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Is Darwin Deason a Crook?

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ACS_Concerned

Arlington, TX

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#1
Nov 2, 2007
 
All -

Dear Darwin:
From the first day that you and Cerberus Capital Management, L.P. made a proposal to acquire ACS, the independent directors have acted appropriately and in a manner designed to safeguard the best interests of the company and all of its shareholders. We immediately began a process designed to consider your offer in a fair and balanced manner and to protect the company's minority shareholders. Although you control in excess of 40% of the voting power of ACS, you represent less than 10% of the outstanding shares. We must look after the minority shareholders - even if it means you cannot get the deal that is most advantageous to you personally. From the outset, you have attempted to subvert the process in order to prevent superior alternatives to your proposal from being consummated.
On March 20, 2007, when you and Cerberus Capital Management, L.P. publicly disclosed your proposal to acquire ACS, we first learned of the Exclusivity Agreement that you had previously entered into with Cerberus. On March 21, 2007, after lengthy discussion, the Board of Directors of ACS, through its lead director, advised you that the Board was concerned with the Exclusivity Agreement between you and Cerberus and requested that the agreement be voided so that the Board would have the ability to deal with all parties (including you and Cerberus) who might be interested in a transaction involving the company. You refused. The Special Committee (which was formed to consider all strategic alternatives available to ACS, including your proposal), after extensive discussions with Lazard Freres & Co. LLC, its independent financial advisor, and Weil, Gotshal & Manges LLP, its independent legal advisor, also concluded that, with the Exclusivity Agreement in place, it could not effectively consider all of the company's strategic alternatives, including a transaction involving a third party other than Cerberus. Also, the Special Committee and its advisors were not comfortable with a "go-shop" here given the terms of your employment agreement, your voting power and the fact that potentially interested parties would be deterred given your partnership with Cerberus.
As a result, the Special Committee insisted that the Exclusivity Agreement be voided. Unfortunately, for almost three months until June 10, 2007, you and Cerberus refused to in any way modify the Exclusivity Agreement in response to the Special Committee's concerns. Your self-serving conduct had a material adverse impact on the process of considering strategic alternatives, including your own offer.(Several parties who had expressed an interest in a transaction with ACS were not willing to proceed with the Exclusivity Agreement in place.)
Nevertheless, the Special Committee and its advisors have carefully evaluated your offer, as well as other potential alternatives that still exist and, as you are well aware, we were prepared to deliver our recommendations with respect to all of the alternatives that may be available to the company at the next regularly scheduled board meeting. In addition, and as you know, we have engaged you and Cerberus in an effort not only to deal with the Exclusivity Agreement, but also to modify the proposal in a way that would make sense for all of the company's shareholders, including increasing the offer price to a level that could be supported. You refused.
ACS_Concerned

Arlington, TX

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#2
Nov 2, 2007
 
Is Darwin a Crook - Part 2
Any suggestion that the Special Committee should have rolled over and simply agreed to your self-interested proposal without having an opportunity to consider alternative transactions would be irresponsible. In fact, several significant shareholders publicly agreed with the position of the Special Committee and the inadequacy of your proposal. In an effort to avoid any misunderstandings, we also would like to point out that we did respond (through our financial advisor) to ACS shareholders who made contact with the Special Committee regarding the process.
Even after entering into the Waiver Agreement on June 10, 2007, you and your management team have worked hard to make it difficult for any other potential buyer to have access to the same information provided to Cerberus and, therefore, to proceed with a proposal that would provide ACS shareholders with greater value than your proposal.(As you are well aware, the actions of your management team caused one significant potential strategic buyer to walk-away and, very recently, your management team refused even to engage with another significant potential strategic buyer - despite their interest.) Your interest only in a transaction in which you would participate on the buy side and management's interest in retaining their jobs (all at the expense of ACS shareholders) consistently delayed the process and made it virtually impossible to implement an even modestly effective process, which has worked to the detriment of ACS shareholders. There are countless examples of your interference with the process. We are sure you recall the time you directed management to refuse to meet with senior executives of a large industry bidder (who had made a proposal to acquire the company for an amount greater than that included in your proposal) who had flown hours to meet with management. Or, the attempts by you and ACS management to interfere with the ability of the Special Committee to meet with the company's regular outside counsel.

Your carefully choreographed power play Tuesday evening to coerce the independent directors of ACS into resigning on the spot is consistent with your continuing refusal to understand that the Board's fiduciary duties are to all shareholders - not just to you. Your ultimatum: resign in one hour or I will go to the press and smear your reputations - was a remarkable piece of bullying and thuggery, and it almost worked. We also find it curious that your counsel in connection with your proposal, Cravath, Swaine & Moore LLP, is now serving as the company's outside counsel. In this capacity, Cravath, your personal counsel, is taking a lead role in removing the very directors who refused to go along with your proposal. We cannot understand how you and ACS management could become comfortable with this blatant conflict.
ACS_Concerned

Arlington, TX

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#3
Nov 2, 2007
 
Is Darwin a Crook? Last Part

You have not only interfered with the mandate of the Special Committee (to the detriment of our shareholders), but have made it impossible for us to continue to effectively serve as directors of ACS.(You have, over the past few months, privately encouraged the directors to keep the process of considering strategic alternatives going; however, your current actions are inconsistent with these conversations.) Given the extraordinary powers you have under the terms of your employment agreement, your actions (particularly over the past few months), as well as the actions of your hand-picked management team, and the tone that you have set at the company, we do not see how we, or any other truly independent directors, could properly discharge their fiduciary duties. We could fire you and the entire management team, but that would not help our shareholders, customers or employees. Rather, it would rip the Company apart and cause a lengthy fight and period of uncertainty from which the Company would be unlikely to recover. As a result, we have decided after much discussion among ourselves that the best way for us to discharge our fiduciary duties is to resign in favor of a new majority of independent directors.
As you are aware, we have more than 30 years of collective service with ACS, have participated in the significant growth of the company and care deeply about the company and its shareholders and employees. You have identified four potential Board candidates, and we are prepared to meet with them as early as tomorrow to determine if they are truly independent and capable of protecting minority shareholders. We also would welcome any suggestions for new independent directors from our shareholders. Although our efforts over the years to add independent directors to the Board have been met with resistance, we continue to believe that having strong independent directors is critical. Once the process of vetting independent director candidates is complete, it will be with great relief that we will immediately step down as directors.
Very truly yours,
/s/ Robert B. Holland
/s/ J. Livingston Kosberg
/s/ Dennis McCuistion
Robert B. Holland, III
J. Livingston Kosberg
Dennis McCuistion
/s/ Joseph P. O'Neill
/s/ Frank A. Rossi
Joseph P. O'Neill
Frank A. Rossi

cc: Lynn Blodgett
John Rexford
Bill Deckelman
Part_1

Arlington, TX

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#4
Nov 2, 2007
 
Is he a crook? Part 1

Mr. Darwin Deason
Affiliated Computer Services, Inc.
2828 North Haskell Avenue
Dallas, Texas 75204

Dear Darwin:

From the first day that you and Cerberus Capital Management, L.P. made a proposal to acquire ACS, the independent directors have acted appropriately and in a manner designed to safeguard the best interests of the company and all of its shareholders. We immediately began a process designed to consider your offer in a fair and balanced manner and to protect the company's minority shareholders. Although you control in excess of 40% of the voting power of ACS, you represent less than 10% of the outstanding shares. We must look after the minority shareholders - even if it means you cannot get the deal that is most advantageous to you personally. From the outset, you have attempted to subvert the process in order to prevent superior alternatives to your proposal from being consummated.

On March 20, 2007, when you and Cerberus Capital Management, L.P. publicly disclosed your proposal to acquire ACS, we first learned of the Exclusivity Agreement that you had previously entered into with Cerberus. On March 21, 2007, after lengthy discussion, the Board of Directors of ACS, through its lead director, advised you that the Board was concerned with the Exclusivity Agreement between you and Cerberus and requested that the agreement be voided so that the Board would have the ability to deal with all parties (including you and Cerberus) who might be interested in a transaction involving the company. You refused. The Special Committee (which was formed to consider all strategic alternatives available to ACS, including your proposal), after extensive discussions with Lazard Freres & Co. LLC, its independent financial advisor, and Weil, Gotshal & Manges LLP, its independent legal advisor, also concluded that, with the Exclusivity Agreement in place, it could not effectively consider all of the company's strategic alternatives, including a transaction involving a third party other than Cerberus. Also, the Special Committee and its advisors were not comfortable with a "go-shop" here given the terms of your employment agreement, your voting power and the fact that potentially interested parties would be deterred given your partnership with Cerberus.

As a result, the Special Committee insisted that the Exclusivity Agreement be voided. Unfortunately, for almost three months until June 10, 2007, you and Cerberus refused to in any way modify the Exclusivity Agreement in response to the Special Committee's concerns. Your self-serving conduct had a material adverse impact on the process of considering strategic alternatives, including your own offer.(Several parties who had expressed an interest in a transaction with ACS were not willing to proceed with the Exclusivity Agreement in place.)

Nevertheless, the Special Committee and its advisors have carefully evaluated your offer, as well as other potential alternatives that still exist and, as you are well aware, we were prepared to deliver our recommendations with respect to all of the alternatives that may be available to the company at the next regularly scheduled board meeting. In addition, and as you know, we have engaged you and Cerberus in an effort not only to deal with the Exclusivity Agreement, but also to modify the proposal in a way that would make sense for all of the company's shareholders, including increasing the offer price to a level that could be supported. You refused.
Part_2

Arlington, TX

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#5
Nov 2, 2007
 
Any suggestion that the Special Committee should have rolled over and simply agreed to your self-interested proposal without having an opportunity to consider alternative transactions would be irresponsible. In fact, several significant shareholders publicly agreed with the position of the Special Committee and the inadequacy of your proposal. In an effort to avoid any misunderstandings, we also would like to point out that we did respond (through our financial advisor) to ACS shareholders who made contact with the Special Committee regarding the process.

Even after entering into the Waiver Agreement on June 10, 2007, you and your management team have worked hard to make it difficult for any other potential buyer to have access to the same information provided to Cerberus and, therefore, to proceed with a proposal that would provide ACS shareholders with greater value than your proposal.(As you are well aware, the actions of your management team caused one significant potential strategic buyer to walk-away and, very recently, your management team refused even to engage with another significant potential strategic buyer - despite their interest.) Your interest only in a transaction in which you would participate on the buy side and management's interest in retaining their jobs (all at the expense of ACS shareholders) consistently delayed the process and made it virtually impossible to implement an even modestly effective process, which has worked to the detriment of ACS shareholders. There are countless examples of your interference with the process. We are sure you recall the time you directed management to refuse to meet with senior executives of a large industry bidder (who had made a proposal to acquire the company for an amount greater than that included in your proposal) who had flown hours to meet with management. Or, the attempts by you and ACS management to interfere with the ability of the Special Committee to meet with the company's regular outside counsel.

Your carefully choreographed power play Tuesday evening to coerce the independent directors of ACS into resigning on the spot is consistent with your continuing refusal to understand that the Board's fiduciary duties are to all shareholders - not just to you. Your ultimatum: resign in one hour or I will go to the press and smear your reputations - was a remarkable piece of bullying and thuggery, and it almost worked. We also find it curious that your counsel in connection with your proposal, Cravath, Swaine & Moore LLP, is now serving as the company's outside counsel. In this capacity, Cravath, your personal counsel, is taking a lead role in removing the very directors who refused to go along with your proposal. We cannot understand how you and ACS management could become comfortable with this blatant conflict.
Current ACS

Pittsburgh, PA

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#6
Nov 4, 2007
 
Dear Independent Directors,

I've been an employee of ACS for almost 20 years. I find it hard to believe that you were not or are not aware of this man's prime motivation 'GREED'. All you have to do is look at the history of the Company, how and why it went public, the nepotism over the years and the now infamous stock options dealings among senior management.
This Company has always been driven by greed and usually (no always) at the expense of the employees and stockholders. While Darwin flitted around town in his chauffeur driven strech lemo off to lunch and the golf course, private jets etc.(Nero also fiddled while Rome burned).
Mr. Deasons prime reasons for taking the company from public back to private was his way of accomplishing two major goals: First, get the Feds off his back on the stock options dealings and secondly but most importantly get total control of the finances again to enrich his coffers.
The only way to get Mr. Deason back on track is to get a true and accurate accounting of the goings on in this Company for the past 20 years. Let the Feds sort it out and give him what he richly deserves.
Body Guard

Garland, TX

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#7
Nov 14, 2007
 
This entire incident is sad. No body at ACS is going to experience the growth that ACS once had for many years, now. From the Resignation of Jeff Rich CEO, to the the firing of the recent CEO and COO for improper stock option grants,(did Deason KNOW about this????)and now the resignation of 5 experienced, good intentioned, professional board members of ACS. The real culprit sets in his throne only to have his servants (body guards, house keepers, chef, admins, Blodgett, Rexford and Deckleman and the female @#$%&*) kiss his ring. I sadly watch my stock dwindle in value as ACS burns while Nero plays his fiddle.
Class-Action

Annapolis, MD

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#8
Dec 11, 2007
 
Class Action Lawsuit Coming!$$$$ for exempt employees!!
I heard there's a class action lawsuit in the works and being formed by former and current ACS employees, which could award exempt workers any hours worked over 40 at their hourly rate and a half dating back 5 years. This would include all technical workers like network engineers and probably 1st and 2nd level managers that where considered exempt from overtime. I suspect there will be a huge audit and payout to these employees. ACS is going to be forced to pay up just like IBM, UPS and Citigroup which had pay almost 300 million to their exempt staff for back pay.
Hummmm n

Fort Worth, TX

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#9
Jul 9, 2008
 
Nice to know about all of this.. I was gonna accept a position in this company but now I DONT THINK SO. I dont want to be stuck on a sinking ship while the El Capitan sits on the shore with his limo, driver, Body Guard, and henchmen and watch.
Dallas

Frisco, TX

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#10
Aug 11, 2008
 

Judged:

1

(Former) Independent Directors:

The tone of your letter to Deason is ironic since it is the tone that thousands of employees have felt for years.

Your cumulative "30 years of service" with ACS should have granted you the understanding that the company that you represent has a long history of treating their employees poorly. But now (here's the irony), it's your turn to be treated poorly. The tears are just running down my cheek for you.

"We could fire you and the entire management team, but that would not help our shareholders, customers or employees." That last part cracks me up - since when have you cared about your customers or employees?

I hope that each of you gets your just rewards for being part and parcel to such a horrid company.
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