EXHIBIT 10(K)(2)

                                AMENDMENT NO. 1
                                      TO
                               XEROX CORPORATION
                   DEFERRED COMPENSATION PLAN FOR DIRECTORS
                        1997 AMENDMENT AND RESTATEMENT

                                  WITNESSETH:
                                  ----------

WHEREAS, Xerox Corporation (the "Company") has adopted the Xerox Corporation
Deferred Compensation Plan For Directors, 1997 Amendment and Restatement (the
"Plan");

WHEREAS, the Company has determined to amend the Plan to allow Participants to
select beneficiary(s) in the event of their death either during service on the
Board of Directors or following retirement from the Board and to permit the
selection of any beneficiary(ies) selected by the Participant without
limitation; and

WHEREAS, pursuant to Section 18 of the Plan the Vice President responsible for
human resources of the Company is authorized to amend the Plan;

NOW, THEREFORE, subsections (d), (e) and (f) of Section 9 of the Plan be and
hereby are amended to read in their entirety as follows:

     "(d)  Upon termination of service on the Board of Directors, other than
termination resulting from death, prior to retirement, the total value of the
Participant's Accounts under the Plan shall be paid to the Participant as soon
as administratively possible after his or her date of termination.

     (e)  Upon the death of a Participant either before or after retirement the
total value of the Participant's Accounts under the Plan shall be paid in
accordance with an election made by such Participant in a lump sum or in
installments, as appropriate, from the Accounts established under Section 8 to
the beneficiary(ies) designated by the Participant.

     (f)  If a Participant dies either before or after retirement without
having made such an election, the total value of his or her Accounts under the
Plan shall be paid in a single payment to the Participant's estate as soon as
administratively possible after notice of his or her date of death has been
received by the Administrator."

This amendment is effective as of the date hereof.  In all other respects the
Plan shall remain unchanged.

IN WITNESS WHEREOF, the Company has caused this Amendment to be signed as of
the 1st day of January 1998.

                                          XEROX CORPORATION

                                          By:   /s/ Hector Motroni
                                              -----------------------
                                                   Vice President

Attest:

By:   Martin S. Wagner
      --------------------
      Assistant Secretary