The purpose of the Compensation Committee (the "Committee") of
the Board of Directors (the "Board") of Xerox Corporation (the
"Company") is to discharge the responsibilities of the Board
relating to compensation of the Company's officers, to oversee the
evaluation of the Chief Executive Officer and other members of management,
to oversee the administration of the Company's executive compensation plans
and to produce an annual report on executive compensation for inclusion in
the Company's proxy statement, in accordance with applicable rules and
regulations of the Securities and Exchange Commission ("SEC"); to
consult with the Chief Executive Officer and advise the Board with respect
to senior management succession planning; and shall have such other powers
and perform such other duties as the Board may from time to time delegate
to it in accordance with Article III of the By-Laws of the Company, as the
same shall from time to time be amended.
Duties and Responsibilities
and make recommendations to the Board with respect to executive
compensation and executive retirement plans. Executive compensation
plans include cash and/or equity payments earned in the short term
and/or long term.
review and approve performance goals and objectives with respect to
the compensation of the Chief Executive Officer and all other officers
consistent with approved compensation plans.
oversee the performance evaluation of the Chief Executive Officer and
all other officers against approved goals and objectives.
on the evaluation, set the compensation of the Chief Executive Officer
and all other officers (including annual base salary level, annual
incentive level, long-term incentive level and any special or
and approve employment, severance, change-in-control, termination and retirement arrangements for all
with the Chief Executive Officer and advise the Board with respect to
senior management succession planning.
authority to retain and terminate the consulting firms engaged to
assist the Committee in the evaluation of the compensation of the
Chief Executive Officer and senior management. The Committee may also
conduct or authorize investigations into or studies of matters within
the Committee's scope of responsibilities and may retain, at the
Company's expense, such independent counsel or other advisers as it
and interpret executive compensation plans to the extent required by
the terms of such plans.
consultation with senior management of the Company, oversee regulatory
compliance with respect to compensation matters, including overseeing
the Company's policies on structuring compensation programs to
preserve tax deductibility and, as and when required, establishing
performance goals and certifying that performance goals have been
attained for purposes of Section 162(m) of the Internal Revenue Code
of 1986, as amended.
the executive compensation report from the compensation committee
required by the rules of the SEC to be included in the Company's
annual proxy statement.
Committee shall annually conduct an evaluation of its own performance
and, in light of this, consider changes in its membership, charter or
procedures. The Committee shall report to the Board the results of its
evaluation, including recommended charter, membership and other
Composition and Qualifications
The Committee shall be comprised of three or more directors, the exact
number to be determined from time to time by resolution of the Board. Each
member of the Committee shall be "independent" as required by
NYSE listing standards and any other legal requirements as shall from time
to time be in effect. The Board of Directors shall, in the exercise of
business judgment, determine the "independence" of directors for
Members of the Committee shall also qualify as "non-employee
directors" within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, and "outside directors"
within the meaning of Section 162(m) of the Internal Revenue Code of 1986,
The Chairman of the Committee shall be designated by a majority vote
of the entire Board.
Members of the Committee shall be designated annually by a majority of
vote of the entire Board (after considering any recommendations of the
Corporate Governance Committee) at the organizational meeting of the Board
of Directors held in connection with the annual meeting of shareholders.
Vacancies on the Committee shall be filled by a majority vote of the
entire Board. By a majority vote of the entire Board, a member of the
Committee may be removed.
In selecting the members of the Committee from time to time, the
Board shall consider the following qualifications for membership: prior
service on the Committee or a compensation committee of another public
company or service with a public company which involved executive
The Chairman of the Committee is responsible for the orientation of
new members regarding compensation matters.
The Committee shall be fully independent, accountable, and vigorous
in taking primary responsibility for all aspects of executive compensation
including employment, retention, and severance agreements.
Structure and Operation
members of the Committee shall constitute a quorum. When more than two
members are present, the act of a majority of the members present at a
meeting at which a quorum is present shall be the act of the
Committee, and when only two members are present, the unanimous vote
of the two members shall constitute the act of the Committee.
Committee may form and delegate authority to subcommittees when
person as may be designated by the Chairman of the Committee shall act
as secretary and keep the minutes of all meetings of the Committee.
Committee shall meet in person or telephonically, at least three times
a year at such times and places determined by the Chairman of the
Committee, with further meetings to occur, or actions to be taken by
unanimous written consent, when deemed necessary or desirable by the
Committee or its Chairman.
Committee shall meet in executive session without the presence of any
members of management as often as it deems appropriate.
Committee may request that any directors, officers or employees of the
Company, or other persons whose advice and counsel are sought by the
Committee, attend any meeting of the Committee to provide such
pertinent information as the Committee requests.
Chairman of the Committee shall report to the Board at each meeting of
the Board the deliberations, actions and recommendations of the
Committee since the last Board meeting.
as expressly provided in this Charter, the By-laws of the Company or
the Company's Corporate Governance Guidelines, or as required by law,
regulations or NYSE listing standards, the Committee shall establish
its own rules of procedure.