EXHIBIT 10 (P)
Separation Agreement dated May 11, 2000 between Registrant and G. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, former President and Chief Executive Officer of Registrant.
THE DOCUMENT COMPANY
XEROX
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman of the Board
Xerox Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(203) 968-4515
May 11, 2000
Mr. G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
The following information summarizes the arrangements for your separation from
Xerox Corporation (the Company) subject to approval by the Board of Directors
or the Executive Compensation and Benefits Committee commencing May 11, 2000.
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 stock
options both vested and non-vested specified in the table below under Options
and Rights (the "Stock Options") will be cancelled immediately. However, if
the Company advises you in advance 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 cancel the Stock Options 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. The Company
agrees not to publicly make any derogatory or disparaging statements about you.
BONUS
You will receive $375,000 as a prorated 2000 bonus in February 2001.
OTHER COMPENSATION
You will receive a cash payment of $200,000 in lieu of continuation of life
insurance benefits. Payment will be made as soon as administratively possible.
OPTIONS AND RIGHTS
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.
Grant Date Grant Amount Vesting* Expiration Date*
Price Remaining
N/Q Stock
Options:
6/11/97 $34.8125 1,000,000 480,000 (Now) 12/31/04
(Sign-on) 260,000 on 1/1/2001 Options
260,000 on 1/1/2002 exercisable for
balance of term
6/11/97 $34.8125 100,540 100,540 (Now) 12/31/04
(Sign-on) Options
exercisable for
balance of term
12/31/97 $36.7032 400,512 264,335 (Now) 12/31/05
(LEEP) 136,177 on 1/1/2001 Options
exercisable for
balance of term
10/12/98 $46.8750 171,648 114,432 (Now) 12/31/08
(LEEP) 57,216 on 1/1/2001 Options
exercisable for
balance of term
12/7/98 $54.8594 163,480 81,740 (Now) 2/26/09
(LEEP) 81,740 on 1/1/2001 Options
exercisable for
balance of term
1/1/99 $59.4375 1,374 458 (Now) 12/31/06
(Profit 458 on 1/1/01 Options
Sharing) 458 on 1/1/02 exercisable for
balance of term
9/9/99 $47.50 42,188 42,188 on 3/1/03 12/31/09
(Bonus) Options
exercisable for
balance of term
10/11/99 $25.3755 250,000 125,000 on 10/11/03 12/31/09
(Retention) 125,000 on 6/25/04 Options
exercisable for
balance of term
2/7/00 $21.7812 100,000 100,000 on 1/1/02 12/31/09
(Retention) if meets targets, Options
or 1/1/05 if not exercisable for
balance of term
Total 2,229,742
Incentive
Stock
Rights:
6/11/97 80,000 40,000 on 1/1/01
(Sign on) 40,000 on 1/1/02
Total 80,000
Note: Subject only to the second and third paragraphs of this letter (relating
to competition with the Company, disclosure of confidential business
information or publicly making derogatory or disparaging statements about the
Company), by reason of your separation from the Company, all of your options as
set forth in the table above will continue to vest on the dates provided
(subject to no other conditions) and will be exercisable until their expiration
dates as set forth in such table.
PROFIT SHARING AND SAVINGS ACCOUNT
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. A calculation of your account balances will be completed
at the end of your salary continuance period at which time you will have the
opportunity to elect how and when the proceeds will be distributed.
RETIREMENT BENEFIT
You will be entitled to an annual retirement benefit of $800,000 commencing as
of the date hereof. The form of benefit is 100% joint and survivor meaning
that your wife will continue to receive this benefit after your death.
MEDICAL, DENTAL AND OTHER BENEFITS
You will be entitled to retiree medical and dental coverage under the Mid-
Career Hire Executive Retirement Program commencing the date hereof.
LIFE INSURANCE
Your Contributory Life Insurance coverage of $3,000,000 will terminate on the
date of this agreement. Upon termination of the Plan Agreement in accordance
with the terms of the Contributory Life Insurance Plan, the Company will
recover its cumulative premiums paid into the Contributory Life Insurance Plan,
plus an amount for administrative expenses as stated in the Plan Agreement. At
that time you will become sole owner of the policy along with any remaining
cash value, with the option to continue the coverage at your own expense.
DEFERRED COMPENSATION PLAN
Your deferred compensation accounts will be paid out in accordance with the
terms of the plan. You will receive the proceeds in early July. The balance
of your accounts as of May 8, 2000 was $13,022,591 which is subject to
fluctuation based upon hypothetical investment results through the date of
distribution.
OTHER ARRANGEMENTS
You will be paid for any accrued and unused vacation upon commencement of
salary continuance. You will not accrue any further vacation during salary
continuance.
Your company financial counseling program will be continued through the end of
2000.
Tax preparation will be extended through 2001 for the 2000 tax year.
The Executive Expense Allowance payment has been made in 2000. You will not be
entitled to any future Executive Expense Allowance payments while on salary
continuance.
You will be eligible for your 2000 physical under the Executive Physical
program.
The company will provide you with an office and administrative support at First
Stamford Place for 2 years, commencing May 15, 2000.
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 and provisions of California Labor
Code Section 2802 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, Ltd., including,
without limitation, In re Xerox Securities Litigation, 3:99-CV-2374(AWT)
pending in the United States District Court for the District of Connecticut.
RELEASE
This agreement shall not become effective until you execute and delivery to the
Company the release in the form attached. This agreement supercedes any prior
agreements between you and the Company with respect to your separation from the
Company.
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 upon reasonable notice
for consultation with the Company's counsel in any such litigation and to
provide testimony before or during any trial.
DIRECTOR/OFFICER STATUS
You hereby withdraw your nomination for election as a Director of the Company
at the Annual Meeting of Shareholders scheduled to be held on May 18, 2000, or
any adjournment thereof, and hereby decline to serve as a Director.
Concurrently herewith you are executing your resignation as a Director and
Officer of the Company and as a director or officer of any subsidiary or
affiliate of the Company in which you serve in such capacity, effective on the
date hereof.
Sincerely,
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PAA/crl
AGREED AND ACCEPTED
/s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
