Exhibit 10(l)
As amended through
February 5, 1996
XEROX CORPORATION
1989 DEFERRED COMPENSATION PLAN FOR DIRECTORS
1996 AMENDMENT AND RESTATEMENT
Preamble. This Plan is a private unfunded nonqualified deferred
compensation arrangement for Directors and all rights shall be governed by and
construed in accordance with the laws of New York, except where preempted by
federal law. It is intended to provide a vehicle for setting aside funds for
retirement.
Section 1. Effective Date. The original effective date of the Plan
is January 1, 1989. The effective date of this amendment and restatement is
May 16, 1996.
Section 2. Eligibility. Any Director of Xerox Corporation (the
"Company") who is not an officer or employee of the Company or a subsidiary of
the Company is eligible to participate in the Plan. A participant who
terminates an election to defer receipt of compensation is not eligible to
participate again in the Plan until twelve months after the effective date of
such termination.
Section 3. Deferred Compensation Account. There shall be established
for each participant a deferred compensation account.
Section 4. Amount of Deferral.
(a) A participant may elect to defer receipt of all or a specified part,
expressed either in terms of a fixed dollar amount or a percentage, of the
cash compensation otherwise payable to the participant for serving on the
Company's Board of Directors or committees of the Board of Directors. Any
amount deferred is credited to the participant's deferred compensation account
on the date such amount is otherwise payable.
(b) In addition to the foregoing, there shall be credited to the
deferred compensation accounts of each person who is serving as a Director on
May 15, 1996 a sum computed by the Company as the present value of his or her
accrued benefit under the Company's Retirement Income Plan For Directors, if
any, as of such date and each such Director shall be given notice of such
amount. The amount so computed shall be final and binding on the Company and
each such Director. Within 30 days of giving such notice, each such Director
shall make an election on a form provided by the Company as to the
hypothetical investment of such amount and the payment methods as permitted
under Sections 6 and 8 hereof as in effect on such date under the
administrative rules adopted by the Administrator.
Section 5. Time of Election to Defer. The election to defer will be
made prior to the individual's commencement of services as a Director for
amounts to be earned for the remainder of the calendar year. In the case of
an individual currently serving as a Director, the election to defer must be
made prior to December 31, of any year for amounts to be earned in a
subsequent calendar year or years. An election to totally terminate deferrals
may be made at any time prior to the relevant payment date.
Section 6. Hypothetical Investment. Deferred compensation is assumed
to be invested, without charge, in the Balanced Fund, Income Fund, U.S. Stock
Fund, International Stock Fund, Small Company Stock Fund or Xerox Stock Fund
(the "Funds") established under the Xerox Corporation Profit Sharing and
Savings Plan (the "Profit Sharing Plan") as elected by the participant;
provided, however, that the Administrator, as hereinafter defined, shall have
the right from time to time, without adversely affecting participants'
accruals in deferred compensation accounts, to substitute for the Income Fund
other hypothetical fixed return investments for the deferred compensation.
Elections to make hypothetical investments in any one or more of the
Funds shall be subject to administrative rules adopted by the Administrator
from time to time.
No shares of Xerox stock will ever actually be issued to a participant
under the Plan.
Section 7. Value of Deferred Compensation Accounts and Installment
Payments. The value of each participant's deferred compensation account shall
reflect all amounts deferred, and gains and losses from the hypothetical
investments, and shall be determined on the last day of each month (the
"Valuation Dates"). Hypothetical investments in the Profit Sharing Plan shall
be valued as of the valuation date under such Plan coincident with or last
preceding the Valuation Date under this Plan. The value of hypothetical
investments not made under the Profit Sharing Plan shall be determined as of
each Valuation Date by the best information available to the Administrator.
Section 8. Manner of Electing Deferral. A participant may elect to
defer compensation by giving written notice to the Administrator on a form
provided by the Company, which notice shall include (1) the amount and/or
percentage to be deferred; (2) if more than one is offered under the Plan, the
hypothetical investment applicable to the amount deferred; (3) the number of
installments for the payment of the deferred compensation; and (4) the date of
the first installment payment. A participant may elect a single method of
payment for (A) termination of service as a Director, (B) death, (C)
disability or (D) while still in service as a Director, or separate methods of
payment for each of these events, provided, however, that the amount credited
to deferred compensation accounts under Section 4(b) shall not be payable
while in service as a Director. The Administrator may adopt rules of general
applicability regarding commencement and duration of payments under the Plan
which may be elected by participants.
Section 9. Payment of Deferred Compensation. No withdrawal may be
made from the participant's deferred compensation account, except as provided
under this Section and Sections 10 and 11.
The value of a participant's deferred compensation account is payable in
cash in annual installments on February 15 or August 15 following the first
occurrence of one of the events elected under Section 8 or following a fixed
period after one of such events based on the value of the participant's
deferred compensation account as of the second preceding Valuation Date.
Unless otherwise elected by a participant with the written approval of
the Administrator, payments of deferred compensation shall be made pursuant to
the following formula: the amount of the first payment shall be a fraction of
the value of the participant's deferred compensation account on the second
preceding Valuation Date, the numerator of which is one and the denominator of
which is the total number of installments elected, and the amount of each
subsequent payment shall be a fraction of the value on the second Valuation
Date preceding each subsequent payment date, the numerator of which is one and
the denominator of which is the total number of installments elected minus the
number of installments previously paid. There shall be added to each payment
determined in accordance with the foregoing, imputed interest for a period of
one month at the same annual rate credited to accounts invested in the Income
Fund under the Profit Sharing Plan for the month of December or June, as the
case may be. Any other payment method selected with the written approval of
the Administrator must in all events provide for payments in substantially
equal installments.
Section 10. Acceleration of Payment for Hardship.
(a) For Hardship. Upon written approval from the Board of Directors,
a participant may be permitted to receive all or part of his accumulated
benefits if, in the discretion of the Board of Directors, it is determined
that an emergency event beyond the participant's control exists and which
would cause such participant severe financial hardship if the payment of his
benefits were not approved. Any such distribution for hardship shall be
limited to the amount needed to meet such emergency. A participant who makes
a hardship withdrawal cannot reenter the Plan for twelve months after the date
of withdrawal.
(b) Upon a Change in Control. Within 5 days following the occurrence
of a change in control of the Company (as hereinafter defined), each
participant shall be entitled to receive a lump sum payment equal to the value
of his deferred compensation account. For purposes hereof, a "change in
control of the Company" shall be deemed to have occurred if (A) any "person",
as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") other than the Company, any
trustee or other fiduciary holding securities under an employee benefit plan
of the Company, or any company owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20 percent or more of the combined
voting power of the Company's then outstanding securities; or (B) during any
period of two consecutive years, individuals who at the beginning of such
period constitute the Board, including for this purpose any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in this Section)
whose election or nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof.
Section 11. Other Penalized Withdrawals. Notwithstanding the
provisions of Sections 9 and 10, a participant may be permitted to receive all
or part of his accumulated benefits at any time provided that (A) the
Administrator approves such distribution in his or her sole discretion, and
(B) the participant forfeits a portion of his account balance equal to a
percentage of the amount distributed. The percentage reduction shall be the
greater of (A) six percent, or (B) a percentage equal to one-half of the prime
interest rate, as determined by the Administrator.
Section 12. Time Of Hypothetical Investment. The amount in the
participant's deferred compensation account as of each Valuation Date which
has not been previously deemed invested shall be deemed invested in a
hypothetical investment on such date, based on the value of the hypothetical
investment on such date.
Section 13. Participant's Rights Unsecured. The benefits payable
under this Plan shall be unfunded. Consequently, no assets shall be
segregated for purposes of this Plan and placed beyond the reach of the
Company's general creditors. The right of any participant to receive future
installments under the provisions of the Plan shall be an unsecured claim
against the general assets of the Company.
Section 14. Statement of Account. Statements will be sent to each
participant during February and August and more frequently if the
Administrator so determines as to the value of their deferred compensation
accounts as of the end of December and June, respectively.
Section 15. Assignability. No right to receive payments hereunder
shall be transferable or assignable by a participant, except by will or by the
laws of descent and distribution.
In the event of a participant's death without having an election under
Section 8 (B) in effect regarding payment of his account after death, the
value of the participant's deferred compensation account shall be determined
as of the Valuation Date coincident with or immediately following death and
such amount shall be paid in a single payment to the participant's estate (a)
the first January 15 or July 15 following such Valuation Date, or (b) if such
payment cannot be made at the time specified in (a), it shall be made within
30 days after the participant's death. There shall be added to such payment,
interest for the full calendar months elapsed following such Valuation Date to
the payment date at the same annual rate credited to accounts invested in the
Income Fund under the Profit Sharing Plan for the month of such Valuation
Date.
In the event of a participant's death after installment payments have
commenced to be paid, the balance of the deferred compensation account shall
be paid to the participant's estate.
Section 16. Business Days. In the event any date specified herein
falls on a Saturday, Sunday or legal holiday, such date shall be deemed to
refer to the next business day thereafter.
Section 17. Administration. The Plan shall be administered by the
Vice President of the Company having responsibility for human resources (the
"Administrator"). The Administrator shall have the authority to adopt rules
and regulations for carrying out the plan, and interpret, construe and
implement the provisions of the Plan.
Section 18. Amendment. The Plan may at any time or from time to time
be amended, modified or terminated by the Board of Directors or the Executive
Committee of the Board of Directors of the Company. Upon termination the
Administrator in his or her sole discretion may pay out account balances to
participants. No amendment, modification or termination shall, without the
consent of a participant, adversely affect such participant's accruals in
his/her deferred compensation account.