important benefits information: summary of material ... · important benefits information: summary...

Important Benefits Information: Summary of Material Modifications (SMM)

to the Summary Plan Description (SPD) of the Xerox Corporation Retirement Income

Guarantee Plan (RIGP) and The Xerographic Division, Rochester Regional Joint Board on Behalf of Itself and Other Regional Joint

Boards

Plan Number 003 July 2012

Xerox has made the following changes to the RIGP since the publication of the SMM in July 2011: 1. The section “If you leave Xerox and Are Later Reemployed by Xerox” (page 13) is modified as follows: Delete the sentence in the third paragraph “However, if you return to Xerox prior to having a five-year break in service, your forfeiture will be reinstated to your CBRA.” Details of this plan can be found in the plan document that governs all aspects of the plan. In the event of a discrepancy between the information contained in this SMM and the applicable plan document, the relevant plan document shall be controlling. The Company, at its discretion, reserves the right to amend or terminate the plan at any time for any reason. This SMM is only a summary of certain benefits changes and does not create a contract between the Company and any employee.* *Certain classes of workers including (without limitation) independent contractors, leased employees, supplemental contract workers, consultants, agents, or anyone classified as such by Xerox, or any other third party individuals who perform services for the Company, are neither eligible for nor covered by the plan summarized herein (unless qualifying as a beneficiary of an employee). For purposes of this paragraph, “Company” means Xerox and any of its affiliates that elect to participate in a plan with Xerox’s consent. Retirement Income Guarantee Plan (Union) SMM 07/12

Important Benefits Information: Summary of Material Modifications (SMM)

to the Summary Plan Description (SPD) of the Xerox Corporation Retirement Income Guarantee

Plan (RIGP) and The Xerographic Division, Rochester Regional Joint Board

on Behalf of Itself and Other Regional Joint Boards

Plan Number 003 July 2011

Xerox has made the following changes to the RIGP since the publication of the SPD in August 2008: 1. References to plan name, including, but not limited to “Plan Name” and “Type of Plan” (page 28) are changed to: The Xerox Corporation Retirement Income Guarantee Plan and The Xerographic Division, Rochester Regional Joint Board on Behalf of Itself and Other Regional Joint Boards. 2. A new bullet is added after the 7th bullet on page 1, which reads as follows: The Xerox Retirement Investment Committee (‘‘XRIC’’) is a named fiduciary of the plan. It has the authority to control and manage the assets of the plan, including the authority to appoint another named fiduciary or fiduciaries or investment manager or managers to manage all or any part of the assets of the plan. The XRIC is comprised of the Treasurer; Chief Accounting Officer; Vice President, Worldwide Taxes; Vice President, Human Resources; and Chief Information Officer. The Treasurer is chairman of the XRIC. 3. A new section entitled ‘‘Overpayments’’ is added after the ‘‘Limitations on Actions’’ section (page 26), as follows: Under ERISA and the plan, the RIGP is not permitted to pay benefits to or on behalf of anyone if the payments are not expressly provided for by the plan, or if the payments might cause the IRS to revoke the plan’s tax-qualified status. Any amount received by a payee from the plan to which the payee is not entitled by the terms of the plan is an overpayment. The payee is obligated to reimburse the overpayment to the plan and the plan has the right to recover these amounts by all allowable means as set forth under the terms of the plan. Details of this plan can be found in the plan document that governs all aspects of the plan. In the event of a discrepancy between the information contained in this SMM and the applicable plan document, the relevant plan document shall be controlling. The Company, at its discretion, reserves the right to amend or terminate the plan at any time for any reason. This SMM is only a summary of certain benefits changes and does not create a contract between the Company and any employee.* *Certain classes of workers including (without limitation) independent contractors, leased employees, supplemental contract workers, consultants, agents, or anyone classified as such by Xerox, or any other third party individuals who perform services for the Company, are neither eligible for nor covered by the plan summarized herein (unless qualifying as a beneficiary of an employee). For purposes of this paragraph, “Company” means Xerox and any of its affiliates that elect to participate in a plan with Xerox’s consent. Retirement Income Guarantee Plan (Union) SMM 07/11

Retirement Income Guarantee Plan (RIGP) of Xerox Corporation and The Xerographic Division, UNITE HERESummary Plan Description

This material, prepared by Xerox Corporate Benefits in August 2008, is intended to constitute the summary plan description (SPD) of the Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, UNITE HERE (herein referred to as “RIGP” or the “plan”). This plan is one component of the Xerox-sponsored comprehensive benefits program for eligible employees* covered by a UNITE HERE collective bargaining agreement. It supersedes the portions of all previous SPDs up to this date relating to this plan.

Key features of the plan, including eligibility requirements, are summarized in this SPD. However, it cannot cover all the details. Those details can be found in the official plan document that legally governs all aspects of the plan. In the event of a discrepancy between the plan document and the information provided in this book, the plan document is controlling. If you have any questions or if you need any additional information about your Xerox-sponsored benefits, visit the Your Benefits Resources Web site at http://resources.hewitt.com/xerox/ or call the Xerox Benefits Center at 1.888.979.9961.

The plan summarized in this SPD, prepared in August 2008, is subject to change. This SPD does not create a contract between Xerox or the plan and any employee. In order to meet its needs under changing conditions, the Company and The Xerographic Division, UNITE HERE, may jointly terminate or change the plan or the statements made in this material.

RIGP is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) dealing with reporting and disclosure, participation and vesting, funding, plan termination, and fiduciary responsibility. Also, the plan is subject to the funding and termination insurance provisions of ERISA that apply to defined benefit pension plans.

∗Certain classes of workers including (without limitation) independent contractors, leased employees, supplemental contract workers,

consultants, agents, or anyone classified as such by Xerox, or any other third-party individuals who perform services for the Company, are neither eligible for nor covered by the plan summarized herein (unless qualifying as a beneficiary of an employee). For purposes of this paragraph, “Company” means Xerox and any of its affiliates that elect to participate in a plan with Xerox’s consent. The plan also excludes members of the “Temporary Work Force” under the terms of the collective bargaining agreement who receive credit for fewer than 1,000 hours of service during the plan year.

Contents

RIGP at a Glance..........................................................................................................................................................................1

Who Is Eligible..............................................................................................................................................................................2

How the Plan Works....................................................................................................................................................................3 How Your Benefit Is Determined ...........................................................................................................................................................3 When You Can Receive Your Benefit....................................................................................................................................................3 Calculating Your Benefit ...........................................................................................................................................................6 At a Glance......................................................................................................................................................................................................6 Cash Balance Retirement Account (CBRA) ........................................................................................................................................6 Formula Benefit ............................................................................................................................................................................................7

Highest-Average Pay ........................................................................................................................................................................7 Alternative Method for Long-Service Employees..................................................................................................................7 Formula Benefit Examples .............................................................................................................................................................8

Normal Retirement at Age 65.................................................................................................................................................8 Early Retirement ...........................................................................................................................................................................9

Estimating Your Formula Benefit .............................................................................................................................................10 Transitional Retirement Account ........................................................................................................................................................ 11 Comparing the Calculations ................................................................................................................................................................. 11 If You Become Disabled or Die ............................................................................................................................................ 12 If You Become Disabled ......................................................................................................................................................................... 12 If You Die...................................................................................................................................................................................................... 12 Special Situations That Could Affect Your Benefit ....................................................................................................... 13 Maximum Benefits.................................................................................................................................................................................... 13 Qualified Domestic Relations Order (QDRO).................................................................................................................................. 13 If You Leave and Are Later Reemployed by Xerox ...................................................................................................................... 13 If You Received a Prior Distribution................................................................................................................................................... 14

What This Means for You............................................................................................................................................................15 How Prior Distributions Affect Future Pension Benefits..................................................................................................15

Receiving Your RIGP Benefit ................................................................................................................................................ 17 At a Glance................................................................................................................................................................................................... 17 Valuation of Your RIGP Benefit........................................................................................................................................................... 17 Applying for Your Benefit....................................................................................................................................................................... 18 About the Distribution Options ........................................................................................................................................... 19 Lump-Sum Cash Distribution................................................................................................................................................................ 19 Rollovers: Direct or Indirect ................................................................................................................................................................... 19

Direct Rollover ..................................................................................................................................................................................19 Indirect Rollover ..............................................................................................................................................................................19 Requesting a Rollover....................................................................................................................................................................19

Annuity Options ......................................................................................................................................................................................... 20 Single Life Annuity .........................................................................................................................................................................20 Joint and Survivor Annuities.......................................................................................................................................................20 Certain and Life Annuities...........................................................................................................................................................20 A Cash Refund Option...................................................................................................................................................................20

Minimum Distributions ........................................................................................................................................................................... 20 Tax Issues.................................................................................................................................................................................... 21 Mandatory Withholding ......................................................................................................................................................................... 21 Voluntary Withholding............................................................................................................................................................................ 21

Statement of ERISA Rights ................................................................................................................................................... 22 Rights of a Plan Participant or Beneficiary Under ERISA.......................................................................................................... 22 Receive Information About Your Plan and Benefits ................................................................................................................... 22 Prudent Actions by Plan Fiduciaries................................................................................................................................................... 22 Enforce Your Rights .................................................................................................................................................................................. 22 Assistance With Your Questions.......................................................................................................................................................... 23 Claims and Appeals Procedures ........................................................................................................................................... 24 Notice of Claims Determinations........................................................................................................................................................ 24 Appealing an Adverse Benefits Determination............................................................................................................................. 24 Notice of Determination on Review/Appeal .................................................................................................................................. 25 Discretionary Authority of the Plan Administrator...................................................................................................................... 25 Additional Information .......................................................................................................................................................... 26 Limitation on Actions............................................................................................................................................................................... 26 Plan Documents ......................................................................................................................................................................................... 26 Plan Continuation ..................................................................................................................................................................................... 26 Security of Your Retirement Benefits................................................................................................................................................ 26

Pension Benefit Guaranty Corporation [font size] ............................................................................................................27 Administrative Facts................................................................................................................................................................ 28 Plan Name.................................................................................................................................................................................................... 28 Employer Identification Number ........................................................................................................................................................ 28 Plan Number................................................................................................................................................................................................ 28 Plan Administrator .................................................................................................................................................................................... 28 Type of Plan................................................................................................................................................................................................. 28 Service of Legal Process .......................................................................................................................................................................... 28 Plan Trustee ................................................................................................................................................................................................. 28 Plan Funding................................................................................................................................................................................................ 28

RIGP at a Glance

RIGP is designed to provide you with a foundation of income during your retirement:

• If you are eligible for RIGP, participation is automatic.

• You are not eligible to participate in RIGP if you were hired after 2005 (or, if you’re an eligible employee covered by the UNITE HERE Local 14Z collective bargaining agreement, on or after April 1, 2006) with no prior service credit.

• You do not make any contributions to your retirement benefit under RIGP—Xerox pays the full cost. RIGP is a defined benefit pension plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

• You earn your RIGP benefit under one or more plan formulas while you continue your career with Xerox.

• You “vest” in, or become entitled to your RIGP benefit if you are in Xerox employment on or after January 1, 2008.

• Vesting entitles you to the RIGP benefit you may have earned by RIGP participation as of your vesting date and thereafter. It does not entitle you to RIGP benefits you may have previously forfeited, or to a RIGP benefit to the extent you are not eligible to participate in RIGP.

• You can receive your benefit after you retire or leave Xerox employment. You have a choice of payment options to meet your needs.

The rest of this summary explains how RIGP works in more detail and can help you make the most of your retirement plan benefits. If you have any questions about the information contained in this summary, call the Xerox Benefits Center at 1.888.979.9961, or access the Your Benefits Resources™ Web site at http://resources.hewitt.com/xerox/.

1

Who Is Eligible

Eligibility and Automatic Enrollment If you were hired on or before December 31, 2005 as a Xerox employee whose terms of employment are covered by a collective bargaining agreement with UNITE HERE (or on or before March 31, 2006 if you’re an eligible employee covered by the UNITE HERE Local 14Z collective bargaining agreement), you automatically became a participant in RIGP on the January 1 following your year of hire and were credited with vesting service and benefit service from your first day of work.

You are not eligible for RIGP if you are hired after December 31, 2005 (or after March 31, 2006 if you’re an eligible employee covered by the UNITE HERE Local 14Z collective bargaining agreement).

Please note: The fact that you have received this SPD does not make you eligible to participate in this or any other plan sponsored by Xerox, if you are not eligible to participate under the plan’s terms.

Enrollment in the plan is automatic. Xerox pays the entire cost of providing your retirement income under RIGP. However, it’s important to designate a beneficiary for your benefit in the event you die before receiving the benefit to which you are entitled.

Naming a Beneficiary If you’re single, you can name anyone you want to be the beneficiary of any death benefit that may become payable if you are otherwise vested in your RIGP benefit. If no beneficiary has been designated, payment will be made to your estate.

If you’re married, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) has established certain rules for married employees regarding designating a beneficiary and how death benefits are paid if you die before receiving your vested benefit:

• If you are under age 35 and married, your spouse is automatically your beneficiary. You cannot designate someone else as your beneficiary.

• If you are age 35 or older, your spouse is automatically your beneficiary unless you designate someone other than your spouse and submit your spouse’s written and notarized consent to do so on forms available for your elections. Otherwise, your spouse remains your beneficiary. If you are married and designate someone other than your spouse as your beneficiary without having obtained your spouse’s written and notarized consent, this designation is invalid. Please note that if you designate someone other than your spouse as your beneficiary, any death benefits that are only paid to the spouse of a married employee will no longer apply.

You may visit the Your Benefits Resources web site at http://resources.hewitt.com/xerox/ or call the Xerox Benefits Center at 1.888.979.9961 to complete or change your beneficiary designation at any time and to get the form necessary to obtain your spouse’s written and notarized consent if you want to name someone other than your spouse.

Refer to “If You Become Disabled or Die,” on page 12, for information about how the benefit payable to your beneficiary is determined.

2

How the Plan Works

How Your Benefit Is Determined Xerox looks at up to three different ways to calculate your benefit (based on your eligibility), and you receive the one that yields the highest result: • Cash Balance Retirement Account (CBRA) for all eligible employees. This is an

account to which Xerox makes annual CBRA credits equal to 4% of your eligible pay. Also, your account earns annual interest, which is credited daily.

Note: If you were hired after December 31, 2005 (or after March 31, 2006 if you’re an eligible employee covered by the UNITE HERE Local 14Z collective bargaining agreement), you will not be eligible for a RIGP benefit.

• Formula benefit for all eligible employees. The formula uses the average of your five highest-paid calendar years and your years of benefit service to determine your formula benefit.

• Transitional Retirement Account (TRA) for eligible employees hired before 1989. You may also have a TRA. The value changes daily, based on the investment results of the funds in which your account is invested.

Refer to “Calculating Your Benefit,” on page 6, for details on how your benefit is determined.

When You Can Receive Your Benefit You “vest” in, or become entitled to your RIGP benefit if you are in Xerox employment on or after January 1, 2008 (prior to January 1, 2008, you needed five years of vesting service to vest). Vesting entitles you only to the RIGP benefits you may have earned through RIGP participation as of your vesting date and thereafter. Vesting does not entitle you to RIGP benefits or benefit service you may have previously forfeited before your vesting date. Also, vesting does not entitle you to RIGP benefits if you are not eligible to participate in RIGP—for example if you were hired after 2005. You cannot receive your benefit until after you retire or leave Xerox employment. If you leave before you are vested, no benefit is payable to you.

If you are vested when you leave, distribution of your benefit can be postponed and paid starting on your normal retirement date or as late as April 1 of the calendar year following the later of the calendar year in which you reach age 70-1/2 or terminate employment; alternatively, you may choose to receive payment at an earlier date.

Normal retirement age is 65. Your normal retirement date is the first day of the month after you reach age 65. If your 65th birthday falls on the first of the month, your normal retirement date falls on that day. If you’re still working for Xerox, you become fully vested in your RIGP benefit at age 65, regardless of your years of vesting service. If you do not retire at age 65 and continue to work for Xerox, your benefit will not be paid until after you retire. Your age-65 benefit will not be increased to compensate you for delaying payment past age 65, although you may continue to earn additional benefits for continuing to work past that age.

3

Early retirement eligibility is significant for purposes of determining your formula benefit. If, after you leave Xerox, you choose to start receiving a monthly benefit early, your formula benefit is subject to an early retirement reduction. You are eligible for early retirement after you have reached age 55 as an active employee and have completed ten years of vesting service when you leave Xerox employment:

• If you leave Xerox when you are at least age 55 with ten or more, but fewer than 30, years of vesting service, your formula benefit will be reduced from age 65 for early payment.

• If you leave Xerox when you are at least age 55 with 30 or more years of vesting service, your formula benefit will be reduced from age 62 for early payment, or your benefit will be unreduced if you start payment at age 62 or later.

• The method of computing the early retirement reduction if your formula benefit begins before age 65 (before age 62 if you leave after attaining age 55 and 30 years of vesting service) is described in more detail on page 9.

Deferred vested retirement is when you leave with a vested benefit before you are eligible for either normal or early retirement.

You may choose to receive payment right away or postpone to a later date. There’s an exception: If the value of your benefit is $1,000 or less, you will automatically receive your benefit as an immediate lump sum.

If you receive your formula benefit before age 65, it will be reduced from age 65 for early payment. For each year that payment precedes age 65, the early payment reduction is greater for the deferred vested benefit than for the early retirement benefit. The formula benefit reduced for early payment is actuarially equivalent to the benefit payable to you at age 65. Actuarial equivalence is determined using the same interest rate and mortality table as prescribed by Federal law for calculating minimum lump-sum pension distributions. These factors change each year, and were significantly modified for 2008 and later years by Federal legislation. This new law will gradually replace the old interest rate, based on the 30-Year Treasury bond yields, with the rates determined by the government based on corporate bond yields. The new law also modified the mortality table. As these new factors are phased in from 2008 through 2012, the value of the lump sum distribution option is likely to decrease relative to the value of the annuity option.

If the value of your vested benefit is more than $1,000 and you postpone payment, your CBRA will continue to earn interest credits. Also, if applicable, your TRA will continue to fluctuate based on investment results. Although your formula benefit does not grow in the same manner as either of these balances, when you postpone payment to a later date, the reduction for early payment of the formula benefit is lower, which can result in a higher benefit paid to you.

Refer to “About the Distribution Options,” on page 19, for information about payment choices.

How Service Is Counted Vesting service is defined as the time worked for the Company that counts toward eligibility to receive a benefit and eligibility for retirement. Vesting service is important at three different times:

• If you are in Xerox employment on or after January 1, 2008, you are vested in your plan benefit to the extent not previously forfeited (For participants terminating Xerox employment prior to January 1, 2008, five years were required for vesting.)

• When you have ten years of vesting service, you are eligible for retirement if you are at least age 55 when you leave Xerox employment.

• When you have 30 years of vesting service and are at least age 55 when you leave Xerox employment, your benefit reduction for early retirement can be lower.

4

Benefit service is defined as the time you have worked for the Company as an active union employee and could include certain periods during which you did not actively work for the Company—for example, while receiving short-term disability benefits. It does not include certain leaves of absence, and service as a contract employee. (Time worked at Xerox as a contract employee may count toward vesting if you are hired as an employee and meet the eligibility criteria, but the contract service period will not count as benefit service.) Benefit service is used in calculating the RIGP formula benefit.

If you have an interruption in your service, certain rules apply for how your prior vesting and benefit service are treated when you return. For information about how vesting service and benefit service are calculated if you left Xerox and were subsequently rehired, refer to “If You Received a Prior Distribution,” on page 14.

5

Calculating Your Benefit

At a Glance If you are vested when you retire or leave Xerox, you are entitled to receive the greatest of three components (as applicable):

• The value of your Cash Balance Retirement Account (CBRA). Refer to “Cash Balance Retirement Account,” below.

• Your formula benefit, based on years of benefit service and highest-average pay, including a special formula if you have exceptionally long service. Refer to “Formula Benefit,” on page 7.

• The value of your Transitional Retirement Account (TRA), if you have one. TRA is not available for employees originally hired after 1989. Refer to “Transitional Retirement Account,” on page 11.

Details about how each of these benefit values is determined follow.

Cash Balance Retirement Account (CBRA) Each year after 2005 (or after March 31, 2006 if you’re an eligible employee covered by the UNITE HERE Local 14Z collective bargaining agreement), Xerox credits your CBRA with an employer credit equal to 4% of your eligible pay. Note: For participation in years prior to January 1, 2006 (or prior to April 1, 2006 if you’re an eligible employee covered by the UNITE HERE Local 14Z collective bargaining agreement), you received an employer credit equal to 5% of eligible pay.

This employer credit is made on the last day of February for the previous year. If you receive a distribution in the same year you retire or terminate, your CBRA credit on pay in that year is included in your distribution. Note: If you retire or terminate in January or February and receive a distribution before the last day of February, the CBRA credit on pay for that year and the prior year will be included in your distribution.

Your CBRA will continue to earn interest, set annually at a rate that will remain in effect for the entire calendar year. Interest will continue each year at that year’s applicable rate until you take a distribution. The interest rate is the 12-month average of the effective yields on the one-year Treasury at constant maturity (often referred to as the one-year Constant Maturity Treasury or one-year CMT) as of the first business day of each of the 12 months preceding the plan year, plus 1%. The one-year CMT is developed by the Federal Reserve to represent the yield on one-year Treasury bills based on the universe of yields on existing Treasury bills, notes, and bonds. For CBRA credits earned before 2006, the interest rate credited in any year cannot fall below the preceding year’s rate by more than two percentage points. For CBRA credits earned beginning in 2006, the two-percentage point floor does not apply.

If you were with Xerox before 1989, you may have had a balance in the Profit Sharing Retirement Account, which was part of The Profit Sharing and Savings Plan of Xerox Corporation and the Xerographic Division, Union of Needletrades, Industrial and Textile Employees, A.F.L.-C.I.O.-C.L.C. (now called The Savings Plan of Xerox Corporation and The Xerographic Division, UNITE HERE) before the plan was revised in 1990. That balance was credited to establish your CBRA in 1990, along with the Profit Sharing Retirement Account contribution for 1989.

When you retire, die, or leave the Company, your CBRA credits will stop, but your account will continue to earn interest until you settle with the plan. Your CBRA will be valued when you settle with the plan. For more information on the valuation date, refer to “Valuation of Your RIGP Benefit,” on page 17.

6

Formula Benefit Your formula benefit is determined using your average eligible pay during your five highest-paid calendar years with Xerox and your years of benefit service:

Use Your Benefits Resources Web Site to Model Estimates Your highest-average pay can be accessed on Your Benefits Resources where you can model your RIGP estimates based on your own assumptions.

X =

1.4% of your highest-average pay

Years of benefit service (up to 30)

Your annual retirement benefit

Highest-Average Pay Your highest-average pay is calculated using the five complete calendar years of employment with Xerox (after 1974) during which your eligible pay was the highest. The years need not be consecutive. Also, if you terminated employment before 1976, these prior years of pay before 1976 are not considered. The average pay of these five years is used in the above formula. In calculating your highest-average pay, the plan only considers annual amounts up to a Federally mandated limit. (The limit is $230,000 for 2008, subject to change annually.) Also, you must have worked the entire year (including the last day of the year) for that year’s pay to be used in your highest-average pay. Your eligible pay includes your annual base salary plus overtime, certain bonuses, and lump-sum wages (excluding lump-sum salary continuance payments), and is calculated prior to any qualified before-tax savings and/or salary redirection. It does not always equal your W-2 earnings since not all elements of your eligible pay are included in your W-2 earnings, and some elements of your W-2 earnings are not included in eligible pay.

Alternative Method for Long-Service Employees If you have exceptionally long service, this alternative method may produce a higher benefit. It does not limit your years of benefit service to 30:

X =

1% of your highest-average pay

Years of benefit service

Your annual retirement benefit

7

Formula Benefit Examples Here are examples of how the formula benefit would be calculated based on certain assumptions about highest-average pay, your age, and years of benefit service at retirement.

Use Your Benefits Resources Web Site to Model Estimates Your highest-average pay can be accessed on Your Benefits Resources where you can model your RIGP estimates based on your own assumptions.

Normal Retirement at Age 65 The formula benefit is unreduced. You can retire at age 65 or later and receive an unreduced benefit after you leave Xerox employment.

Retirement at Age 65 or Older With 30 or More Years of Benefit and Vesting Service

Highest-average pay $50,000 × 1.4% $ 700

Years of benefit service × 30

Annual retirement benefit from Xerox $ 21,000

Your annual retirement benefit will be supplemented by the value of your savings and Company match in the 401(k) Savings Plan, your ESOP account (if any), Social Security, your savings, and assets outside of Xerox.

Retirement at Age 65 or Older With Fewer Than 30 Years of Benefit and Vesting Service



Annual retirement benefit from Xerox $ 16,800


Retirement at Age 65 or Older With 44 Years of Benefit and Vesting Service

Highest-average pay $50,000 × 1% $ 500


Annual retirement benefit from Xerox $22,000


8

Early Retirement Early retirement is from age 55 to 65 with at least ten years of vesting service:

• If you have at least ten, but fewer than 30, years of vesting service, your formula benefit is subject to an early retirement reduction calculated from age 65.

• If you have at least 30 years of vesting service, your formula benefit is subject to an early retirement reduction calculated from age 62 instead of from age 65.

The benefit is reduced by 5% for each complete year and 1/12 of 5% for each month that you begin receiving benefits before your unreduced age, which is—age 65—if you have fewer than 30 years of vesting service, and before age 62 if you have 30 or more years of vesting service.

Retirement at Age 60 (60 months before age 65) and 25 Years of Benefit and Vesting Service



Annual retirement benefit payable at age 65 $17,500

Minus early retirement reduction (60 months x [1/12x.05] = 25%)

− 4,375

Annual retirement benefit payable from Xerox at age 60 $13,125

Your annual retirement benefit will be supplemented by the value of your savings and Company match in the 401(k) Savings Plan, your ESOP account (if any), your savings and assets outside of Xerox, and Social Security when you reach age 62.

Retirement at Age 55 (120 months before age 65) and 25 Years of Benefit and Vesting Service



Annual retirement benefit payable at age 65 $17,500

Minus early retirement reduction (120 months x [1/12x.05] = 50%)

− 8,750

Annual retirement benefit payable from Xerox at age 55 $ 8,750

Your annual retirement benefit will be supplemented by the value of your savings and Company match in the 401(k) Savings Plan, your ESOP account (if any), your savings and assets outside of Xerox, and Social Security when you reach age 62.

9

Estimating Your Formula Benefit One way to estimate your annual formula benefit is to multiply your highest-average pay (the average of your highest five complete calendar years) by the percentage indicated for your age and service If you have questions, call the Xerox Benefits Center for assistance.

Retirement Age

Benefit Service 55 56 57 58 59 60 61 62 63 64 65

30 27.3% 29.4% 31.5% 33.6% 35.7% 37.8% 39.9% 42.0% 42.0% 42.0% 42.0% 29 20.3% 22.3% 24.4% 26.4% 28.4% 30.4% 32.5% 34.5% 36.5% 38.6% 40.6%

28 19.6% 21.6% 23.5% 25.5% 27.4% 29.4% 31.4% 33.3% 35.3% 37.2% 39.2%

27 18.9% 20.8% 22.7% 24.6% 26.5% 28.4% 30.2% 32.1% 34.0% 35.9% 37.8%

26 18.2% 20.0% 21.8% 23.7% 25.5% 27.3% 29.1% 30.9% 32.8% 34.6% 36.4%

25 17.5% 19.2% 21.0% 22.8% 24.5% 26.2% 28.0% 29.8% 31.5% 33.2% 35.0%

24 16.8% 18.5% 20.2% 21.8% 23.5% 25.2% 26.9% 28.6% 30.2% 31.9% 33.6%

23 16.1% 17.7% 19.3% 20.9% 22.5% 24.2% 25.8% 27.4% 29.0% 30.6% 32.2%

22 15.4% 16.9% 18.5% 20.0% 21.6% 23.1% 24.6% 26.2% 27.7% 29.3% 30.8%

21 14.7% 16.2% 17.6% 19.1% 20.6% 22.0% 23.5% 25.0% 26.5% 27.9% 29.4%

20 14.0% 15.4% 16.8% 18.2% 19.6% 21.0% 22.4% 23.8% 25.2% 26.6% 28.0%

19 13.3% 14.6% 16.0% 17.3% 18.6% 20.0% 21.3% 22.6% 23.9% 25.3% 26.6%

18 12.6% 13.9% 15.1% 16.4% 17.6% 18.9% 20.2% 21.4% 22.7% 23.9% 25.2%

17 11.9% 13.1% 14.3% 15.5% 16.7% 17.8% 19.0% 20.2% 21.4% 22.6% 23.8%

16 11.2% 12.3% 13.4% 14.6% 15.7% 16.8% 17.9% 19.0% 20.2% 21.3% 22.4%

15 10.5% 11.6% 12.6% 13.6% 14.7% 15.8% 16.8% 17.8% 18.9% 20.0% 21.0%

14 9.8% 10.8% 11.8% 12.7% 13.7% 14.7% 15.7% 16.7% 17.6% 18.6% 19.6%

13 9.1% 10.0% 10.9% 11.8% 12.7% 13.6% 14.6% 15.5% 16.4% 17.3% 18.2%

12 8.4% 9.2% 10.1% 10.9% 11.8% 12.6% 13.4% 14.3% 15.1% 16.0% 16.8%

11 7.7% 8.5% 9.2% 10.0% 10.8% 11.6% 12.3% 13.1% 13.9% 14.6% 15.4%

10 7.0% 7.7% 8.4% 9.1% 9.8% 10.5% 11.2% 11.9% 12.6% 13.3% 14.0%

10

Transitional Retirement Account If you were hired before 1989, your RIGP benefit is calculated yet another way, as the benefit value provided by your TRA.

If you were eligible when plan changes were made in 1990, your Profit Sharing Retirement Account balance was transferred to this account as of December 31, 1989. Your Profit Sharing Retirement Account contribution for 1989 was also added to this account.

No further contributions or employer credits are made to this account. Your TRA balance fluctuates from the investment results of the funds in which your account was invested as of December 31, 1989. For most participants, their TRA is invested in the Balanced Fund-Pension—some participants may have a portion of their TRA balance invested in the Income Fund If you have a TRA balance, you can find out how your account is invested by accessing the Your Benefits Resources Web site.

Your account value will continue to share in investment results until you settle with the plan. The valuation date depends on a number of factors, which are explained in more detail in “About the Distributions Options,” on page 20.

Comparing the Calculations If you are vested when you leave Xerox:

• First, if you were hired before January 1, 2006 your formula benefit payable as an annuity at age 65 is calculated. This benefit is then adjusted for early payment. The adjusted benefit is actuarially equivalent to the benefit payable to you at age 65. Actuarial equivalence is determined using the same interest rate and mortality tables as used for computing your benefit if you leave before early retirement, as described on page 3. (Solely for comparing benefits to see which is the greatest, your actuarially equivalent formula benefit is computed, even if you are eligible for early retirement when you leave).

• Then, your balances in the CBRA and the TRA (if you have one) are converted to annuities payable immediately so they can be compared to your formula benefit. The annuities are actuarially equivalent to your balance in the CBRA or TRA (if you have one), determined using the same interest rate and mortality tables used for determining the actuarially equivalent formula benefit.

• Whichever calculation provides the greatest annuity benefit will be the basis for determining the benefit value you receive from RIGP.

• If you run an estimate on Your Benefits Resources or request a retirement benefit estimate from the Xerox Benefits Center, you will receive a comparison of monthly benefits. (For simplicity, the examples on pages 8 and 9 show annual benefits.)

• The form of your benefit payment depends on the payment method you choose. Refer to “About the Distribution Options,” on page 19, for information about payment choices.

11

If You Become Disabled or Die

If You Become Disabled If you are disabled for up 26 weeks and you are receiving Xerox Accident and Sickness benefits, you will continue to earn vesting and benefit service. Also, your Cash Balance Retirement Account (CBRA) will continue to receive the annual 4% of pay CBRA credits and interest credits. Your CBRA credits will be determined assuming your pay continued at the same rate just before you became disabled. If you have a Transitional Retirement Account (TRA) balance, it will continue to fluctuate based on investment results.

If you have a long-term disability and you are receiving benefits under the Xerox Corporation Long-Term Disability (LTD) Income Plan (generally up to age 65), you will continue to accrue vesting and benefit service. Your CBRA will continue to receive the annual 4% of pay CBRA credits and interest credits. Your CBRA credits will be determined using your pay rate just before you became disabled. If you have a TRA balance, it will continue to vary with investment results.

If You Die The full value of your account (the greater of the CBRA or TRA is payable to your beneficiary if you die while employed

• rried at the time you die, payment is made to your spouse unless a valid designation is on file with the

nd your spouse has not agreed to a different beneficiary, your spouse has an automatic

If ve begun, any death benefit provision is

by Xerox (regardless of your years of vesting service) or if you die after you leave Xerox employment with a vested benefit and have not yet started payment:

• If you’re single at the time you die, a valid beneficiary designation must be on file with the Xerox Benefits Center prior to your death in order for payment to be made to your beneficiary; otherwise, payment will be made to your estate.

If you’re maXerox Benefits Center, in which your spouse has agreed, in writing, to an alternative beneficiary and your spouse’s signature is notarized.

Also, if you’re married aright to 50% of the value (if any) by which your formula benefit, that could be paid at that time in the form of a 50% joint and survivor annuity, exceeds your benefit from your CBRA or TRA, (whichever is higher). A non-spousebeneficiary is not entitled to this additional formula benefit (if any).

you die after payment of your benefit has been made or payments hasubject to the provision of the payment method you chose. Refer to “About the Distribution Options,” on page 19.

12

Special Situations That Could Affect Your Benefit

These factors do not apply to all employees. You should read this section carefully to determine which—if any—apply to your situation. If you have any questions about how your benefit could be affected, call the Xerox Benefits Center.

Maximum Benefits Federal law imposes a limit on the annual benefit that may be paid to plan participants. If your benefit exceeds that limit, the amount you receive could be reduced.

Qualified Domestic Relations Order (QDRO) In general, your benefit cannot be assigned to someone else while you’re still living. An exception is if Xerox receives and accepts a QDRO to provide a portion of your benefits to an alternate payee. A QDRO is a state order or judgment relating to marital property rights, alimony, and/or child support. The plan is required by law to follow the terms of the order. This generally means that a separate accounting of your benefit will be required to make payment to an alternate payee under the order, such as your former spouse. As a result, your benefit will be reduced for the benefits assigned to an alternate payee. The plan maintains specific procedures for QDROs. You may obtain a copy of these procedures at any time, free of charge, by contacting the Xerox Benefits Center.

If You Leave and Are Later Reemployed by Xerox A “one-year break in service” occurs when you have missed 12 consecutive months of work, measured from the date your employment ended.

If you terminate and you return to work at Xerox before a one-year break in service occurs, the time you did not work at Xerox will be counted as vesting service, but not as benefit service.

If you leave Xerox for any reason and a one-year break in service occurs, the time you did not work for Xerox will not be counted for vesting service or benefit service. You will begin to earn vesting service and benefit service again when you return to work.

If you leave Xerox before becoming vested (before completing five years of service or before you reach age 65 if you left before January 1, 2008), you will forfeit any CBRA and any service credit for vesting and benefit service that you may have had from that prior period of service. However, if you return to Xerox prior to having a five-year break in service, your forfeiture will be reinstated to your CBRA. In addition, your service credit for vesting service will be restored. Note that special rules apply in these situations:

• If you are on a maternity/paternity leave, up to the first 12 months of your leave will not be regarded in determining if you have a one-year break in service.

• If you are reemployed following an approved military leave within the protected reemployment period under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), you receive benefit service and vesting service for the entire period of your leave. When you return, your benefit value will be adjusted to reflect pay and additional benefit service while you were on leave.

Call the Xerox Benefits Center for answers to questions regarding breaks in service.

13

If You Received a Prior Distribution If you previously received a distribution from RIGP, this prior distribution will affect future benefits payable to you under the plan. If you have a prior distribution, the current value is reported each year in your Value Added Statement. It is also included in the Statement of Accounts, which you can view on Your Benefits Resources, or you can request a printed copy at any time from the Xerox Benefits Center.

Your future RIGP benefit must take into account the current value of this prior distribution, as if it had remained in your account and experienced investment results or received interest credits. This ensures the same retirement funding levels for all employees—whether or not they had taken a prior distribution.

To recap, if you were hired before January 1, 2006 (or before April 1, 2006 if you’re an eligible employee covered by the UNITE HERE Local 14Z collective bargaining agreement) , when you retire or leave Xerox, you are entitled to receive the greatest of these components, as applicable:

• The benefit determined by the formula benefit.

• The value of your CBRA.

• The value of your TRA, if you have one. TRA is not available for employees originally hired after 1989.

When you subsequently retire or leave Xerox, your benefit will be based on the component that provides the greatest total benefit: the current value of your prior distribution plus any actual amount in your account. With regard to the formula benefit, this greatest total benefit would be the formula benefit based on all of your service. This greatest total benefit will then be offset by the current value of your prior distribution.

The retirement plan formula gives you credit for all periods of employment with Xerox. This includes all prior periods of employment and your service since you were hired. But a portion of the amount intended to fund this benefit has already been paid to you in your prior distribution. The actual amounts in your accounts are based on service since you were rehired.

To make an apples-to-apples comparison among the three components, the plan provides a process that takes into account the current value of your prior distribution—the value as it would have been had it remained in your account. To determine retirement benefits payable to employees who have received prior distributions, the Xerox Benefits Center follows this process:

Step 1: Calculate the Current Value of Your Prior Distribution To determine what the value of your accounts would have been if you had not taken a distribution, take the amount of each account at the time it was distributed to you and add interest credits for CBRA or the investment results for TRA to the accounts that would have been earned had a distribution not been taken.

Step 2: Determine the Greatest Total Benefit Add the current values of the CBRA and TRA that were previously distributed to any actual amounts earned since your rehire date. Using these total amounts, compare the three components—retirement plan formula based on all benefit service, total CBRA, and total TRA—to determine the greatest benefit.

Step 3: Reduce the Greatest Total Benefit by the Current Value of the Prior Distribution Your future pension payment will not include the current value of your prior distribution, since this prior distribution amount has already been paid. The greatest total benefit calculated in Step 2 will be reduced by the current value of your prior distribution (the current value that would have been in your account had you not taken your prior distribution). The remaining benefit, if any, is the amount payable to you when you leave.

14

What This Means for You • If your total CBRA is the greatest benefit, your benefit payable when you leave will be your actual CBRA—that is,

the amount earned since your rehire date.

• If your total TRA is the greatest benefit, your benefit payable when you leave will be your actual TRA—that is, the amount earned, if any, since your rehire date. If you took a prior distribution and were rehired after 1989, the current value of this account is $0.

• If your retirement plan formula benefit is the greatest benefit, your benefit payable when you leave will be reduced by the current value of the prior distribution of the higher total account (for example, if total CBRA is greater than total TRA, the reduction is the current value of the prior distribution of CBRA).

How Prior Distributions Affect Future Pension Benefits Length of benefit service is a key factor in determining retirement benefits. Calculating and including the current value of prior distributions puts employees who received a prior distribution in the same situation as employees whose balances remained in the plan. Without this adjustment, employees who took prior distributions could receive higher (or lower) benefits than employees who had no prior distributions. This process ensures that the Company provides the same benefit dollars for employees with the same pay and benefit service—whether or not there was a prior distribution. Your benefit is determined by the component that yields the greatest total benefit, not the actual amounts in your accounts, as the following examples demonstrate:

When TRA Provides the Greatest Benefit

TRA CBRA Retirement Plan Formula

Lump-sum value at first date of termination $50,000 $45,000 $30,000

Actual account balance at second date of termination

$0 $12,000 N/A

Current value of prior distribution $80,000 $60,000 N/A

Total benefit $80,000 $72,000 $55,000

Benefit payable at second date of termination

$0 N/A N/A

How Future Benefits Are Calculated

Greatest total benefit (TRA) $80,000

Minus current value of prior distribution (TRA) −80,000

Pension benefit payable $0

Although this employee has a $12,000 actual CBRA balance that reflects credits since he or she was rehired, the benefit payable is $0. If this employee had not elected a distribution at the time of his or her first termination, the benefit payable at the second termination would have been $80,000. This is the same benefit that would be payable to an employee with the same pay and benefit service but no prior distribution.

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When CBRA Provides the Greatest Benefit




$0 $12,000

Current value of prior distribution $70,000 $60,000

N/A

Total benefit $70,000 $72,000 $55,000

Benefit payable at second date of termination N/A $12,000 N/A


Greatest total benefit (CBRA) $72,000

Minus current value of prior distribution (CBRA) −60,000

Pension benefit payable $12,000

This employee receives the $12,000 actual CBRA balance that reflects credits since rehire because the total CBRA (with the current value of prior distribution) is the greatest benefit.

When the Retirement Plan Formula Provides the Greatest Benefit




$0 $12,000

Current value of prior distribution $80,000 $60,000

N/A

Total benefit $80,000 $72,000 $84,000

Benefit payable at second date of termination N/A N/A $4,000


Greatest total benefit (formula benefit) $84,000

Minus current value of prior distribution (TRA)*

−80,000

Pension benefit payable $4,000

*TRA provides the second greatest total benefit, so the formula is offset by the current value of the prior distribution from the TRA.

16

Receiving Your RIGP Benefit

At a Glance When you retire or leave Xerox, you will need to inform the Xerox Benefits Center of your intentions for receiving your RIGP benefit. You must initiate this process. If you take no action, your benefits will remain with the plan until you begin the settlement process. There’s an exception: If the value of lump-sum value of your RIGP benefit is $1,000 or less, it will be automatically paid to you as a cash lump sum, minus 20% Federal income tax withholding—unless you request a direct rollover.

Thinking About Retirement?Check out the Retirement Guide on the Your Benefits Resources Web site. It takes you step-by-step through the retirement process. To access the guide, go to the “Retirement Planning” tab; then, from the “Retirement Process” section, click on the “Your Retirement Guide” link.

You will receive a summary of your benefits and benefit values from the Xerox Benefits Center, as well as information about the tax consequences of receiving plan distributions. Before making any decisions about your plan distributions, Xerox recommends that you consult with a financial or tax advisor. No one at the Company can provide you with tax advice.

In general, you’ll have the choice of receiving payment when you retire or leave or deferring payment to a later date. When you decide to receive payment, you’ll have a choice of:

• Annuity options;

• Rollover to the 401(k) Savings Plan;

• Lump-sum rollover to an Individual Retirement Account (IRA) or other qualified retirement plan; or

• Lump sum payable to you (taxable).

If you are married and elect a form of payment that does not provide a continuing lifetime benefit of at least 50% to your spouse in case you die first, Federal law requires that you obtain your spouse’s written and notarized consent.

You may also defer settlement and leave your money in the plan, in which case your Cash Balance Retirement Account (CBRA) continues to earn interest and your Transitional Retirement Account (TRA) balance (if any) remains invested until you settle. To comply with the minimum distribution rules, however, you will be required to settle by the later of April 1 following the year in which you reach age 70-1/2 or terminate employment.

Valuation of Your RIGP Benefit Before your pension benefit can be paid, your CBRA and TRA (if any) must be valued. The date of this valuation will be the latest of:

• The first of the month following the date you leave or retire from Xerox.

• The 13th day from the date the Xerox Benefits Center sends you the paperwork for electing payment of a pension benefit. The day the paperwork is mailed counts as the first day. The Internal Revenue Service (IRS) requires a waiting period to give plan participants the opportunity to review their paperwork and make any changes, if needed.

• The date your completed paperwork is received in the Xerox Benefits Center. If your paperwork is not complete, your benefit cannot be valued.

Note: If the valuation date falls on a day that the New York Stock Exchange (NYSE) is not open (for example, a weekend or a holiday), the valuation will occur on the next day that the NYSE is open.

17

Applying for Your Benefit Important Reminder If you do not keep the Company informed of your current address, you may not receive important correspondences about your benefit.

As a participant or beneficiary, you must apply to receive your benefit. If you feel you are entitled to a benefit that is denied, you have the right to appeal the plan’s decision. Refer to “Claims and Appeals Procedures,” beginning on page 24, for details on plan procedures for claim denials and appeals.

You may request the paperwork for claiming a pension benefit from the Your Benefits Resources Web site or by calling the Xerox Benefits Center anytime within 90 days of the date you expect to begin receiving your benefits. This date is not the same as the date you retire.

18

About the Distribution Options

Lump-Sum Cash Distribution If the lump-sum value of your RIGP is $1,000 or less, your benefit is automatically paid out to you in a lump sum.

If the lump sum exceeds $1,000, you may choose to receive your benefit value as a lump-sum cash distribution. If you’re married, you’ll need your spouse’s consent to this form of payment for your RIGP benefit.

If you receive a lump sum, your distribution is subject to a mandatory 20% Federal income tax withholding, unless you request a direct rollover of your payment in order to continue to postpone taxes.

How the Lump Sum Is Calculated If your benefit is based on your CBRA, and you receive your benefit as a lump sum, the lump sum value is the CBRA account balance. If your benefit is based on your TRA, and you receive your benefit as a lump sum, the lump sum value is the TRA account balance. If your benefit is based on the formula benefit, the lump sum value is calculated using interest rates and a mortality table prescribed by Federal law for computing minimum lump sum pension distributions. These factors change each year, and were significantly modified for 2008 and later years by federal legislation. This new law will gradually replace the old interest rate, based on the 30-Year Treasury bond yields, with the rate determined by the government and based on corporate bond yields. The new law also modified the mortality table. As these new factors are phased in from 2008 through 2012, the value of the lump sum distribution option is likely to decrease relative to the value of the annuity option. Rollovers: Direct or Indirect If you receive a lump-sum distribution, Federal law allows you to re-deposit or roll over all or part of this distribution to another tax-favored plan, such as another employer’s qualified retirement plan that accepts rollovers or an Individual Retirement Account (IRA), including a Roth IRA. You can also elect a rollover of your RIGP benefit value to the 401(k) Savings Plan. Rollovers of annuity payments are not permitted, and certain required minimum distributions after you reach age 70-1/2 cannot be rolled over.

There are two ways to make a rollover:

Direct Rollover If you elect a direct rollover, you indicate the name of the plan or institution the check is to be made out to. The check, made out to the plan or institution you designate, can either be sent directly to that plan or institution, or sent to you for forwarding to that plan or institution. There is no current tax consequence for the portion that you roll over in this way. Indirect Rollover Alternatively, you can elect to receive the lump sum distribution as a check made out to you in your name. In this case, the plan is required by Federal law to withhold 20% of the payment as an advance on your estimated Federal income tax liability. You have 60 days to complete an indirect rollover of all or a portion of your distribution. The amount permitted to be rolled over includes the 20% withheld for taxes. To include the 20% withheld amount in your rollover, you must supply this amount from your own funds, to make up what was withheld and paid over to the Federal government. Requesting a Rollover

nds by requesting that the Xerox Benefits Center transfer your funds directly to another also

You can roll over your fuqualified retirement plan or IRA. You can also make this request on the Your Benefits Resources Web site. You canrequest that the Xerox Benefits Center sends a check to you, payable to the trustee of the new plan. You can request that the Xerox Benefits Center sends your funds to you in the form of a check made payable to you. In this case, 20%will be withheld for Federal income taxes, and you must rollover the distribution (including the 20% withheld amount, if you wish to make this up from your own funds) within 60 days.

19

Annuity Options For RIGP benefits, you have a choice of annuities from which to select. Your choices include, but are not limited to:

Single Life Annuity In a RIGP settlement, if you are not married, this annuity option is automatically assigned to you unless you elect otherwise. With this option, you will receive monthly payments for the remainder of your lifetime. All benefit payments stop when you die. If you are married, elect this option, and your spouse lives after your death, he or she receives no payments. If you are married and elect this option, you will need to obtain your spouse’s written and notarized consent. Joint and Survivor Annuities

married, the 50% Joint and Survivor Annuity option is automatically assigned to you

to

In a RIGP settlement, if you areunless you elect otherwise with the written and notarized consent of your spouse. With this option, payments are made for your lifetime. After your death, your spouse (if he or she is still alive) will receive a monthly benefit equal 50% of your benefit. Your benefit is generally reduced to cover the cost of this 50% surviving spouse benefit. A 75% or 100% Joint and Survivor Annuity is also available. Since the 75% or 100% Joint and Survivor Annuity provides a larger monthly benefit to your surviving spouse, there is generally a reduction in the benefit payable during your lifetime, in order to pay for the larger survivor benefit.

Certain and Life Annuities In a RIGP settlement, with this annuity option, you receive pension payments for your lifetime with payments guaranteed over a specific time period. The monthly payment as a Single Life Annuity is reduced to cover the cost of this guarantee period. RIGP offers these Certain and Life Annuity options:

• Five-Year Certain and Life Annuity;

• Ten-Year Certain and Life Annuity;

• 15-Year Certain and Life Annuity; and

• 20-Year Certain and Life Annuity.

If you die within the five-, ten-, 15-, or 20-year period, your beneficiary receives payments equal to what you were receiving before you died for what remains of the five, ten, 15, or 20 years. If you die after the five-, ten-, 15-, or 20-year period, no payments are made to your beneficiary.

A Cash Refund Option This option can be combined with any of the annuity options described above. The cash refund option provides your surviving spouse or beneficiary with:

• The original amount transferred to the insurance company to purchase your annuity, LESS

• The amount of retirement benefits paid.

For more information on annuity options, call the Xerox Benefits Center.

Minimum Distributions If you are retired, Federal law requires that you begin receiving your distributions from all qualified plans no later than April 1 of the calendar year following the calendar year in which you reach age 70-1/2. If you reached age 70-1/2 on or after January 1, 1999 and are still actively employed at Xerox, you must settle your benefit payment with RIGP by April 1 of the calendar year following the calendar year in which you reach age 70-1/2 or the year of your retirement, whichever is later.

20

Tax Issues

Tax issues surrounding receipt of your benefit can be complicated and are subject to change. No one at the Company can provide you with tax advice. Xerox recommends that you consult with a tax advisor before you make your payment decision.

Mandatory Withholding If your balance in the Retirement Income Guarantee Plan (RIGP) is $1,000 or less, your benefit is automatically paid directly to you in a lump sum. This amount has not been previously taxed and is subject to 20% Federal income tax withholding.

Mandatory withholding applies to any portion of your payment that is not attributable to after-tax contributions and is made directly to you rather than to the trustee of another plan or Individual Retirement Account (IRA) in a direct rollover. If a taxable distribution eligible for rollover is paid directly to you, Federal law requires 20% to be withheld on the

d

ion is made out in your name and paid directly to you, and you want to roll over all or part of the You

If your payment is not eligible for rollover, mandatory withholding does not apply. In this case, you are generally ing taxes that apply to the taxable portion. To elect out of withholding on your RIGP

nter.

taxable portion (state tax withholding may also apply). That 20% withheld is paid to the Internal Revenue Service (IRS) as advance payment on your income taxes. When you file your income tax return for that year, you are requireto report the total amount of the distribution, including the withheld tax. You will be entitled to a credit for the tax withheld against any income tax you owe for that year. You also may be subject to an additional 10% tax on early withdrawals. If the distributdistribution to an IRA or other qualified retirement plan, you must do so within 60 days of the date of distribution.can roll over the taxable portion of your payment to an institution or other eligible qualified plan that accepts the rollover distribution. To roll over the entire amount, you must find other money during the 60-day period to replace the 20% that was withheld. You would receive credit for the amount withheld when you file your income tax return for that year. On the other hand, if you roll over only 80% of the taxable portion that you received, you will be taxed on the 20% that was withheld. Direct rollovers made payable to the trustee of an IRA or to another qualified retirement plan are not subject to 20% mandatory withholding.

Voluntary Withholding

allowed to elect out of withholddistribution, you must indicate this on the Tax Withholding Direct Deposit form provided by the Xerox Benefits CeIf you do nothing, an amount will be taken out of the taxable portion of your payment for Federal income tax withholding.

21

Statement of ERISA Rights

Rights of a Plan Participant or Beneficiary Under ERISA As a participant in the plan summarized in this summary plan description (SPD), you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). ERISA provides that all participants in benefit plans governed by ERISA shall be entitled to the rights described in this section.

Receive Information About Your Plan and Benefits • Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites and

union halls, all documents governing the plan including insurance contracts and collective bargaining agreements and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration (EBSA).

• Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the plan, including insurance contracts, copies of the latest annual report (Form 5500 Series), and an updated SPD. The Plan Administrator may make a reasonable charge for the copies.

• Receive a summary of the plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.

• Obtain a statement telling you whether you have a right to receive a pension at normal retirement age (generally age 65) and, if so, what your benefits would be at normal retirement age if you stop working under the plan now. If you do not have a right to a pension, the statement will tell you how many more years you have to work to get a right to a pension. This statement must be requested in writing and is not required to be given more than once every 2 months. The plan must provide this statement free of charge.

Prudent Actions by Plan Fiduciaries In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the plan, called “fiduciaries” of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA.

Enforce Your Rights If your claim for a pension benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision, without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce your rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and do not receive them within 30 calendar days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the plan’s decision or lack thereof concerning the status of a domestic relations order, you may file suit in a Federal court.

If it should happen that plan fiduciaries misuse the plan’s money or if you are discriminated against for asserting your ERISA rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court.

22

The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance With Your Questions If you have any questions about the plan, you should contact the Xerox Benefits Center or the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration (EBSA), U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries at:

Division of Technical Assistance and Inquiries Employee Benefits Security Administration U.S. Department of Labor 200 Constitution Avenue N.W. Washington, D.C. 20210

You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the EBSA.

23

Claims and Appeals Procedures

As a participant in or beneficiary of RIGP, to file a claim under ERISA, you must file, with the Plan Administrator, a written claim for benefits under the plan. Disagreements about benefit eligibility or benefit amounts can arise. Accordingly, there are formal claims and appeals procedures in place for ERISA-covered plans.

This section explains the steps that the Plan Administrator must take to notify you of the determination. It also explains the steps you or your authorized representative is required to take to file an ERISA claim or appeal for RIGP benefits. Please note: If you have a question or concern regarding a RIGP matter, you may informally contact the Xerox

nation, the Plan Administrator or its delegate will, within a “reasonable

Specific reference to the provision(s) of the plan on which the determination is based;

A description of any additional material or information necessary to process the claim and an explanation of why

A description of the plan’s review procedures and the time limits applicable to such procedures, including a tion on

The “reasonable time” cannot exceed 90 calendar days, unless special circumstances require an extension of time of not more than an additional 90 calendar days. In that case, you will be notified of the delay during the first 90-

claim determination has not been furnished to you, and your claim has not been granted

hole or in part, you may appeal the denial to the Plan

in

clude your bringing any future proceedings with

Benefits Center before requesting a formal claim or appeal determination in writing.

Notice of Claims Determinations In the event of an adverse benefits determitime,” provide adequate notice to you, in writing, clearly setting forth all the following matters:

• The specific reason or reasons for the adverse determination;

•

• such material or information is necessary; and

• statement of your right to bring a civil action under section 502(a) of ERISA following an adverse determinareview.

calendar-day period.

If written notice of thewithin the time prescribed above (including any applicable extensions), you should consider the claim denied.

Appealing an Adverse Benefits Determination If you have received an adverse benefits determination, in wAdministrator. This appeal must be submitted within 60 calendar days from either the receipt of the adverse claims determination or from the time the claim is considered determined (if the Plan Administrator does not respond withthe time frame set forth above). You are entitled to receive upon request and free of charge reasonable access to and copies of all documents, records, and other information relevant to your claim, and you may submit written issues and comments along with any documents to support your claim.

Failure to file an appeal within the applicable time period will prerespect to the claim to the extent permitted by law.

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Notice of Determination on Review/Appeal Review on appeal cannot exceed 60 calendar days after receipt of request for such review unless the Plan Administrator determines that an extension is required for processing the review, in which case you will be notified of the extension, which cannot exceed an additional 60 calendar days, during the initial 60-day review period.

The Plan Administrator will notify you of the decision within 60 calendar days (unless special circumstances require an extension) after an appeal is received. This decision will be in writing and will include specific reasons for the decision and specific reference to the provision(s) of the plan on which the decision is based; a statement that you are entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to your claim; and a statement that you have a right to bring a civil action under section 502(a) of ERISA. The Plan Administrator (or designee) has the exclusive right to interpret the appropriate plan provisions. The Plan Administrator’s (or designee’s) decisions are conclusive and binding.

Discretionary Authority of the Plan Administrator The Plan Administrator (or designee) has the sole, exclusive, and full discretionary authority to determine eligibility and benefits under the plan; to interpret the plan and related summary plan description (SPD), trust, and other documents, and resolve ambiguities with respect to their terms; to determine questions of fact and to correct any defect, omission, ambiguities, or inconsistencies in the plans and related SPDs, trusts, and other documents.

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Additional Information

Limitation on Actions A participant or beneficiary under the Company’s plan must bring any action in state or Federal court for the alleged wrongful denial of plan benefits or for the alleged intentional interference with any ERISA-protected rights that the participant or beneficiary is or may become entitled to, within one year after the cause of action accrued. This is generally from the time one first knew, or should have known, of the alleged wrongful denial or interference, or as otherwise determined by a court of law. Such an action may only be brought in Federal District Court, Western District of New York. Failure to bring such an action within this time frame will preclude a participant from bringing such action.

Failure to request reconsideration of a claim denial as provided in “Claims and Appeals Procedures,” beginning on

If the plan is terminated, plan assets will be used to provide benefits for participants as described in the plan’s legal

page 24, also will preclude a participant from bringing any further proceeding regarding such claim to the extent permitted by law.

Plan Documents While this summary plan description (SPD) describes the key features of the plan, it does not cover all the details. The full terms and conditions of the plan are described in the various plan documents. These documents legally govern theoperation of the plan. In the event of a discrepancy between these documents and information contained in this SPD, the plan documents are controlling.

Copies of all plan documents, as well as the annual reports of plan operations filed with the Internal Revenue Service (IRS), are available for review at any time during normal business hours at the office of the Plan Administrator or the Xerox Corporate headquarters.

Plan Continuation The Company and the Xerographic Division, UNITE HERE jointly reserve the right to amend or terminate the plan.

Security of Your Retirement Benefits RIGP cannot be changed or terminated in a way that would reduce the value of your accrued benefit from the value on the date of the change or termination to the extent required by law.

If the plan is completely or partially terminated and you are not 100% vested, your vesting will not be increased except to the extent required by law.

The plan can be merged with another plan and/or your benefit transferred to another plan in connection with a corporate transaction. However, under such circumstances, your benefit (and that of a surviving spouse or beneficiary) immediately after the change must be equal to or greater than the benefit that would be received immediately before the transaction.

document and as required by law. If any assets remain after satisfaction of all benefits due participants, surviving spouses, and beneficiaries, these assets can be returned to Xerox.

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Pension Benefit Guaranty Corporation [font size] Your pension benefits under RIGP are insured by the Pension Benefit Guaranty Corporation (PBGC), a Federal insurance agency. If the plan terminates (ends) without enough money to pay all benefits, the PBGC will step in to pay pension benefits. Most people receive all of the pension benefits they would have received under the plan but some people may lose certain benefits. The maximum amount that the PBGC guarantees is set each year under the provisions of ERISA. The PBGC guarantee generally covers: (1) normal and early retirement benefits; (2) disability benefits if you become

The PBGC guarantee generally does not cover: (1) benefits greater than the maximum guaranteed amount set by law

ot

h

it guarantees, ask the Plan Administrator (see page 28) or

nty Corporation

05-4026

ll the Federal relay service toll free at

ilable through the PBGC’s Web site at

disabled before the plan ends; and (3) certain benefits for your survivors.

for the year in which the plan terminates; (2) some or all of the benefit increases and new benefits based on plan provisions that have been in place for fewer than five years at the time the plan terminates; (3) benefits that are nvested because you have not worked long enough for the Company; (4) benefits for which you have not met all of therequirements at the time the plan terminates; (5) certain early retirement payments (for example, supplemental benefits that stop when you become eligible for Social Security) that result in an early retirement monthly benefit greater than your monthly benefit at the plan’s normal retirement age; and (6) non pension benefits, such as healtinsurance, life insurance, certain death benefits, vacation pay, and severance pay. Even if certain of your benefits are not guaranteed, you still may receive some of those benefits from the PBGC, depending on how much money the planhas and how much the PBGC collects from employers. For more information about the PBGC and the benefits contact the PBGC at:

Pension Benefit GuaraTechnical Assistance Division 1200 K Street N.W. Suite 930 Washington, D.C. 200

1.202.326.4000 (This is not a toll-free number.) TTY/TDD users may ca1.800.877.8339 and ask to be connected to 202.326.4000.

Additional information about the PBGC’s pension insurance program is avahttp://www.pbgc.gov.

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Administrative Facts

Plan Name Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, UNITE HERE

Employer Identification Number Xerox Corporation employer identification number, assigned by the Internal Revenue Service (IRS), is 16-0468020.

Plan Number 003

Plan Sponsor Xerox Corporation 45 Glover Avenue Norwalk, CT 06850 1.203.968.3000 Plan Administrator The Plan Administrator for this plan is:

The Joint Administrative Board c/o Lawrence Becker Xerox Corporation 45 Glover Avenue Norwalk, CT 06850 1.203.968.3000 Type of Plan Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, UNITE HERE is a defined benefit plan.

Service of Legal Process Legal process may be served on the Plan Administrator at the address above or the Plan Trustee at the address below.

Plan Trustee State Street Bank & Trust Co. P.O. Box 1992 Boston, MA 02015

Plan Funding Xerox’s contribution is actuarially determined and paid to the Plan trustee. Distributions are made from the trust.

Plan Year The end of the year for purposes of maintaining fiscal records for all of the ERISA plans is December 31.

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