EXHIBIT 10(l)
(As amended through 10/13/97)
XEROX CORPORATION
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
(Formerly 1989 Deferred Compensation Plan For Executives)
AMENDMENT AND RESTATEMENT
Preamble. This Deferred Compensation Plan For Executives, 1997 Amendment
and Restatement (the "Plan") is a private unfunded nonqualified deferred
compensation arrangement for executives 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 employee of Xerox Corporation (the
"Company"), and any employee of a wholly owned subsidiary of the Company
which has adopted this Plan with the approval of the Company's Board of
Directors or the Committee (as hereinafter defined) ("Participating
Subsidiary"), who is in Corporate B and A (or its equivalent) or above, and
such additional group or groups of employees of the Company or of a
Participating Subsidiary as designated from time to time by the
Administrator, are eligible to participate in the Plan (an individual 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 make deferrals 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 one or more deferred compensation Accounts (as
hereinafter defined).
Section 4. Amount of Deferral. A Participant may elect to defer
receipt of compensation for services (up to 50% in the case of base salary and
up to 100% in the case of any other long or short term compensation that is
eligible for deferral) as an employee of the Company or a Participating
Subsidiary otherwise payable to the Participant in the form of cash. Any
amount deferred is credited to the Participant's Accounts on the date such
amount is otherwise payable.
Section 5. Time of Election of Deferral. An election to defer
compensation must be made by a Participant prior to the year in which the
Participant would
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otherwise have an unrestricted right to such compensation. When an employee
first becomes eligible to participate in the Plan, he or she may elect to
defer any compensation to which he or she has yet to have an unrestricted
right to payment. An election to totally terminate future 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 (a) the Balanced Fund, Income Fund, U. S.
Stock Fund, International Stock Fund, Small Company Stock Fund or Xerox Stock
Fund (or the successors thereto) established from time to time under 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 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 Investment applicable to
the amount deferred; and (3) the payment method that will apply to the
deferred compensation. A Participant may elect up 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 employed by
the Company may change their payment elections previously made under the Plan
which specified payment dates relating to termination, retirement, death, or
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disability, by selecting payments pursuant to the methods described in
Accounts 1 through 3 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 employed by Xerox 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 employment, 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 one-time, 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.
(a) For Hardship. Upon written approval from the Company's Chief
Executive Officer (the Company's Board of Directors, in the case of a request
from the Chief Executive Officer), a Participant may be permitted to receive
all or part of his accumulated benefits if, in the discretion of the Chief
Executive Officer (or the Board, if applicable), 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
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
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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 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
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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.
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.