Separation Agreement and General Release

SEVERANCE TERMS AND CONDITIONS:

Base Severance. Under the Company’s Severance Pay Plan, you are eligible to receive one (1) week of Base Severance for each year of service (or fraction thereof) but no less than two (2) weeks pay at your base salary rate of $606,500.00 in effect as of your Separation Date . You will have 8.25 year(s) of service as of your Separation Date. Therefore, you will be eligible to receive 8.5 weeks of Base Severance, which in total is equal to the gross sum of $99,139.42 less applicable withholdings and deductions. You are eligible to receive Base Severance even if you do not sign this Agreement. Because you are considered a “key employee” as defined under Internal Revenue Code Sections 416 and 409A, your Base Severance, to which you are entitled under the Severance Pay Plan, will be aggregated with the portion of the Enhanced Severance payable in a stream as provided in Paragraph 2.b. and that aggregated balance will be paid to you in a stream of payments as described in Paragraph 2.b. below. As used in this Agreement, the term Base Severance Period means the period from your Separation Date through to the end of the period in which you are receiving Base Severance.

Enhanced Severance. If you sign this Agreement and comply with all of its terms, you also will be eligible to receive Enhanced Severance in the amount of $2,530,044.51 , less applicable withholdings and deductions. Of that sum, $736,903.93, less applicable withholdings and deductions shall be paid in a lump sum as soon as practicable after your last day worked. The balance of your Enhance Severance, $1,793,140.58, will be aggregated with your Base Severance, $99,139.42, and the aggregated balance will be paid to you in a stream of approximately equal installments, less applicable withholding and deductions, on regular paydays over a period beginning six months after your Separation Date and ending on April 15, 2010. As used in this Agreement, the term Enhanced Severance Period means the period from the date the Base Severance ends to April 15, 2010.

By operation of the Pitney Bowes Pension Plan and the Pitney Bowes Pension Restoration Plan your Base Severance and, if you sign this Agreement, $2,238,669.51 of your Enhanced Severance will be used as pensionable earnings in calculating your pension benefit under the Pension Plan or the Pension Restoration Plan, as the case may be.

You will be paid for any earned and unused vacation pay in a lump sum as soon as practicable after your last day worked.

You agree that any money you owe the Company may be deducted from any Severance paid, subject to applicable law.

Any Flex Dollars and Life Anniversary Dollars will cease upon your Separation Date. If you sign this Agreement and comply with all of its terms, your Flex Dollars will continue through the period during which you are entitled to the active employee rate.

Payment of any Severance is contingent upon your performance of your job responsibilities at acceptable levels through your Separation Date.

For purposes of this Agreement, the term Severance Period means the period from your Separation Date through to the end of the period in which you are receiving any severance payments.

PENSION PLAN AND RETIREE MEDICAL PLAN COVERAGE:

You are fully vested in the Pitney Bowes Pension Plan (“Pension Plan”). In order to qualify for early retirement under the Pension Plan, however, you need Credited Service until January 10, 2010 . Although you currently are not eligible for early retirement under the Pension Plan, if you sign this Agreement, the Pension Plan and the Pension Restoration Plan, as the case may be, provide that the entire Severance Period counts for purposes of bridging service to an Early Retirement eligibility date, in your case January 10, 2010. As your Severance Period extends from your Separation Date to April 14, 2010, you will have sufficient Credited Service for Early Retirement under the Pension Plan and Pension Restoration Plan, if you sign this Agreement.

If you sign this Agreement, you will be eligible to continue to participate in the Pitney Bowes medical, prescription, and dental plans on the same basis as active employees during your Severance Period. The active employee rate is subject to change annually effective January 1st. You will be eligible to participate in benefit plans for retirees, including medical, prescription drug and/or dental coverage, after your Severance Period ends. Alternatively, you may elect coverage under COBRA when your active coverage ceases at the end of your Severance Period. Shortly after the end of your Severance Period, Hewitt Associates LLC will mail a kit containing COBRA information to your home.

You will be direct billed for this coverage on a monthly basis. Hewitt administers the active employee rate coverage through its COBRA system. You should read the COBRA notice carefully and make the appropriate election for active medical coverage. You must make that election to activate your coverage. This election will not negate the fact that you will be eligible for COBRA coverage for the full COBRA period when your active coverage ceases. At that time you will also be eligible for retiree medical coverage.

If you do not sign this Agreement, your current active-employee medical, prescription drug and dental coverage elections and related costs will continue until the end of the month in which your employment terminates. Thereafter, you have the right to elect to continue your Pitney Bowes medical, prescription drug and/or dental coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) generally for up to 18 months after your coverage as an active employee ends at the full COBRA rate. Shortly after your Separation Date, Hewitt Associates will mail a kit containing COBRA information to your home. You will be required to submit your COBRA election form and payment directly to Hewitt Associates (through the Pitney Bowes Services

Center) to continue your coverage at the full COBRA rate . Failure to provide payment may result in a lapse of coverage.

Coverage may cease before the end of the COBRA period if certain events take place (please refer to “Your Benefits Information Handbook” for more information). When the COBRA period has ended you may be offered coverage under your provider's individual coverage conversion provision, if offered by the Provider. The individual coverage offered may not be the same coverage offered under the active or COBRA plan.

LIFE INSURANCE COVERAGE:

If you sign this Agreement and comply with all its terms, you will receive Company- provided term life insurance coverage equal to one year of your base salary in effect as of your Separation Date for the full term of your Severance Period (the “Extended Coverage Period”). There is no employee-paid monthly premium for this life insurance coverage but you will have imputed income based on this coverage pursuant to tax law to the extent the coverage exceeds $50,000. If, however, at any time during the Extended Coverage Period, you accept new employment and become eligible for life insurance coverage from your new employer, or if you retire, your Extended Coverage Period will immediately terminate.

TRANSITIONAL SUPPORT:

If you sign this Agreement and comply with all of its terms, you will be eligible to receive transitional support for a period of up to six months or, if sooner, until such time as you commence other employment (“Transitional Support Period”). Transitional support expenses will not exceed $40,000. You agree to be available for consultation with respect to Company business during the Transitional Support Period.

EXECUTIVE FINANCIAL COUNSELING:

If you sign this Agreement and comply with all of its terms, you shall continue to be provided with professional financial counseling and tax preparation services at the Company’s sole expense for a period of 24 months following the Effective Date up to an amount not to exceed $21,000.00 per calendar year (or pro rata portion for a partial calendar year) or such higher amount established by the Company on a uniform basis for similarly situated executives.

CASH INCENTIVE UNITS:

The Company shall pay you a prorated payout of outstanding Cash Incentive Units (“CIUs”) pursuant to the KEIP at the close of each respective cycle in accordance with the terms of KEIP. The payout of CIUs shall be based on your total number of completed months of active service with the Company during each 36-month CIU cycle and on the achievement of performance-based targets associated with the CIUs. For purposes of this prorated calculation, the targeted payout shall be multiplied by a fraction, the

numerator of which is your total number of completed months of active service with the Company through the Separation Date during the particular CIU cycle and the denominator of which is 36.

STOCK OPTIONS AND RESTRICTED STOCK :

If you sign this Agreement, in accordance with the terms of Pitney Bowes Severance Policy – Treatment of Stock Options and your Award Agreement, stock options granted to you before your Separation Date that are at least partially vested as of your Separation Date will continue to vest after your Separation Date until January 10, 2010 when all outstanding unvested stock options will vest and remain exercisable until the award expiration date set forth in the respective Stock Option Award Agreement. Any stock options granted to you for which no vesting has occurred as of your Separation Date (generally within one year of your Separation Date) are automatically forfeited on your Separation Date. The restricted stock award issued to you on October 7, 2004 will forfeit on your Separation Date. If you have any outstanding incentive stock options (“ISOs”) outstanding for more than one year on your Separation Date, you must exercise those options within 90 days of your Separation Date, in order to receive the favorable tax treatment accorded to ISOs. Exercising ISOs after that period will result in the options b