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Xerox Reassigns Controller

November 16, 2001

STAMFORD, Conn. (AP) _ Xerox Corp. has reassigned its controller, who was responsible for the company’s accounting practices that are now under investigation by the Securities and Exchange Commission.

However, a Xerox spokesman defended the move, saying that Gregory M. Tayler remains well regarded by the company for his financial acumen.

Tayler was shifted to become treasurer of the Stamford-based copier maker because the current treasurer, Eunice Filter, is retiring, spokesman Bill McKee said Friday.

The move means Tayler will no longer sign off on filings with the SEC. Gary R. Kabureck, the company’s assistant controller, will take over those responsibilities, Xerox said.

McKee declined to comment on a Wall Street Journal report that KPMG LLP, the company’s former auditors, had recommended the reassignment.

Tayler is one of several Xerox officials named in lawsuits against the company. The shareholder lawsuits charge that Xerox officials deceived investors about the company’s financial condition.

Separately, Xerox said Friday it expected to raise $500 million by offering redeemable convertible trust preferred securities in a private placement. The cash will be used for general corporate purposes, including the payment of indebtedness, Xerox said.

Xerox has struggled with a mountain of debt, but has been reducing that burden by selling billions of dollars in assets. That move is part of a wider turnaround plan announced last year in an effort to return to profitability.

Investors did not react well to the latest developments. Xerox shares fell 51 cents, or 7 percent, to $6.58 in heavy trading Friday on the New York Stock Exchange.


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