Form of Executive Long-Term Incentive Award – Xerox

AGREEMENT PURSUANT TO

XEROX CORPORATION

2004 PERFORMANCE INCENTIVE PLAN AS AMENDED OR RESTATED
TO DATE

AGREEMENT, by Xerox Corporation, a New York corporation (the
“Company”), dated as of the date which appears as the “Date of Agreement and
Award” in the Award Summary attached hereto (the “Award Summary”) in favor of
the individual whose name appears on the Award Summary, an employee of the
Company, one of the Company153s subsidiaries or one of its affiliates (the
“Employee”).

In accordance with the provisions of the “2004 Performance
Incentive Plan” and any amendments and/or restatements thereto (the “Plan”), the
Compensation Committee of the Board of Directors of the Company (the
“Committee”) or the Chief Executive Officer of the Company (the “CEO”) has
authorized the execution and delivery of this Agreement.

Terms used herein that are defined in the Plan or in this
Agreement shall have the meanings assigned to them in the Plan or this
Agreement, respectively.

The Award Summary contains the details of the awards covered
by this Agreement and is incorporated herein in its entirety.

NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration the Company agrees as follows:

AWARDS

1. Award of Performance Shares. Subject to all terms
and conditions of the Plan and this Agreement, the Company has awarded to the
Employee on the date indicated on the Award Summary the number of Performance
Shares (individually, the “PS”) as shown on the Award Summary. Notwithstanding
anything herein to the contrary, only active Employees and those Employees on
Short Term Disability Leave, Social Service Leave, Family Medical Leave or Paid
Uniform Services Leave (pursuant to the Company153s Human Resources Policies) on
the effective date of the award as shown on the Award Summary shall be eligible
to receive the award.

TERMS OF THE PERFORMANCE SHARES

2. Entitlement to Shares. As soon as practicable on or
after the Vesting Date indicated on the Award Summary in connection with the PSs
(the “Vesting Date”), the Company shall, without transfer or issue tax to the
person entitled to receive the shares, deliver to such person a certificate or
certificates for a number of shares of Common Stock equal to the number of
vested PSs (subject to reduction for withholding of Employee153s taxes in relation
to the award as described in Paragraph 10 below). No fractional shares shall be
issued as a result of such tax withholding. Instead, the Company shall apply the
equivalent of any fractional share amount to amounts withheld for taxes.

The Committee shall set performance goals and review
performance against such goals in connection with determining the payout of PSs.
The award of PSs covered hereby shall be earned based on achieving one hundred
percent (100%) of a target on an annual basis based on certain performance
measures as shall be determined from time to time by the Committee.
Notwithstanding the above, to the extent that a measure is not subject to
three-year cumulative performance goals, PSs shall be earned annually based on
achieving performance between base and maximum levels (as shall be determined by
the Committee). For any measure(s) subject to three-year cumulative performance
goals (as shall be determined by the Committee), to the extent such performance
measures are achieved at or between threshold and maximum levels on a three-year
cumulative basis, an additional award of PSs will be earned, net of shares
previously earned for annual achievement. The Vesting Date for earned PS awards
granted shall be set forth in the Award Summary.

Upon the occurrence of an event constituting a Change in
Control, all PSs and dividend equivalents outstanding on such date shall be
treated pursuant to the terms set forth in the Plan. Upon payment pursuant to
the terms of the Plan, such awards shall be cancelled.

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3. Dividend Equivalents. The Employee shall become
entitled to receive from the Company on the Vesting Date a cash payment equaling
the same amount(s) that the holder of record of a number of shares of Common
Stock equal to the number of PSs covered by this Agreement (relating exclusively
to PSs earned, based on achievement of annual or three-year cumulative
performance targets, not to exceed the target award amount shown on the Award
Summary) that are held by the Employee on the close of business on the business
day immediately preceding the Vesting Date would have been entitled to receive
as dividends on such Common Stock during the period commencing on the date
hereof and ending on the Vesting Date as provided under Paragraph 2. Payments
under this Paragraph shall be net of any required withholding taxes.
Notwithstanding anything herein to the contrary, for any Employee who is no
longer an employee on the payroll of any subsidiary or affiliate of the Company
on the payment date of the dividend equivalents, and such subsidiary or
affiliate has determined, with the approval of the Vice President, Human
Resources of the Company, that it is not administratively feasible for such
subsidiary or affiliate to pay such dividend equivalents, the Employee will not
be entitled to receive such dividend equivalents.

4. Ownership Guidelines. Guidelines pertaining to the
Employee153s required ownership of Common Stock shall be determined by the
Committee or its authorized delegate, as applicable, in its sole discretion from
time to time as communicated to Employee in writing.

5. Holding Requirements. The Employee must retain
fifty percent (50%) of the net shares of Common Stock acquired in connection
with the PSs (net of withholding tax and any applicable fees) until ownership
guidelines are met under Paragraph 4 hereof. Such shares shall be held in the
Employee153s Morgan Stanley Smith Barney account or at another account acceptable
to the Company. In addition, shares used to maintain the Employee153s ownership
level pursuant to this award should be held with Morgan Stanley Smith Barney or
in another account acceptable to the Company.

If employment terminates due to the death of the Employee,
such holding requirements shall cease at the date of death. If the Employee
terminates for any other reason, the holding requirement will be applicable for
up to a one year period following termination.

OTHER TERMS

6. Rights of a Shareholder. Employee shall have no
rights as a shareholder with respect to any shares covered by this Agreement
until the date of issuance of a stock certificate to him for such shares. Except
as otherwise provided herein, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock certificate is
issued.

7. Non-Assignability. This Agreement shall not be
assignable or transferable by Employee except by will or by the laws of descent
and distribution.

8. Effect of Termination of Employment
or Death.

(a) Effect on PSs. In the event the Employee

(i) voluntarily ceases to be an Employee of the Company or
any subsidiary or affiliate for any reason other than retirement, and the PSs
have not vested in accordance with Paragraph 2, the PSs shall be cancelled on
the date of such voluntary termination of employment.

(ii) involuntarily ceases to be an Employee of the Company or
any subsidiary or affiliate for any reason (including Disability as provided
pursuant to Paragraph 8(b) below or under a disability policy of any subsidiary
or affiliate, as applicable), other than death or for Cause, or voluntarily
ceases to be an Employee of the Company or any subsidiary or affiliate due to a
reduction in workforce, shares will vest on a pro rata basis, which may, at the
discretion of the Company, be contingent upon Employee executing a general
release, and which may include an agreement with respect to engagement in
detrimental activity, in a form acceptable to the Company. Such shares will vest
on a pro-rata basis for annual and three-year cumulative performance if achieved
in accordance with Paragraph 2, based on the Employee153s actual months of
service. For the year in which termination occurs, shares earned for that year
will be calculated as follows: multiply the total award earned for that year by
a fraction, the numerator of which will be the number of months of full service
for that year (earning period) and the denominator will be 12. Any shares earned
for annual performance pursuant to this grant for years prior to such
involuntary termination of employment and shares earned on a pro-rata basis for
annual performance as described herein will be paid out as soon as practicable
following the Vesting Date noted in the Award Summary. For three-year cumulative
performance, vesting will be calculated as follows: multiply the total
three-year cumulative award earned by a fraction, the numerator of which will be
the number of months of full service during the three years and the denominator
of which will be 36. Payout shall occur as soon as practicable following the
Vesting Date noted in the Award Summary.

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(iii) ceases to be an Employee of the Company or any
subsidiary or affiliate by reason of death, 100% of the PSs pursuant to this
grant shall vest on the date of death and the certificates for shares shall be
delivered in accordance with Paragraph 7 to the personal representatives, heirs
or legatees of the deceased Employee.

(iv) ceases to be an Employee of the Company or any
subsidiary or affiliate by reason of retirement (under a retirement policy of
the Company, its subsidiary or affiliate, as applicable), shares will vest on a
pro rata basis, which may, at the discretion of the Company, be contingent upon
Employee executing a general release, and which may include an agreement with
respect to engagement in detrimental activity, in a form acceptable to the
Company. Such shares will vest on a pro-rata basis for annual and three-year
cumulative performance, if achieved in accordance with Paragraph 2, based on the
Employee153s actual months of service. For the year in which retirement occurs,
shares earned for that year will be calculated as follows: multiply the total
award earned for that year by a fraction, the numerator of which will be the
number of months of full service for that year (earning period) and the
denominator will be 12. Any shares earned for annual performance pursuant to
this grant for years prior to retirement and shares earned on a pro-rata basis
for annual performance as described herein will be paid out as soon as
practicable following the Vesting Date noted in the Award Summary. For
three-year cumulative performance, vesting will be calculated as follows:
multiply the total three-year cumulative award earned by a fraction, the
numerator of which will be the number of months of full service during the three
years and the denominator of which will be 36. Payout shall occur as soon as
practicable following the Vesting Date noted in the Award Summary; and

(v) ceases to be an Employee of the Company or any subsidiary
or affiliate due to termination for Cause, the PSs shall be cancelled as
provided under the Plan.

(b) Disability. Cessation of active employment due to
commencement of long-term disability under the Company153s long-term disability
plan shall not be deemed to constitute a termination of employment for purposes
of this Paragraph 8 and during the continuance of such Xerox-sponsored long-term
disability plan benefits the Employee shall be deemed to continue active
employment with the Company. If the Employee is terminated because the Employee
has received the maximum coverage under the Xerox long-term disability plan, the
vesting of PSs shall be provided pursuant to Paragraph 8 (a)(ii) above.

(c) Cause. “Cause” means (i) a violation of any of the
rules, policies, procedures or guidelines of the Company, including but not
limited to the Company153s Business Ethics Policy and the Proprietary Information
and Conflict of Interest Agreement (ii) any conduct which qualifies for
“immediate discharge” under the Company153s Human Resource Policies as in effect
from time to time (iii) rendering services to a firm which engages, or engaging
directly or indirectly, in any business that is competitive with the Company or
represents a conflict of interest with the interests of the Company; (iv)
conviction of, or entering a guilty plea with respect to, a crime whether or not
connected with the Company; or (v) any other conduct determined to be injurious,
detrimental or prejudicial to any interest of the Company.

9. General Restrictions. If at any time the Committee
or its authorized delegate, as applicable, shall determine, in its discretion,
that the listing, registration or qualification of any shares subject to this
Agreement upon any securities exchange or under any state or Federal law, or the
consent or approval of any government regulatory body, is necessary or desirable
as a condition of, or in connection with, the awarding of the PSs or the issue
or purchase of shares hereunder, the certificates for shares may not be issued
in respect of PSs in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee or its authorized delegate , as
applicable, and any delay caused thereby shall in no way affect the date of
termination of the PSs.

10. Responsibility for Taxes. Employee acknowledges
that the ultimate responsibility for Employee153s Federal, state and municipal
individual income taxes, the Employee153s portion of social security and other
payroll taxes, and any other taxes related to Employee153s participation in the
Plan and legally applicable to Employee, is and remains his or her
responsibility and may exceed the amount actually withheld by the Company or the
Employer.

11. Nature of Award. In accepting the award, Employee
acknowledges that:

(a) the Plan is established voluntarily by the Company, it is discretionary
in nature and it may be modified, amended, suspended or terminated by the
Company at any time in a manner consistent with Section 13 of the Plan regarding
Plan amendment and termination.

(b) the award of the PSs is voluntary and occasional and does not create any
contractual or other right to receive future grants of PSs, or benefits in lieu
of PSs, even if PSs have been granted repeatedly in the past;

(c) all decisions with respect to future PS awards, if any, will be at the
sole discretion of the Committee or its authorized delegate, as applicable;

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(d) Employee153s participation in the Plan shall not create a right to further
employment with the Employer and shall not interfere with the ability of the
Employer to terminate Employee153s employment relationship at any time; further,
the PS award and Employee153s participation in the Plan will not be interpreted to
form an employment contract or relationship with the Company or any subsidiary
of the Company;

(e) Employee is voluntarily participating in the Plan;

(f) the PSs and the shares of Common Stock subject to the PSs are an
extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to the Company or the Employer, and which is
outside the scope of Employee153s employment contract, if any;

(g) the PSs and the shares of Common Stock subject to the PSs are not
intended to replace any pension rights or compensation;

(h) the PSs and the shares of Common Stock subject to the PSs are not part of
normal or expected compensation or salary for any purposes, including, but not
limited to, calculating any severance, resignation, termination, redundancy,
dismissal, end of service payments, bonuses, long-service awards, pension or
retirement or welfare benefits or similar payments and in no event should be
considered as compensation for, or relating in any way to, past services for the
Company, the Employer or any subsidiary of the Company;

(i) the future value of the underlying shares of Common Stock is unknown and
cannot be predicted with certainty;

(j) in consideration of the award of the PSs, no claim or entitlement to
compensation or damages shall arise from forfeiture of the PSs, including, but
not limited to, forfeiture resulting from termination of Employee153s employment
with the Company or the Employer (for any reason whatsoever and whether or not
in breach of local labor laws) and Employee irrevocably releases the Company and
the Employer from any such claim that may arise; if, notwithstanding the
foregoing, any such claim is found by a court of competent jurisdiction to have
arisen, Employee shall be deemed irrevocably to have waived Employee153s
entitlement to pursue such claim; and

(k) subject to the provisions in the Plan regarding Change in Control, PSs
and the benefits under the Plan, if any, will not automatically transfer to
another company in the case of a merger, take-over or transfer of liability.

12. No Advice Regarding Award. The Company is not providing any tax,
legal or financial advice, nor is the Company making any recommendations
regarding Employee153s participation in the Plan, or his or her acquisition or
sale of the underlying shares of Common Stock. Employee is hereby advised to
consult with his or her own personal tax, legal and financial advisors regarding
his or her participation in the Plan before taking any action related to the
Plan.

13. Amendment of This Agreement. With the consent of
the Employee, the Committee or its authorized delegate, as applicable, may amend
this Agreement in a manner not inconsistent with the Plan.

14. Subsidiary. As used herein the term “subsidiary”
shall mean any present or future corporation which would be a “subsidiary
corporation” of the Company as the term is defined in Section 425 of the
Internal Revenue Code of 1986 on the date of award.

15. Affiliate. As used herein the term “affiliate”
shall mean any entity in which the Company has a significant equity interest, as
determined by the Committee.

16. Recoupments.

(a) If an Employee or former Employee of the Company is
deemed by the Committee or its authorized delegate, as applicable, to have
engaged in detrimental activity against the Company, any awards granted to such
Employee or former Employee shall be cancelled and be of no further force or
effect and any payment or delivery of an award within six months prior to such
detrimental activity may be rescinded. In the event of any such rescission, the
Employee shall pay to the Company the amount of any gain realized or payment
received as a result of the rescinded exercise, payment or delivery, in such
manner and on such terms and conditions as may be required by the Committee or
its authorized delegate, as applicable. Detrimental activity may include:

(i) violating terms of a non-compete agreement with the
Company, if any;

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(ii) disclosing confidential or proprietary business
information of the Company;

(iii) violating any rules, policies, procedures or guidelines
of the Company;

(iv) directly or indirectly soliciting any employee of the
Company to terminate employment with the Company;

(v) directly or indirectly soliciting or accepting business
from any customer or potential customer or encouraging any customer, potential
customer or supplier of the Company to reduce the level of business it does with
the Company;

(vi) engaging in any other conduct or act that is determined
to be injurious, detrimental or prejudicial to any interest of the Company.

(b) If an accounting restatement by the Company is required
in order to correct any material noncompliance with financial reporting
requirements under relevant securities laws, the Company will have the authority
to recover from executive officers or former executive officers, whether or not
still employed by the Company, any excess incentive-based compensation (in
excess of what would have been paid under the accounting restatement), including
entitlement to shares, provided under this Agreement to executive officers of
the Company that was based on such erroneous data and paid during the three-year
period preceding the date on which the Company is required to prepare the
accounting restatement. Notwithstanding anything herein to the contrary, the
Company may implement any policy or take any action with respect to the recovery
of excess incentive-based compensation, including entitlement to shares that the
Company determines to be necessary or advisable in order to comply with the
requirements of the Dodd-Frank Wall Street Financial Reform and Consumer
Protection Act.

17. Cancellation and Rescission of Award. Without
limiting the foregoing Paragraph regarding non-engagement in detrimental
activity against the Company, the Company may cancel any award provided
hereunder if the Employee is not in compliance with all of the following
conditions:

(a) An Employee shall not render services for any
organization or engage directly or indirectly in any business which would cause
the Employee to breach any of the post-employment prohibitions contained in any
agreement between the Company and the Employee.

(b) An Employee shall not, without prior written
authorization from the Company, disclose to anyone outside the Company, or use
in other than the Company153s business, any confidential information or material,
as specified in any agreement between the Company and the Employee which
contains post-employment prohibitions, relating to the business of the Company,
acquired by the Employee either during or after employment with the Company.

(c) An Employee, pursuant to any agreement between the
Company and the Employee which contains post-employment prohibitions shall
disclose promptly and assign to the Company all right, title and interest in any
invention or idea, patentable or not, made or conceived by the Employee during
employment with the Company, relating in any manner to the actual or anticipated
business, research or development work of the Company and shall do anything
reasonably necessary to enable the Company to secure a patent where appropriate
in the United States and in foreign countries.

(d) Failure to comply with the provision of subparagraphs
(a), (b) or (c) of this Paragraph 17 prior to, or during the six months after,
any payment or delivery shall cause such payment or delivery to be rescinded.
The Company shall notify the Employee in writing of any such rescission within
two years after such payment or delivery. Within ten days after receiving such a
notice from the Company, the Employee shall pay to the Company the amount of any
payment received as a result of the rescinded payment or delivery pursuant to an
award. Such payment to the Company by the Employee shall be made either in cash
or by returning to the Company the number of shares of common stock that the
Employee received in connection with the rescinded payment or delivery.

18. Notices. Notices hereunder shall be in writing and
if to the Company shall be mailed to the Company at P.O. Box 4505, 45 Glover
Avenue, 6^th Floor, Norwalk, Connecticut 06856-4505, addressed to the
attention of Stock Plan Administrator, and if to the Employee shall be delivered
personally or mailed to the Employee at his address as the same appears on the
records of the Company.

19. Language. If Employee has received this Agreement
or any other document related to the Plan translated into a language other than
English and if the meaning of the translated version is different than the
English version, the English version will control.

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20. Electronic Delivery and Acceptance. The Company
may, in its sole discretion, decide to deliver any documents related to current
or future participation in the Plan by electronic means. Employee hereby
consents to receive such documents by electronic delivery and agrees to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or a third party designated by the Company.

21. Interpretation of This Agreement. The Committee or
it authorized delegate, as applicable, shall have the authority to interpret the
Plan and this Agreement and to take whatever administrative actions, including
correction of administrative errors in the awards subject to this Agreement and
in this Agreement, as the Committee or its authorized delegate, as applicable,
in its sole good faith judgment shall be determined to be advisable. All
decisions, interpretations and administrative actions made by the Committee or
its authorized delegate, as applicable, hereunder or under the Plan shall be
binding and conclusive on the Company and the Employee. In the event there is
inconsistency between the provisions of this Agreement and of the Plan, the
provisions of the Plan shall govern.

22. Successors and Assigns. This Agreement shall be
binding and inure to the benefit of the parties hereto and the successors and
assigns of the Company and to the extent provided in Paragraph 8 to the personal
representatives, legatees and heirs of the Employee.

23. Governing Law and Venue. The validity,
construction and effect of the Agreement and any actions taken under or relating
to this Agreement shall be determined in accordance with the laws of the state
of New York and applicable Federal law.

This grant is made and/or administered in the United States.
For purposes of litigating any dispute that arises under this grant or the
Agreement the parties hereby submit to and consent to the jurisdiction of the
state of New York, agree that such litigation shall be conducted in the courts
of Monroe County, New York, or the federal courts for the United States for the
Western District of New York.

24. Separability. In case any provision in the
Agreement, or in any other instrument referred to herein, shall become invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions in the Agreement, or in any other instrument referred to
herein, shall not in any way be affected or impaired thereby.

25. Integration of Terms. Except as otherwise provided
in this Agreement, this Agreement contains the entire agreement between the
parties relating to the subject matter hereof and supersedes any and all oral
statements and prior writings with respect thereto.

26. Appendix for Non-U.S. Countries. Notwithstanding
any provisions in this Agreement, the PS award shall be subject to any special
terms and conditions set forth in any appendix to this Agreement for Employee153s
country (the “Appendix”). Moreover, if Employee relocates to one of the
countries included in the Appendix, the special terms and conditions for such
country will apply to Employee, to the extent the Company determines that the
application of such terms and conditions is necessary or advisable in order to
comply with local law or facilitate the administration of the Plan. The Appendix
constitutes part of this Agreement.

27. Imposition of Other Requirements. The Committee or
its authorized delegate, as applicable, reserves the right to impose other
requirements on Employee153s participation in the Plan, on the PSs and on any
shares of Common Stock acquired under the Plan, to the extent the Committee or
its authorized delegate, as applicable, determines it is necessary or advisable
in order to comply with local law or facilitate the administration of the Plan,
and to require Employee to sign any additional agreements or undertakings that
may be necessary to accomplish the foregoing.

IN WITNESS WHEREOF, the Company has executed this Agreement as of the day and
year set forth on the Award Summary.

		XEROX CORPORATION
By:
		Signature

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