EXHIBIT 10(k)
As amended through
October 13, 1997
XEROX CORPORATION
DEFERRED COMPENSATION PLAN FOR DIRECTORS
(Formerly 1989 Deferred Compensation Plan For Directors)
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
October 13, 1997.
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 Director who has so
elected to participate is hereinafter referred to as a "Participant"). 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 Accounts. There shall be
established for each Participant one or more deferred compensation Accounts
(as hereinafter defined).
Section 4. Amount of Deferral.
(a) A Participant may elect to defer receipt of all or a specified
part, expressed as 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 Accounts 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 17, 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 the giving of such notice, each such
Director shall make an election on a form provided
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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 (a) Balanced Fund, Income Fund, U.S.
Stock Fund, International Stock Fund, Small Company Stock Fund or Xerox Stock
Fund (or the successors thereto) (the "Funds") established from time to time
under the Xerox Corporation Profit Sharing and Savings Plan (the "Profit
Sharing Plan") (b) a fund with a variable fixed rate of return based upon the
prime or base rate charged by one or more banks ("Prime Rate Investment") and
(c) such other fixed income return investments ("Fixed Return Investment"),
all as shall be made available from time to time by the Administrator in his
or her administrative discretion ("Investments") as elected by the participant
It is anticipated that the Administrator will substitute the Prime Rate
Investment for the Income Fund effective January 1, 1998. Amounts deferred
prior to January 1, 1998 shall have a rate of return at the Income Fund or
the Prime Rate Investment as elected by Participants on forms provided by the
Administrator in connection with the implementation of the Prime Investment
Rate.
Elections to make hypothetical investments in any one or more of the
Investments 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 Accounts shall reflect all amounts
deferred, gains , losses and rates of return from the Investments, and shall
be determined at the close of business on each day on which securities are
traded on the New York Stock Exchange. Hypothetical investments in the Profit
Sharing Plan shall be valued on each business day based upon the value of such
hypothetical investment as determined under such Plan on the valuation date
under such Plan coincident with or last preceding such business day. The
value of Investments not made under the Profit Sharing Plan shall be
determined from such available source or sources as the Administrator in his
or her sole discretion shall from time to time determine. The date as of which
investments are valued pursuant to the foregoing sentences are referred to
herein as a Valuation Date.
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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 percentage to be
deferred; (2) if more than one is offered under the Plan, the hypothetical
investment applicable to the amount deferred; and (3) the payment method that
will apply to the deferred compensation. A Participant may elect to a maximum
of four separate payment methods during his or her participation in the Plan
("Accounts"). Such payment methods once made may never be changed. Each
election to defer compensation under the Plan shall specify an Account from
which payment will be made. The Accounts available under the Plan shall be:
ACCOUNT 1 which shall be payable beginning the July 15 of a calendar year that
follows the calendar year of retirement by the number of years elected by the
Participant (0, 1, 2, 3, 4, or 5 years). The last payment shall be on the
July 15 of the year in which the Participant attains a certain age elected by
the Participant.
ACCOUNT 2 which shall be payable beginning the July 15 of a calendar year that
follows the calendar year of retirement by the number of years elected by the
Participant (0, 1, 2, 3, 4, or 5 years) and is payable on each subsequent
July 15 until the number of payments elected by the Participant have been
made.
ACCOUNT 3 which shall be payable on the July 15 of a calendar year that
follows the calendar year of retirement by the number of years elected by the
Participant (0, 1, 2, 3, 4, or 5 years) and is payable as a single sum.
ACCOUNT 4 shall be available with respect to amounts deferred during 1998 and
later years. This account is payable beginning on the July 15 of a specified
year whether before or after retirement. In addition to this payment date, the
Participant must elect the number of payments that are to commence on this
date. The payment(s) from this account can be as a single sum or payable in up
to four annual installments. Once Account 4 is established (an election is
made to defer and the payment date is defined), deferrals to Account 4 shall
cease for any calendar year in which a payment is scheduled to be made from
this Account. The full account balance shall be distributed by the end of the
installment period. Once the final payment is made from this Account, the
Participant may elect to create a new Account 4. The initial election or any
subsequent election to use this Account must be made by December 31 of the
year preceding the calendar year in which deferrals will be allocated to this
Account. The first payment date that can be elected is the July 15 of the
calendar year that follows the calendar year of election (calendar year
containing the December 31 due date for election) by three years.
Not later than December 31, 1997, Participants who are currently serving as
Directors of the Company may change their payment elections previously made
under the Plan which specified payment dates relating to termination,
retirement, death, or disability, by selecting payments pursuant to the
methods described in Accounts 1 through 3
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above. Such change shall be effected by the Participant filing with the
Administrator a change of election on a form or forms established by the
Administrator for such purpose. Such change shall be effective only with
respect to payments in 1999 or later for Participants who are serving on the
Company's Board of Directors as of December 31, 1998.
The Administrator may adopt rules of general applicability for administration
of payments under the Plan which may be elected by Participants, including
without limitation, fixing the maximum age selected for payments to terminate
and the maximum number of payments.
Section 9. Payment of Deferred Compensation.
(a) No withdrawal may be made from the Participant's Account, except
as provided under this Section and Sections 10 and 11.
(b) Payments from a Participant's Account are made in cash in
accordance with the elections made under Section 8 of the Plan based on the
value of the Participant's deferred compensation Accounts as of the Valuation
Date immediately preceding the date of payment.
(c) 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 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
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. Any other payment
method selected with the written approval of the Administrator must in all
events provide for payments in substantially equal installments.
(d) Upon termination of service on the Board of Directors, including
termination resulting from death, prior to retirement, the total value of the
Participants Accounts under the Plan shall be paid to the Participant, or his
or her estate, as the case may be, as soon as administratively possible after
his or her date of termination.
(e) Upon the death of a Participant following retirement the total
value of the Participant's Accounts under the Plan shall be paid in accordance
with a onetime, irrevocable election made by such Participant as follows:
1. The total value shall be paid to the Participant's estate as soon as
administratively possible after the death of a Participant, or
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2. Payments shall continue under the election made by the Participant to the
Participant's surviving spouse until the surviving spouse's death. Any
remaining payments shall be paid as a single sum to the surviving spouse's
estate.
(f) If a Participant dies after retirement without having made such
irrevocable 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.
Section 10. Acceleration of Payment for Hardship.
(a) For Hardship. Upon written approval from the Board of Directors
(with the Participant requesting the withdrawal not participating) a
Participant may be permitted to receive all or part of his accumulated
benefits if, in the discretion of such 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 receive a lump sum payment equal to the value of his or her
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
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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 Investment. Amounts deferred under the Plan
shall begin to be credited with gains, losses and rates of return from
Investments commencing on the date credited to the Participant's Accounts.
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 by 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 or except as provided under Section 9.
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 Company expressly reserves the right to
amend the Plan at any time and in any particular manner. Such amendments,
other than amendments relating to termination of the Plan or relating to
Investments under Section 6 of the Plan, may be effected by (i) the Board of
Directors, (ii) a duly constituted committee of the Board of Directors
("Committee"), or (iii) the Vice President of the Company responsible for
human resources or a representative thereof. In the event such office is
vacant at the time the amendment is to be made, the Chief Executive Officer of
the Company shall approve such amendment or appoint a representative.
Amendments relating to termination of the Plan or relating to Investments
under Section 6 of the Plan shall be effected pursuant to a resolution duly
adopted by the Board of Directors of the Company, or a duly constituted
committee of the Board of Directors of the Company, in accordance with the
Business Corporation Law of the State of New York.
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Any amendment, alteration, modification or suspension under subsection (iii)
of the preceding paragraph shall be set forth in a written instrument executed
by any Vice President of the Company and by the Secretary or an Assistant
Secretary 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 Accounts.