Document:

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                                                                     EXHIBIT (i)
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                    PITNEY BOWES INC. DIRECTORS' STOCK PLAN

             Amended and Restated Effective as of October 11, 1999
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                    PITNEY BOWES INC. DIRECTORS' STOCK PLAN
             Amended and Restated Effective as of October 11, 1999

     1. PURPOSE AND EFFECTIVE DATE OF PLAN: This Plan shall be known as the
Pitney Bowes Inc. Directors' Stock Plan. The purpose of the Plan is to enable
Pitney Bowes Inc. (the "Company") to attract and retain persons of outstanding
competence to serve as non-employee directors of the Company by paying such
persons a portion of their compensation in stock of the Company pursuant to the
terms of the Plan. The Plan became effective on the date the Plan was initially
approved by the stockholders of the Company. The Plan may be amended from time
to time and was amended and restated effective as of October 11, 1999.

     2. STOCK AVAILABLE FOR THE PLAN: An aggregate of 400,000 shares of Common
Stock, $1 par value per share, of the Company ("Common Stock"), after giving
effect to the stock dividend in 1998, shall be available for issuance pursuant
to the provisions of the Plan. Such shares shall be authorized and unissued
shares or shares which have been reacquired by the Company.

     3. ELIGIBILITY FOR PARTICIPATION IN PLAN: Persons who serve as directors of
the Company and who are not "employees" of the Company or its subsidiaries
within the meaning of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") shall be considered "Eligible Directors" for purposes of the
Plan. It is intended that all Eligible Directors participate in the Plan.

     4. AWARDS OF RESTRICTED STOCK: Each Eligible Director then serving as a
director of the Company shall receive an annual award of 1400 restricted shares
of Common Stock on the date of the first meeting of directors after each annual
stockholders' meeting; provided, however, that an Eligible Director who joins
the Board after such date shall receive a partial award of restricted shares of
Common Stock that is prorated by multiplying 1400 by a fraction the numerator of
which is the number of days remaining in the 12 month period beginning on the
date following the annual stockholders' meeting and the denominator of which is
365. Fractional shares shall not be issued to Eligible Directors. A whole number
of shares shall be determined by rounding each fractional share to the next
highest whole number.

     5. TRANSFER RESTRICTIONS, REMOVAL OF RESTRICTIONS, TERMS AND CONDITIONS
        AND INTER VIVOS TRANSFERS OF AWARDS OF RESTRICTED STOCK:

     (a) Each participant or transferee pursuant to Section 5(d) hereof shall
have the right to receive all dividends and other distributions made with
respect to the shares registered in his or her name and shall have the right to
vote or execute proxies with respect to such registered shares. The Company may
elect to record the ownership of the shares in book entry form or issue
certificates representing the shares. The Company may elect to have the
Treasurer of the Company retain possession of the certificates of restricted
shares for the benefit of Eligible

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Directors, until the provisions of the Plan relating to removal of the
restrictions have been satisfied.

     (b) Subject to Section 5 (d) of the Plan, shares of restricted stock may
not be sold, assigned, pledged or otherwise transferred by the Eligible Director
unless and until all of the transfer restrictions imposed by this Plan have been
removed pursuant to the provisions of the Plan.

     (c) Subject to Section 5(d) of the Plan, awarded shares shall remain
subject to the Plan's restrictions prohibiting sale or transfer of such shares
as set forth in Section 5(b) hereof until the later of (i) the termination of
the Eligible Director's service as a director of the Company and (ii) the day
following the end of the six (6) month period beginning on the date of the award
of such restricted shares; provided, however, all restrictions imposed under the
Plan on such shares shall lapse upon the occurrence of a "Change of Control" (as
defined below). Notwithstanding any other provision of this Plan, the issuance
or delivery of any shares may be postponed for such period as may be required to
comply with any applicable requirements of any national securities exchange or
any requirements under any other law or regulation applicable to the issuance or
delivery of such shares, and the Company shall not be obligated to issue or
deliver any such shares if the issuance or delivery thereof shall constitute a
violation of any provision of any law or of any regulation of any governmental
authority or any national securities exchange.

     (d) If, pursuant to the Pitney Bowes Inc. Directors' Stock Ownership
Policy, an Eligible Director is considered to own shares of Common Stock having
a Fair Market Value of at least $350,000, such Eligible Director may during his
or her lifetime transfer to a Family Member, Family Entity or Charitable
Organization whole shares of Common Stock originally acquired under the Plan
having a Fair Market Value up to, but not greater than, the Fair Market Value of
the Eligible Director's Common Stock holdings in excess of $350,000, rounded up
or down, as the case may be, to prevent the transfer of fractional shares;
provided, that each of the following conditions is met.

          (1)  Immediately before and after the date of transfer, the Eligible
               Director is considered to have attained the minimum level of
               stock ownership under the Pitney Bowes Inc. Directors' Stock
               Ownership Policy based on the Fair Market Value as of the date of
               transfer;

          (2)  A Family Member and Family Entity shall not be permitted to
               further transfer restricted shares until the restrictions set
               forth in Section 5(c) of the Plan have lapsed; provided, however,
               that a Charitable Organization may transfer restricted shares
               upon the Eligible Director's completion of six months of service
               with the Company following the date on which the restricted
               shares were granted without regard to the Eligible Director's
               termination of service from the Company;

          (3)  Eligible Directors must comply with applicable securities laws
               and regulations with respect to transfers made hereunder; and

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          (4)  Transfers under this Section 5(d) must meet all of the
               requirements under applicable provisions of the Internal Revenue
               Code to be considered "gift" transfers or charitable
               contributions, as the case may be.

          (5)  For purposes of the Plan, the following definitions shall apply:

               (A)  Family Member means the Eligible Director's natural or
                    adopted child, stepchild, grandchild, parent, stepparent,
                    grandparent, spouse, former spouse, sibling, mother-in-law,
                    father-in-law, son-in-law, daughter-in-law, sister-in-law,
                    brother-in-law, nephew, niece (including by adoption) and
                    any person sharing the Eligible Director's household (other
                    than a tenant or employee);

               (B)  Family Entity means any trust in which the Eligible Director
                    has more than a 50% beneficial interest and any entity in
                    which the Eligible Director and/or a Family Member owns more
                    than a 50% of the voting interests; and

               (C)  Charitable Organization means any not-for-profit entity
                    recognized as such under the Internal Revenue Code of 1986,
                    as amended.

     6. STOCK OPTIONS. Each Eligible Director who elects to defer cash
compensation for serving as director in accordance with the terms of the Pitney
Bowes Inc. Deferred Incentive Savings Plan for the Board of Directors (the
"Directors' Deferral Plan"), and who selects the Pitney Bowes Stock Option
return on such deferred amount, shall be granted a stock option under the terms
of this Section 6 (an"Option").

     (a) Each Option shall represent the right to purchase a number of shares of
Common Stock and the number of Options granted with respect to the deferred
amount shall be determined by (i) dividing the deferred amount by the per share
Fair Market Value, as hereinafter defined, of the Common Stock on the date the
deferred compensation would otherwise have been paid (the "Date of Grant") and
(ii) multiplying the result times two; provided, however, that the method for
determining the number of shares subject to Options may be modified from time to
time by the Governance Committee of the Board.

     (b) The exercise price of each Option shall be the per share Fair Market
Value on the Date of Grant.

     (c) The duration of the Option shall be coextensive with the deferral
period selected by the Eligible Director in respect of his or her deferred
compensation relating to the Option.

     (d) Subject to Section 6(e) and (g), no portion of the Option is
exercisable until the third anniversary of the Date of Grant, at which time the
Option will become exercisable in full. Notwithstanding the foregoing, all
Options will become exercisable in full in the event of a Change of Control, as
hereinafter defined.

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     (e) Subject to Section 6(f) and (g) of the Plan, if an Eligible Director
ceases to serve as a director, all Options held by such Eligible Director that
are not exercisable at the time of such cessation will be forfeited.

     (f) Upon termination of service by a director, any Option granted prior to
October 11, 1999 held by the affected director that is exercisable at the time
of such termination shall be exercisable for three months following the date of
such termination. Notwithstanding the foregoing, if an Eligible Director shall
die while serving as a director or during the three month period after
termination of service as a director, any Option held by the deceased Eligible
Director that is exercisable at the time of death shall remain exercisable by
such Eligible Director's legal representative for one year following the date of
death or the last day of the Option term, whichever occurs first.

     (g) Options that are granted hereunder on or after October 11, 1999 shall
continue to be exercisable beyond the termination of the Eligible Director's
services until the expiration of the Option term; provided that the Eligible
Director's termination of service occurs (1) due to death, (2) due to
disability, as defined under the Company's long-term disability plan for
employees, (3) following the completion of 10 years of service with the Company
as a director, or (4) following attainment of the Company's mandatory retirement
age for directors. In the case of an Eligible Director's termination of service
for all other reasons, any Options or portions thereof that are exercisable at
the time of termination of service shall be exercisable until the earlier to
occur of (i) the last day of the Option term or (ii) the last day of the three
month period following such termination. Any Options granted on or after October
11, 1999 that are not exercisable at the time of the Eligible Director's
termination of service or that are not exercised by the last day of the
additional exercise period described in the preceding sentence shall be
forfeited.

     (h) Notwithstanding Section 10 herein to the contrary, an Eligible Director
may transfer by gift any Option that is exercisable provided that the following
conditions (A) through (G) are met:

               (A)  The donees of the gift transfer are limited to Family
                    Members and Family Entities;

               (B)  The Option is not further transferable by gift or otherwise
                    by such Family Member or Family Entity;

               (C)  All rights appurtenant to the Option, including exercise
                    rights, are irrevocably and unconditionally assigned to the
                    donee;

               (D)  Transfers under this Section 6(h) must meet all of the
                    requirements under applicable provisions of the Internal
                    Revenue Code to be considered "gift" transfers.

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               (E)  Following the transfer, the donee is subject to the same
                    terms and conditions under the Option as was the Eligible
                    Director;

               (F)  Unless one of the conditions set forth in Section 6(g)(1-4)
                    hereof occurs, the exercise period of Options transferred
                    under this Section 6(h) shall not extend beyond the one year
                    period beginning on the Eligible Director's termination of
                    service, except that for Options granted prior to October
                    11, 1999, the one year extension period shall commence on
                    the date of the Eligible Director's death if the director
                    dies within three months of terminating service as a
                    director.

               (G)  For purposes of the Plan, the following definitions shall
                    apply:

                    (a)  Family Member means the Eligible Director's natural or
                         adopted child, stepchild, grandchild, parent,
                         stepparent, grandparent, spouse, former spouse,
                         sibling, mother-in-law, father-in-law, son-in-law,
                         daughter-in-law, sister-in-law, nephew, niece
                         (including by adoption) and any person sharing the
                         Eligible Director's household (other than a tenant or
                         employee); and

                    (b)  Family Entity means any trust in which the Eligible
                         Director has more than a 50% beneficial interest and
                         any entity in which the Eligible Director and/or a
                         Family Member owns more than a 50% of the voting
                         interests.

     (i) Fair Market Value shall mean fair market value, as determined by such
methods or procedures as shall be established from time to time by the Board.

     7. CHANGE OF CONTROL. For purposes of this Plan, a "Change of Control"
shall be deemed to have occurred if:

     (i) there is an acquisition, in any one transaction or a series of
transactions, other than from Pitney Bowes Inc., by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), of beneficial ownership
(within the meaning of Rule 13(d)(3) promulgated under the Exchange Act) of 20%
or more of either the then outstanding shares of Common Stock or the combined
voting power of the then outstanding voting securities of Pitney Bowes Inc.
entitled to vote generally in the election of directors, but excluding, for this
purpose, any such acquisition by Pitney Bowes Inc. or any of its subsidiaries,
or any employee benefit plan (or related trust) of Pitney Bowes Inc. or its
subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by the individuals
and entities who were the beneficial owners, respectively, of the common stock
and voting securities of Pitney Bowes Inc. immediately prior to such acquisition

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in substantially the same proportion as their ownership, immediately prior to
such acquisition, of the then outstanding shares of Common Stock or the combined
voting power of the then outstanding voting securities of Pitney Bowes Inc.
entitled to vote generally in the election of directors, as the case may be; or

  (ii) individuals who, as of October 11, 1999, constitute the Board (as of such
date, the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to September 9, 1996, whose election, or nomination for election by
Pitney Bowes' shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of Pitney Bowes Inc. (as such terms are used in Rule 14(a)(11) or
Regulation 14A promulgated under the Exchange Act); or

  (iii) there occurs either (A) the consummation of a reorganization, merger or
consolidation, in each case, with respect to which the individuals and entities
who were the respective beneficial owners of the common stock and voting
securities of Pitney Bowes Inc. immediately prior to such reorganization, merger
or consolidation do not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation, or (B) an approval by the shareholders
of Pitney Bowes Inc. of a complete liquidation of dissolution of Pitney Bowes
Inc. or of the sale or other disposition of all or substantially all of the
assets of Pitney Bowes Inc.

     8. AMENDMENT OR TERMINATION OF PLAN: The Company reserves the right to
amend, modify or terminate this Plan at any time by action of its Board of
Directors, provided that such action shall not adversely affect any Eligible
Director's rights under the provisions of this Plan with respect to awards of
restricted stock or Options which were made prior to such action.

     9. NON TRANSFERABILITY: Except as permitted under Section 5(d) and 6(h)
hereof, restricted shares of Common Stock and Options prior to distribution or
exercise thereof, as the case may be, shall not be transferable except by will
or the laws of descent and distribution, and during the holder's lifetime,
Options may be exercisable only by such holder.

     10. ADMINISTRATION OF PLAN: This Plan shall be administered by the
Governance Committee of the Board of Directors or any successor committee having
responsibility for the remuneration of the directors (hereinafter referred to as
the "Administrator"). All decisions which are made by the Administrator with
respect to interpretation of the terms of the Plan, or with respect to any
questions or disputes arising under this Plan, shall be final and binding on the
Company and on the Eligible Directors and their heirs or beneficiaries.

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     11. RECAPITALIZATION: In the event of any change in the number or kind of
outstanding shares of Common Stock of the Company by reason of a
recapitalization, merger, consolidation, dividend, combination of shares or any
other change in the corporate structure or shares of stock of the Company, the
Board of Directors of the Company will make appropriate adjustments in the
number of shares available for delivery pursuant to the provisions of this Plan,
the number of shares to be awarded to each Eligible Director under Section 4,
and in the number of shares, exercise price and any other affected provisions of
any Options outstanding under the Plan, to prevent enlargement or diminution of
the benefits intended to be granted under the Plan.

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                                                                    EXHIBIT (ii)
                                                                    ------------

             THE PITNEY BOWES AMENDED AND RESTATED 1998 STOCK PLAN
                         Effective as of January 1, 1999
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             THE PITNEY BOWES AMENDED AND RESTATED 1998 STOCK PLAN
             -----------------------------------------------------

Section 1. Purpose.

The purposes of this Pitney Bowes 1998 Stock Plan (the "Plan") are (1) to make
available to key employees, certain compensatory arrangements related to the
growth in value of the common stock of the Company so as to generate an
increased incentive to contribute to the Company's future financial success and
prosperity, (2) to enhance the ability of the Company and its Affiliates to
attract and retain exceptionally qualified individuals whose efforts can affect
the financial growth and profitability of the Company, and (3) to align
generally the interests of key employees of the Company and its Affiliates with
the interests of Pitney Bowes shareholders.

Section 2. Definitions.

As used in the Plan, the following terms shall have the meanings set forth
below:

     (a)  "Affiliate" shall mean (i) any entity that, directly or through one or
          more intermediaries, is controlled by the Company or (ii) any entity
          in which the Company has a significant equity interest, as determined
          by the Committee.

     (b)  "Award" shall mean any Option, Restricted Stock, Restricted Stock
          Unit, Dividend Equivalent, Other Stock-Based Award, Performance Award
          or Substitute Award, granted under the Plan.

     (c)  "Award Agreement" shall mean any written agreement, contract, or other
          instrument or document evidencing any Award granted under the Plan.

     (d)  "Board of Directors" shall mean the Board of Directors of the Company
          as it may be composed from time to time.

     (e)  "Code" shall mean the Internal Revenue Code of 1986, as amended from
          time to time, or any successor code thereto.

     (f)  "Committee" shall mean the Board of Directors, excluding any director
          who is not a Non-Employee Director" within the meaning of Rule 16b-3,
          or any such other committee designated by the Board of Directors to
          administer the Plan, which committee shall be composed of not less
          than the minimum number of members of the Board of Directors from time
          to time required by Rule 16b-3 or any applicable law, each of whom is
          a Non-Employee Director within the meaning of Rule 16b-3.

     (g)  "Company" shall mean Pitney Bowes Inc., or any successor thereto.

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     (h)  "Covered Award" means an Award, other than an Option or other Award
          with an exercise price per Share not less than the Fair Market Value
          of a Share on the date of grant of such Award, to a Covered Employee,
          if it is designated as such by the Committee at the time it is
          granted. Covered Awards are subject to the provisions of Section 13 of
          this Plan.

     (i)  "Covered Employees" means Participants who are designated by the
          Committee prior to the grant of an Award who are, or are expected to
          be at the time taxable income will be realized with respect to the
          Award, "covered employees" within the meaning of Section 1 62(m).

     (j)  "Dividend Equivalent" shall mean any right granted under Section 6(c)
          of the Plan.

     (k)  "Employee" shall mean any employee of the Company or of any Affiliate.

     (l)  "Fair Market Value" shall mean, with respect to any property
          (including, without limitation, any Shares or other securities), the
          fair market value of such property determined by such methods, or
          procedures as shall be established from time to time by the Committee.

     (m)  "Incentive Stock Option" or "ISO" shall mean an option granted under
          Section 6(a) of the Plan that is intended to meet the requirements of
          Section 422 of the Code, or any successor provision thereto.

     (n)  "Non-Qualified Stock Option" shall mean an option granted under
          Section 6(a) of the Plan that is not intended to be an Incentive Stock
          Option.

     (o)  "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
          Option.

     (p)  "Other Stock-Based Award" shall mean any Award granted under Section
          6(d) of the Plan.

     (q)  "Participant" shall mean an Employee who is granted an Award under the
          Plan.

     (r)  "Performance Award" shall mean any Award granted hereunder that
          complies with Section 6(e)(ii) of the Plan.

     (s)  "Performance Goals" means one or more objective performance goals,
          established by the Committee at the time an Award is granted, and
          based upon the attainment of targets for one or any combination of the
          following criteria: operating income, revenues, return on operating
          assets, return on investment, economic value added, earnings per
          share, return on stockholder equity, stock price, achievement of cost
          control, or such other measure as the Committee may decide, of the
          Company or such subsidiary, division or department of the Company for
          or within which the participant is primarily employed. Performance
          Goals also may be based upon attaining specified levels of Company
          performance based upon one or more of the criteria described above
          relative to prior periods or the

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          performance of other corporations. Performance Goals shall be set by
          the Committee within the time period prescribed by Section 162(m).

     (t)  "Person" shall mean any individual, corporation, partnership,
          association, joint-stock company, trust, unincorporated organization,
          or government or political subdivision thereof.

     (u)  "Released Securities" shall mean securities that were Restricted
          Securities with respect to which all applicable restrictions have
          expired lapsed, or been waived.

     (v)  "Restricted Securities" shall mean Awards of Restricted Stock or other
          Awards under which issued and outstanding Shares are held subject to
          certain restrictions.

     (w)  "Restricted Stock" shall mean any Share granted under Section 6(b) of
          the Plan.

     (x)  "Restricted Stock Unit" shall mean any right granted under Section
          6(b) of the Plan that is denominated in Shares.

     (y)  "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
          Exchange Commission under the Securities Exchange Act of 1934 as
          amended, or any successor rule and the regulation thereto.

     (z)  "Section 162(m)" means Section 162(m) of the Code or any successor
          thereto, and the Treasury Regulations thereunder.

     (aa) "Share" or "Shares" shall mean share(s) of the common stock of the
          Company, $2 par value, and such other securities or property as may
          become the subject of Awards pursuant to the adjustment provisions of
          Section 4(c).

     (bb) "Substitute Award" shall mean an Award granted in assumption of, or in
          substitution for, an outstanding award previously granted by a company
          acquired by the Company or with which the Company combines.

Section 3. Administration.

     (a)  The Plan shall be administered by the Committee. Subject to the terms
          of the Plan and applicable law, the Committee shall have full power
          and authority to:

         (i)   designate Participants;

         (ii)  determine the type or types of Awards to be granted to each
               Participant under the Plan;

         (iii) determine the number of Shares to be covered by (or with respect
               to which payments, rights, or other matters are to be calculated
               in connection with) Awards;

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          (iv)   determine the terms and conditions of any Award;

          (v)    determine whether, to what extent, and under what circumstances
                 Awards may be settled or exercised in cash, Shares, other
                 securities, other Awards, or other property, or to what extent,
                 and under what circumstances Awards may be canceled, forfeited,
                 or suspended, and the method or methods by which Awards may be
                 settled, exercised, canceled, forfeited, or suspended;

          (vi)   determine whether, to what extent, and under what circumstances
                 cash, Shares, other securities, other Awards, other property,
                 and other amounts payable with respect to an Award under the
                 Plan shall be deferred either automatically or at the election
                 of the holder thereof or of the Committee;

          (vii)  interpret and administer the Plan and any instrument or
                 agreement relating to the Plan, or any Award made under the
                 Plan, including any Award Agreement;

          (viii) establish, amend, suspend, or reconcile such rules and
                 regulations and appoint such agents as it shall deem
                 appropriate for the proper administration of the Plan; and

          (ix)   make any other determination and take any other action that the
                 Committee deems necessary or desirable for the administration
                 of the Plan.

     (b)  Unless otherwise expressly provided in the Plan, all designations,
          determinations, interpretations, and other decisions under or with
          respect to the Plan, any Award, or any Award Agreement, shall be
          within the sole discretion of the Committee, may be made at any time,
          and shall be final, conclusive, and binding upon all Persons,
          including the Company, any Affiliate, any Participant, any holder or
          beneficiary of any Award, and any employee of the Company or of any
          Affiliate.

     (c)  The Committee may delegate to one or more executive officers of the
          Company or to a committee of executive officers of the Company the
          authority to grant Awards to Employees who are not officers or
          directors of the Company and to amend, modify, cancel or suspend
          Awards to such employees, subject to Sections 7 and 9.

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Section 4. Shares Available For Awards.

     (a)  Maximum Shares Available. The maximum number of Shares that may be
          issued to Participants pursuant to Awards under the Plan shall be
          30,800,000 (the "Plan Maximum), subject to adjustment as provided in
          Section 4(c) below. Only 9,240,000 Shares may be issued pursuant to
          Awards of Restricted Stock and Restricted Stock Units under Section
          6(b) of the Plan. Pursuant to any Awards, the Company may in its
          discretion issue treasury Shares or authorized but previously unissued
          Shares pursuant to Awards hereunder. For the purpose of accounting for
          Shares available for Awards under the Plan, the following shall apply:

          (i)   Only Shares relating to Awards actually issued or granted
                hereunder shall be counted against the Plan Maximum. Shares
                corresponding to Awards that by their terms expired, or that are
                forfeited, canceled or surrendered to the Company without full
                consideration paid therefor shall not be counted against the
                Plan Maximum.

          (ii)  Shares that are forfeited by a Participant after issuance, or
                that are reacquired by the Company after issuance without full
                consideration paid therefor, shall be deemed to have never been
                issued under the Plan and accordingly shall not be counted
                against the Plan Maximum.

          (iii) Awards not denominated in Shares shall be counted against the
                Plan Maximum in such amount and at such time as the Committee
                shall determine under procedures adopted by the Committee
                consistent with the purposes of the Plan.

          (iv)  Substitute Awards shall not be counted against the Plan Maximum,
                and clauses (i) and (ii) of this Section shall not apply to such
                Awards.

          The maximum number of Shares that may be the subject of Awards made to
          a single Participant in any one calendar year shall be 400,000.

     (b)  Shares Available for ISOs. The maximum number of Shares for which ISOs
          may be granted under the Plan shall not exceed the Plan Maximum as
          defined in Section 4(a) above, subject to adjustment as provided in
          Section 4(c) below.

     (c)  Adjustments to avoid dilution. Notwithstanding paragraphs (a) and (b)
          above, in the event of a stock dividend, split-up or combination of
          Shares, merger, consolidation, reorganization, recapitalization, or
          other change in the corporate structure or capitalization affecting
          the outstanding common stock of the Company, such that an adjustment
          is determined by the Committee to be appropriate in order to prevent
          dilution or enlargement of the benefits or potential benefits intended
          to be made available under the Plan or any Award, then the Committee
          may make appropriate adjustments to (i) the number or kind of Shares
          available for the future granting of Awards hereunder, (ii) the number
          and type of Shares subject to outstanding Awards, and (iii) the grant,
          purchase, or

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          exercise price with respect to any Award; or if it deems such action
          appropriate, the Committee may make provision for a cash payment to
          the holder of an outstanding Award; provided, however, that with
          respect to any ISO no such adjustment shall be authorized to the
          extent that such would cause the ISO to violate Code Section 422 or
          any successor provision thereto. The determination of the Committee as
          to the adjustments or payments, if any, to be made shall be
          conclusive.

     (d)  Other Plans. Shares issued under other plans of the Company shall not
          be counted against the Plan Maximum under the Plan.

Section 5. Eligibility.

Any Employee, including any officer or employee director of the Company or of
any Affiliate, who is not a member of the Committee shall be eligible to be
designated a Participant.

Section 6. Awards.

     (a)  Options. The Committee is hereby authorized to grant Options to
          Participants with the following terms and conditions and with such
          additional terms and conditions, not inconsistent with the provisions
          of the Plan, as the Committee shall determine:

          (i)   Exercise Price. The exercise price per Share under an Option
                shall be determined by the Committee; provided, however, that
                except in the case of Substitute Awards, no Option granted
                hereunder may have an exercise price of less than 100% of Fair
                Market Value of a Share on the date of grant.

          (ii)  Times and Method of Exercise. The Committee shall determine the
                time or times at which an Option may be exercised in whole or in
                part; in no event, however, shall the period for exercising an
                Option extend more than 10 years from the date of grant. The
                Committee shall also determine the method or methods by which
                options may be exercised, and the form or forms ('including
                without limitation, cash, Shares, other Awards, or other
                property, or any combination thereof, having a Fair Market Value
                on the exercise date equal to the relevant exercise price), in
                which payment of the exercise price with respect thereto may be
                made or deemed to have been made.

          (iii) Incentive Stock Options. The terms of any Incentive Stock Option
                granted under the Plan shall comply in all respects with the
                provisions of Section 422 of the Code, or any successor
                provision thereto, and any regulations promulgated thereunder.

          (iv)  Termination of Employment. In the event that a Participant
                terminates employment or becomes disabled, Options granted
                hereunder shall be exercisable only as specified below:

                                       7
<PAGE>

               (A)  Disability, Death and Retirement. Options Granted On Or
                    --------------------------------
                    After January 1,1999. If a Participant becomes disabled,
                    dies or retires, any outstanding Option granted to such a
                    Participant on or after January 1, 1999, whether or not full
                    or partial vesting has occurred with respect to such Option
                    at the time of the disability, death or retirement, shall be
                    exercisable during the ten (10) year period beginning on the
                    date of grant (or during such shorter period if the original
                    term is less than ten (10 years) even though the disability,
                    death or retirement occurs prior to the last day of such
                    option term. Any vesting requirements under the Option shall
                    be deemed to be satisfied as of the date of disability,
                    death or retirement.

                    Options Granted Prior to January 1, 1999. If a Participant
                    becomes disabled, dies or retires, any outstanding Option
                    granted to a Participant prior to January 1, 1999, whether
                    or not full or partial vesting has occurred with respect to
                    such Option at the time of the disability, death or
                    retirement, shall be exercisable for four (4) years (or
                    during such shorter period if the remaining term of the
                    Option is less than four (4) years following the disability,
                    death or retirement unless the Committee has in its sole
                    discretion established a special exercise period following
                    the occurrence of such events. Any vesting requirements
                    under the Option shall remain in effect during the exercise
                    period following the Participant's disability, death or
                    retirement.

                    For purposes of the Plan, a Participant shall be considered
                    to be "disabled" on the date he or she is determined to be
                    totally disabled under the procedures and provisions of the
                    Pitney Bowes Long Term Disability Plan, irrespective of
                    whether the Participant is eligible for benefits under the
                    LTD Plan. In addition, for purposes of the Plan, a
                    Participant shall be considered to retire on the date he or
                    she terminates employment on or after attainment of age 55
                    with at least 10 years of company service, as determined
                    under the Pitney Bowes Pension Plan. In the case of death,
                    an Option may be transferred to the executor of personal
                    representative of the Participant's estate or the
                    Participant's heirs by will or the laws of descent and
                    distribution.

               (B)  Termination for Reasons Other Than Death, Disability or
                    -------------------------------------------------------
                    Retirement.
                    ----------
                    If a Participant terminates employment for reasons other
                    than death, disability or retirement, any vested,
                    unexercised portion of an Option that is at least partially
                    vested at the time of the termination shall be forfeited in
                    its entirety if not exercised by the Participant within
                    three (3) months of the date of termination of employment,
                    unless the Committee has in its sole discretion established
                    an additional exercise period (but in any case not longer
                    than the original

                                       8
<PAGE>

                    option term). Any portion of such partially vested Option
                    that is not vested at the time of termination shall be
                    forfeited unless the Committee has in its sole discretion
                    established that a Participant may continue to satisfy the
                    vesting requirements beyond the date of his or her
                    termination of employment. Any outstanding Option granted to
                    a Participant terminating employment other than for death,
                    disability or retirement, for which no vesting has occurred
                    at the time of the termination shall be forfeited on the
                    date of termination and the Committed shall have no
                    discretion to extend the exercise period of such Option.

               (C)  Sale of Business. In the event the "business unit," (defined
                    ----------------
                    as a division, subsidiary, unit or other delineation that
                    the Committee in its sole discretion may determine) for
                    which the Participant performs substantially all of his or
                    her services is assigned, sold, outsourced or otherwise
                    transferred, including an asset, stock or joint venture
                    transaction, to an unrelated third party such that after
                    such transaction the Company owns or controls directly or
                    indirectly less than 51% of the business unit, the affected
                    Participant shall become 100% vested in all outstanding
                    Options as of the date of the closing of such transaction,
                    whether or not fully partially vested, and such Participant
                    shall be entitled to exercise such Options during the three
                    (3) months following the closing of such transaction, unless
                    the Committee has in its sole discretion established an
                    additional exercise period (but in any case not longer than
                    the original option term). All Options which are unexercised
                    at the end of such three (3) months shall be automatically
                    forfeited.

               (D)  Conditions Imposed on Unvested Options. Notwithstanding the
                    --------------------------------------
                    foregoing provisions describing the additional exercise
                    periods for Options upon termination of employment, the
                    Committee may in its sole discretion condition the right of
                    a Participant to exercise any portion of a partially vested
                    Option for which the Committee has established an additional
                    exercise period on the Participant's agreement to adhere to
                    such conditions and stipulations which the Committee may
                    impose, including, but not limited to, restrictions on the
                    solicitation of employees or independent contractors,
                    disclosure of confidential information, covenants not to
                    compete, refraining from denigrating through adverse or
                    disparaging communication, written or oral, whether or not
                    true, the operations, business, management, products or
                    services of the Company or its current or former employees
                    and directors, including without limitation, the expression
                    of personal views, opinions or judgements. The unvested
                    Options of any Participant for whom the Committee has given
                    an additional exercise period subject to such conditions
                    subsequent as set forth in

                                       9
<PAGE>

                    this Section 6(a)(iv)(D) shall be forfeited immediately upon
                    a breach of such conditions.

               (E)  Forfeiture for Gross Misconduct. Notwithstanding anything to
                    -------------------------------

                    the contrary herein, any Participant who engages in Gross
                    Misconduct, as defined herein, (including any Participant
                    who may otherwise qualify for disability or retirement
                    status) shall forfeit all outstanding, unexercised Options,
                    whether vested or unvested, as of the date such Gross
                    Misconduct occurs. For purposes of the Plan, Gross
                    Misconduct shall be defined to mean (i) the Participant's
                    conviction of a felony (or crime of similar magnitude in
                    non-U.S. jurisdictions) in connection with the performance
                    or nonperformance of the Participant's duties of (ii) the
                    Participant's willful act or failure to act in a way that
                    results in material injury to the business or reputation of
                    the Company or employees of the Company.

               (F)  Vesting. For purposes of the Plan, any reference to the
                    -------
                    "vesting" of an Option shall mean any events or conditions
                    which, if satisfied, entitle a Participant to exercise an
                    Option with respect to all or a portion of the shares
                    covered by the Option. The complete vesting of an Option
                    shall be subject to Section 6(a)(iv)(E) hereof. Such vesting
                    events or conditions may be set forth in the Notice of Grant
                    or determined by the Committee.

     (b)  Restricted Stock and Restricted Stock Units. The Committee is hereby
          authorized to grant Awards of Restricted Stock and or Restricted Stock
          Units to Participants with the following terms and conditions.

          (i)  Restrictions. Shares of Restricted Stock and Restricted Stock
               Units shall be subject to such restrictions as the Committee may
               impose (including, without limitation, continued employment over
               a specified period or the attainment of specified Performance
               Objectives (as defined in Section 6(e)(ii)(B) or Performance
               goals, in accordance with Section 13), which restrictions may
               lapse separately or concurrently at such time or times, in such
               installments or otherwise, as the Committee may deem appropriate.
               Notwithstanding the foregoing, (A) any Awards of Restricted Stock
               or Restricted Stock Units as to which the sole restriction
               relates to the passage of time and continued employment must have
               a restriction period of not less than three years and (B) any
               Award not described in Clause (A) must have a restriction period
               of not less than one year subject, in the case of both (A) and
               (B) to the proviso to Section 6(b)(iii) below.

          (ii) Registration. Any Restricted Stock granted under the Plan may be
               evidenced in such manner, as the Committee may deem appropriate,
               including without limitation, book-entry registration or issuance
               of a stock certificate or certificates. In the event any stock
               certificate is issued in respect of Shares of Restricted Stock

                                       10
<PAGE>

               granted under the Plan, such certificate shall be registered in
               the name of the Participant and shall bear an appropriate legend
               referring to the terms, conditions, and restrictions applicable
               to such Restricted Stock.

         (iii) Termination of Employment. Upon termination of employment of a
               Participant for any reason during the applicable restriction
               period, all Restricted Stock and all Restricted Stock Units, or
               portion thereof, still subject to restriction shall be forfeited
               and reacquired by the Company; provided, however, that in the
               event termination of employment is due to the death, total
               disability or retirement of the Participant, the Committee may
               waive in whole or in part any or all remaining restrictions with
               respect to Restricted Stock or Restricted Stock Units.

     (c)  Dividend Equivalents. The Committee may grant to Participants Dividend
          Equivalents under which the holders thereof shall be entitled to
          receive payments equivalent to dividends with respect to a number of
          Shares determined by the Committee, and the Committee may provide that
          such amounts shall be deemed to have been reinvested in additional
          Shares or otherwise reinvested. Subject to the terms of the Plan, such
          Awards may have such terms and conditions, as the Committee shall
          determine.

          (i)  Termination of Employment. Upon termination of the Participant's
               employment for any reason during the term of a Dividend
               Equivalent, the right of a Participant to payment under a
               Dividend Equivalent shall terminate as of the date of
               termination; provided, however, that in the event the
               Participant's employment terminates because of the death, total
               disability or retirement of a Participant the Committee may
               determine that such right terminates at a later date.

     (d)  Other Stock-Based Awards. The Committee is hereby authorized to grant
          to Participants such other Awards that are denominated or payable in,
          valued in whole or in part by reference to, or otherwise based on or
          related to Shares (including without limitation securities convertible
          into Shares), as are deemed by the Committee to be consistent with the
          purposes of the Plan; provided, however, that such grants must comply
          with Rule 16b-3 and applicable law.

          (i)  If applicable, Shares or other securities delivered pursuant to a
               purchase right granted under this Section 6(d) shall be purchased
               for such consideration, which may be paid by such method or
               methods and in such form or forms, including without limitation
               cash, Shares, other securities, other Awards or other properly,
               or any combination thereof, as the Committee shall determine;
               provided, however, that except in the case of Substitute Awards,
               no derivative security (as defined in Rule 16b-3) awarded
               hereunder may have an exercise price of less than 100% of Fair
               Market Value of a Share on the date of grant.

          (ii) In granting any Stock-Based Award pursuant to this Section 6(d)
               the Committee shall also determine what effect the termination of
               employment of the Participant

                                       11
<PAGE>

               holding such Award shall have on the rights of the Participant
               pursuant to the Award.

     (e)  General. The following general provisions shall apply to all Awards
          granted hereunder, subject to the terms of other sections of this Plan
          or any Award Agreement.

          (i)  Award Agreements. Each Award granted under this Plan shall be
               evidenced by an Award Agreement which shall specify the relevant
               material terms and conditions of the Award and which shall be
               signed by the Participant receiving such Award, if so indicated
               by the Award.

          (ii) Performance Awards. Subject to the other terms of this Plan, the
               payment, release or exercisability of any Award, in whole or in
               part, may be conditioned upon the achievement of such Performance
               Objectives" (as defined below) during such performance periods as
               are specified by the Committee. (Hereinafter in this Section
               6(e)(ii) the terms payment, pay, and paid also refer to the
               release or exercisability of a Performance Award, as the case may
               require.)

               (A)  Terms. The Committee shall establish the terms and
                    conditions of any Performance Award including the
                    Performance Objectives (as defined below) to be achieved
                    during any performance period, the length of any performance
                    period, any event the occurrence of which will entitle the
                    holder to payment, and the amount of any Performance Award
                    granted.

               (B)  Performance Objectives. The Committee shall establish
                    "Performance Objectives" the achievement of which shall
                    entitle the Participant to payment under a Performance
                    Award. Performance Objectives may be any measure of the
                    business performance of the Company, or any of its divisions
                    or Affiliates, including but not limited to the growth in
                    book or market value of capital stock, the increase in the
                    earnings in total or per share, or any other financial or
                    non-financial indicator specified by the Committee.

               (C)  Fulfillment of Conditions and Payment. The Committee shall
                    determine in a timely manner whether all or part of the
                    conditions to payment of a Performance Award have been
                    fulfilled and, if so, the amount, if any, of the payment to
                    which the Participant is entitled.

         (iii) Rule 16b-3 Six Month Limitations. To the extent required in order
               to render the grant of an Award, the exercise of an Award or any
               derivative security, or the sale of securities corresponding to
               an Award, an exempt transaction under Section 16b of the
               Securities Exchange Act of 1934 only, any equity security granted
               under the Plan to a Participant must be held by such Participant
               for at least six months from the date of grant, or in the case of
               a derivative security granted pursuant to the Plan to a
               Participant, at least six months must elapse from the date of
               acquisition of the derivative security to the date of disposition
               of the derivative security (other

                                       12
<PAGE>

               than upon exercise or conversion) or its underlying equity
               security. Terms used in the preceding sentence shall, for the
               purposes of such sentence only, have the meanings if any,
               assigned or attributed to them under Rule 16b-3.

          (iv) Limits on Transfer of Awards. No Award (other than Released
               Securities), and no right under any such Award shall be
               assignable, alienable, pledgeable, attachable, encumberable,
               saleable, or transferable by a Participant other than by will or
               by the laws of descent and distribution or pursuant to a domestic
               relations order (or, in the case of Awards that are forfeited or
               canceled, to the Company); and any purported assignment, sale,
               transfer, thereof shall be void and unenforceable against the
               Company or Affiliate. If the Committee so indicates in writing to
               a Participant, he or she may designate one or more beneficiaries
               who may exercise the rights of the Participant and receive any
               property distributable with respect to any Award upon the death
               of the Participant.

               Each Award, and each right under any Award, shall be exercisable,
               during the Participant's lifetime only by the Participant or, if
               permissible under applicable law, by the Participant's guardian
               or legal representative or by a transferee receiving such Award
               pursuant to a domestic relations order referred to above.

          (v)  Gift Transfers. Notwithstanding Section 6(e)(iv) herein to the
               contrary, a Participant may transfer by gift the exercisable
               portion of an Option provided that the following conditions (A)
               through (G) are met:

               (A)  The donees of the gift transfer are limited to Family
                    Members and Family Entities;

               (B)  The Option is not further transferable by gift or otherwise
                    by such Family Member and Family Entity;

               (C)  All rights appurtenant to the Option including exercise
                    rights, are irrevocability and unconditionally assigned to
                    the donee;

               (D)  Transfers under this Section 6(e)(v) must meet all of the
                    requirements under applicable provisions of the Internal
                    Revenue Code to be considered "gift" transfers.

               (E)  Following the transfer, the donee is subject to the same
                    terms and conditions under the Option as was the
                    Participant;

               (F)  The early exercise of the transferred Option shall be
                    triggered if the Participant dies, becomes disabled, retires
                    or terminates employment prior to the end of the Option term
                    in accordance with Section 6(a)(iv) hereof.

               (G)  For purposes of the Plan, the following definitions shall
                    apply:

                                       13
<PAGE>

                    (1)  Family Member means the Participant's natural or
                         adopted child, stepchild, grandchild, parent,
                         stepparent, grandparent, spouse, former spouse,
                         sibling, mother-in-law, father-in-law, son-in-law,
                         daughter-in-law, sister- in-law, nephew, niece
                         (including by adoption) and any person sharing the
                         Participant's household (other than a tenant or
                         employee); and

                    (2)  (2) Family Entity means any trust in which the
                         Participant has more than a 50% beneficial interest and
                         any entity in which the Participant and/or a Family
                         Member owns more than a 50% of the voting interests.

          (vi)   No Cash Consideration for Awards. Awards may be granted for no
                 cash consideration, or for such minimal cash consideration as
                 the Committee may specify, or as may be required by applicable
                 law.

          (vii)  Awards May Be Granted Separately or Together. Awards may, in
                 the discretion of the Committee, be granted either alone or in
                 addition to, in tandem with, or in substitution for any other
                 Award or any award granted under any other plan of the Company
                 or any Affiliate. Awards granted in addition to or in tandem
                 with other Awards or in addition to or in tandem with awards
                 granted under any other plan of the Company or any Affiliate
                 may be granted either at the same time as or at a different
                 time from the grant of such other Awards or awards. Performance
                 Awards and Awards which are not Performance Awards may be
                 granted to the same Participant.

          (viii) Forms Of Payment Under Awards. Subject to the terms of the Plan
                 and of any applicable Award Agreement, payments or transfers to
                 be made by the Company or an Affiliate upon the grant,
                 exercise, or payment of an Award may be made in such form or
                 forms as the Committee shall determine, including, without
                 limitation, cash, Shares, other securities, other Awards, or
                 other property, or any combination thereof, and may be made in
                 a single payment or transfer, in installments, or on a deferred
                 basis, in each case in accordance with rules and procedures
                 established by the Committee. Such rules and procedures may
                 include, without limitation, provisions for the payment or
                 crediting of reasonable interest on installment or deferred
                 payments or the grant or crediting of Dividend Equivalents in
                 respect of installment or deferred payments.

          (ix)   Term of Awards. Except as provided in Sections 6(a)(ii) or
                 6(a)(iv), the term of each Award shall be for such period as
                 may be determined by the Committee.

          (x)    Share Certificates. All certificates for Shares or other
                 securities delivered under the Plan pursuant to any Award or
                 the exercise thereof shall be subject to such stop transfer
                 orders and other restrictions as the Committee may deem
                 advisable under the Plan or the rules, regulations, and other
                 requirements of the Securities and Exchange Commission, any
                 stock exchange upon which such Shares or other

                                       14
<PAGE>

               securities are then listed, and any applicable Federal or state
               securities laws, and the Committee may cause a legend or legends
               to be put on any such certificates to make appropriate reference
               to such restrictions. Unrestricted certificates representing
               Shares, evidenced in such manner as the Committee shall deem
               appropriate, shall be delivered to the holder of Restricted
               Stock, Restricted Stock Units or any other relevant Award
               promptly after such related Shares shall become Released
               Securities.

Section 7. Amendment And Termination Of Awards.

Except to the extent prohibited by applicable law and unless otherwise expressly
provided in an Award Agreement or in the Plan, the following shall apply to all
Awards.

     (a)  Amendments to Awards. Subject to Section 6(b)(i), the Committee may
          waive any conditions or rights under, amend any terms of, or amend,
          alter, suspend, discontinue, cancel or terminate, any Award heretofore
          granted without the consent of any relevant Participant or holder or
          beneficiary of an Award; provided, however, that no such amendment,
          alteration, suspension, discontinuance, cancellation or termination
          that would be adverse to the holder of such Award may be made without
          such holder's consent. Notwithstanding the foregoing, the Committee
          shall not amend any outstanding Option to change the exercise price
          thereof to any price that is lower than the original exercise price
          thereof, except in connection with an adjustment authorized under
          Section 4(c).

     (b)  Adjustments of Awards Upon Certain Acquisitions. In the event the
          Company or an Affiliate shall issue Substitute Awards, the Committee
          may make such adjustments, not inconsistent with the terms of the
          Plan, in the terms of Awards as it shall deem appropriate in order to
          achieve reasonable comparability or other equitable relationship
          between the assumed awards and the Substitute Awards granted under the
          Plan.

     (c)  Adjustments of Awards Upon the Occurrence of Certain Unusual or
          Nonrecurring Events. The Committee shall be authorized to make
          adjustments in the terms and conditions of, and the criteria included
          in, Awards in recognition of unusual or nonrecurring events
          (including, without limitation, the events described in Section 4(c)
          hereof) affecting the Company, any Affiliate, or the financial
          statements of the Company or any Affiliate, or of changes in
          applicable laws, regulations, or accounting principles, whenever the
          Committee determines that such adjustments are appropriate in order to
          prevent dilution or enlargement of the benefits or potential benefits
          to be made available under the Plan or an Award Agreement.

     (d)  Correction of Defects, Omissions, and Inconsistencies. The Committee
          may correct any defect, supply any omission, or reconcile any
          inconsistency in any Award Agreement in the manner and to the extent
          it shall deem desirable to carry the Plan into effect.

                                       15
<PAGE>

Section 8. Acceleration Upon A Change Of Control.  In the event of a Change of
Control (as defined in Section 8(b) below) the following shall apply:

     (a)  Effect on Awards.

          (i)   Options. In the event of a Change of Control, (1) all Options
                outstanding on the date of such Change of Control shall become
                immediately and fully exercisable without regard to any vesting
                schedule provided for in the Option.

          (ii)  Restricted Stock and Restricted Stock Units. In the event of a
                Change of Control, all restrictions applicable to any Restricted
                Stock or Restricted Stock Unit shall terminate and be deemed to
                be fully satisfied for the entire stated restricted period of
                any such Award, and the total number of underlying Shares shall
                become Released Securities. The Participant shall immediately
                have the right to the prompt delivery of certificates reflecting
                such Released Securities.

          (iii) Dividend Equivalents. In the event of a Change of Control, the
                holder of any outstanding Dividend Equivalent shall be entitled
                to surrender such Award to the Company and to receive payment of
                an amount equal to the amount that would have been paid over the
                remaining term of the Dividend Equivalent, as determined by the
                Committee.

          (iv)  Other Stock-Based Awards. In the event of a Change of Control,
                all outstanding Other Stock-Based Awards of whatever type become
                immediately vested and payable in an amount that assumes that
                the Awards were outstanding for the entire period stated
                therein, as determined by the Committee.

          (v)   Performance Awards. In the event of a Change of Control,
                Performance Awards for all performance periods, including those
                not yet completed, shall immediately become fully vested and
                payable in accordance with the following:

               (A)  The total amount of Performance Awards conditioned on
                    nonfinancial Performance Objectives and those conditioned on
                    financial Performance be immediately payable (or exercisable
                    or released, as the case may be) as if the Performance
                    Objectives had been fully achieved for the entire
                    performance period.

               (B)  For Performance Awards conditioned on financial Performance
                    Objectives and payable in cash, the Committee shall
                    determine the amount payable under such Award by taking into
                    consideration the actual level of attainment of the
                    Performance Objectives during that portion of the
                    performance period that had occurred prior to the date of
                    the Change of Control, and with respect to the part of the
                    performance period that had not occurred prior to the date
                    of the Change of Control, the Committee shall determine an
                    anticipated level of attainment taking into consideration

                                       16
<PAGE>

                    available historical data and the last projections made by
                    the Company's Chief Financial Officer prior to the Change of
                    Control. The amount payable shall be the present value of
                    the amount so determined by the Committee discounted using a
                    factor that is the Prime Rate as established by Chase
                    Manhattan Bank, N.A. as of the date of the Change of
                    Control.

          (vi)  The Committee's determination of amounts payable under this
                Section 8(a) shall be final. Except as otherwise provided in
                Section 8(a)(1), any amounts due under this Section 8(a) shall
                be paid to Participants within 30 days after such Change of
                Control.

          (vii) The provisions of this Section 8(a) shall not be applicable to
                any Award granted to a Participant if any Change of Control
                results from such Participant's beneficial ownership (within the
                meaning of Rule 13d-3 under the Securities and Exchange Act of
                1934, as amended (the "Exchange Act")) of Shares or other
                Company common stock or Company voting securities.

     (b)  Change of Control Defined. "A Change of Control" shall be deemed to
          have occurred if:

               (i) there is an acquisition, in any one transaction or a series
               of transactions, other than from Pitney Bowes Inc., by any
               individual, entity or group (within the meaning of Section
               13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
               amended (the "Exchange Act")), of beneficial ownership (within
               the meaning of Rule 13(d)(3) promulgated under the Exchange Act)
               of 20% or more of either the then outstanding shares of Common
               Stock or the combined voting power of the then outstanding voting
               securities of Pitney Bowes Inc. entitled to vote generally in the
               election of directors, but excluding, for this purpose, any such
               acquisition by Pitney Bowes Inc. or any of its subsidiaries, or
               any employee benefit plan (or related trust) of Pitney Bowes Inc.
               or its subsidiaries, or any corporation with respect to which,
               following such acquisition, more than 50% of the then outstanding
               shares of common stock of such corporation and the combined
               voting power of the then outstanding voting securities of such
               corporation entitled to vote generally in the election of
               directors is then beneficially owned, directly or indirectly, by
               the individuals and entities who were the beneficial owners,
               respectively, of the common stock and voting securities of Pitney
               Bowes Inc. immediately prior to such acquisition in substantially
               the same proportion as their ownership, immediately prior to such
               acquisition, of the then outstanding shares of Common Stock or
               the combined voting power of the then outstanding voting
               securities of Pitney Bowes Inc. entitled to vote generally in the
               election of directors, as the case may be; or

               (ii) individuals who, as of September 9, 1996, constitute the
               Board (as of such date, the "Incumbent Board") cease for any
               reason to constitute at least a majority of the Board, provided
               that any individual becoming a director subsequent to
               September 9, 1996, whose election, or nomination for election by
               Pitney Bowes' shareholders,

                                       17
<PAGE>

               was approved by a vote of at least a majority of the directors
               then comprising the Incumbent Board shall be considered as though
               such individual were a member of the Incumbent Board, but
               excluding, for this purpose, any such individual whose initial
               assumption of office is in connection with an actual or
               threatened election contest relating to the election of the
               directors of Pitney Bowes Inc. (as such terms are used in Rule
               14(a)(11) or Regulation 14A promulgated under the Exchange Act);
               or

               (iii) there occurs either (A) the consummation of a
               reorganization, merger or consolidation, in each case, with
               respect to which the individuals and entities who were the
               respective beneficial owners of the common stock and voting
               securities of Pitney Bowes Inc. immediately prior to such
               reorganization, merger or consolidation do not, following such
               reorganization, merger or consolidation, beneficially own,
               directly or indirectly, more than 50% of, respectively, the then
               outstanding shares of common stock and the combined voting power
               of the then outstanding voting securities entitled to vote
               generally in the election of directors, as the case may be, of
               the corporation resulting from such reorganization, merger or
               consolidation, or (B) an approval by the shareholders of Pitney
               Bowes Inc. of a complete liquidation of dissolution of Pitney
               Bowes Inc. or of the sale or other disposition of all or
               substantially all of the assets of Pitney Bowes Inc.

Section 9. Amendment And Termination Of The Plan.

Except to the extent prohibited by applicable law and unless otherwise expressly
provided in an Award Agreement or in the Plan, the Board of Directors may amend,
alter, suspend, discontinue, or terminate the Plan, including without limitation
any such action to correct any defect, supply any omission or reconcile any
inconsistency in the Plan, without the consent of any stockholder, Participant,
other holder or beneficiary of an Award, or Person; provided that any such
amendment, alteration, suspension, discontinuation, or termination that would
impair the rights of any Participant, or any other holder or beneficiary of any
Award heretofore granted shall not be effective without the approval of the
affected Participant(s); and provided further, that, notwithstanding any other
provision of the Plan or any Award Agreement, without the approval of the
stockholders of the Company no such amendment, alteration, suspension,
discontinuation or termination shall be made that would increase the total
number of Shares available for Awards under the Plan, except as provided in
Section 4 hereof.

Section 10. General Provisions

     (a)  No Rights to Awards. No Employee, Participant or other Person shall
          have any claim to be granted any Award under the Plan, and there is no
          obligation for uniformity of treatment of Employees, Participants, or
          holders or beneficiaries of Awards under the Plan. The terms and
          conditions of Awards need not be the same with respect to each
          recipient.

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     (b)  Withholding. The Company or any Affiliate shall be authorized to
          withhold from any Award granted or any payment due or transfer made
          under any Award or under the Plan the amount (in cash, Shares, other
          securities, other Awards, or other property) of withholding taxes due
          in respect of an Award, its exercise, or any payment or transfer under
          such Award or under the Plan and to take such other action as may be
          necessary in the opinion of the Company or Affiliate to satisfy all
          obligations for the payment of such taxes.

     (c)  No Limit on Other Compensation Agreements. Nothing contained in the
          Plan shall prevent the Company or any Affiliate from adopting or
          continuing in effect other or additional compensation arrangements and
          such arrangements may be either generally applicable or applicable
          only in specific cases.

     (d)  No Right to Employment. The grant of an Award shall not be construed
          as giving a Participant the right to be retained in the employ of the
          Company or any Affiliate. Further, the Company or an Affiliate may at
          any time dismiss a Participant from employment, free from any
          liability or any claim under the Plan, unless otherwise any claim
          under the Plan, unless otherwise expressly provided in the Plan or in
          any Award Agreement.

     (e)  Governing Law. The validity, construction, and effect of the Plan and
          any rules and regulations relating to the Plan shall be determined in
          accordance with the laws of the State of Connecticut and applicable
          Federal law.

     (f)  Severability. If any provision of the Plan or any Award is or becomes
          or is deemed to be invalid, illegal, or unenforceable in any
          jurisdiction, or as to any Person or Award, or would disqualify the
          Plan or any Award under any law deemed applicable by the Committee,
          such provision shall be construed or deemed amended to conform to
          applicable laws, or if it cannot be so construed or deemed amended
          without, in the determination of the Committee, materially altering
          the intent of the Plan or the Award, such provision shall be stricken
          as to such jurisdiction, Person, or Award and the remainder of the
          Plan and any such Award shall remain in full force and effect.

     (g)  No Trust or Fund Created. Neither the Plan nor any Award shall create
          or be construed to create a trust or separate fund of any kind or a
          fiduciary relationship between the Company or any Affiliate and a
          Participant or any other Person. To the extent that any Person
          acquires a right to receive payments from the Company or any Affiliate
          pursuant to an Award, such right cured general creditor of the Company
          or any Affiliate.

     (h)  No Fractional Shares. No fractional Share shall be issued or delivered
          pursuant to the Plan or any Award, and the Committee shall determine
          whether cash, other securities, or other property shall be paid or
          transferred in lieu of any fractional Shares, or whether such
          fractional Shares, or whether such fractional Shares or any rights
          thereto shall be canceled, terminated, or otherwise eliminated.

                                       19
<PAGE>

     (i)  Headings. Headings are given to the sections and subsections of the
          Plan solely as a convenience to facilitate reference. Such headings
          shall not be deemed in any way material or relevant to the
          construction or interpretation of the Plan or any provision thereof.

Section 11. Effective Date Of The Plan.

The Plan shall be effective as of the date of its approval by the stockholders
of the Company.

Section 12. Term Of The Plan.

No Award shall be granted under the Plan after May 31, 2006. However, unless
otherwise expressly provided in the Plan or in an applicable Award Agreement,
any Award theretofore granted may extend beyond such date, and the authority of
the Committee hereunder to amend, alter, adjust, suspend, discontinue, or
terminate any such Award, or to waive any conditions or rights under any such
Award, and the authority of the Board of Directors of the Company to amend the
Plan, shall extend beyond such date.

Section 13. Participants Subject to Section 162(m)

     (a)  The provisions of this Section 13 shall be applicable to all Covered
          Awards. Covered Awards shall be made subject to the achievement of one
          or more preestablished Performance Goals, in accordance with
          procedures to be established by the Committee from time to time.
          Notwithstanding any provision of the Plan to the contrary, the
          Committee shall not have discretion to waive or amend such Performance
          Goals or to increase the number of Shares subject to Covered Awards or
          the amount payable pursuant to Covered Awards after the Performance
          Goals have been established; provided, however, that the Committee
          may, in its sole discretion, reduce the number of Shares subject to
          Covered Awards or the amount which would otherwise be payable pursuant
          to Covered Awards; and provided, further, that the provisions of
          Section 8 shall override any contrary provision of this Section 13.

     (b)  No shares shall be delivered and no payment shall be made pursuant to
          a Covered Award unless and until the Committee shall have certified in
          writing that the applicable Performance Goals have been attained.

     (c)  The Committee may from time to time establish procedures pursuant to
          which Covered Employees will be permitted or required to defer receipt
          of amounts payable under Awards made under the Plan.

     (d)  Notwithstanding any other provision of the Plan, for all purposes
          involving Covered Awards, the Committee shall consist of at least two
          members of the Board of Directors, each of whom is an outside
          director" within the meaning of Section 162(m).

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