17PT Barclays 24

RNS Number:6392G
Xerox Corp
9 July 2001


For additional information contact:

Leslie Varon
Director, Investor Relations
203-968-3110
Leslie.Varon@usa.xerox.com
 
Timothy J. Fogal 
Manager, Investor Relations 
203-968-3489 
Timothy.Fogal@usa.xerox.com
 
800 Long Ridge Road 
Stamford, Connecticut 06904 
Fax (203) 968-3944 
www.xerox.com/investor

                        XEROX ELIMINATES STOCK DIVIDEND

                   "This decision contributes to the progress 
              Xerox is making in restoring its financial strength"

STAMFORD, Conn., July 9, 2001 - The Board of Directors of Xerox Corporation
(NYSE: XRX) today decided to eliminate the payment of dividends on its common
stock. The decision was made in line with the company's turnaround objective to
strengthen Xerox's liquidity and to restore long-term value to shareholders and
bondholders. Previously the company had paid a quarterly dividend of 5 cents per
share.

"After serious deliberation, the Board of Directors chose to eliminate the
dividend - a decision that contributes to the progress Xerox is making in
restoring its financial strength and helps to provide the flexibility required
to build on the effective execution of its turnaround plan," said Paul A.
Allaire, chairman and chief executive officer. "As Xerox returns to
profitability, the Board will consider the reinstatement of dividends."

Today's announcement will reduce the company's cash requirement by approximately
$140 million on an annualized basis. This savings is in addition to the progress
Xerox has made in generating cash and strengthening liquidity through cost
reductions, improved working capital management and the sale of $2 billion in
assets. The company stated that the elimination of the dividend is not the
result of any unanticipated second quarter developments.

The Xerox Board of Directors today also chose not to declare the dividend on the
company's Employee Stock Ownership Program (ESOP) preferred stock, which is used
to service the ESOP debt. Instead, Xerox will make an additional contribution to
the ESOP trust. Previously the company had paid a quarterly dividend of $1.5625
per share on the preferred stock.


For additional information about The Document Company Xerox, please visit our
Worldwide Web site at www.xerox.com/investor.


This release contains forward-looking statements and information relating to
Xerox that are based on our beliefs as well as assumptions made by and
information currently available to us. The words "anticipate," "believe,"
"estimate," "expect," "intend," "will" and similar expressions, as they relate
to us, are intended to identify forward-looking statements. Actual results could
differ materially from those projected in such forward-looking statements.
Information concerning certain factors that could cause actual results to differ
materially is included in the company's Form 10-K for the year ended December
31, 2000.

XEROX(R), The Document Company(R) and the digital X(R) are trademarks of XEROX
CORPORATION.

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