AMENDED & RESTATED 1998 STOCK PLAN

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








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

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.

2

(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

3

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;

4

(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.

5

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

6

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

(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

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

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

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

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

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

(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

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

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

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

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.

18

(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

(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).

20