STAMFORD, Conn.- July 26, 2001-- The Board of Directors of Xerox Corporation today appointed Anne M. Mulcahy as president and chief executive officer effective Aug. 1. Mulcahy, formerly president and chief operating officer, succeeds Paul A. Allaire as chief executive officer. Allaire continues as chairman until his retirement at the end of this year. "This leadership transition is consistent with the Board's plans developed last year when I returned as CEO and Anne was named president and COO,'' said Allaire. "The plan called for a gradual transition of leadership with Anne becoming CEO when the Board was confident of the effective execution of Xerox's turnaround. Clearly, this requirement has been met. Anne has led the significant progress Xerox has made in improving the company's core operations and restoring its financial strength. She is a proven, dynamic leader who knows the Xerox business and respects our values, but who also embraces change and anticipates the future. This is a rare combination and one that will ensure the future growth and success of Xerox.'' In her role as chief operating officer, Mulcahy has developed and executed on a turnaround strategy to reduce costs and build on Xerox's core growth opportunities in the production printing and networked office markets with a focus on color, services and solutions. As reported yesterday in the company's earnings announcement, Xerox's focus on operational improvements contributed to a strong second quarter of cash generation from operations, led by cost reductions, improved inventory turnover and gross-margin stabilization. "Despite tremendous challenges, Xerox people worldwide have made impressive progress in implementing a bold and aggressive turnaround strategy,'' said Mulcahy. "As CEO of Xerox, I am ready and privileged to lead a team of dedicated employees who are as sharply focused and committed as I am in the successful turnaround of our company, transforming it to the realities of the digital age and putting Xerox back on a growth trajectory.'' Mulcahy, 48, who assumes her new responsibilities on Aug. 1, began her 25-year Xerox career as a field sales representative and assumed increasingly responsible management and executive positions, including chief staff officer and president of Xerox's General Markets Operations. Allaire, 63, joined Xerox in 1966 as a financial analyst in Rochester, N.Y. Prior to becoming chairman and CEO, he held such positions as president, chief staff officer and managing director of Rank Xerox, now Xerox Europe.