of the term of such Option.
                  On the Awardee's Severance Date, the Shares covered by the
                  unvested portion of his or her Option shall revert to the
                  Plan. If the Awardee does not exercise any Shares covered by
                  the vested portion of his or her Option, the unexercised
                  Shares covered by the vested portion of such Option shall
                  revert to the Plan on the date such Option terminates.

         (e)      Death. Unless otherwise provided in the Award Agreement, if an
                  Awardee ceases to be an Employee as a result of his or her
                  death, or dies while the Awardee has a Total Disability to
                  which Section 10(c) applies, the Awardee's Option shall (i)
                  immediately vest with respect to all Shares covered by such
                  Option, and (ii) terminate on the expiration date of such
                  Option. The Option may be exercised by the beneficiary
                  designated by the Awardee (as provided in Section 17), the
                  executor or administrator of the Awardee's estate or, if none,
                  by the person(s) entitled to exercise the Option under the
                  Awardee's will or the laws of descent or distribution. If such
                  Option is not exercised with respect to any Shares covered by
                  such Option, the unexercised Shares shall revert to the Plan
                  on the expiration of the term of such Option.

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         (f)      Buyout Provisions. At any time, the Administrator may, but
                  shall not be required to, offer to buy out for a payment in
                  cash or Shares an Option previously granted based on such
                  terms and conditions as the Administrator shall establish and
                  communicate to the Awardee at the time that such offer is
                  made.

11.      STOCK AWARDS.

         (a)      General. Stock Awards may be issued either alone, in addition
                  to, or in tandem with other Awards granted under the Plan,
                  except to Non-Exempt Employees. After the Administrator
                  determines that it will offer a Stock Award under the Plan, it
                  shall advise the Participant in writing or electronically, by
                  means of an Award Agreement, of the terms, conditions and
                  restrictions related to the offer, including the number of
                  Shares that the Participant shall be entitled to receive or
                  purchase, the price to be paid, if any, and, if applicable,
                  the time within which the Participant must accept such offer.
                  The offer shall be accepted by execution of an Award Agreement
                  in the form determined by the Administrator. The Administrator
                  will require that all Shares subject to a right of repurchase
                  or forfeiture be held in escrow until such repurchase right or
                  risk of forfeiture lapses.

         (b)      Termination of Employment. Unless the Administrator determines
                  otherwise, the Award Agreement shall provide for the
                  forfeiture of the unvested Restricted Stock upon the Awardee
                  ceasing to be an Employee except as provided below in Sections
                  11(c), (d) and (e). To the extent that the Awardee purchased
                  the Restricted Stock, the Company shall have a right to
                  repurchase the unvested Restricted Stock at the lesser of (i)
                  the Fair Market Value or (ii) the original price paid by the
                  Awardee, on or after the Awardee's Severance Date, except as
                  provided below in Sections 11(c), (d) and (e).

         (c)      Total Disability. Unless otherwise provided for by the
                  Administrator in the Award Agreement, if an Awardee ceases to
                  be an Employee as a result of the Awardee's Total Disability,
                  (i) the Awardee's Stock Award shall continue to vest while the
                  Awardee's Total Disability continues to exist, and (ii) to the
                  extent that the Awardee purchased the Restricted Stock, the
                  Company shall have a right to repurchase the unvested
                  Restricted Stock at the lesser of (A) the Fair Market Value or
                  (B) the original price paid by the Awardee, on or after the
                  Awardee's Severance Date.

         (d)      Retirement of Awardee. Unless otherwise provided for by the
                  Administrator in the Award Agreement, if an Awardee ceases to
                  be an Employee as a result of the Awardee's retirement on or
                  after attaining the age of 65 years, or otherwise in
                  accordance with his or her Employer's retirement policy, the
                  Awardee's Stock Award shall (i) cease to vest immediately upon
                  the Awardee's Severance Date, and (ii) to the extent that the
                  Awardee purchased the Restricted Stock, the

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                  Company shall have a right to repurchase the unvested
                  Restricted Stock at the lesser of (A) the Fair Market Value,
                  or (B) the original price paid by the Awardee, on or after the
                  Awardee's Severance Date.

         (e)      Death of Awardee. Unless otherwise provided for by the
                  Administrator in the Award Agreement, if an Awardee ceases to
                  be an Employee as a result of his or her death, or dies while
                  the Awardee has a Total Disability to which Section 11(c)
                  applies, the Awardee's Stock Award shall immediately vest with
                  respect to all Shares covered by such Stock Award. The vested
                  portion of the Stock Award shall be delivered to the
                  beneficiary designated by the Participant (as provided in
                  Section 17), the executor or administrator of the
                  Participant's estate or, if none, by the person(s) entitled to
                  receive the vested Stock Award under the Participant's will or
                  the laws of descent or distribution.

         (f)      Rights as a Stockholder. Unless otherwise provided for by the
                  Administrator in the Award Agreement, once the Stock Award is
                  accepted, the Awardee shall have the rights equivalent to
                  those of a stockholder, and shall be a stockholder when his or
                  her acceptance of the Stock Award is entered upon the records
                  of the duly authorized transfer agent of the Company.

12.      STOCK APPRECIATION RIGHTS.

         (a)      General. The Committee, in its discretion, may grant Stock
                  Appreciation Rights to Participants. The following provisions
                  apply to such Stock Appreciation Rights.

         (b)      Grant of Stock Appreciation Right. The Stock Appreciation
                  Right shall entitle the holder upon exercise to an amount for
                  each Share to which such exercise relates equal to the excess
                  of (i) the Fair Market Value on the date of exercise over (i)
                  the base or exercise price per Share set forth in the
                  applicable Award Agreement. Notwithstanding the foregoing, the
                  Committee may place limits on the amount that may be paid upon
                  exercise of a Stock Appreciation Right.

         (c)      Forfeiture of Option. If a Stock Appreciation Right is granted
                  in tandem with an Option, upon exercise of such Stock
                  Appreciation Right, the related Option shall no longer be
                  exercisable and shall be deemed canceled to the extent of such
                  exercise.

         (d)      Form of Payment. The Company's obligation arising upon the
                  exercise of a Stock Appreciation Right may be paid currently
                  or on a deferred basis with such interest or earnings
                  equivalent as may be determined by the Committee, and may be
                  paid in Common Stock or in cash, or in any combination of
                  Common Stock and cash, as the Committee, in its sole
                  discretion, may determine.

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         (e)      Other Provisions. The Award Agreement evidencing a Stock
                  Appreciation Right shall contain such other terms, provisions
                  and conditions not inconsistent with the Plan as may be
                  determined by the Committee in its sole discretion. The
                  provisions of such Awards need not be the same with respect to
                  each recipient.

13.      CASH AWARDS.

         Cash Awards may be granted either alone, in addition to, or in tandem
         with other Awards granted under the Plan. After the Administrator
         determines that it will offer a Cash Award, it shall advise the
         Participant in writing or electronically, by means of an Award
         Agreement, of the terms, conditions and restrictions related to the
         Cash Award.

14.      NON-TRANSFERABILITY OF AWARDS.

         Unless determined otherwise by the Administrator with respect to any
         Award other than an Incentive Stock Option, an Award may not be sold,
         pledged, assigned, hypothecated, transferred, or disposed of in any
         manner other than by beneficiary designation, will or by the laws of
         descent or distribution and may be exercised, during the lifetime of
         the Awardee, only by the Awardee. If the Administrator makes an Award
         transferable, the Award Agreement for such Award shall contain such
         additional terms and conditions as the Administrator deems appropriate.

15.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR DISSOLUTION OR
         LIQUIDATION.

         (a)      Changes In Capitalization. Subject to any required action by
                  the stockholders of the Company, the number and kind of shares
                  of Common Stock covered by each outstanding Award, and the
                  number and kind of shares of Common Stock which have been
                  authorized for issuance under the Plan but as to which no
                  Awards have yet been granted or which have been returned to
                  the Plan upon cancellation or expiration of an Award, as well
                  as the price per share of Common Stock covered by each such
                  outstanding Award, shall be proportionately adjusted for any
                  increase or decrease in the number or kind of issued shares of
                  Common Stock resulting from a stock split, reverse stock
                  split, stock dividend, combination or reclassification of the
                  Common Stock, or any other increase or decrease in the number
                  of issued shares of Common Stock effected without receipt of
                  consideration by the Company; provided, however, that
                  conversion of any convertible securities of the Company shall
                  not be deemed to have been "effected without receipt of
                  consideration." Such adjustment shall be made by the Board,
                  whose determination in that respect shall be final, binding
                  and conclusive. Except as expressly provided herein, no
                  issuance by the Company of shares of stock of any class, or
                  securities convertible into shares of stock of any class,
                  shall affect, and no adjustment by reason thereof shall be
                  made with respect to, the number or price of shares of Common
                  Stock subject to an Award.

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         (b)      Dissolution or Liquidation. In the event of the proposed
                  dissolution or liquidation of the Company, the Administrator
                  shall notify each Awardee as soon as practicable prior to the
                  effective date of such proposed transaction. The Administrator
                  in its discretion may provide for an Option to be fully vested
                  and exercisable until 10 days prior to such transaction. In
                  addition, the Administrator may provide that any restrictions
                  on any Award shall lapse prior to the transaction, provided
                  the proposed dissolution or liquidation takes place at the
                  time and in the manner contemplated. To the extent it has not
                  been previously exercised, an Award will terminate immediately
                  prior to the consummation of such proposed transaction.

         (c)      Merger or Asset Sale. In the event there is a change of
                  control of the Company or any Subsidiary, as determined by the
                  Board, the Board may, in its discretion, (A) provide for the
                  assumption or substitution of, or adjustment to, each
                  outstanding Award; (B) accelerate the vesting of Options and
                  terminate any restrictions on Cash Awards or Stock Awards; and
                  (C) provide for the cancellation of Awards for a cash payment
                  to the Awardee.

16.      AMENDMENT AND TERMINATION OF THE PLAN.

         (a)      Amendment and Termination. The Board may at any time amend,
                  alter, suspend or terminate the Plan and the Administrator may
                  at any time, subject to the authority set forth in Section 4,
                  adopt subordinate arrangements, policies and programs in each
                  case, in such manner as may be necessary to enable the Plan to
                  achieve its stated purposes in any jurisdiction outside the
                  United States in a tax-efficient manner and in compliance with
                  local rules and regulations by adopting schedules of
                  provisions to be applicable to awards granted in such
                  jurisdiction.

         (b)      Stockholder Approval. The Company shall obtain stockholder
                  approval of any Plan amendment to the extent necessary or
                  desirable to comply with Applicable Laws.

         (c)      Effect of Amendment or Termination. No amendment, alteration,
                  suspension or termination of the Plan shall impair the rights
                  of any Award, unless mutually agreed otherwise between the
                  Awardee and the Administrator, which agreement must be in
                  writing and signed by the Awardee and the Company. Termination
                  of the Plan shall not affect the Administrator's ability to
                  exercise the powers granted to it hereunder with respect to
                  Awards granted under the Plan prior to the date of such
                  termination.

17.      DESIGNATION OF BENEFICIARY.

         (a)      An Awardee may file a written designation of a beneficiary who
                  is to receive the Awardee's rights pursuant to his or her
                  Award or the Awardee may include his or

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                  her Awards in an omnibus beneficiary designation for all
                  benefits under the Plan. To the extent that an Awardee has
                  completed a designation of beneficiary while employed with the
                  Company or its Subsidiaries or Affiliates, such beneficiary
                  designation shall remain in effect with respect to any Award
                  hereunder until changed by the Awardee.

         (b)      Such designation of beneficiary may be changed by the Awardee
                  at any time by written notice. In the event of the death of an
                  Awardee and in the absence of a beneficiary validly designated
                  under the Plan who is living at the time of such Awardee's
                  death, the Company shall allow the executor or administrator
                  of the estate of the Awardee to exercise the Award, or if no
                  such executor or administrator has been appointed (to the
                  knowledge of the Company), the Company, in its discretion, may
                  allow the spouse or one or more dependents or relatives of the
                  Awardee to exercise the Award.

18.      LEGAL COMPLIANCE.

         Shares shall not be issued pursuant to the exercise of an Option or
         Stock Award unless the exercise of such Option or Stock Award and the
         issuance and delivery of such Shares shall comply with Applicable Laws
         and shall be further subject to the approval of counsel for the Company
         with respect to such compliance.

19.      INABILITY TO OBTAIN AUTHORITY.

         To the extent the Company is unable, or the Administrator deems it
         infeasible or commercially impracticable, to obtain authority from any
         regulatory body having jurisdiction, which authority is deemed by the
         Company's counsel to be necessary to the lawful issuance and sale of
         any Shares hereunder, the Company shall be relieved of any liability
         with respect to the failure to issue or sell such Shares as to which
         such requisite authority shall not have been obtained.

20.      RESERVATION OF SHARES.

         The Company, during the term of this Plan, will at all times reserve
         and keep available such number of Shares as shall be sufficient to
         satisfy the requirements of the Plan.

21.      STOCKHOLDER APPROVAL.

         The Plan shall be subject to approval by the stockholders of the
         Company within 12 months of the date the Plan is adopted. Such
         stockholder approval shall be obtained in the manner and to the degree
         required under Applicable Laws.

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22.      NOTICE.

         Any written notice to the Company required by any provisions of this
         Plan shall be addressed to the Secretary of the Company and shall be
         effective when received.

23.      GOVERNING LAW.

         This Plan and all determinations made and actions taken pursuant hereto
         shall be governed by the substantive laws, but not the choice of law
         rules, of the state of Delaware.

24.      UNFUNDED PLAN.

         Insofar as it provides for Awards, the Plan shall be unfunded. Although
         bookkeeping accounts may be established with respect to Participants
         who are granted Awards of Shares under this Plan, any such accounts
         will be used merely as a bookkeeping convenience. Except for the
         holding of Restricted Stock in escrow pursuant to Section 11, the
         Company shall not be required to segregate any assets which may at any
         time be represented by Awards, nor shall this Plan be construed as
         providing for such segregation, nor shall the Company nor the
         Administrator be deemed to be a trustee of stock or cash to be awarded
         under the Plan. Any liability of the Company to any Participant with
         respect to an Award shall be based solely upon any contractual
         obligations which may be created by the Plan; no such obligation of the
         Company shall be deemed to be secured by any pledge or other
         encumbrance on any property of the Company. Neither the Company nor the
         Administrator shall be required to give any security or bond for the
         performance of any obligation which may be created by this Plan.

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