Exhibit 10(p)
THE DOCUMENT COMPANY
XEROX
CONFIDENTIAL
Xerox Corporation
800 Long Ridge Road
Stamford, CT 06904
Paul A. Allaire
Chairman of the Board
December 4, 2000
Mr. William F. Buehler
535 Smith Ridge Road
New Canaan, CT 06840
Dear Bill:
The purpose of this letter is to summarize the arrangements for your retirement
from Xerox Corporation (the Company) as follows:
Last day of active employment: January 15, 2001
Salary Continuance: 12 months
January 16, 2001 to January 15, 2002
Salary Continuance Amount: $56,250 per month
Retirement Date: January 16, 2002
If you obtain employment as an employee of, or consultant to, another firm or
corporation (other than the Company or an affiliate) that is a direct competitor
of the Company in any business presently engaged in by the Company or in which
the Company as of the date hereof may reasonably be expected to engage in the
future, or is or may become such a competitor indirectly through a partnership,
joint venture or other business arrangement with, or as a supplier or consultant
to, such a direct competitor ("Competitor"), the salary continuance described
above will terminate upon the commencement of such employment. However, if the
Company advises you in writing that in its reasonable judgment such other firm
or corporation is not a Competitor, the remaining salary continuance will
continue to be paid. We will provide notice to you upon your request as to the
competitive nature of a prospective employer.
The Company may also terminate the salary continuance in the event you disclose
confidential business information or if you publicly make any
derogatory or disparaging statements about the Company, its management or its
business.
If your salary continuance ends pursuant to the preceding paragraphs, your
employment with the Company will terminate on the same date that salary
continuance terminates and any benefits described below or otherwise that are
dependent upon continued employment, including without limitation, continued
vesting of benefits and determination of years of service for retirement, will
also terminate. In addition, stock options both vested and unexercised and
non-vested will be cancelled immediately. As referred to in this letter, your
retirement date means January 16, 2002 or the earlier termination of your salary
continuance pursuant to this paragraph.
BONUS
Your 2000 bonus will be paid in February 2001 based on achievement against
metrics. No bonus will be paid during the time you receive salary continuance.
Summarized below are the relevant provisions that apply to your long-term
incentive awards, profit sharing and savings accounts, pension benefits, life
insurance benefits and other benefits arrangements. In case of inconsistencies
between this summary and the relevant plan, the terms of the plan will govern.
LONG-TERM INCENTIVE AWARDS
Grant Grant Amount Vesting Payment
Date Price Remaining Date Date
N/Q Stock Options:
12/31/97 $36.7032 109,634 53,997 (Now) Options continue to be
(LEEP) 55,637 on available as if an active
1/1/2001 employee.
10/12/98 $46.8750 70,128 46,752 (Now) Options continue to be
(LEEP) 23,376 on available as if an active
1/1/2001 employee.
12/7/98 $54.8594 104,440 52,220 (Now) Options continue to be
(LEEP) 52,220 on available as if an active
1/1/2001 employee.
1/1/99 $59.4375 2,154 718 (Now) All vested options remain
(Profit 718 on 1/1/2001 exercisable for 12 months
Sharing) following retirement date.
718 on 1/1/2002
11/9/99 $25.8125 21,563 21,563 on Options will vest as
(SO Bonus) 3/1/2003 indicated for retirees
and the exercise period
will be until 12/31/09.
2/7/2000 $21.7812 50,000 50,000 on Options not vested at
(CEO 1/1/2005 time of retirement are
Challenge) cancelled.
5/18/00 $27.0000 100,000 50,000 on Options continue to be
(Non-trad 1/1/2001 available as if an active
NQ) 50,000 on employee.
1/1/2002
Total 457,919
Incentive Stock Rights
10/13/97 20,000 20,000 on
10/13/2001
12/31/97 15,896 15,896 on ISRs vest if EPS targets
(LEEP) 3/1/2001 are met.
12/7/98 10,444 10,444 on ISRs vest if EPS targets
(LEEP) 3/1/2001 are met.
5/18/00 30,000 15,000 on
(Special ISR) 1/1/2001
15,000 on
1/1/2002
Total 76,340
PROFIT SHARING AND SAVINGS ACCOUNTS
As you know, under relevant plan provisions, you have choices available
regarding the continued investment of your account balances and the time and
form of distribution. Please refer to You and Xerox: Wealthwise for a
description. A determination of your account balances will be done at
retirement.
EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
Upon retirement, your ESOP account can be taken as cash, in stock, or rolled
over to the Xerox 401(k) savings plan. A determination of your final plan
benefit will be done at retirement.
PENSION BENEFITS
Effective on your retirement date, you will become a retiree of Xerox. As a
retiree, you will receive pension benefits accrued in the Retirement Income
Guarantee Plan (RIGP).
In addition to your vested RIGP benefit, you will receive a benefit under the
Supplemental Executive Retirement Plan (SERP), which as you know, will allow you
to begin to receive retirement income benefits unreduced for age and will be
offset by your RIGP benefits. This benefit will commence on your retirement
date, and will be paid in monthly installments reflecting your survivor
election. This benefit is unfunded and is not tax qualified.
In addition to RIGP and SERP benefits you will receive a retirement supplement
approved by the ECBC and communicated to you last November. It will provide the
equivalent of $75K per year and will be paid in 3 equal installments of $280,746
beginning 1/1/02. You can elect a single lump sum payment ($842,238) of this
part of your retirement benefits if you make that election prior to December 31,
2001.
MEDICAL BENEFITS
As a retiree, you are eligible to receive medical coverage under Xerox Retiree
Flex. This program will include, among other things, coordination of benefits if
you are covered by more than one plan including Medicare. As you get closer to
your retirement date, an information package will be sent to you
from United HealthCare.
LIFE INSURANCE
Your Contributory Life Insurance coverage of $1,500,000 will continue during
your salary continuance period. During this period, both you and the Company
will continue to share in the cost of premiums according to the original plan
agreement. In the event of your death during salary continuance, salary would
cease and your beneficiaries will, subject to applicable plan provisions receive
the proceeds of your life insurance coverage. Additional information will be
sent to you from LongMiller, our consultants for this program.
DEFERRED COMPENSATION PLAN
Your deferred compensation accounts will be paid out according to the terms of
your prior elections following retirement.
OTHER ARRANGEMENTS
You will be paid for any accrued and unused vacation upon commencement of salary
continuance. You will not accrue any further vacation.
Your company financial counseling program will be continued through the end of
2002.
Tax preparation will be extended through 2002 for the 2001 tax year.
When salary continuance begins, you will not be entitled to any future Executive
Expense Allowance payments.
INDEMNITY
You will be entitled to be indemnified with respect to all periods of your
service as a director or officer of the Company or any of its subsidiaries in
accordance with 1) the provisions of Sections 721 through 725 of the Business
Corporation Law of the State of New York, 2) Section 2 of Article VIII of the
by-laws of the Company as in effect on the date hereof and 3) the Company
directors and officers liability insurance policies with Federal Insurance
Company, National Union Fire Insurance Company Of Pittsburgh P.A., Reliance
Insurance Company, Chubb Atlantic Ltd., Gulf Insurance Company and A.C.E
Insurance Company, Ltd., or any successor insurance company.
RELEASE
This agreement shall not become effective until you execute and delivery to the
Company the release in the form attached.
COOPERATION IN LITIGATION
You will cooperate fully with the Company and its counsel in any litigation that
arises out of or is related to your service with the Company or any of its
subsidiaries, or in which you are named as a party. That cooperation includes
making yourself available for reasonable periods of time for consultation with
the Company's counsel in any such litigation and to testify in such litigation
at the Company's expense for travel and lodging, if required.
Margie Filter will contact you regarding your resignation as a Corporate Officer
and Vice Chairman of the Board of Directors.
Bill, if you have any questions on the above, please call me or Pat Nazemetz at
(203) 968-3158. Otherwise, please sign this letter and return it to me.
Sincerely,
/s/ Paul A. Allaire
Paul A. Allaire
PAA/bjf
Attachment
Copies:
HJMotroni
PMNazemetz
RLStrahota
AGREED AND ACCEPTED
/s/ W. F. Buehler
William F. Buehler
Date: 12/8/00