CHANGE-IN-CONTROL/SEVERANCE AGREEMENT


         AGREEMENT,  dated as of , 1996,  by and  between  PSC Inc.,  a New York
corporation (the "Company") and the undersigned,  an officer of the Company (the
"Executive").
         WHEREAS,  in order to  enhance  Executive's  continued  service  to the
Company in an effective manner without  distraction by reason of the possibility
of a  termination  of  employment  by the  Company or a change in control of the
Company and in order to assure both the Company and the  Executive of continuity
of management in the event of any actual or threatened  change in control of the
Company,  the Company wishes to provide in this agreement for severance benefits
to the Executive in the event of a termination of employment by the Company or a
change in control of the Company.
         NOW,  THEREFORE,  in  consideration  of the  premises  and of Executive
agreeing to continue to serve as an employee of the Company,  the parties hereto
agree as follows:
         1.       Severance Payment.
                  (a)  Termination  of Employment - In General.  In the event of
the  termination  of employment of Executive by the Company for any reason other
than Termination for Cause (as hereinafter  defined),  death,  disability,  or a
Change in Control (as hereinafter defined), the Company will continue to pay the
Executive for a period of one year following such termination an amount equal to
the Executive's  salary at the annual rate then in effect.  Such amount shall be
payable  bi-weekly.  In  addition,  the  Company  will  provide  Executive  with
Executive's  then  current  health,   dental,  life  and  accidental  death  and
dismemberment  insurance  benefits  for a  period  of one  year  following  such
termination.  In the  event  of  Executive's  death  while  receiving  severance
payments  hreunder,  all  remaining  severance  installment  payments  otherwise
payable to Executive  hereunder will be paid in the same amounts and in the same
manner to  Executive's  heirs and legal  representatives.  All payments  made to
Executive hereunder will be subject to all applicable employment and withholding
taxes.
                  (b)  Termination  of  Employment  - Change in Control.  In the
event of the  termination of employment of Executive  within the two year period
following a Change in Control (as hereinafter  defined) of the Company, and such
termination  is (i) by the Company  for any reason  other than  Termination  for
Cause (as hereinafter  defined),  death or disability,  or (ii) by the Executive
for "Good Reason" (as hereinafter  defined),  the Company will pay the Executive
in a lump sum cash  payment  an amount  equal to the  product  of the sum of (x)
Executive's  salary at the annual rate then in effect and (y) the highest annual
bonus paid to Executive under the Company's current Management Incentive Plan or
any  successor  plan  in the  three  full  fiscal  years  preceding  termination
multiplied  by two. In addition,  Executive  will be  immediately  vested in any
retirement,  incentive,  or option  plans  then in effect and the  Company  will
continue to provide Executive with Executive's then current health, dental, life
and accidental death and dismemberment  insurance benefits for a period of three
years.  All  payments  made  to  Executive  hereunder  will  be  subject  to all
applicable employment and withholding taxes.

<PAGE>

         2.  Limitations.  Notwithstanding  anything  in this  Agreement  to the
contrary,  the maximum amount of cash and other benefits  payable  (whether on a
current or deferred basis and whether or not includible in income for income tax
purposes) under Section 1 of this Agreement (the "Severance  Benefits") shall be
limited to the extent  necessary to avoid causing any portion of such  Severance
Benefits,  or any other payment in the nature of  compensation to the Executive,
to be treated as a "parachute  payment" within the meaning of Section 280G(b)(2)
of the Internal  Revenue Code of 1986, as amended.  Any  adjustment  required to
satisfy the limitation described in the preceding sentence shall be accomplished
first  by  reducing  any  cash  payments  that  would  otherwise  be made to the
Executive and then, if further  reductions  are  necessary,  by adjusting  other
benefits as determined by the Company.
         3.       Certain Definitions.
                  (a) Change in Control.  A "Change in Control"  shall be deemed
to have  occurred (i) on the date that any person or group deemed a person under
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, other than
the  Company,  in a  transaction  or  series of  transactions,  has  become  the
beneficial  owner,   directly  or  indirectly  (with  beneficial   ownership  as
determined as provided in Rule 13d-3,  or any successor rule under such Act), of
30% or more of the outstanding voting securities of the Company;  or (ii) on the
date on which one third or more of the members of the Board of  Directors  shall
consist of persons other than Current Directors (for these purposes, as "Current
Director"  shall  mean any  member  of the  Board  of  Directors  elected  at or
continuing  in office  after,  the 1996  Annual  Meeting  of  Shareholders,  any
successor  of a Current  Director  who has been  approved  by a majority  of the
Current  Directors then on the Board, and any other person who has been approved
by a majority of the Current  Directors then on the Board); or (iii) on the date
of  approval of (x) the merger or  consolidation  of the  Company  with  another
corporation  where the  shareholders  of the Company,  immediately  prior to the
merger or  consolidation,  would not  beneficially  own,  immediately  after the
merger or  consolidation,  shares entitling such  shareholders to 50% or more of
all votes  (without  consideration  of the rights of any class of stock to elect
directors by a separate class vote) to which all shareholders of the corporation
would be entitled in the election of directors or where the members of the Board
of Directors of the Company,  immediately  prior to the merger or consolidation,
would not immediately after the merger or  consolidation,  constitute a majority
of the Board of Directors of the  corporation  issuing cash or securities in the
merger  or  consolidation  or (y) on the date of  approval  of the sale or other
disposition of all or substantially all the assets of the Company.

<PAGE>

                  (b) Termination for Cause. The Company shall have the right to
terminate  the services of Executive  at any time without  further  liability or
obligations to Executive if: (i) Executive has failed or refused to perform such
services as may reasonably be delegated or assigned to Executive consistent with
the  Executive's  position,  by the Chief  Executive  Officer or by the Board of
Directors,  (ii)  Executive has been grossly  negligent in  connection  with the
performance of Executive's duties,  (iii) Executive has committed acts involving
dishonesty,  willful misconduct, breach of fiduciary duty, fraud, or any similar
offense which  materially  affects  Executive's  ability to perform  Executive's
duties for the Company or may materially  adversely affect the Company,  or (iv)
Executive has been convicted of a felony.
         Termination  of the  services  of  Executive  for  Cause  shall  not be
effective  unless and until acted upon by the Board of Directors  and unless and
until  written  notice  shall have been given to  Executive  which  notice shall
include  identification  with  specificity  of each and every  factual  basis or
incident upon which the termination is based.
                  (c) Good  Reason.  Good Reason  shall mean the  occurrence  or
existence of any of the  following  with respect to Executive:  (i)  Executive's
annual rate of salary is reduced  from the annual rate then  currently in effect
or Executive's other employee benefits are in the aggregate  materially  reduced
from those then currently in effect (unless such reduction of employee  benefits
applies to employees of the Company  generally),  or (ii)  Executive's  place of
employment is moved more than 25 miles from its then current location,  or (iii)
Executive  is assigned  duties that are  demeaning or are  otherwise  materially
inconsistent with the duties then currently performed by Executive.
         Before Executive may terminate Executive's  employment for Good Reason,
Executive  must  notify  the  Company in writing  of  Execution's  intention  to
terminate and the Company shall have 15 days after receiving such written notice
to remedy the situation, if possible.
         4. Right to  Employment.  Nothing  contained  herein  shall confer upon
Executive  any  right  to be  continued  in the  employment  of the  Company  or
interfere  in any way with the right of the  Company  to  terminate  Executive's
employment  at any time  for any  reason.  Executive  hereby  acknowledges  that
Executive is and will remain an employee-at-will of the Company, terminable with
or without Cause.
 
<PAGE>

       5. Notices. All notice given in connection with this Agreement shall be
in writing and shall be  delivered  either by personal  delivery,  by  telegram,
telex,  telecopy or similar  facsimile  means, by certified or registered  mail,
return receipt requested, or by express courier or delivery services,  addressed
to the parties hereto at the following addresses:
         To Executive:                         To PSC:
                                               PSC Inc.
                                               675 Basket Road
                                               Webster, NY  14580
                                               Attn:  Chief Executive Officer
                                               FAX:  (716) 265-6406

or at such other  address  and  number as either  party  shall  have  previously
designated by written notice given to the other party in the manner  hereinabove
set forth.  Notice  shall be deemed  given when  received,  if sent by telegram,
telex,  telecopy or similar  facsimile  means  (confirmation  of such receipt by
confirmed facsimile  transmission being deemed receipt of communications sent by
telex,  telecopy or other facsimile means); and when delivered and receipted for
(or  upon  the  date of  attempted  delivery  where  delivery  is  refused),  if
hand-delivered,  sent  by  express  courier  or  delivery  services,  or sent by
certified or registered mail, return receipt requested.

         6.       Waiver.  Any waiver of a breach of any of the terms of this 
Agreement shall not operate as a waiver of any other breach of such terms or of 
any other terms, nor shall failure to enforce any term hereof operate as a 
waiver of any such term or of any other term.


<PAGE>


         7.       Severability.  If any term of this Agreement or the 
application thereof is held invalid or unenforceable, the validity or 
unenforceability shall not effect any other term of this Agreement which can be
given effect without the invalid or unenforceable term.

         8. Governing Law; Venue. This Agreement shall be construed and enforced
in  accordance  with and governed by the internal laws of the State of New York,
without  reference to conflict of law principles of any jurisdiction  (including
without  limitation  New York)  which  would  result in the  application  of the
domestic substantive laws of any other jurisdiction.  The parties consent to the
exclusive jurisdiction of the Supreme Court of New York, Monroe County or of the
United States  District Court of the Western  District of New York for any legal
action  instituted  by any party  against any other with  respect to the subject
matter hereof.
         9.       Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof.  This Agreement 
may not be amended or changed except by a writing signed by both parties.

         10.      Successors and Assigns.  This Agreement shall bind and inure
to the benefit of the parties hereto and their respective successors and 
assigns.


<PAGE>


         IN WITNESS  WHEREOF,  Executive  has executed  this  Agreement  and the
Company has caused this Agreement to be executed as of the date set forth above.
                                    PSC Inc.

                                    By:
                                             L. Michael Hone
                                    Its:     Chief Executive Officer


                                    EXECUTIVE