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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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or Section 240.14a-12
XEROX CORPORATION
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(Name of Registrant as Specified in Its Charter)
_________________________________________________
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if other than the Registrant)
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The Document Company
Xerox
Xerox Corporation
800 Long Ridge Road
P.O. Box 1600
Stamford, Connecticut 06904
203 968-4515
Paul A. Allaire
Chairman & Chief Executive Officer
April 29, 1998
Dear ESOP Participant:
Ownership is our direction for 1998. We want employees not
only to feel a sense of ownership of the company, but also
to have real ownership in the company, and to share in its
success.
That's why we are incorporating stock-based payments into the
way we share profits with Xerox people under the profit sharing
plan. We will offset the impact of the recently announced
restructuring by making a combination of cash and stock-related
payments for 1998. For 1999 and beyond, we will move to a new
formula for profit sharing_one that's based on earnings growth
rather than ROA_with a portion of the payout being stock related.
I want stock options to be part of the profit sharing payout.
Stock options give you the opportunity to benefit financially
from increases in the price of Xerox common stock. The more
the stock increases, the more valuable the option. Stock
options have become an important part of the Total Pay for
employees who received them in the past.
The 1998 Employee Stock Option Plan will provide the shares
needed to give stock options to Xerox employees eligible for
profit sharing. The Plan has been presented to shareholders
for their approval at this year's Annual Meeting of Shareholders
on May 21. The adoption of the Plan will not affect the Employee
Stock Ownership Plan (ESOP). ESOP shares will continue to be
allocated to employees until the reserve is exhausted in 2003,
as set forth in the Trust establishing the ESOP.
The Board of Directors of the Company recommends that
shareholders vote FOR the approval of the 1998 Employee Stock
Option Plan. I want to emphasize that recommendation to
you as an employee and a shareholder.
As a participant in the ESOP, you already know the impact
of increased stock price. With the common stock trading at
around $110, each share of stock in your ESOP account
currently has a market value of about $330, more than
four times the $78.25 minimum. Stock options offer you
another potential opportunity to share in the success
of The Document Company, along with all Xerox shareholders.
Sincerely,
Paul A. Allaire
PAA/pw
You can vote by signing and returning your Voting Instruction
Card. You may also vote by phone (1-888-807-7699) or by
Internet (www.equiserve.com/proxy). Your telephone or Internet
vote authorizes the Trustee to vote your shares in the same
manner as if you had marked, signed and returned your Voting
Instruction Card. You may change your Voting Instruction at
anytime before May 21 through Internet or telephone voting.
To vote by phone or Internet you will need your 13-digit control
number, printed above your name and address on the Voting
Instruction Card and on the address card included with this
letter.
Xerox has a confidential voting policy. Your vote, like those
of all shareholders, will be held in the strictest confidence.